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Customer Data Management Overview of Current Challenges and Approaches Prof. Dr. Boris Otto, Assistant Professor Mainz, June 21, 2012
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Customer Data Management Overview of Current Challenges and Approaches
Prof. Dr. Boris Otto, Assistant Professor
Mainz, June 21, 2012
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Agenda
Business Rationale for Customer Data Management
Current Challenges
State-of-the-Art
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Why companies must move toward customer-centricity
Meeting customer expectations through a 360 degree view
Achieving competitive advantage through understanding the customer process
Engaging in customer community and communication activities (such as social
media, consumerization etc.) and not reacting to it
Anticipating compliance and legal issues caused by customers
Spending marketing budgets effectively and increasing sales
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Innovative business models require thinking in
customer solutions
MP3 player, songs, ... Value of music
experience
Production costs,
standard products
Value for the
customer
Amount of
explosives Broken rock
Compressor Compressed air
Overall package Individualized
portfolio of
standard services
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Endress+Hauser manages the entire customer process
Endress+Hauser Customer
Configuration
and Purchase
Operations
Disposal,
Replacement
Installation
Specification
Maintenance
Automation
Solutions Endress+Hauser Homepage
Applicator
eShop
eCatalog
Order Status
370,000 downloads p.a.
Download Area
Spare Finder
Tool
Installed Base
Analyst
2.5 mill.
equipment
records
Common
Equipment Record
Field Care
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Customer-centricity presupposes a paradigm shift in
the way companies organize for success
Business
Processes
Customer
Processes
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Agenda
Business Rationale for Customer Data Management
Current Challenges
State-of-the-Art
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Are you ready?
Who is your customer?
Do you know the customer process?
Is there an unambiguous definition of the business object “customer” in your
organization?
Do you know who owns and maintains customer data?
Is there a conceptual model in your organization relating the business object
“customer” to other objects such as “contact”, “employee”, “product”, “prospect”?
Do you know where your customer data is stored?
Do you know about the quality of your customer data?
Do you know the value of your customer data?
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Customer data quality implications at Carl Zeiss
Missing data
Data not up-to-date
Incorrect data
Meaning of data fields are interpreted differently
Misuse of data fields (not used as intended)
Obsolete data is not marked for deletion/ archiving
Duplicates
Customer data quality issues
Introduction of CRM blocked
Inefficiencies in processes
No integrated reporting (no 360° view; all customer information at one glance)
Automation of processes not possible
High effort for data migration from Legacy to CRM system
High call back rate result in unnecessary efforts
Business impact of poor customer data quality
Source: Ilg, D.: Master Data Management at Carl Zeissi. In: Procesdings of the 4th CC CDQ3 Workshop (Hamburg, 2011-06-09). University of St. Gallen, 2011.
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Customer data management relates to a number of
different business objects
Customer
B2B Customer
B2C Customer
Active Customer
Inactive
Customer
Prospect
Ship-to Party Sold-to Party
Contact
Employee
Business Segment
Customer Engagement Lifecycle
Partner Roles
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Different perceptions of the “customer” exists across
the company
Department Customer View
Marketing Customer is a prospect
Strategic Sales
Team
Customer is a global entity composed of many buying organizations
Product Team Customer needs features and functions
IT Department Customer is a linked entity with a unique ID across all systems
Source: Hitachi Consulting: Creating the Single Customer View. Hitachi, Ltd.: Tokyo, 2010.
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Customer data typically is managed in a variety of
different information systems along the value chain
Account
Management
Sales
(“Innendienst”) Fulfillment
Accounts
Receivables
Service &
Support
ERP
CRM
4 0 0 0 0
4 4 0 0 4
4 4 0 0 4
0 4 4 4 4
Legende: 4 used to support process; 4 partially used; 0 not used.
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Agenda
Business Rationale for Customer Data Management
Current Challenges
State-of-the-Art
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The internet service “Business Dictionary” proposes a
set of business definitions
Source: WebFinance, Inc.: Business Dictionary. © 2012. http://www.businessdictionary.com/. Requested on 2012-06-19.
