“Listening to customers must become everyone’s business



Customer Relationship Management at Datamatrics Services limited

ACKNOWLEDGEMENT

I would like to express my sincere gratitude towards my project guide, B.Sc. MBA (Operation Management), Head Operations and Corporate strategy ,Data Matrics Services Pvt. Ltd., 15, Pratap Nagar, Mayur Vihar, Phase 1, New Delhi- 110096 for his invaluable guidance, immense patience and constant encouragement during the course of my project. He has more than 08 years of experience in different companies in India in Management Cadre. He is also a visiting faculty in Management Institutes and also helping in the development of the student.

I would also like to express my gratitude to Ms. Bhavana Kochar, Sr. Operation Manager, Private Banking Group Bajaj Capital Ltd., New Delhi who has guided me throughout the project. She has around 04 years of experience in investment sector with deferent companies. I thank them both for their keen interest and kind cooperation during the course of my project.

I feel privileged to acknowledge my sincere gratitude to my colleagues who contributed to a great extent in laying the foundation for the project and provided invaluable guidance during the course of the project.

Last but not the least, my special thanks to all respondents who have co-operated in sharing their valuable views and have given their time and co-operate me in my project.

With All Regards,

NO OBJECTION CERTIFICATE

This is to certify that Mr. is an employee of this organization for the past __ years.

We have no objection for him/her to carry out a project work titled “CRM AT DATAMATRICS SERVICES PVT LTD “ in our organization and for submitting the same to the Director, SCDL as a party of fulfillment of the of SCDL’s Two Year Programme i.e. Post Graduate Diploma in Business Administration (PGDBA) to Symbiosis, Centre for Distance Learning, Pune, India.

We wish him/her all the success.

Seal of the company

Place: New Delhi (Signature of the competent authority

Date: of the Organization)

DECLARATION

This is to declare that I have carried out this project report “CRM AT DATAMATRICS SERVICES PVT LTD “myself and submitted in part fulfillment of the of SCDL’s Two Year Programme i.e. Post Graduate Diploma in Business Administration (PGDBA) to Symbiosis, Centre for Distance Learning, Pune, India.

The work is original, has not been copied from anywhere else and has not been submitted to any other University /Institute for an award of any degree/diploma.

Date:21/11/10 Reg. No:

CERTIFICATE OF SUPERVISOR (GUIDE)

Certified that the work incorporated in this project report entitled as ““ JUST IN TIME :Present Scenario in Indian Industries” submitted by Mr. Debjit in his original work and completed under my supervision. Material obtained from other sources has been acknowledged in the Project Report.

Date : 10 Feb 2011 Certified

Place : New Delhi (Guide’s Name, Qualification & Address)

B.Sc. MBA (operation management),

Head Operation brightIndya Edu. Venture Pvt. Ltd., 15, Pratap Nagar, Mayur Vihar,

Phase-1, New Delhi- 110096

Contents

• Company Analysis

➢ Infrastructure……………………………………………………………………………………………..8

➢ Branch Network ………………………………………………………………………………………….9

➢ Management Team …………………………………………………………………………………..11

➢ Group clients………………………………………………………………………………………………13

➢ Quality Policy ……………………………………………………………………………………………..14

➢ Group Synergies & Alliances………………………………………………………………………17

➢ Corporate social responsibility initiatives…………………………………………………..19

➢ Siebal CRM services……………………………………………………………………………………20

          

• Chapter 1 (Conceptual Framework For CRM)

➢ Key CRM Principles…………………………………………………………………………………….27

➢ CRM Activities……………………………………………………………………………………………29

➢ Emergence Of CRM Practice……………………………………………………………………..30

➢ CRM Formation Process…………………………………………………………………………….31

➢ CRM Programs…………………………………………………………………………………………..33

➢ CRM Implementation Issue……………………………………………………………………….34

• Chapter2 ( CRM & Related Concepts )

➢ KM With Focus on CRM……………………………………………………………………………..36

➢ Role Of CRM In Context Of SCM ………………………………………………………………37

➢ ERP & CRM………………………………………………………………………………………………..37

• Chapter 3 ( Technological Tools For CRM)

➢ Tools…………………………………………………………………………………………………………38

➢ Data Mining For CRM……………………………………………………………………………….39

➢ Existing CRM Solutions……………………………………………………………………………..40

➢ CRM Model ……………………………………………………………………………………………..41

➢ e CRM………………………………………………………………………………………………………42

➢ Review & Assessment Of CRM Solutions…………………………………………………43

• Case Study 1 Implementing A Technology

Based CRM Solution The ICCI Experience……………………….46

• Chapter 4 ( Organizing For CRM)

➢ Assessing Needs…………………………………………………………………………………… 52

➢ Employee Empowerment & CRM

Hewlett Packard (HP) Case…………………………………………………………………53

• Chapter 5 ( Status OF CRM In INDIA)

➢ Survey OF Service Firms……………………………………………………………………………56

➢ Research Objective…………………………………………………………………………………..56

➢ Methodology ………………………………………………………………………………………….. 57

➢ Analysis OF Findings……………………………………………………………………………………… 57

• Chapter 6 ( CRM In Select Services)

➢ Customer Relationship Management At APTECH…………………………………………..64

➢ CRS…………………………………………………………………………………………………………………..66

➢ Financial Framework For CRM…………………………………………………………………………70

➢ CRM IN HMTL ………………………………………………………………………………………………….72

• Refrences ………………………………………………………………………………………………..75

• Annexure ………………………………………………………………………………………………..76

“Listening to customers must become everyone’s business. With most competitors moving ever faster, the race will go to those who listen and respond more intently”.

Tom Peters, Thriving on Chaos

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Conceptual Framework for CRM

Company profile

Datamatics is a global provider of intelligent, value-driven technology and business solutions. These solutions span IT consulting, business process transformation, off-the-shelf technology solutions and customized software services. They leverage our proven expertise in developing technology to drive business efficiency and productivity.

Product innovation, IP-creation and technology collaboration form the core of our Company's positioning as a 'one-stop-solution provider'. Datamatics has built up strong teams of Business Analysts, Technology Architects, Delivery Experts, Quality Specialists and Marketing and Pre-sales Professionals. These teams are geared up to provide solutions that are based on technology platforms that deliver competitive advantage to our customers.

Our domain and technology experts have integrated Artificial intelligence (AI) into many of the solutions that Datamatics currently markets. For instance, AI has given i-Q©, our path-breaking, intelligent information processing solution, the capability to think like a human being, giving the software intelligence and intuition. Besides AI, i-Q© also conducts tree search and is capable of pattern recognition, automatic learning, displaying confidence level of information located, auto correction, and has Heuristics in hundreds of its components.

This success is being replicated across the organization, and solutions with similar features have already been launched during the past year: i-Mask™, i-Cat™, i-Pub™, i-Mark™ and i-Clinic™.

Mobile Serve™ , a web-based application for developing surveys on handheld devices, has been tested and found to be highly-effective. Built on the latest technology, MobileServe™ gives customers the power to conduct surveys using a range of mobile phones and PDA platforms.

