CRM Hall of Fame: Understanding CRM

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CRM Hall Of Fame Understanding The CRM Market
Greg Galluzzi, President TMG Consulting
2003 CIS Conference Session 1C Sunday
06/01/03 1000 am to 1130 am
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Speaker Introduction Greg Galluzzi

• 1978 B.S. Computer Science Accounting

• 1980 M.B.A. General Business

• 1980-87 Manager Andersen Consulting

• 1987-91 Partner Utility Consulting Firm

• 1991-03 President TMG Consulting, Inc.

• 23 years of Utility, Customer and IT Experience

• Participating in 25 Customer System Initiatives

TMG grants reuse of slides or slide components
under the condition that TMG Consulting be
identified as the source for the information.
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Speaker Perspective
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Agenda
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• The Customer

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A Utility / Energy Company Viewpoint
How is customer defined? It depends on the
utility type and the department.
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A General Market Viewpoint
General Market How is customer defined ?
An Entity
Household personal and business accounts
Something Else (account, bill, etc)
Anyone who pays bill
No common definition
Household with 2 accounts
InformationWeek Survey of 145 IT Managers
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Why is Customer Focus Important ?
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Participate in Global Village
Today we face the 5th wave of innovation
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Reach the Customer
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Enhance Executive Decision Making
3
Enhance Products Services
2
Leverage Investments
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Reduce Costs
1960s
1970s
1980s
1990s
2000s
2010s
2020s
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Why are Customer Initiatives Important ?
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Participate in Global Village
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Reach the Customer
4
Enhance Executive Decision Making
3
Enhance Products Services
2
Leverage Investments
Reduce Costs
1960s
1970s
1980s
1990s
2000s
2010s
2020s
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Application Evolution
Relationship
Customer
Account
Premise
Meter
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Billing Based Versus Customer Based
1960s Technical Efficiency
1970s Cost Reduction
1980s Office Effectiveness
1990s Flexibility
2000s Global Village
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The Customer Is Our Focus
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How Customer Focused Is Your Utility ?
Strategy
Structure
Customer
People
Process
Systems
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Core and Extended Customer Service
Core Customer Service. Mechanical elements
including Quality, Cost and Delivery. Extended
(Caring) Customer Service. Human elements
including Friendliness, Caring, Flexibility,
Problem-solving, and Recovery.
Customer Grade Outstanding A Exceeds
Expectations B Satisfactory
C Unsatisfactory D Failing F
Core Service Satisfies
Caring Service Delights
Core service will never exceed a grade of C or
satisfactory. Dont spend time and money
attempting to exceed expectations here. Caring
service will allow the organization to exceed
customer expectations through perceived delivery.
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How Does Your Company Rate?
Where would you place your utility/energy company?
Customer Grade Outstanding A Exceeds
B Satisfactory C Unsatisfactory
D Failing F
Focus on Caring Customer Service
Acknowledge - Appreciate - Affirm - Assure
Or Here?
Here?
Focus on Core Customer Service
Provide Basic Products, Programs, Services
Here?
Are You Here?
Discount Your Customers
Impatient - Rude - Sarcastic - Ignore - Blame
Others
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How Is A Customer Delighted?
The Customers Perceived Value The State in
which the quality of a total experience,
perceived by the customer, exceeds its cost.
Expectations Customer attitudes which form a
framework for judging performance.
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We Must Understand Our Customers Value Package
To provide extended customer service a customer
value package must be defined and may include
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Categorize and Target Customers
Finally we must, analyze customer history,
segment and target, customize and personalize our
customer base and interactions.

• Know The Customer and Make It Known
• Perform to Customer Value Package
• Exceed Customer Expectations
• Support Multiple Channels
• Remember to Sell
• Migrate to Digital Channels Where Greatest
  Results Are Achieved

Convert Customer e.g. Current customer
profitable receiving service from another
provider
Retain Customer e.g. Current customer - profitable
Monitor Customer e.g. New customer potential
future profitability
Upgrade Customer e.g Current customer was
profitable now strong advocate
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So Whats Next ?
Provide A Single Enterprise-Wide View Of The
Customer, . . .
. . . this requires a comprehensive Customer
Relationship Management Solution.
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• CRM Definition

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CRM Means Different Things To Different People
However, regardless of the meaning the following
key elements of CRM stand out

• CRM must be part of an overall company philosophy.

• CRM solutions must includes not just systems, but
  also people, process and strategy.

• CRM must focus on selecting and managing customer
  value and loyalty through a long-term
  relationship.

• CRM is not a single system but a comprehensive
  application architecture consisting of several
  systems.

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The Need To Move Beyond A Single Transaction
Today, emphasis is placed on the customer
transaction rather than the long-term
relationship, e.g. staff are measured by how many
telephone calls they can take within an hour.
Utilitys Customer Understanding and Analysis
Utilitys Long-Term Customer Relationship
Utilitys Transactions
Customer Interactions
Customer
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CRM Components
The following represent primary CRM components
and systems.