Customer A party that receives or consumes products (goods or services) and has the ability to choose
between different products and suppliers.
Prospect Potential customer or client qualified on the basis or his or her buying authority, financial
capacity, and willingness to buy. Also called sales lead.
Active
Customers Customers who have bought a firm's products at least once in a 12 month period. Active
customers are more likely (than the non-active or occasional customers) to buy again.
Address A place or location where a particular piece of information is stored, or where an entity can be
communicated with.
Contact An individual's private or personal information by which another person, business, or entity
can use to reach the individual.
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Also, some not-so-frequently used definitions can be
found on “Business Dictionary”
Source: WebFinance, Inc.: Business Dictionary. © 2012. http://www.businessdictionary.com/. Requested on 2012-06-19.
Subsidiary An enterprise controlled by another (called the parent) through the ownership of greater than
50 percent of its voting stock.
Sales Lead Inquiry, referral, or other information, obtained through advertisements or other means, that
identifies a potential customer (prospect).
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Different standards organizations define customer data
and related information
OASIS SID ebXML GS1 UPU
Logo
Specification OASIS CIQ
(Customer
Information Quality)
V3.0
TM Forum Shared
Information/Data
Model V8
Core Components
Technical
Specification V2.01
n/a n/a
Standards Body Non-profit, users
and technology
companies
Industry
association
UN/CEFACT Industry
association
Industry
association
Industry Focus Cross-industry Telecom Cross-industry Retail, CPG,
transportation
Postal services
Scope Names, names and
addresses,
address, party
Customer,
Customer Bill,
Customer Order,
Customer Service
Level Agreement
etc.
Many business
information entities,
most relevant
“address”
n/a Address formats in
different countries
Status Most recent version
from 2008
Version 8 from
2008
Version 2.01 from
2003
Initiative just
started
Wide adoption
within industry
Initial Assessment Technically sound,
semantics
addressed
Widely-used, good
structure, industry-
focused
Limited functional
coverage, low
adoption
No results yet, but
needs to be
watched
Limited focus on
addresses
Legend: n/a – not applicable.
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The TM Forum Shared Information/Data Model at a
glance
NB: See www.tmforum.org for more detailed information.
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SAP provides definitions of core business objects used
in CRM 7.0
Business Object Definition
Business Partner Business partners are any parties in which your company has a business interest. You can
create and manage your business partners centrally for different business transactions, and
reflect the different roles they play, such as sold-to party and ship-to party.
Account An account is a company, individual, or group with which you have a business relationship.
An account can be, for example, a customer, prospect, vendor, or competitor. Accounts are
subdivided into the following types:
Corporate accounts (companies or organizations)
Individual accounts (private individuals)
Groups (any groupings, such as households)
Contact A contact is a person with whom you have a business relationship, and is mostly assigned
to a corporate account.
Employees An employee is a member of your company, and involved in the interactions between your
company and customers, prospects, vendors, and other parties.
Account hierarchy The account hierarchy allows you to map complex organizational structures of a business
partner (for example, buying group, co-operative or chain of retail outlets).
Source: SAP AG: SAP Library - SAP Customer Relationship Management. © 2012. http://help.sap.com. Requested on 2012-06-19.
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Other vendors offer customer data models, too
Vendor Logo Solution/Approach Conditions of Use Brief Assessment
Teradata Logical Data Models
(LDM)
Usage fee Wide range of data models for
various industries, fairly well
adopted
IBM Industry Models Usage fee Wide range of information
models for various industries
Oracle Customer data model as
part of Oracle Fusion
Customer Hub
Available through
software license
Sound data model, but linked
to software
SAS Unified customer data
model as part of Customer
Intelligence solution
Available through
software license
Sound data model, but linked
to software
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Customer data quality management instantiates the
CDQ Framework
Strategy
Organization
System
CDQ Controlling
Applications for CDQ
Corporate Data Architecture
Organization
for CDQ
CDQ Processes and
Methods
Strategy for CDQ
local global
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Contact Information
Prof. Dr. Boris Otto Assistant Professor
University of St. Gallen
CC Corporate Data Quality