With customers increasingly demanding solutions to improve operational efficiency, faster go-to-market, higher employee productivity and maximized customer satisfaction, Datamatics has focused on developing solutions to meet these market needs. Dartenium™ and e-Payables Manager© are two such solutions. Dartenium™ is a high-productivity automation framework for web testing. Similarly, e-Payables Manager© is a configurable Web-based workflow system specifically configured to cater to various Accounts Payable Functions. It is widely used by our customers including many Fortune 100 companies. Its flexibility has helped many of our customers in their initiatives to bring automation, visibility and agility to their Accounts Payable process.

Datamatics Global Services has emerged as a leader in niche areas like embedded engineering and telecommunications, having developed solutions for ticketing, toll and parking applications. Such solutions have components that help manage user profiles better, and systems to maintain inventory and issue tickets, smart cards and discount coupons, and to configure vehicle type, tariff and concessions, etc.

We continue to be driven by our vision “To be a World Class Organization Admired for Consistently Delivering Superior Business Value”.

Infrastructure

For nearly three decades DFSL has invested in world class infrastructure capable of servicing India’s expanding capital markets. Our offices provide an environment where employees can be at their productive best and ensure the highest service levels.

• Located in the heart of Mumbai, India’s financial capital

• Over 70,000 sq. ft. of state of the art facilities

• 40,000 sq. ft. of physical document library and retrieval facilities

• Strong rooms as per RBI guidelines to store negotiable financial instruments & sensitive documents

• Access controls across all facilities

• Round the clock security provisions by trained staff

Branch Network

To ensure highest quality service and convenience to investors, DFSL has created a national network of branches, Datamatics Investor Service Centers (DISC), in strategic locations across India.

Staffed with friendly and helpful personnel, our branches provide various services including:

• Transaction requests

• Service requests

• Account queries

• Statement of account generation

• Complaint lodging and redressal etc.

» Mumbai            » Nagpur             » Ahmedabad             » Indore

» Jaipur           » Bangalore             » Patna             » Kolkata

» Bhopal            » Raipur             » Ludhiana             » New Delhi

» Chennai           » Visakhapatnam             » Baroda             » Kochi

» Rajkot             » Lucknow             » Chandigarh             » Vijaywada

» Mangalore             » Hyderabad

Awards and Milestones

1975

The Incorporation of Datamatics.

1983

Pioneered India’s first offshore software factory by setting up a Dedicated Offshore Center for Wang Labs, USA.

1989

First company to establish a satellite link from its software development center in India to AT&T Bell Labs, USA

1992

First Electronic Publishing Company in India.

1995

Chairman, Dr. LS Kanodia, inducted into the Dataquest Hall of Fame... and remains the only software professional to be thus honored.

1997

First in India and second in the world to obtain an ISO 9002 certification in Electronic Publishing.

1998

First company in the world to guarantee a 99.997% accuracy level in data capture.

1999

Prime Minister of India confers the ESC “Most Innovative Software Product Award” upon Datamatics Technologies.

2000

First Indian Technology Company to acquire controlling stake in a US listed data management company (Saztec International).

2003

First Indian company to scale up a dedicated facility into a Joint Venture in the BPO space via acquisition of CorPay for providing customized outsourcing solutions for payables processing and other Finance & Accounting functions.

2004

First Indian non-voice third party BPO Company to get listed on BSE and NSE.

2006

Selected as Rising Star at 'The Global Outsourcing 100' 2006 Outsourcing World Summit.

2006

Among Top 50 best managed outsourcing vendors by 'The Black Book of Outsourcing'.

2007

Winner of the IMC Ramkrishna Bajaj National Quality Award 2006.

2007

Ranked Third globally among global document process outsourcing providers by 'The Black Book of Outsourcing'.

2007

Winner of International Asia Pacific Quality Award. Becomes first and only Indian company to win the award in Services category, beating competition from hundreds of companies across the services spectrum in countries such as the US, Japan, Australia, Russia, Canada...

2009

Amalgamation of IT and BPO divisions complete.

Management Team

Dr L. S. Kanodia – Chairman and Founder, Datamatics Group

Rahul L Kanodia – Vice Chairman and CEO

Vidur Bhogilal – Chief Financial Officer

Sameer L. Kanodia – Executive Director

Arvind Sirrah – President, US

Dr. C M Dwivedi – President and Global HR Head

Michael Thuleweit – Managing Director, Datamatics GmbH (Germany / DACH)

Navin Anand – President, UK / Europe

Ramkumar Akella – Chief Operating Officer

TECHNOLOGY

At DFSL we believe that technology is a key enabler to significantly improve service levels and guarantee customer delight. DSFL has nearly three decades of experience in the R&T business and we leverage our experience to develop world class solutions to enhance our business processes. We use contemporary software technology, state of the art infrastructure and periodic BPR (Business Process Re-engineering) activities to make our processes efficient, our employees more productive and continuously improve our service standards.

Software – Overview

• State of the art Transaction Processing and CRM software built on the Microsoft .Net framework

• Back-end database on the latest Oracle 10g

• Image based transaction processing to enable anytime, anywhere operations

• Built in controls and validation to ensure error free transaction processing

• Parameterized software, enabling customization to meet the unique requirements of different scheme features of AMCs

• System is capable of catering to high volumes of transactions

• Complete integration of all transaction modules offers 360 degrees view of the Investor

• All transactions can be tracked at every stage of processing – from receipt to dispatch of confirmations

• Flexible software architecture that can be integrated with software systems used by the AMCs and Distributors

• AMCs and Distributors can get real time data feeds of transactions to keep their systems and database always updated

Data Center

• International Standard Data Center that guarantees

o High Availability and Superior Performance – leading to higher productivity and ensure meeting client’s SLAs

o Redundancy – to ensure minimum downtime and no loss of data

o Security – to protect our client’s critical data and applications

o Scalability – to be able to scale up our operations as per the requirements of the client and upgrade to better technology as and when available

• Physical security

o Biometric fingerprint scanners and secured card access

o High-security, tamper-proof cabinets with specially keyed locks

o Restricted access to server rooms and 24-hour on-site security staff

Group Clients

The Datamatics Group has partnered with top service providers from around the world to provide our clients an unmatched value proposition.

Partial List Of Clients

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Quality

Datamatics Quality Policy

• Amongst only few ISO 9001:2000 certified R&T agents

• 4 quality layers for all transactions

o Maker – accurate data capture from application form

o Checker – double data entry of critical fields and error corrections

o Auditor – recheck all high value transactions, complex transactions from a randomly generated pool

o Validation – rule based systems validation of all transactions before final update of records

• Documented processes, guidelines & checklists for all service operations

• Dedicated internal audit and QA team for all processes & critical outputs

• Concurrent audits through external auditors

Jidoka - Quality check at every step of the process

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» Poka–yoke – Fail safe systems and processes

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» Kaizen - Continuous improvement

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GROUP STRENGTHS

DFSL is a part of the Datamatics Group of Companies. Through this association we are able to offer our clients a holistic value proposition that is unique only to Datamatics. By associating with DFSL, our clients establish a relationship with the Datamatics Group. The Datamatics Group Value Proposition:

Datamatics Ltd (DL)

As the flagship company, DL is a pioneer in offshore development empowering clients with a competitive edge through software solutions in numerous areas.

We are able to leverage DL’s strengths in:

• Best in class software solutions used in international financial services markets

• Established software development processes

• Continuous improvement to our technology based on international best practices and quality standards

• Assured timely solutions

• Expertise in Migrations

Datamatics Technologies Limited (DTL)

DTL is an end-to-end BPO service provider to the Electronic Publishing, Legal, Healthcare, and Tax and Financial Accounting industry verticals.

