CUSTOMER RELATIONSHIPMANAGEMENTWHITE PAPER

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Executive summaryCustomer Relationship Management (CRM) isa business philosophy which provides a visionfor the way your company wants to deal withyour customers. To deliver that vision, youneed a CRM strategy which gives shape toyour sales, marketing, customer service anddata analysis activities. For most companies,the aim of a CRM strategy is to maximiseprofitable relationships with customers byincreasing the value of the relationship forboth the vendor and the customer.

Software solutions and new technologies mayfacilitate the new ways of working required bya CRM strategy but simply implementing aCRM product will not, in itself, deliver increasedcustomer satisfaction. Instead, companiesneed to introduce new cross-departmentalprocesses which allow them to complete thefour steps in the CRM cycle: plan, interact,process, leverage – and then plan anew.

Many CRM applications tackle only one ortwo elements of the CRM cycle. As a result,a high proportion of CRM projects - whichare based around implementing a particularpackage or suite of applications - fail toincrease customer satisfaction, improvecustomer loyalty or deliver a return on invest-ment for the supplier in the form of increasedrevenues or profits.

Any CRM initiative should therefore start witha vision and strategy which lays out the com-pany’s aims and objectives. You must thenadjust your processes and organisationalstructures so that they will allow you to exe-

cute that strategy effectively. These processesneed to be underpinned by a CRM architecturewhich connects interaction channels with CRMapplications and customer data repositories.Furthermore, your investment in CRM mustencompass tools from all three solutiondomains - collaborative, operational and analytical CRM - if it is to support all four stages of the CRM lifecycle.

Our experience over many projects has allowed us to develop a CRM methodologyand skillset which is enabling our diverseclient base to succeed with CRM. We canhelp you with short-term execution of specificprojects and provide longer-term support asyou devise and then roll out your completeCRM programme. Above all, we can helpyou really leverage your customer informationso that you can deliver increased value tocustomers and continue to reap the benefitsof your CRM strategy over the long term.

What is Customer Relationship Management?Customer Relationship Management (CRM) isa business philosophy which provides a visionfor the way your company wants to deal withyour customers. To deliver that vision, youneed a CRM strategy which gives shape toyour sales, marketing, customer service anddata analysis activities. For most companies,the aim of a CRM strategy is to maximiseprofitable relationships with customers byincreasing the value of the relationship forboth the vendor and the customer.

From the vendor’s perspective, it is clear that not all customers are created equal.

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Customer RelationshipManagement

Customer RelationshipManagement (CRM) isa business philosophywhich provides a visionfor the way your com-pany wants to dealwith your customers

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An example for retail companies shows thatjust 15 per cent of customers will account for45 per cent of revenues and generate 70 percent of a company’s profits. A CRM-basedapproach to business allows companies toidentify these high value customers and thenservice them in a way which keeps them loyal.From the customer’s perspective, the valueof the relationship is a function not only of theclassic marketing "four Ps" - price, product,place and promotion - but also of the qualityof customers’ interactions with a supplierover time. Customers are looking for sup-pliers who understand their needs and whocan respond to those needs with relevantoffers, using the communication channels the customer prefers.

This shift in emphasis is the result of somefar-reaching structural changes which aretaking place in many marketplaces and sectors. Firstly, markets have become moretransparent as customers have found iteasier to gain access to information aboutalternative suppliers using new technologiessuch as the World Wide Web. Becausecustomers are now able to compare suppliersand their offerings more easily and efficiently,the "cost" to customers of switching betweensuppliers has fallen - and customer churnhas increased dramatically.

Moreover, customers’ expectations areincreasing. Greater transparancy meanspeople rapidly find out about all the goodideas of other suppliers - including the waysin which technology can be used to facilitateinteractions between companies and theircustomers. People expect suppliers to beable to deliver more quickly and in ways thatare convenient for the customer rather thanthe supplier. As a result, customers arelooking for services which are - to a greateror lesser extent, depending on the sector -personalised and "aware" of previous inter-actions between supplier and customer.

Meeting these customer demands and mana-ging the customer relationship is becomingever more complex as the number of channelsthrough which interactions can take placehas grown to encompass the telephone, theWorld Wide Web, e-mail and interactive digitalTV as well as traditional high street outletsand direct mail. Companies will only succeedif they adopt a management approach thatputs the customer at the core of the com-pany’s processes and practices. Moreover,companies need to view CRM as a cyclicalprocess which doesn’t treat customer contactsas one-off events but as interactions in along-term relationship which develops anddeepens over time.

