October 7, 2010 TCS Confidential

CRM Overview Module 1: CRM FundamentalsTCS CRM PracticeDraft D

2October 7, 2010

• Introduction

• Building Blocks of CRM

• Benefits of CRM

• CRM Market

• CRM Success Factors

Agenda

3October 7, 2010

• Ted Levitt, Harvard Business School Marketing professor

What is the purpose of a business?

How do we create and keep a customer?

4October 7, 2010

What is CRM?

Customer

Relationship

Management

A Customer is someone who makes use of or receives the products or services of an individual or organization

A Relationship is a way in which customers and organizations are connected to each other

Management is the process by which the relationship between customers and organizations

is handled efficiently and effectively

CRM is Management of Relationship with the Customers.

5October 7, 2010

Some CRM definitions…

• Customer Relationship Management (CRM) includes the methodologies, strategies, software, and web-based capabilities that help an enterprise organize and manage customer relationships. Companies utilize this approach to gain a better understanding of their customer's wants and needs.

– www.ITtoolbox.com

• A comprehensive approach for creating, maintaining and expanding customer relationships.– Customer Relationship Management by Anderson Keer

CRM is a business strategy designed to optimize

Revenue - Sales

Profitability - Marketing

Customer satisfaction - Service

• CRM is a business strategy to select and manage the most valuable customer relationships• It requires a customer-centric business philosophy and culture to support effective marketing,

sales and service processes • CRM applications can enable effective customer relationship management, provided that an

enterprise has the right leadership, strategy and culture – www.crmguru.com

October 7, 2010

Integrated CTI• State-of-the-art telephony

integration with STAPI

• Rules-based routing with context- sensitive screen-pops

• Outbound dialing and support for call scripting

Email Management• Auto acknowledgements with

rules-based personalization

• Library of email responses

• Email tracking and monitoring

• Integration with leading email clients

Unified Agent Desktop• Single desktop for all supported channels

• Simple and intuitive user interface

Case Management• Create, track, and manage

customer service requests

• Integrated with contract management

Service Process Workflow• Case queues to manage agent

workload

• Rules-based case assignment

• Customizable business processes

SLA Tracking & Management• Contract management and

service level commitments

• Escalations and notifications

• Follow-the-sun support

Typical CRM Activities in a Telco

October 7, 2010

Typical CRM Activities in a Telcom contd..• Telecommunications industry offers attractive opportunity to call centers, with almost all

carriers, cellular operators and Internet Service Providers - setting up call centers.

• Intense competition and low customer loyalty force service providers to invest heavily in call center and customer care operations.

• Multi-modal applications get popular amongst the mobile operators as a source of high revenue generation.

• In-house or captive call centers more popular among service providers as they can set up the centers in their existing premises, tapping into their available network resources and expertise.

• However,with phenomenal increase in the number of subscribers for basic and cellular services - opportunities to arise for outsourcing the services to third party contact centers.

• Call center applications gain increasing level of complexity as most large carriers have installed integrated customer support and help-desk solutions that enable customer self-help, and multi-channel support

• Industry more inclined to a multi-channel contact center scenario thereby opening all channels of communication for its customers. As such these service providers are likely to invest in unified solutions for their contact center applications.

8October 7, 2010

Business Challenges

Need for CRM

Global Competition

Technology

Political & Economic

Scenario

Policies & Regulations

Want Prompt Service

Lowest Price

Have Wide Choice

Want High Quality

WantDelivery

Now

Reduced Profit Margin

IncreaseIn Cost

Low CustomerLoyalty

ShortenedProduct Lifecycle

$

$

$

$

$$$$

PROFIT

9October 7, 2010

10

October 7, 2010

What?

Contacts

Communication Channel

Psychography

Response

Activities

Demography •Collect and Analyze Customer Data and Information

•Plan Customer Centric Activities

•Offer ‘Best Fit’ products and services

•Support at all stages in Customer Lifecycle

•Propose and EnhanceCustomer Satisfaction

How?