We are able to leverage DTL’s strengths in:

• World class Data Management, Data Warehousing and Business Intelligence solutions

• Association with companies such as File Net and Humming Bird for work flow and document management solutions

• World class best practices in seamless business process migration

• Proven ability to offer solutions such as Data Migration, Warehousing, Analytics, Knowledge

• Management and Enterprise Portal technologies to help client's build Enterprise-wide Information Architecture.

Datamatics Staffing Services (DSS)

DSS is among India's leading recruitment organizations with over 1,300 person years experience in recruitment consulting

We are able to leverage DSS’s strengths in:

• Recruitment of quality and professional staff

• Augment staff strength in a very short notice during busy periods

• Industry best practices with respect to keeping motivation high and maintaining a low attrition rate

GROUP SYNERGIES

We extract valuable group synergies to provide un-matched services to our clients

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ALLIANCES

Strategic Partners

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Product Partners

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Implementation Partners

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PEOPLE

At DFSL our people are our greatest asset. We are proud of our staff and they are proud of working with us. 400+ strong workforce

• Lowest attrition rate: 8 %.

• Minimum Entry Level: Graduation

• Domain expertise across various financial processes with dedicated teams of qualified finance professionals

• Dedicated legal team headed by a High Court lawyer to handle all legal aspects

• Dedicated ISO and QA team to manage compliance

Training

We also inculcate a system of continuous training to ensure highest productivity. Employees receive on going training on latest technology, processes and policies and most importantly on providing exceptional customer service.

Corporate Social Responsibility Initiatives

Datamatics Global Services Limited has recognized the underutilized potential of the educated and skilled physically-challenged professionals. Datamatics has provided such individuals an opportunity to contribute to the organization's growth while ensuring that they too benefit through the Knowledge Associates (KA) programme.

Datamatics has tied up with a non-governmental organization called NASSEOH (National Society for Equal Opportunities for the Physically Handicapped) and Amar Seva Sangam where nearly 60 physically-challenged individuals work as Knowledge Associates in the Outsourcing Management Team. Apart from these, nearly 20 KAs work from home.

Through the KA programme, Datamatics has provided such individuals the satisfaction of being financially independent, thus improving their status in society. The programme is tailor-made for individuals who cannot commit themselves to full-time employment or travel any distance to the place of work.

Datamatics has also enabled the NGOs to provide opportunities for the physically-challenged by donating PCs to facilitate their IT set up. Trainers from the organization visit the NGOs and homes of the KAs to conduct training and feedback sessions. In some instances, a mentor co-ordinator is stationed at the NGO for 3-6 months to co-coordinate training & hardware setup.

Application Management Services

The AMS team at Datamatics Global Services combines its multi-domain expertise with the decades of experience in designing and deploying new applications that are robust, reliable and scalable, modernizing legacy applications and giving existing applications the competitive edge.

Datamatics AMS Solutions Framework

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AMS Center of Excellence

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Siebel CRM Services

Siebel practice at Datamatics is well established and leverages our vast experience across various industry verticals. We offer industry specific Customer Relationship Management (CRM) solutions to our customers and have proved our expertise in several Siebel implementations. Our value added services include:

• Siebel Testing

• Siebel Implementation

• Siebel Customization

• Siebel Maintenance

• Siebel Support

• Pre-packaged Siebel support

• Siebel Pre-Implementation

• Siebel Post-Implementation

• Siebel Enhancements

• Business process analysis

• Implementation of Siebel

• Customizations / enhancements and upgrade to current Siebel versions

• Pre-packaged Siebel support and upgrade services

Our Siebel Center of Excellence support model can help organizations by:

• Supporting and enforcing business and IT processes

• Lowering support costs

• Preserving knowledge assets

• Enforcing quality standards

Some of the benefits that we have delivered to customers include:

• Improved quality of service to end customers

• Reduced costs by 40%

• Increased responsiveness to end customer

Oracle ERP

Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and Supply Chain Management (SCM) are areas where Datamatics is engaged in providing solutions to customers for a decade. We are one of the most preferred partners of Oracle's E-Business suite for implementation, upgrade, maintenance, and support services. The most important factor in our success is our objectives are closely aligned with our customers in addition to quality, lower TCO (Total Cost of Ownership), and rapid implementation.

Our Oracle practice helps optimize an organization's investment through a complete set of application life cycle management services.

At Datamatics, we have created an Oracle Center of Excellence (CoE) to constantly improve our services for customers. Oracle Center of Excellence focuses on upcoming Oracle technologies and works on designing new tools and frameworks. Through the CoE, we are able to deliver

• Predictable service levels to customers

• Leverage global best practices

• Provide access to a wider pool of talent

SAP ERP Services

Datamatics has a proven track record in providing services for the SAP package. We provide a gamut of services that enable our customers to perform better:

• SAP Application Support

• SAP Testing

• Enterprise Reporting Applications

• SAP Application Implementation

• Application Migration, Consolidation and Upgrade Services for SAP

• Enterprise Application Integration Services ..

The proven benefits from this accelerated ASAP methodology include:

• Reduced costs

• Guaranteed quality and knowledge transfer

• Improved efficiency in a shorter duration

Supply Chain Management Services

We provide complete business consulting and technical integration services for supply chain management (SCM). . Our SCM technology practice provides expertise in solutions like JDA (formerly Manugistics) and SAP backed by experienced technical and functional consultants as well as certified Domain experts.

We have a strategic alliance with JDA for implementations services. We have a dedicated Software Development Center in India for developing / enhancing and creating client specific requirements. We have completed over 50 implementations in different Business Segments in last 5 years.

Our service offerings are:

• Consulting and implementation services

• Migration / Upgrade services

• Post implementation services

• Business Process tuning

• Education services

• Testing services

Datamatics Funnel Methodology

Datamatics uses a ‘funnel’ methodology to deliver a higher selection ratio. We set down requirement analysis and job descriptions in association with clients. A team of 25 recruitment specialists together with technical experts then evaluates all candidates through multiple levels. Only those who meet the criteria are forwarded to the client for final evaluation.

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SAAS and SLA

The business potential of Software as a Service (SAAS) has exponentially increased in the last few years. Organizations are today increasingly adopting the SAAS framework and see significant value in it. We help customers in formulating solutions that ensure their SLAs are built to have a positive business impact with SAAS. This includes precise definition of outages, downtimes, components, resource availability among others. Thus we ensure that the entire services suite is clearly defined by accurate definition of SLA terms. This clarity helps our clients achieve optimum operational efficiency and increased ROI.

Portfolio Services

Datamatics offers the following Portfolio services:

• Portfolio analysis

• Portfolio consolidation

• Portfolio rationalization

Our customers have benefited in several ways from their engagements with us including:

• Demonstrated expertise in portfolio management for International Organizations

• Large pool of skilled and trained resources for portfolio analysis and strategies

• Process based risk management matrix for portfolio

• Optimize project risk and return with our in-house portfolio solution

• Perform successfully in critical, large scope, size and complexity projects

Data Warehousing & Business Intelligence

Datamatics’ end-to-end consulting and implementation services can efficiently synchronize your business data into a Global Data Repository or Enterprise Warehouse and help answer your most difficult business queries.