Diagram: The value of customer value

Customers are lookingfor suppliers whounderstand their needsand who can respondto those needs withrelevant offers, usingthe communicationchannels the customerprefers

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Software solutions and new technologies mayfacilitate the new ways of working required bya CRM strategy but simply implementing aCRM product will not, in itself, deliver increasedcustomer satisfaction. Instead, companiesneed to introduce new cross-departmentalprocesses which allow them to complete thefour steps in the CRM cycle.

The first stage is to plan your marketing strate-gy, determining the customer segments youwill target and the campaigns you will aim at those segments. Those campaigns areincreasingly likely to incorporate some kind of loyalty programme to allow you to developlong-term relationships with customers.

The second stage is to interact with customersand execute the marketing plan so that boththe company and its customers get the mostout of their interactions. Communication withcustomers can take place through many dif-ferent channels and the organisation needsto have processes and systems in place tohandle interactions through any of thesechannels, whether singly or in combination.The next step is to process the informationcaptured during the interaction and ensure

that customer requirements are fulfilled. Toooften, so-called CRM solutions are divorcedfrom a company’s back-office processes andsystems that ensure fulfilment of orders orservices. CRM applications need to be tightlyintegrated with operational applications suchas enterprise resource planning (ERP) systemsso that the service promised during thecustomer interaction is fulfilled efficiently.

Finally, you should leverage the informationyou have collected during the previous threestages to learn about your customers anduse that knowledge to update your plans inorder to take your relationship with the customer to a higher, more intimate level.Analysing the data will help you: spot trendsin customer behaviour; identify new segments;predict how customers are likely to react toparticular campaigns and offerings; anddetermine where you are most likely to see areturn on investment. You can then feed thisknowledge into your plan for the next periodof activity. We believe that it is only by closingthe loop by leveraging your customer datathat you will truly be able to deliver value forcustomers and the company.

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Diagram: CRM Cycle Vision

Analysing the data willhelp you: spot trends incustomer behaviour;identify new segments;predict how customersare likely to react toparticular campaignsand offerings; anddetermine where youare most likely to see areturn on investment

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The CRM marketMany CRM applications tackle only one ortwo elements of the CRM cycle. As a result,a high proportion of CRM projects - whichare based around implementing a particularpackage or suite of applications - fail to incre-ase customer satisfaction, improve customerloyalty or deliver a return on investment for thesupplier in the form of increased revenues orprofits. Current failure rates are around 55%and some expect these to rise to around70%. With Gartner estimating that close toUS$ 7 billion will have been spent on CRMsoftware and services in EMEA in 2001 -while forecasting that the market may growto up to US$ 22 billion annually by 2005 -increasing the success rate of CRM ende-avors represents an enormous opportunity to add value.

At Atos Origin, we have the skills and expe-rience to help companies tackle the full CRMcycle, close the loop and deliver real value forcustomers and a strong return on investmentfor suppliers.

Components of a CRM solutionAny CRM initiative should start with a visionand strategy which lays out the company’saims and objectives. You must then adjustyour processes and organisational structuresso that they will allow you to execute thatstrategy effectively. These processes willneed to be underpinned by a CRM architec-ture which connects interaction channels withCRM applications and customer data reposi-tories. The CRM applications must be tightlyintegrated with each other and with existingback-office systems such as enterpriseresource planning solutions.

The Gartner Group has identified some dozendifferent software components of a CRMsolution. At Atos Origin, we divide them intothree main areas, each of which, following adetailed planning phase, supports the furtherstages in the CRM Cycle:

Collaborative CRM solutions are concernedwith all the elements of the interact stage ofthe CRM Cycle. These interactions can takeplace through multiple channels and media,ranging from the website, e-mail and inboundand outbound telephone calls through onlinechat, co-browsing and voice over IP call-backs to cash registers, kiosks and face-to-face interactions on the high street or in otherlocations such as customers’ homes.

Many organisations will look to implement acustomer interaction centre - which takes theprinciples of the call centre and extends themto new media types - and to integrate it withenhanced systems used in offline channels.Applications which may be required includecomputer-telephony integration, interactivevoice response, agent routing and e-mailresponse management. In addition, workflowmanagement and integration to sales auto-mation solutions will be essential for effectiveexecution of the customer interaction strategy.

Operational CRM solutions relate to theprocess stage of the CRM Cycle. Some of

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Diagram: CRM Cycle Processes - activities and IT components

Any CRM initiativeshould start with avision and strategywhich lays out thecompany’s aims andobjectives.