• CRM may include
• Call Center Management
• Call Center Software
• Contact Management Software
• Customer Relationship Management
• Customer Interaction Center
• Customer Service
• Document Production
• E-Business
• Electronic Commerce
• Electronic Purchasing
• Executive Information System
• Field Service Management
• Help Desk Management
• Marketing
• Mobile Computing
• Online Auctions
• Portals
• Sales

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What Are CRM Business Drivers?
The following are general CRM market drivers
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Transformation Using Technology
People Employee Satisfaction
Formulate Business Strategy Structure
Business Process Excellence
Refocus staffing and responsibility
Systems Integrity Flexibility
Drive Process and Workflow
The utility must change new systems are
frequently the catalyst !
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• CRM Integration

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Comprehensive Customer Application Architecture
CRM is only one of the major product groupings
required for a comprehensive customer application
architecture.
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The CRM and CIS Difference

• What is the difference between CRM and CIS ?
• CRM manages the customer relationship
• CIS manages the customer

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CRM An Extended CIS Component
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An Application Component Example
Utility
Nortel
Customer Profile
Customer Marketing
Customer Sales
Customer Service
Customer Interaction
Customer Relationship
EAI
Microsoft
CIS/CRM
Microsoft
Microsoft
Microsoft
Microsoft
Data Warehouse
Sales Marketing
Customer Choice
Market Interface
ERP
GENTran
Customer Management
SAMI
People Soft
Payment Processing
Portfolio Management
Rates Management
Financial Management
Account Management
Credit Collection
Collection Recovery
Various
CRS
Billing Management
Service Point
Service Address
Address Validation
GIS
Finalist
Inventory Management
Usage Management
Service Order Management
Future Link
Outage Management
SmartBill
Bill Production
Scheduling
Meter Reading
AMR
Meter Inventory
WMS
MI - CSF
FieldMsater
Bill Internet Access
ITRON
Meter2
In Pilot
Dispatch / Routing
FieldMaster
CheckFree
Complex Billing
Field Service Work
E-Commerce
FieldMaster
Power Billing System
Check Free
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Distribution Utility - Core Focus
The following depicts a distribution utility
customer account focus.
Customer Account
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Energy Company - Core Focus
The following depicts an energy company customer
focus.

• Data Tools Repository

• Analyze Reposition

• Back Office Systems

• CRM

• Operate

• Sell/Market

Multiple channels
Customer

• Marketer Interface

• Customer Interaction

• Transact

• Interact

• Commodity

• Commodity Interface

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• CRM Activity

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Whos Buying CRM - Survey 1
CRM and IT Spending as of Total Company Revenues
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Whos Buying CRM - Survey 2
of Survey Respondents
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A CRM Utility Industry Perspective
CRM utility industry market presence and
perspective.
Deregulation Promotes Customer Relationship
Emphasis Moves From Account To Customer Entity
Delay In Markets Promotes Customer Management
CIS / CRM Vendors Enter Into Product
Relationships
CIS Vendors Develop Sales Marketing Features
CIS Vendors Move To Develop CRM-Like Offerings
CRM Vendor Activity HIGH
CRM Vendor Activity LOW
CRM Vendor Activity MODERATE
Utility CRM Purchases LOW
Utility CRM Purchases LOW
Utility CRM Purchases LOW
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A CRM Utility Industry Perspective

• 1. Some say CRM is dead others say it is very
  much alive.

• 2. Utilities are interested in CRM but few are
  buying.

• 3. Primary driver for utilities is not sales and
  marketing.

• 4. Instead utilities focus on commodity and
  customer service.

• 5. Utilities focus on CIS with customer
  management and billing.

• 6. Utilities identify CRM as phase 2 following
  CIS installation.

• 7. Utilities pay money to develop CRM to CIS
  integration.

• 8. CRM being deployed in work groups or vertical
  departments.

• 9. CRM projects are complex and risky
  undertakings.

• 10. CRM projects are difficult to justify using
  traditional benefits.

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A CRM Utility Industry Perspective
20 recent TMG customers and CIS versus CRM
implementations.
10 Focus On CIS/CRM
5 Sales New Service
85 Focus On CIS Only
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• CRM Solutions

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2003 Product Trends CRM Magazine

• "IBM--its eBusiness On Demand initiative is going
  to have a large impact on the industry - it will
  provide a combination of hosted and
  in-house-deployed technology."

• "Salesforce.com has the right strategy a pay
  per use Internet-based solution which is very
  attractive for small and medium-size enterprises.

• "The formal relationship between Siebel and
  Microsoft will be a very formidable thing in the
  industry. That's certainly going to be something
  to watch."

• "The merger of PwC and IBM, PwC's implementation
  expertise and IBM's reach could have a huge
  impact on the market.

• "Siebel helped define the market and consolidate
  a fragmented industry. Dissatisfaction may allow
  smaller players to gain market share.

• With Microsofts CRM a high-tech's 800-pound
  gorilla stomps onto the CRM scene, it will leave
  a footprint on the industry, the question is how
  big and how deep?

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Low Cost CRM
Increasing CRM purchase power in the mid to low
market rewards ease of use and ease of
implementation over increased functionality.

• 1. We have seen the introduction of lower-cost
  CRM systems such as MS CRM, SalesLogix, ACT! and
  GoldMine

• 2. These systems are less expensive than CRM
  products which serve the medium to large
  enterprise.

• 3. Lower cost CRM products sell for 100 to
  1,000 per user versus several thousands per user
  for CRM suites.

• 4. Lower cost CRM products have a smaller
  footprint and can cut implementation time
  considerably.

• 5. Outsourced CRM solutions are offered for as
  low as 90 per user per month.

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CRM For Medium To Large Enterprises
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CRM For Medium To Large Enterprises
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CRM For Medium To Large Enterprises
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CRM For Small To Medium Business
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CRM Software For Rent
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Questions
For additional information or questions contact
Greg Galluzzi PresidentTMG Consulting,
Inc. 9210 Honeycomb Dr. Austin, Texas 78737 p
512-288-2655 f 512-288-2622 e
GregG_at_tmgconsulting.com