• Information Strategy Planning & Road-map Consulting

• Enterprise wide Data Consolidation and Warehouse Construction

• Corporate level Information Delivery and Management Reporting

• Proactive Data Warehouse Maintenance

• Service Spotlight - DW Rescue Mission

Datamatics offers end-to-end services in Data Warehousing & Business Intelligence. Our competence is reflected in our team of highly skilled and trained consultants, who have superior technical, business consulting skills, domain expertise and project management skills.

We believe in our technological expertise & experience of successfully building integrated Enterprise Data Warehouses (EDW) and Business Intelligence (BI) applications utilizing our ‘Global delivery model’.

Information Strategy Planning & Road-map Consulting

• How the data warehouse is going achieve Corporate-objectives

• Identify Cross-functional Needs

• Long-term vision of the warehouse

• Create the technology plan

• Identify & Select a toolkit and associated methods

• Analyze, Prioritize and Target the needs

Enterprise wide Data Consolidation and Warehouse Construction

• Understand the business & work processes

• Reference data through dimensional analysis

• Design for usage while recording history

• Develop and test the queries built and feed results for changes

• Utilize various modeling techniques

• Lift Off! – Go live

Corporate level Information Delivery and Management Reporting

• Trace and Grasp Reporting Environment

• Create Reporting Plan

• Setup Reporting level security hierarchy

• Build and test management reports

• Create iterative or automated report schedules

Proactive Data Warehouse Maintenance

• Monitor the usage

• Analyze and Adapt warehouse to meet current & future business needs

• Align the warehouse with evolving business needs

• Ensure each release supports the greatest needs of the business

• Communicate the DW contributions

Service Spotlight – DW Rescue Mission

• Data Warehouse utilization assessment

• Trace Problem Areas – GAP Analysis

• Corrective Planning to plot the user expectations

• Align the warehouse to meet existing & future needs

Chapter1 Customer Relationship management: an Overview

Before we begin to examine the conceptual foundations of CRM, it will be useful to define what CRM is. A narrow perspective of customer relationship management is database marketing emphasizing the promotional aspects of marketing linked to database efforts.

Another narrow, yet relevant, viewpoint is to consider CRM only as customer retention in which a variety of aftermarketing tactics is used for customer bonding or staying in touch after the sale is made.

Shani and Chalasani define relationship marketing as “an integrated effort to identify, maintain, and build up a network with individual’s consumers and to continuously strengthen the network for mutual benefit of both sides, through interactive, individualized and value-added contacts over a period of time”.

The core theme of all CRM and relationship marketing perspectives is its focus on co-operative and collaborative relationships between the firm and its customers, and/or other marketing actors.

CRM is based on the premise that, by having a better understanding of the customers’ needs and desires we can keep them longer and sell more to them.

Growth Strategies International (GSI) performed a statistical analysis of Customer satisfaction data encompassing the findings of over 20,000 customer surveys conducted in 40 countries by Infoquest.

The conclusions of the study were:

• A Totally Satisfied Customer contributes 2.6 times as much revenue to a company as a Somewhat Satisfied Customer.

• A Totally Satisfied Customer contributes 17 times as much revenue as a Somewhat Dissatisfied Customer.

• A Totally Dissatisfied customer decreases revenue at a rate equal to 1.8 times what a Totally Satisfied Customer contributes to a business.

• By reducing customer defection (by as little as 5%) will result in increase in profits by 25% to 85% depending from industry to industry.

An important facet of CRM is “customer selectivity”. As several research studies have shown not all customers are equally profitable (Infact in some cases 80% of the sales come through 20% of the customers). The company must therefore be selective and tailor its program and marketing efforts by segmenting and selecting appropriate customers for individual marketing programs. In some cases, it could even lead to “ outsourcing of some customers” so that a company better utilize its resources on those customers it can serve better and create mutual value.CRM is defined as:

Customer Relationship management is a comprehensive strategy and process of acquiring, retaining and partnering with selective customers to create superior value for the company and the customer.

Key CRM principles

Differentiate Customers: All customers are not equal; recognize and reward best customers disproportionately. Understanding each customer becomes particularly important. And the same customers’ reaction to a cellular company operator may be quite different as compared to a car dealer. Besides for the same product or the service not all customers can be treated alike and CRM needs to differentiate between a high value customer and a low value customer.

What CRM needs to understand while differentiating customers is:

- Sensitivities, Tastes, Preferences and Personalities

- Lifestyle and age

- Culture Background and education

- Physical and psychological characteristics

• Differentiating Offerings

← Low value customer requiring high value customer offerings

← Low value customer with potential to become high value in near future

← High value customer requiring high value service

← High value customer requiring low value service

Keeping Existing Customers

Grading customers from very satisfied to very disappoint should help the organisation in improving its customer satisfaction levels and scores. As the satisfaction level for each customer improves so shall the customer retention with the organization.

• Maximizing Life time value

Exploit up-selling and cross-selling potential. By identifying life stage and life event trigger points by customer, marketers can maximize share of purchase potential. Thus the single adults shall require a new car stereo and as he grows into a married couple his needs grow into appliances.

• Increase Loyalty Loyal customers are more profitable. Any company will like its mindshare status to improve from being a suspect to being an advocate. Company has to invest in terms of its product and service offerings to its customers.

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(Fig 2. Categorizing Customers)

Summarizing CRM activities:

The CRM cycle can be briefly described as follows:

1. Learning from customers and prospects, (having in depth knowledge of customer)

2. Creating value for customers and prospects

3. Creating loyalty

4. Acquiring new customers

5. Creating profits

6. Acquiring new customers

The Emergence of CRM Practice

The Past:

Looking back at a snapshot history of marketing, we can see the following clear developments and progression over the last four decades:

• 1960’s – the era of Mass marketing, when Gibbs SR toothpaste began the first marketing of this kind with its black and white campaign.

• 1970’s – saw the beginning of segmentation, direct mail campaigns and early telemarketing (such as publishing)

• 1980’s – where Niche marketing made millionaires of those who were best at it.

• 1990’s – Relationship Marketing. The explosion of telemarketing and call centres, all set up to develop relationships with customers. The recognition of the true value of retention and the use of Lifetime Value as a business case.

In recent years however, several factors have contributed to the rapid development and evolution of CRM. These include: -

1. The growing de-intermediation process in many industries due to the advent of sophisticated computer and telecommunication technologies that allow producers to directly interact with end-customers. For example, in many industries such as airlines, banks insurance, software or household appliances and even consumables.

2. Advances in information technology, networking and manufacturing technology have helped companies to quickly match competition. As a result product quality and cost are no longer significant competitive advantages.

3. The growth in service economy. Since services are typically produced and delivered at the same institution, it minimizes the role of the middlemen. .

4. Customer expectations are changing almost on a daily basis. Newly Empowered customers who choose how to communicate with the companies across various available channels. Also nowadays consumers expect a high degree of personalization.

5. Emerging real time, interactive channels including e-mail, ATMs and call centre that must be synchronized with customer’s non-electronic activities. The speed of business change, requiring flexibility and rapid adoption to technologies.

6. In the current era of hyper competition, marketers are forced to be more concerned with customer retention and customer loyalty.

7. As several researches have found out retaining customers is less expensive and more sustainable competitive advantage than acquiring new ones..

8. The globalization of world marketplace makes it necessary to have global account management for the customers.

CRM Formation Process

In the formation process, three important decision areas relate to defining the purpose (or objectives) of engaging in CRM, selecting parties (or customer partners) for appropriate CRM programs and developing programs (or relational activity schemes) for relationship engagement with the customer.