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the required functionality, such as order processing, can be delivered by existingenterprise resource planning (ERP) solutionsand other back-office applications. The keywill be to integrate these systems with mar-keting, customer service and support suitesfrom vendors such as Siebel. Workflow auto-mation and business rules engines must then be applied to create end-to-end processes.Key to the "process" stage is the storage of(updated) customer information in an efficientway in order to support data warehousingand data mining.

Analytical CRM solutions support the lever-age stage of the CRM Cycle. They encompassa range of technologies, including data ware-housing, data mining, statistical analysis andpredictive modelling and multidimensionalreporting. Without customer analytics, com-panies will be unable to effectively leveragetheir operational CRM efforts and make themost of their investment in CRM.Furthermore, as market conditions get toug-her – as in the current economic downturn -companies will want to focus even moreheavily on this area in order to rationalize theirdata structures and to use insights gainedfrom analysing customer data to optimize thereturn from their current investments in CRMprocesses and technology.

The Meta Group has warned that failure toallocate CRM investments across all thesedomains will severely limit customer and supplier value. Atos Origin has experience ofworking with solutions in each of these areasand has strong integration skills to bringtogether the different technologies to createseamless end-to-end CRM processes.

Effective ImplementationOur experience gained in many projects forclients across all sectors has confirmed ourbelief that simply introducing CRM applica-tions will not, by itself, allow you to createbetter relationships with your customers.CRM is not just an IT project but a businessstrategy which touches every area of a com-pany’s operations. Furthermore, CRM is notsimply about making your own operationsmore efficient but about increasing the valuecustomers gain from their interactions withyou. If your customers don’t benefit, youwon’t either.

At the heart of any CRM initiative lies thecustomer data which will support and driveinteractions. From the outset, you need tounderstand what you know and what youdon’t know - and work out how you aregoing to plug any gaps in your knowledge.Creating a robust information architecture is

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CRM is not just an IT project but a business strategywhich touches everyarea of a company’soperations

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crucial because it will form the foundation forthe new processes and technologies thatneed to be introduced to allow you to executeyour CRM strategy.

Because CRM is a business philosophy, itrequires change at every level of the organi-sation. That means you need ongoing sponsorship from the chief executive officerand other board members. They must createa clear strategy setting out your businessgoals and priorities and drive it forwardthrough a change programme which cutsacross the company, and help you break outof the traditional departmental-based siloswhich often prevent organisations from satisfying customer needs.

While technology is a key enabler of CRM,customer value will be created through theactions of your employees. You need tocommunicate the philosophy and purposebehind your CRM vision at all levels of theorganisation and ensure staff are properlytrained in the new processes and techno-logies being introduced. As the programme is rolled out, it is equally important that youcommunicate the success your CRM strategyis creating - to employees and customers.

Finally, because CRM impacts on everyaspect of your company, it is impossible toimplement a CRM programme in one big-bang project. You need to break the programme down into manageable chunkswhich probably last no more than six months,prioritise sub-projects and focus initially onareas where you can achieve quick wins. The key is to make sure each of these smallerprojects fits within an overall architecture:balance the need for excellence in point solu-tions with the need to create a sustainableintegrated solution.

You cannot make this difficult and complextransition alone. You need a consultancy andimplementation partner who can help youwith short-term execution of specific projects

and provide longer-term support as you devise and then roll out your complete CRMprogramme. You need to choose a partnerwho can lead change and see it through todaily practice, who can tightly integrate themany components of CRM and maintainthem, and who can help you really leverageyour customer information to deliver increasedvalue to customers and continue to reap the benefits of your CRM strategy over thelong term.

Helping deliver your CRM visionWe believe Atos Origin is ideally placed tohelp you execute your CRM vision. A full lifecycle IT services provider, Atos Origin’sproven "Consult, Build, Run" approach willenable you to turn your hopes for CRM intoeffective, customer-focused processes. Wecan offer support at every stage of a CRMproject, from initial consultancy through tobuilding solutions and then managing ongoingoperations of IT and complete business pro-cesses such as customer interaction centres.

Our Consulting Services team can work withyou in our CRM Visioning Workshops andCRM Strategy Development service to deve-lop the ideal CRM strategy for your company,based on your current organisational capabi-lities and the marketplace you are operatingin. From there, we can take you through process and architecture modelling to createa blueprint for your CRM solution, beforeassisting you with vendor selection and thedrafting of an implementation plan.

We are then able to support you as you exe-cute that plan with staff skilled in all aspectsof project delivery, from project managementthrough product and technical specialists tocreative designers and marketing specialists.We are a true systems integrator, able toensure your new CRM processes are tightlyintegrated with existing operational systemsto create seamless end-to-end processesthat allow customer needs to be satisfiedquickly and effectively. Our long experience

Because CRM is abusiness philosophy, it requires change atevery level of the organisation

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implementing ERP solutions from vendors suchas SAP means we are particularly well placedto help companies which have previouslyimplemented ERP to introduce CRM.

