© 1999 Kendall Consulting Group, Inc. All Rights Reserved.

It’s The Customer, Stupid!”

Customer Relationship Management

Sell-Side Architectures

Buy-Side Architectures

Supply Chain Management

© 1999 Kendall Consulting Group, Inc. All Rights Reserved.

Fruits Of Entrepreneurship

© 1999 Kendall Consulting Group, Inc. All Rights Reserved.

Customers Are Changing

• Demographics

• Cocooning

• More informed

• Global

• Demanding

• Predictable (individually)

• Innovative

• Price sensitive

• Channel sensitive

• Linked/Networked

• Technology sophisticated

© 1999 Kendall Consulting Group, Inc. All Rights Reserved.

Eight Critical Success Factors

1. Target the right customers

2. Own the customer’s total experience

3. Streamline business processes that impact the customer

4. Provide a 360-degree view of the customer relationship

5. Let customers help themselves

6. Help customers do their jobs

7. Deliver personalized service

8. Foster community

Source: P. Seybold, Customers.com, Times Books, 1998

© 1999 Kendall Consulting Group, Inc. All Rights Reserved.

“It’s The Customer, Stupid!”

Basic principles of Customer Relationship Management…

• The one-to-one enterprise must:

– Identify your customers in as much detail as possible

– Differentiate your customers (needs/values)

– Interact with your customers (cost efficiently and more effectively)

– Customize your aspects of your enterprise’s behavior toward your customers (based on needs/values)

• “Suddenly, marketing’s in charge!”

• CRM is ranked by Forrester as the growth segment through the year 2005

• Becoming a consulting specialty - Siebel, SilkNet, Berkeley Enterprise Partners

Source: Don Peppers, “Are You Ready for One-to-One Marketing?” HBR, January 1999

© 1999 Kendall Consulting Group, Inc. All Rights Reserved.

Observations

• Current solutions build with a vertical (functional) focus

• Processes still internally oriented

• Customer data management not integrated

• Data standards missing or weak

• Data not considered an enterprise asset

• Incomplete technology-enabled selling environment

• Common processes nonexistent

© 1999 Kendall Consulting Group, Inc. All Rights Reserved.

Customer Database

• Enterprise view of customer

– Expand beyond transactional systems view of customer data

– Complete picture of customer history» Purchases

» Service calls

» Products owned

» Event history (campaign management)

• Interdependency with other front office applications

– Bi-directional data flows increase business intelligence

• Data normalized for sophisticated reports and analyses

• OLAP tools

© 1999 Kendall Consulting Group, Inc. All Rights Reserved.

Conventional LandscapeDisconnected islands of automation

No common data modelNo common data model

High integration costsHigh integration costs

Version lockVersion lock

High license costHigh license cost

Call CenterSales ForceAutomation

Customer Service & Support

WebMarketing

EnterpriseResourcePlanning

E-Commerce

Source: J. Gauthier, Compaq. Presentation. April 5, 1999

© 1999 Kendall Consulting Group, Inc. All Rights Reserved.

Three Perspectives

We and ourcompetitors

Customers

Customer'sCustomersSuppliers

Supplier'sSuppliers

Buy SideBuy Side Sell SideSell Side

Supply Chain ManagementSupply Chain Management

© 1999 Kendall Consulting Group, Inc. All Rights Reserved.

Sell Side Or Storefront

CatalogCatalog

ShoppingCart

ShoppingCart

SearchEngineSearchEngine

ConfiguratorConfigurator

PricingPricing

PaymentProcessingPayment

Processing

CustomerService

CustomerService

ManagementTools

ManagementTools

E-MailE-MailSell Side

ElectronicCommerce

Sell SideElectronicCommerce

House-keepingHouse-keeping

Business-to-Business: Trilogy, TradeEx, HitachiBusiness-to-Consumer: OMI, Broadvision, Netscape, OrderTrust

© 1999 Kendall Consulting Group, Inc. All Rights Reserved.