CRM Purpose

The overall purpose of CRM is to improve marketing productivity and enhance value for parties in involved in the relationship. By seeking and achieving operational goals, such as lower distribution costs, streamlining order processing and inventory management, reducing the burden of excessive customer acquisition cost, and through customer retention economics, firms could achieve greater marketing efficiencies. They can enhance marketing effectiveness by carefully selecting, customers for its various programs, individualizing and personalizing their market offerings to anticipate and serve the emerging needs of individual customer, building customer loyalty and commitment, partnering to enter new markets and develop new products, and redefining the competitive playing field for their company. Thus, stating the objectives and defining the purpose of CRM in a company helps clarify the nature of CRM programs and activities that ought to be performed by the partners. Defining the purpose would also help in identifying suitable relationship partners who have necessary expectations and capabilities to fulfill mutual goals.

Relational Parties

In the Initial phase, a company has to decide which customer type and specific customers or customer groups will be the focus of their CRM activities.

CRM Programs

A careful review of literature and observation of corporate practices suggest that there are three types of CRM programs: continuity marketing; one-to-one marketing; and, partnering programs. These take different forms depending on whether they are meant for end-consumers, distributor consumers, or business-to-business customers.

.

|Customer Types |Mass Markets |Distributors |Business to Business |

|Program Types | | |Markets |

|Continuity Marketing |After- Marketing |Continuos Replenishment |Special Sourcing |

| |Loyalty Programs |ECR Programs |Arrangements |

| |Cross-Selling | | |

|One-to-One Marketing |Permission Marketing |Customer Business |Key Account |

| |Personalization |Development |Global Account |

|Partnering/Company-Marketing |Affinity Partnering |Logistics Partnering |Strategic Partnership |

| |Co-Branding |Joint Marketing |Co-Design |

| | | |Co-Develop |

Table 1 presents various types of CRM programs developed for different types of customers

CRM Programs

Continuity Marketing Programs

Take the shape of membership and loyalty card programs where customers are often rewarded for their member and loyalty relationships with the marketers. The basic premise of continuity marketing programs is to retain customers and increase loyalty through long-term special services that has a potential to increase mutual value through learning about each other.

One-to-one Marketing

Meeting and satisfying each customer’s need uniquely and individually. In the mass markets individualized information on customers is now possible at low costs due to the rapid development in the information technology and due to availability of scalable data warehouses and data mining products.

Partnering Programs

The third type of CRM programs is partnering relationships between customer and marketers to serve end user needs. In the mass markets, two types of partnering programs are most common: co-branding and affinity partnering.

CRM Performance Evaluation Process

Without a proper performance metrics to evaluate CRM efforts, it would be hard to make objective decisions regarding continuation, modification, enhancement, or termination of CRM programs.

Another global measure used by firms to monitor CRM performance is the measurement of relationship satisfaction. By measuring relationship satisfaction, one could estimate the propensity of either party’s inclination to continue or terminate the relationship. Such propensity could also be indirectly measured by measuring customer loyalty.

CRM Implementation Issues

One of the most interesting aspects of CRM development is the multitude of customer interfaces that a company has to manage in today’s context. Until recently, a company’s direct interface with the customers, if any was primarily through sales people or service agents. In today’s environment most companies interface with their customers through a variety of channels including sales people, service personnel, call centres, Internet websites, marketing departments, fulfillment houses, market and business development agents,. For example, a customer who just placed an order on the Internet and subsequently calls the call centre for order verification expects the call centre staff to know the details of his or her order history. Similarly a customer approached by a sales person unaware that she has recently complained about dissatisfactory customer service, is not likely to be treated kindly by the customer.

However, the challenge is to develop and integrated CRM platform that collects relevant data input at each customer interface and simultaneously provides knowledge output about the strategy and tactics suitable to win customer loyalty and support. If a call centre personnel cannot identify or differentiate a high value customer and does not know what to up-sell or cross sell to him then it would be a tremendous loss of opportunity for the company. Although most CRM software solutions based on relational databases are helping share customer information, they still do not provide knowledge output to the front line personnel. As shown in Figure.6, CRM solutions platform needs to be based on interactive technology and processes. It should assist the company in developing and enhancing customer interactions and one-to-one marketing through the help of suitable intelligent agents that help develop front-line relationship with customers.

Figure 6 . Information Platform for CRM

Since CRM implementation comprises a significant information technology (IT) component, these companies have handed over the responsibility of CRM implementation to information technology departments. They are focussed on simply installing CRM software solutions without a CRM strategy or program in place. The lack of CRM strategy or CRM programs, would leave the front-line people without any knowledge of what they should be doing with the additional customer information that they now have access to. From a corporate implementation point of view, CRM should not be misunderstood to simply mean a software solutions implementation project.

Chapter 2: CRM and Related Concepts

Knowledge Management (KM) with focus on CRM

As Peter Drucker defined “Information is data endowed with relevance and purpose”.

To effectively implement a CRM solution it is very important to identify real knowledge about different types of customers (Viz. Most valued customers, Most grow able customers, Below zero customers) from plethora of internal and external data, figures, surveys, etc. A straightway technique is to create a data warehouse, thereafter information which is required to effectively implement principles of CRM, could be mined out of this data warehouse.

Marketing, sales after-sales people would be knowledge workers. Front office could be more productive if they could utilize customer knowledge.

Metrics, ROI, Balance Scorecard method, benchmarking are some of the common technique of KM system evaluation. KM implementation is the key to CRM.

It’s a proven fact that 80% of organization revenues come form 20% of its customers; it becomes imperative to design CRM solutions keeping in mind these most valuable customers and to leverage 80% non structured data of about 20% of these most valuable customers.

Just as more tangible corporate assets like computer systems have a finite shell life, so too does knowledge, it must be available at the right time to be able to act upon it. Retaining tacit knowledge (derived from experiences, data and documents) means retaining the individual, which is invariably not possible. It is possible to generate explicit knowledge from tacit knowledge, but it’s a complex exercise. The key ingredient of this exchange is face to face sharing of knowledge or virtual environmental tools like Lotus Notes, which can facilitate tacit knowledge exchange. The choice of Customer Knowledge Management (CKM) architecture should have a layered approach. Existing systems should be seamlessly linked with the proposed layer. The choice for CKM system could be Web (Enterprise information portal) or a packaged solution such as Lotus Notes, Microsoft solution.

Role of CRM in the Context of SCM

In the context of SCM, where alliances and partnerships are keys to success, CRM plays an important role in building long-term relationships. Apart from the end-users, it involves internal employees, channel members and other external entities such as advertising agencies and consulting organizations. The success of relationships depends upon sharing of savings from the supply chain, which may be reinvested to further enhance its efficiency, and sustain the competitive advantage.

The supply chain of tomorrow will look like a virtual organization, seamlessly integrated through sharing data and savings as well. The bonding between partners will be closely held by CRM practices.

ERP and CRM

Like ERP, CRM solutions focus on automating and improving business processes, albeit in front-office areas such as marketing, sales, customer service, and customer support. Whereas ERP implementation can result in improved organizational efficiency, CRM aims to provide organizational effectiveness by reducing sales cycle and selling cost, identifying markets and channels for expansion, and improving customer value, satisfaction, profitability, and retention. While CRM applications provide the framework for embodying, promoting and executing best practices in customer facing activities, ERP provides the backbone, resources and operational applications to make organizations more efficient in achieving these goals.