Our implementation skills are backed up byclose relationships with the leading applica-tion developers, including: CRM and salesautomation arena suites from vendors suchas SAP, Oracle and Siebel; analytics andmarketing applications from amongst others,SAS, Teradata and Epiphany, and customerinteraction centres based on solutions fromAvaya, Alcatel, Genesys and Netcentrex.

Since the key to effective CRM is migratingyour "best" customers from mere satisfactionthrough loyalty to the stage where bothcustomer and supplier derive optimal valuefrom the relationship, we have developed ourown platforms to support loyalty programmesand customer portals, allowing extensive services based around these solutions to bedeployed quickly. Atos Origin is uniquelypositioned to coordinate the segmentation,positioning, and branding aspects of a loyalty

programme with the business processes andIT infrastructure needed to deliver it. We haveimplemented and are running customer loyaltyprograms for a number of high profile custo-mers in the mass retail and oil & gas sectors.

We have particular expertise in designing,building and operating customer interactioncentres capable of handling communicationsthrough a wide range of media types. Thisexpertise has been gained through our experience of running customer interactioncentres on behalf of clients which currentlyprocess some 40 million calls a year acrossEurope. Our call centre operations are justone example of the range of managed services and ASP options we offer whichallow you to hand over the day-to-daymanagement headaches of running thesesolutions once they have been implemented.

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BusinessExperts

Retail/CPG Finance Telco

Hi TechManu-

facturing

IT Experts

Program & Change Management

CRM Strategic Consulting

CRMCustomer

IntelligenceExperts

Data mining and Consumer Marketing Studies

Data warehouse and Marketing Automation,CRM Implementation, Internet/Web,

Customer Interaction Center,Smart Card Application

Diagram: CRM Cycle VisionOur implementation skills are backed up byclose relationships withthe leading applicationdevelopers

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A proven approachOur many satisfied customers will testify tothe success of Atos Origin’s approach toCRM in both B2C and B2B marketplaces.

For example, car manufacturer Peugeot hasworked with Atos Origin to develop CRMsolutions to support both consumers and thecompany’s dealer network. In just six months,Atos Origin was able to help Peugeot designand build a 250-seat customer contact centrewhich handles 1500 calls and 100 e-mails aday. The centre provides multilingual supporton a 24x7 basis, handling enquiries throughfour media and is the base for Peugeot'stelemarketing activities.

For dealers, Peugeot turned to Atos Origin tohelp it develop a marketing data warehouseand data mining solution which is accessiblethrough an extranet. Vendors and Peugeot'sown staff can access interactive reports onPeugeot's market shares on different productand service lines, while vendors can use thesite to obtain information on stock, pricesand delivery times. These two initiatives havehelped Peugeot to achieve 40 per centgrowth in international sales over the lastthree years.

Brewer Carlsberg chose Atos Origin to help itdevelop a B2B portal for selected clients whichallows them to place and track orders online.The portal draws together Carlsberg’s salesforce and customer service and fulfilmentprocesses - linking the company’s salesautomation, customer support and ERP sys-tems - to provide an easy-to-use, informativeportal for Carlsberg’s most important clients.

Also in the B2B arena, oil companyExxonMobil selected Atos Origin to developand run a fleet card management systemand card centre operation. ExxonMobil waslooking for a single application which couldhandle operations across different countriesin Europe and Latin America and supportmultiple products and services for clientswith a variety of corporate structures. Theseneeds were met by Card One from AtosOrigin, a global fleetcard billing applicationwhich encompasses: client management;administration of pricing regulations; transac-tion acquisition; billing and clearing; and acard operation centre.

The ExxonMobil contract is a good exampleof Atos Origin’s "consult, build, run" philosophyin action. Another client with whom Atos Originhas been working for many years is SystemeU, the third largest co-operative retailer inFrance, which has 800 stores nationwide.With the help of Atos Origin, Systeme Ubecame the first food retailer to launch a loyalty scheme. Atos Origin helped Systeme U

Our many satisfiedcustomers will testifyto the success of Atos Origin’s approachto CRM

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design the scheme, from determining thebonus points system and point redemptionmechanism to selecting and implementingthe technical infrastructure. Following a suc-cessful pilot in 1997, Atos Origin helpedSysteme U roll the scheme out to all 800 stores in 1998. The retailer now has some2.7 million customers signed up for the loyaltyscheme, of whom three quarters are activemembers. The scheme has been a key ele-ment in Systeme U’s drive to gain marketshare and increase average basket trans-actions and share of wallet, while communi-cation with customers has been enriched.