Know the Customer

11

October 7, 2010

Finance

Admin

HRProcurement

Manufacturing

IT

Building a Customer Focused Enterprise

En

terp

rise

12

October 7, 2010

Customer Centric Processes

Ass

ure

S

ervi

ceHow can we deliver

superior customer service?

Activate

Service

How do we ensure service is

delivered on time?

ManageOrders

How can we eliminate order

rejects?

Capture

Orders How can we

accelerate capture of

accurate sales orders.

Co

nfi

gu

re

Qu

ote

s

How can we quickly deliver valid quotes?

Manage

LeadsHow can we increase our

win rate?

LaunchCampaigns

How can we best communicate our

offers?DevelopOfferings

What should we offer them?

Segment

Prospects

Who are our customers?

13

October 7, 2010

Source: Oracle

CallsCalls

WebWeb

DirectDirect

CallsCalls

WebWeb

DirectDirect

Outbound

Inbound

Campaign Execution

Creative Creative DevelopmentDevelopment

ROIROIAnalysisAnalysis

BudgetBudgetAllocationAllocation

Campaign Design

The The MarketingMarketing

LoopLoopResponse/Response/

Order Mgmt.Order Mgmt.

Segmentation/Segmentation/Pre-AnalysisPre-Analysis

Product/Product/OfferOffer

DefinitionDefinition

Execution / Execution / FulfillmentFulfillment

AnalyticsAnalytics

CampaignTracking

CRM : Marketing"...the management process of anticipating, identifying and satisfying

customer requirements profitably"

- Chartered Institute of Marketing

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October 7, 2010

• Sales Cycle consists of:

– Planning Process

– Execution Process

– Analysis Process

• Feedback loop:

– Plans Execution Activities Results Analysis Control Plans

• A Sales Process is a systematic methodology for performing product or service sales

ExecuteAnalysis

PlanSales PlanningMissionGoals

Objectives

Sales ForecastingResources

Action PlansProcess

Key Account PlanningTerritory Management

Sales Force ManagementPerformance Management

Sales ProcessEngageQualifyAssessPropose

Close

Sales Process AnalysisFeedback

Process MetricsBehavioral patterns

PerformanceReporting

SalesManagement

CRM : Sales

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October 7, 2010

CRM : Services

Customer service (also known as Client Service) is the provision of service to customers before, during and after a purchase. - Wikipedia

Self Service

Field ServiceAssisted Service

Web Portal

Smart Device IVR/ Speech

ATM/ Kiosk

Field Agents

Partners/ Dealers

Email/ IM

Contact Center

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October 7, 2010

• Introduction

• Building Blocks of CRM

• Benefits of CRM

• CRM Market

• CRM Success Factors

Agenda

17

October 7, 2010

1. CRM Vision

2. CRM Strategy

3. Valued CustomerExperience

4. OrganisationalCollaboration

The Eight Building Blocks of CRM

8. CRM Metrics

7. CRM Technology

6. CRM Information

5. CRM Processes

Source: Gartner

18

October 7, 2010

The vision is the "what" and the "why."

1. Creating the CRM Vision

The CRM vision is a picture of what

the company wants to be to its target

customers.

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October 7, 2010

What are the objectives of a CRM Strategy?

2. CRM Strategy: Setting the objectives right!

Customers &

Prospects

Optimize Margins

•Channel Migration•Results Measurement•Product Stratification

Retain Existing

Customers

•Retention & Loyalty•Customer Care & Service•Win-backSource: LEAPthought

•New Product Launch•Prospecting and Lead generation

•Lead Qualification•New Sales

Acquire New

Customers

Optimize Existing

Customers

•Cross-Sell•Up-Sell•Increase Product Usage

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October 7, 2010

2. Developing a CRM Strategy

Setting the destination, auditing the current situation and mapping the journey is an iterative process that may require several revisions before a final CRM