Regain Management

“The cost of acquiring a new customer is 9 to 12 times that of holding on to an existing customer.”-Philip Kotler

Consumer Life Time Value

Quantifying the “value” of customers is absolutely essential in regain management. In fact, the percentage of profit a company makes from continued sales to its own customer base is consistently higher than the profit made on original sale.

Chapter 3: Technological Tools for CRM

Tools

• Customer database

A good customer information system should consist of a regular flow of information, systematic collection of information that is properly evaluated and compared against different points in time, and it has sufficient depth to understand the customer and accurately anticipate their behavioral patterns in future. The customer database helps the company to plan, implement, and monitor customer contact. Customer relationships are increasingly sustained by information systems. Companies are increasingly adding data from a variety of sources to their databases. Customer data strategy should focus on processes to manage customer acquisition, retention, and development.

Other Technologies that are used are as follows:

• Electronic Point of Sale(EPOS)

• Sales Force Automation

• Customer Service Helpdesk

• Call Centers

Call Centre helps in automating the operations of inbound and outbound calls generated between company and its customer. These solutions integrate the voice switch of automated telephone systems (e.g. EPABX) with agent host software allowing for automating call routing to agents, auto display of relevant customer data, predictive dialing, self service Interactive Voice Response systems, etc.

Systems Integration

While CRM solutions are front office automation solutions, ERP is back office automation solution. An ERP helps in automating business functions of production, finance, inventory, order fulfillment and human resource giving an integrated view of business, where as CRM automates the relationship with customer covering contact and opportunity management , marketing and product knowledge, sales force management, sales forecasting, customer order processing and fulfillment, delivery, installation, pre-sale and post-sale services and complaint handling by providing an integrated view of the customer. It is necessary that the two systems integrate with each other and complement information as well as business workflow. Therefore, CRM and ERP are complementary. This integration of CRM with ERP helps companies to provide faster customer service through an enabled network.

CRM – A FRAMEWORK

Data Mining for CRM: Some Relevant issues

Data mining is an important enabler for CRM. Advances in data storage and processing technologies have made it possible today to store very large amounts of data in what are called data warehouses and then use data mining tools to extract relevant information. Data mining helps in the process of understanding a customer by providing the necessary information and facilitates informed decision-making.

Operational CRM solutions involve integration of business processes involving customer touch points. Collaborative CRM involves the facilitation of collaborative services(such as e-mail) to facilitate interactions between customer and employees. All this effort produces rich data that feeds the Analytical CRM technologies.

Information Requirements Of An Effective CRM Solution

The existing CRM Solutions

Delivering the ‘360 view’ requires automation to bring together all the data concerning a customer. This implies the organization has to change from:

Mass Marketing Product Focus

Product Focus Customer Focus

Economies of Scale Economies of time

1 way communication Interactive

Response Time Real Time

Present CRM Alternatives

Present CRM solutions are offered by host of vendors that are to a great extent not industry specific. While there are some vendors, who have come up with industry specific solutions, the broad model around which the CRM solutions are built remain the same. Adopting a similar or a look a like solution across industries is what causes major strain in servicing a customer.

Typical offerings of the current CRM solutions (such as Siebel, Oracle Apps or , etc) vary from solution to solution. However typical CRM offerings consist of:

Customer Development Field sales, Tele sales, Internet Sales

Service Centre Call Centers, Field Service

Sale management and support Internet Customer Service

Market Analysis Service Interaction Centre

Internet, Tele marketing Business Partner Collaboration

Product and brand management

The Customer focused organization: CRM Model

The idea here is to develop systems that allow flexibility, work on not completely predefined processes so as to enable front office to be proactive to each customer needs

The Mindset impact on CRM

A typical data warehouse will have the following components:

• While developing a data warehouse one takes into account all the legacy and operation systems. But typically sales teams could be managing leads on an excel worksheet. Sometimes critical DSS input like “Profitability Analysis” itself may reside on a worksheet.

eCRM

What is eCRM?

eCRM provides companies with means to conduct interactive, personalized and relevant communications with customer across both electronic and traditional channels. It utilizes a complete view of the customer to make decisions about messaging, offers and channel delivery. It synchronizes communication across otherwise disjoint-customer facing systems. It adheres to permission based practices, respecting individual’s preferences regarding how and whether they wish to communicate with you and it focuses on understanding how the economics of customer relationship affect the business.

eCRM Vs CRM

CRM is essentially a business strategy for acquiring and maintaining the “right” customers over the long term. Within this framework, a number of channels exist for interacting with customers. One of these channels is “electronic” – and has been labeled “e-commerce” or “e-business”. This electronic channel does not replace the sales force, the call Centre, or even the fax. It is simply another extension, albeit a powerful new one, to the customer. The thrust of eCRM is not what the organization is “doing on the web” but how fully the organization ties its on-line channel back to its traditional channels, or customer touch points.

Why employ eCRM?

Companies need to take firm initiatives on the eCRM frontier to

• Optimize the value of interactive relationship

• Enable the business to extend its personalized reach

• Company-ordinate marketing activities across all customer channels.

• Leverage customer information for more effective emarketing and ebusiness

• Focus the business on improving customer relationship and earning a greater share of each customer’s business through consistent measurement, assessment and “actionable” customer strategies.

Review and Assessment of CRM solutions

CRM software applications embody best practices and employs advanced technologies to help organizations achieve these goals.

Categories of CRM solutions

Any enterprise, which wants to implement CRM solutions, can choose from four categories of solutions

– Integrated applications suite

– Interfaced applications bundle

– Interfaced best of breed solutions

– Best of cluster

Key requirements for CRM solutions

Some of the functional and technical requirements for CRM solutions are as listed below:

• Business intelligence and analytical capabilities

• Unified channels of customer interactions

• Support for web based functionality

• Centralized repository for customer information

• Integrated work flow

• Integration with ERP applications

Functional Components of CRM solution

CRM applications are a convergence of functional components, advanced technologies and channels. Functional components and channels are described below:

Sales applications

Common applications include calendar and scheduling, contact and account management; compensation; opportunity and pipeline management; sales forecasting; proposal generation and management; pricing; territory assignment and management; and expense reporting.

Marketing applications

• SIEBEL

It continues to out market and out sell the competition. It is one of the few front office suite vendors having vertical specific functions. Its functionality is compelling. It can be integrated with most of the back office solution like SAP and Oracle. The solutions for the verticals described above are discussed below:

• For Consumer goods: a Siebel eConsumer goods offers eBusiness solution spanning the entire demand chain from the end consumer, through the retailer and the wholesaler, to the manufacturer. It has robust trade promotions planning functionality allowing users to manage customer promotion plans and the funds to support them, while comprehensive route planning functionality enables integrated account targeting.

• For Financial Services: Siebel eFinance enables banking, brokerage, insurance, and capital market organizations to establish and maintain long term profitable relationship with consumers, small businesses, and corporate customers. The organizations can capitalize on information captured during each customer interaction to more effectively cross-sell and up-sell additional products and services.