Sell-Side Architecture

Sell-Side Business Server

Access Mgmt

Shopping Cart

Promotions

Fulfillment Interface

Reporting

E-mail

Storefront/Catalogs

Configurators

Personalization

Cust. Mgmt/Care

Payment Engine

Business Rules

Firewall

Call Center

CustomerCare/Info

Mgmt

Back Office

DatabaseLegacy

Systems

ContentManagement

Publishing/Content ToolsMediaServer

Financial SettlementProcesses

Fulfillment Center/Processes Firewall

ClientBrowsers

CertificateAuthority

InternetWWW

Source: META Group, Stamford, CT.

© 1999 Kendall Consulting Group, Inc. All Rights Reserved.

Customer Interaction Center

Customers(Internal/External)

Telephone IVRS Internet E-mail Fax Video

Customer Interaction Center (CIC)Call Center

WAN/VPN

Branch Ofcs

HQ

Customer RelationshipManagement Systems

Marketing

Sales

ProductDevelopment

Settlement

Fulfillment

Finance &Accounting

Source: META Group, Stamford, CT.

© 1999 Kendall Consulting Group, Inc. All Rights Reserved.

Knowledge/Rules Systems

MarketingCampaign

Management

CommonCRM

Rules Engine

DataWarehouse/

Mining

MasterCustomer

DB Schema

Customer Management Architecture Considerations

Source: META Group, Stamford, CT.

Face-to-Face Support Systems

CallCenters

HelpDesks

CSRApps

POS SFA

Customer Self-Service Systems

IVRSystems

OnlineDial-Up

Kiosks WebApps

Customer Interface Systems

LOBs

Application Systems

Application

Information DB

DB

Transaction DB

Services DB

Application Systems

Application

Information DB

DB

Transaction DB

Services DB

Application Systems

Application

Information DB

DB

Transaction DB

Services DB

Application Systems

Application

Information DB

DB

Transaction DB

Services DB

© 1999 Kendall Consulting Group, Inc. All Rights Reserved.

CRM Drivers

• Marketing database foundation

– Data mining

– Targeting and segmentation

– Touch point systems

• Hybrid distribution structures

– Channels

– Direct sales

– Call centers

• Technology

– Internet

– Front office automation products

© 1999 Kendall Consulting Group, Inc. All Rights Reserved.

Customer Relationship Management (CRM)

• Management of customer relations

• Understanding and building on customer value disciplines

• Accommodating many, different customer needs

• Managing and integrating all of a company’s (supply chain’s) resources on behalf of each customer

DefinitionDefinition

Processes, applications, technologies and culture that facilitate buildingand maintaining profitable relationships among enterprises,

their customers, business partners, suppliers and employees

Processes, applications, technologies and culture that facilitate buildingand maintaining profitable relationships among enterprises,

their customers, business partners, suppliers and employees

© 1999 Kendall Consulting Group, Inc. All Rights Reserved.

Customer Relationship Management (CRM)

• Harder to create competitive differentiation

• Increasing reach

• Customer empowerment

• Ccustomer churns at all-time highs

• Customer loyalty from customer knowledge emerges as the only sustainable differentiation

Why care?Why care?

© 1999 Kendall Consulting Group, Inc. All Rights Reserved.

ManagementProcesses

ManagementProcesses

Culture,Beliefs

andNorms

Culture,Beliefs

andNorms

Informationand

InformationSystems

Informationand

InformationSystems

Organization,Jobs and

Skills

Organization,Jobs and

SkillsBusiness

ProcessesBusiness

Processes

The “Business Diamond” Operating Model

© 1999 Kendall Consulting Group, Inc. All Rights Reserved.

Negotiated Price Selling

MemberManagement

MemberManagement

PaymentBrokeringPaymentBrokering

RegistrationRegistration

InventoryManagement

InventoryManagement

BidProcessing

BidProcessing

OrderManagement

OrderManagement

BackOfficeBackOffice

ManagementTools

ManagementTools

HousekeepingHousekeeping

MarketplaceElectronicCommerce

MarketplaceElectronicCommerce

E-mailE-mail

© 1999 Kendall Consulting Group, Inc. All Rights Reserved.

Some Cost Elements

Commerce Service Providers - $20 to $1000 per month UP!