At the same time, Atos Origin understandsthat companies embarking on the CRM jour-ney may want to begin with relatively low-keysolutions. For instance, Kuwait PetroleumItalia (Kupit), a subsidiary of one of the world’slargest oil conglomerates, wanted to transformthe sales force operations in two of its divisionsthrough the introduction of sales force auto-mation modules from Siebel. In both projects,Atos Origin helped Kupit understand its exis-ting processes – based around paper and alegacy application – and then design newprocesses. Atos Origin then helped tailor theSiebel modules and interface them to Kupit’sInformix-based legacy systems. The solutionallows Kupit to access a complete picture of

its dealings with any customer, while givingthe sales force a highly effective set of toolsto support the sales process.

Similarly, eyewear specialists Essilor waslooking for a way to manage large volumes ofcustomer information and a wealth of complexproduct data. The company, which suppliescontact and eyeglass lenses, frames andlens-glazing equipment to more than 200,000optical laboratories, wanted to give salesrepresentatives easy access to informationwhile they were with customers. Atos Originhelped Essilor to formulate and then implementan eCRM strategy based on a CRM solutionfrom Saratoga. The solution not only allowssales representatives to provide improvedservice when with customers but has alsoenhanced Essilor’s reputation as a more professional organisation.

Atos Origin can also handle CRM projectswhich are central to a company’s long-termstrategic success. For Interpolis, one of the largest insurance companies in TheNetherlands, CRM is the heart of a strategyaimed at achieving growth and maintaining acompetitive edge. The goal is to upgradecustomer contact and customer service in allchannels and ensure customers experience a consistent and high quality service witheach and every interaction. Atos Origin isacting as a strategic partner in this long-termstrategy, supporting Interpolis with migration,implementation and change managementservices.

Specifically, Atos Origin has helped Interpolisdevelop a uniform implementation methodo-logy for CRM projects. This has already beenapplied to the introduction of software fromSiebel and Avaya in two business units, withAtos Origin helping Interpolis to: provide training for customer service representatives;set up new procedures; plan and execute the rollout and go live; and provide post-implementation user support and changecontrol. This foundation has improved the

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Atos Origin can alsohandle CRM projectswhich are central to acompany’s long-termstrategic success

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efficiency of customer service representativeswhile allowing them to handle contactsthrough multiple channels and the customerand contact information collected is beingused for marketing purposes.

For mobile telephony provider Mobistar, thechallenge was to develop an effective custo-mer loyalty programme which would helpMobistar reduce customer churn in a highlyvolatile marketplace. Using Atos Origin’s ownPoseidon suite of products, we helpedMobistar to devise a loyalty point systemwhich was successfully integrated withMobistar’s billing system, call centre, IVR service, fulfilment operations and website.

Atos Origin also has extensive experience oflinking CRM to web strategies. This was thechallenge posed by Accor, Europe’s leadingtravel, tourism and services group. Accor has some 3600 hotels worldwide, along withtravel agencies, restaurants and casinos. Italso operates a range of corporate servicessuch as food vouchers, expenses manage-ment and health and social care services.The challenge for Accor was to leverage itsbrands over the web, create up-selling and

cross-selling opportunities online and use the web to recruit customers and generateloyalty through personalisation.

Atos Origin carried out an audit of Accor’sexisting marketing and technical context, helped the company to devise a eCRM strategy for the next two years and proposeda technical architecture. Atos Origin then helped Accor devise and implement aneCRM action plan based around data mining,segmentation and e-mail campaigns.

ConclusionCustomer Relationship Management is anissue that every company, large or small,must tackle in some way. Handled well, aCRM strategy can deliver significant benefitsfor companies and customers alike. Yetexperience has shown that developing andimplementing a CRM strategy is fraught withpitfalls and that many companies end upwasting scarce resources on projects thatdisappoint rather than delight customers.

To steer your way through this minefield, youneed support from an experienced partnerwho has a clear understanding of the philoso-phies behind CRM and the implementationmethodologies that succeed - as well as theCRM technologies that can be used. Ourfocus on all four stages of the CRM lifecycleensures you will progress beyond simplyplanning, interacting and processing to lever-aging your investment in CRM processes andsolutions. Our "consult, build, run" approachcan help your company make the journeyfrom initial concept to optimal customerexperience. Our track record of successfulclient projects speaks for itself.

Our "consult, build, run"approach can helpyour company makethe journey from initialconcept to optimalcustomer experience

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