• For Healthcare: Siebel eHealthcare gives organizations the ability to streamline and improve sales, member services, medical management, and network management services. By using multiple distribution channels, including the Internet, call Centers, home office staff and independent brokers, Siebel eHealthcare provides organizations with a single view of their customers, thereby ensuring better service and improved quality of care.

• For telecom service providers: Siebel eCommunications helps wireless, cable, and Internet service providers to target and win the right customers, accelerate service delivery, and provide service across all touchpoints. Siebel eCommunications embodies the industry’s best practices for generating accurate service orders, managing billing inquiries and adjustments, and up-selling and cross-selling additional services

|Some of Siebel employee-facing applications|Some of Siebel customer-facing applications |Some of the additional products available in version 6.0 |

|are: |are: | |

|Siebel Call Center |Siebel eChannel |Siebel eBusiness Connector for SAP R/3 ® |

|Siebel eMail Response |Siebel eCustomer |Siebel Communications Server |

|Siebel Field Service |Siebel eMarketing |Siebel Distance Learning |

|Siebel Marketing |Siebel eSales |Siebel Global Enterprise Support |

|Siebel Sales |Siebel eService |Siebel Language Extensions |

|Siebel Service | |Siebel Wireless |

• Clarify

It offers customer service & support and field service suite; however its sales functionality is immature.

• Oracle

Oracle is betting everything on its thin, Web Based, centralized computing model. The Internet computing architecture is compelling for connected non-mobile users; Oracle is rebuilding functionality on the new platform and integrates its various acquired products. It offers a broad set of functionality across e-commerce, front office and business intelligence applications.

• Vantive

Vantive offers a compelling customer service and support and field service suite. The rest of its front office functionality makes it suite more of a bundle. The solution is integrated with PeopleSoft at the back office.

Table 2 Comparative Assessment of CRM Products for Vertical Specific Requirements

|CRMApplicationRequirement |Siebel |Clarify |Oracle |Vantive |

|Consumer Products |  |  |  |  |

|Category Management |Available |Available |Available |Available |

|Promotion Management |Available |Available |Available |Available |

|Demand Planning |Available |N.A. |Available |N.A. |

|Interactive Selling |Available |Available |Available |Available |

|  |  |  |  |  |

|Telecom Service Providers |  |  |  |  |

|Blended Sales & service contact Centre |Available |Available |Available |Available |

|Competitive Pricing Analysis |N.A. |N.A. |N.A. |N.A. |

|Integration with Billing System |Available |Available |Available |N.A. |

|Churn management |Available |Available |Available |N.A. |

|  |  |  |  |  |

|Commercial Banking |  |  |  |  |

|Contact Centre |Available |Available |Available |Available |

|Profitability Analysis |Available |Available |Available |Available |

|Integrated Targeting |N.A. |N.A. |Available |N.A. |

|Marketing Datamining |N.A. |N.A. |Available |N.A. |

|  |  |  |  |  |

|Pharma & Healthcare |  |  |  |  |

|Contract Management |Available |N.A. |Available |N.A. |

|Marketing Analysis |N.A. |Available |N.A. |N.A. |

|Disease Education System |Available |N.A. |N.A. |N.A. |

|Knowledge Management System |Available |Available |N.A. |Available |

Case Study 1: Implementing a Technology- Based CRM Solution

The ICICI Experience

ICICI set up as Development Bank over four decades ago to provide products and services for the corporate segment, diversified into the retail segment of the financial markets in the early 1990s.

In 1994, it established ICICI bank as a commercial bank that is flexible, innovative and prompt in meeting customer requirements. In addition to the bank, the retail initiatives include Prudential ICICI AMC, ICICI Personal Financial Services, ICICI Capital Services, and ICICI web trade, Prudential ICICI Life Insurance, ICICI Lombard General insurance. This apart the retail initiatives also include a plethora of web based businesses including city portals and various other utility sites such as , , and , among others.

The Retail Strategy

As part of plans, it is implementing various projects to establish world class CRM practices, which would provide an integrated view of its customers to everyone in the organization. CRM at ICICI involves increased communication between the virtual universal bank and its customers and prospects, as well as within the group itself. The underlying idea is to enhance every instance of contact with the customer. ICICI believes that a true customer centric relationship can only be accomplished by considering the unique perspectives of every single customer of the organization. Hence the pressing need to put in place a technology enabled CRM solution.

The CRM Roadmap

CRM, at ICICI, is viewed as a discipline as well as a set of discrete software technologies, which will focus on automating and improving the business processes associated with the customer – face –to-face, call Centre, ATM, web, telephone, kiosk, bank branch, sales associates, etc – so as to allow ICICI to carry out cradle-to-grave customer management more efficiently. It should allow ICICI to engage in one-to-one marketing by tracking complete customer life-cycle history. To begin with it will automate process-flow tracking in the product sales process, and be able to generate customized reports and promote cross selling. It will also enable efficient campaign management by providing a software interface for definition, tracking, execution, and analysis of campaigns..

Implementing CRM

A very detailed and comprehensive CRM action plan was developed based on the understanding that CRM will require enterprise wide transformation.

The CRM Business Transformation Map below shows the various aspects of that change.

|Product |Sales |Channel |Marketing |

|71% |78% |86% |86% |

Impact of referrals was measured as a part of six-sigma improvement team working on Sales productivity improvement. Order conversion rates from various sources of lead generation was taken and the results are as follows

|Method of lead generation |Sample Size |Conversion Rate |

|Cold Calling |2210 |3% |

|Database |1674 |1% |

|Referrals |352 |29% |

Organization/selling channels have to individually draw the sale cost line for their products. This will determine saving rate impact through referrals and can serve as a decision point for how much investment should be made for tracking & accelerating referrals.

CRM IN HMTL: A Financial Analysis

Hutchison Max Telecom Ltd. (HMTL) is the leading cellular operator in India. It owns the brand ‘Orange’. In Mumbai, there are about 14,000 customer interactions in a day, i.e. on an average a single customer interacts once in 14 days. Therefore, one can appreciate the fact for having an effective customer relation.

The customer interactions can be segmented into various categories:

E-Mail 2%

Direct Walk-In 5%

Fax/Letter 8%

Calls 85%

The peak load hours are from 10:00 AM to 11:00 PM. In telecom industry the cost of handling the customer can be calculated by assigning the various cost factors such as cost of operation of call office, cost of mailers. Staffing cost, etc. it is not possible to quantitatively find out the benefits of having a CRM. Instead of the Cost-Benefit Analysis, it is recommended the cost of not serving the customer (i.e. when CRM is not in place).

Financial Analysis

The complete transition from the internally developed CRM to a commercial CRM package would take 6 to 12 months.

A typical commercial CRM package to be installed at HMTL would cost around Rs. 5 Crore (Assuming one would go for a top of the line CRM package like Siebel, Vantive, Clarify, Oracle.)

Assumptions

Package is purchased for 100 sales people

Cost of Product acquisition including opportunity cost and training cost is approximately: Rs. 5 crores.

Other Costs are as follows:

– Staffing Cost: In call centre at HMTL, the staff requirement is around 100, which can be reduced to 80 using CRM

– Telephone outcall cost

– Delay cost

– Transition cost

Benefit Parameters

✓ Reduction in staff cost

✓ Enhanced productivity (subscriber to agent ratio)

✓ Quicker turnaround times

✓ Saving due to call handling by alternate channels

✓ Better Customer Relations

✓ Churn Prevention

✓ Segmented Promotions

The total benefits expected from these parameters are approximately Rs.3 crores. Hence it is safe to conclude that the payback period should be approximately 2 years for HMTL.

