Getting ROI from CRM
CRM becomes a source of real business intelligence for the enterprise.
by Karen J. Bannan, May 2008
Ottawa, Ontario-based Cognos, a leader in the business intelligence market, and Bayer HealthCare Pharmaceuticals, a subsidiary of Schering AG, Germany, are two firms that have discovered that customer relationship management (CRM) can be a critical source of real business intelligence for the enterprise and can generate a real return on investment (ROI).
Cognos credits its updated CRM system with providing critical improvements to customer service and its ability to gather business intelligence. The company, which was acquired in January 2008 by IBM, used to depend on an outdated, legacy contact center system until January 2007 when it started an 11-month project to implement Oracle's Siebel Customer Relationship Management (CRM) 7.8.
Cognos now uses advanced call center routing to route customers based on their problems and which customer service agent is best suited to help. Response time has definitely improved. In addition, data from every customer can be logged and documented, so agents can focus on customer needs during calls. Later, the data can be used to help develop better products and services.
Bayer HealthCare Pharmaceuticals depends on Siebel CRM 8 to help its more than 250 outside salespeople who visit medical offices and another 100 Siebel CRM users in-house. In the past, users were able to access customer data, but they couldn't easily merge it with industry data.
Learn how Bayer is seeing real ROI from CRM. With Siebel CRM 8, customer data is online and quickly accessible and industry data is integrated right into the CRM system.
Ottawa, Ontario-based Cognos is one of the leaders in the business intelligence market, consistently scoring high marks in research firm Gartner's Magic Quadrant for business intelligence platforms, which ranks Cognos both a leader and a visionary in the industry. And yet the company, which in January was acquired by IBM, has struggled in the past with customer relationship management (CRM). Specifically, Cognos found it difficult to provide the level of customer service it thought its customers deserved using an outdated, homegrown legacy contact center system.
As recently as January 2007, Cognos was using its own 15-year-old contact center system—known internally as Tracker—which was cumbersome and difficult to customize. So if Cognos, for example, wanted to introduce a tiered entitlement program, the company would have to spend up to 12 months on such an implementation. "It required an extensive amount of testing to do even the simplest of changes," explains Claudio Silvestri, the company's chief information officer.
Business as Usual
Companies around the world are being challenged with the latest industry thought leadership on customers—customer centricity
has become the new mantra in strategy meetings, and CRM software is viewed as a critical tool to enable companies to get the business intelligence they need to successfully meet new business demands. Although CRM implementation and use has finally evolved to the point where companies are seeing return on investment (ROI) and benefits—Cognos executives say the company saw a significant return on its original CRM investment—there's still so much more that companies can do, explains Denis Pombriant, the managing principal of Beagle Research Group, a CRM market research and analysis firm and consultancy.
"We're finally at the point where we always thought CRM was heading in the early days. We're getting payback and ROI, but people still think of CRM as an investment that will prove itself out over time," he says. This may not be the best tactic for executives to take, however. CRM can and does provide ROI—Pombriant notes that most companies have lots of low-hanging fruit in the form of the need to help salespeople track deals and help customer service agents streamline communications. But the real promise and benefit of CRM, he says, is when you can take it one step further and combine it with analytics to turn data into usable information—not just use the systems to make your salespeople's and customer service agents' lives easier.
"Where CRM is today is that the forward-thinking companies are taking it upstream one or two levels to the point where—rather than trying to identify which customers are going to leave you—you're working with customers to identify things that they may want, before they know they want them, so you as the vendor are poised and ready," emphasizes Pombriant. "CRM is being used to obliterate the whole attrition cycle."
Piling More on Top
CRM use is also changing because there's functionality and compatibility built in that, in the past, was either impossible or extremely expensive to add. This, in turn, makes it possible for CRM users to do more with their systems and actually change the way they do business, says Pombriant.
"We've got things being added to CRM incrementally that maybe five years ago weren't part of the core functionality," Pombriant says. "And some of them weren't even on the radar for most people back then. Things like social networking technologies and communities of interest. Companies can form online focus groups that are much more powerful and allow vendors to repeatedly ask their customers, 'Does this meet your needs?' or 'Which marketing message resonates with you?' When a company goes to design a new product, it can tap a rich trove of knowledge."