Conclusion

In the past, CRM was mostly about the technology, not about the customer. There is a change in the way the organizations do business. At a technology level, CRM is increasingly about conjoined best-of-breed applications delivered via portal technologies. At a business level, it is beginning to invade traditional territories occupied by brand management or customer support. Peel shows companies how to make the shift to the new paradigm.

The CRM vendors look like they have got their act together in terms of coupling their wares to the needs of the business. The market now distinguishes between CRM and eCRM. One would be forgiven for thinking that this differentiation was contrived to allow the vendors to retreat back to pre ecommerce CRM. But the opposite is true. eCRM is the new game and the vendors are being bullish about it. It may well be worth creating a CRM vendor index, as I think that it will be a good indicator of confidence in business in general and technology in particular.

 

References

✓ Gruen, T. W. (1997), ’Relationship Marketing: The Route to Marketing Efficiency and Effectiveness’, Business Horizons, November – December,

✓ Berry, L. L. (1983), ‘Relationship Marketing of Services: Growing Interest, Emerging Perspectives’, Journal of the Academy of Marketing Science,

✓ Parasuraman, A., Zeithaml, V. A., and Berry, L. (1985), "A Conceptual Model of Service Quality and its Implications for Future Research," Journal of Marketing

✓ Payne, A. (2000), ‘Relationship Marketing: The UK Perspective’, in Sheth, J. N. and Parvatiyar, A. (eds.) Handbook on Relationship Marketing, Sage Publications, Inc.:

✓ Reichheld, F. F. and Sasser, W. E. (1990), 'Zero Defections: Quality Comes to Services', Harvard Business Review, September – October

✓ Sheth, J. N. and Parvatiyar, A. (1995) ‘Relationship Marketing in Consumer Markets: Antecedents and Consequences', Journal of the Academy of Marketing Science

✓ Jagdish And Sheth, Atul Parvatiyar, G Shainesh, ‘CRM Emerging Concepts, Tools and Applications’

✓ Websites

(Accessed on 6 May, 2010)

(Accessed on 13 May, 2010)

(Accessed on 20 May, 2010)

(Accessed on 27 May, 2010)

(Accessed on 9 June, 2010)

(Accessed on 17 June , 2010)

CRM-(Accessed on 23 June, 2010)

✓ Philip Kotler: Marketing Management

Annexure 1:

Sample Questionnaire asked to 50 managers across various companies in the service industry.

1. What are the various CRM initiatives undertaken by the firm?

2. How do they develop these programs?

3. How do they measure the effectiveness of these programs?

4. How successful are these programs in retaining customers?

5. What are the quality and customer centric processes that they follow?

6. How do they decide the technology that is to be implemented?

7. What steps have they undertaken for employee empowerment?

8. What strategy do they follow to acquire more knowledge about the customer?

-----------------------

High value customers who require a high level of service are maintained without expanding the costly offering to the entire customer population

Low value customers who

require high levels of service

must either purchase the higher level of service or become our competitors low value/high cost customers

High

Service Requirement

High

Low

Fig. 1 Customer value – Service Matrix

Customer Value

Low

#Potential Customers

*Existing Customers

*Cultivate Relationship.

Spend Energy.

Go Out Of Your Way.

#Think Of Strategies TO Move Them Away From Competition.

Will Consume Disproportionately High Energy.

*You have No Choice But To Handle Them Very Carefully.

Will Consume Energy

# Think Of Innovative Ways of Getting them On Your Side, But The ‘Cost Of Acquisition’ Must Be Controlled

High

Strategic Importance To Your Business Plan

Low

High

Low

*Focus On Short Term Profitability.

Spend Minimum Energy To Meet Your Objectives.

#Don’t Pursue.

Use Opportunity As It Comes.

Short Term Acquisition Shouldn’t Affect

Long Term Image.

*Very cautious decision needed. Re-examine business Plan & Strategy. Evaluate That Your Loss (i.e. Your competitor’s gain) Doesn’t become nightmare for you.

#Needs In-depth strategic review as acquisition alone and dissatisfaction later could be more harmful

Relationship & Profitability Potential

Learning from customers a& prospects

Creating Profits

Acquiring new customers

4

Creating loyal customers

2

Creating value for customers & prospects

Fig.3

CRM Activities

1

5

3

Purpose

❑ Increase Effectiveness

❑ Improve Efficiency

-

-

-

Relationship Performance

❑ Strategic

❑ Financial

❑ Marketing

← Retention

← Satisfaction

← Loyalty

Role Specification

Process Alignment

Planning Process

Programs

❑ Account Management

❑ Retention Marketing

❑ Co-op Agreements

❑ Strategic Partnerships

Monitoring Process

Communication

Employee Motivation

Partners

❑ Criteria

❑ Process

Employee Training

Evolution

Enhancement

Improvement

­

Fig 5. CRM Process Framework

Internet

Sales Group

Knowledge

Output

Data Input

Data Input

Knowledge

Output

Integrated Marketing

Information Platform

Information Content

Relational Databases

Decision Support System

Active Intelligence

Business Rules

Collaborative Communication

User Profiles

Data Input

Call Centre

Knowledge

Output

Knowledge

Output

Market

Development

Data Input

Data Input

Knowledge

Output

Data Input

Customer

Operations/

Service

Knowledge

Output

Marketing

Web-Enabled & Integration Approach

Customer Information

System

• Customer Database

Electronic Point of Sale

Sales Force Automation

Automation of Customer

Support

Call Centres

Systems Integration

Lifetime value of a Customer

Traditional Approach to CRM

Customer Contact by

– Telephone

– Mail

– In Person

Personal Selling

After Sales Service

Complaint Handling

Account Management

Customer care

Customer Satisfaction

Integration with technology

(Web & Internet)

Collaborative CRM

Analytical CRM

Operational CRM

Fig.8 Interactions between CRM Technologies

Customer

Data

Warehouse

Legacy & Operation

Extract & Transfer

Campaign Mgmt

Mktg &

Sales Cube

Risk Cube

F P & A

Cube

OLAP Tool

BUSINESS FOCUS

ORGANISATIONAL STRUCTURE

BUSINESS METRICS

MARKETING FOCUS

TECHNOLOGY

Independent Databases

Operations

Credit Agent

Scrutiny

Sales Agent

Call Centre

Operations

Scrutiny

Sales Agent

Call Centre

Credit Agent

Database

Satisfaction

With Manager

Productivity

Job

Satisfaction

Employee

Satisfaction

Customer

Satisfaction

Market Share

-ve

Cost Of Quality

Satisfaction with

Right Skills

-ve

Market Share

ESS

40%

CSS

35%

30%

25%

Market Share

1990 91 92 93 94 95 96 97

ESS

CSS

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[pic]

[pic]

[pic]

[pic]

[pic]

[pic]

[pic]

Exception

Today’s Feedback

Awaiting Ratification

Ratified

Pending Closure

New FEEDBACK by student

Notification to SRO/CH

Actions/Investigation

Inform Student to ratify

Over 15 days

Awaiting

Ratification

Ratified

Pending

Closure

Pending

Closure

Close

Complaint

Satisfied

Ratified

Closed

Oracle Application

Authors/

Contributors

Exception

Reports

Experts

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