strategy is developed

Set the DestinationAudit the Current Situation

Map The Journey

Based on:•CRM Vision •Goals/ Objectives

By Assessing:•Skills•Resources•Competitors•Partners•Customers

To Be:•Continuous•Dynamic•Up-to-date

CR

M S

trategy

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October 7, 2010

Company

CustomersFeedback

Experience

Feedback

CVP

1. BeforeSet expectations

2. DuringFocus on what customers care about

4. RepeatAct on feedback

3. AfterCollect feedback

3. Customer Experience Management:Before, During and After the Experience

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October 7, 2010

More than 80 percent of CRM strategies will fail to articulate the brand values in the customer experience; the result will be a large decrease in benefits from CRM (0.8

probability).

Case Study:Company with 2,000,000 customersRevenue = $200,000,000 per year Average Revenue per Customer = $100 per year

At risk: 55%Decline in wallet

share

Defect: 45%

Poor experience22%

Positiveexperience

78%

Complain2%

Do notcomplain

98%

At risk: 34%Issue not resolved

Defect: 28%

Resolved: 38%440,000customers

431,200customers

2,464 customers$246,400

194,040 customers$19,404,000

2,992 customers$299,200

237,160 customers$23,716,000

8,800customers

3. Customer Experience (contd…):Economics of Poor Customer Experience

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October 7, 2010

Leadershipand

Partnership

Skillsand

Competencies

Knowledgeand

LearningOrganisation

Recognitionand

Incentives

Sense of Purpose Brand Values Management Style Supportive Team Leadership Motivation for Joint

Decision-Making

Interpersonal Professional Customer Facing Positive Reinforcement Customer Understanding Build Creativity Coaching Collaboration New Technology

Agile and AlignedInnovation and RenewalDirection and Trust

Fluid Teams New Roles Matrix Community Decision Making

Objectives Cascade Relevant Metrics Creative Compensation

4. Creating Organisational Collaboration: Five Elements

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October 7, 2010

WelcomingDeath

Change addressQuote to cash

Campaign to compensation Order managementFeedback collection

Service managementCross-sell or up-sell

Incentive compensation

Available to promise Engineer to order

BillingMortgaging

ProvisioningRetail pricingBuild-to-order

Grant approvalStock replenish

Trade promotions Claims management

Attributes

Generic-departmental

Greater integration complexityMore expensive

Slower to implementMore difficult political battlesHigher level of customisation

Increased competitive advantage

Generic cross-department Industry-specific

Field engineer scheduling Campaign management Complaint management

Market segmentation Proposal generationCase management

Sales forecastingAccount planning

Invoicing

Outside-InInside-out

5. Processes: Generic, Industry-Specific, Inside-Out and Outside-In

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October 7, 2010

5. Processes: Customer Process Re-engineering

1. Audit and map the touch points and processes that affect customers

2. Identify key processes from the customers' perspective

3. Quantify then prioritise processes by impact on CRM strategy goals

4. Measure key processes by their contribution to customer value

Identify Key Processes

5. Implement changes in back office and front office, where necessary.

6. Give each key process a cross-functional owner.

7. Examine how changes may affect suppliers and partners.

8. Set up a customer service-level agreement (SLA) for the key processes.

9. Segment the customer base, reassess key processes and redefine SLAs.

Re-engineer Processes

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October 7, 2010

Benefits: Cost Savings — Reducing Duplication Increased Revenue — Retention and Cross Selling Improved Service, Customer Experience and Security

Company

Consumer

Physician

Citizen

6. Information: Creating the Single View of the Customer

Social Information

Personal Information

Professional History

Medical History

Single View of the

Customer

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October 7, 2010

7. Technology: Sourcing CRM Application Types

Processes Integrated CRM and ERP processes. "Best practice."

Integrated CRM processes. "Best practice."

Re-express own processes. Workflow engine.

Limited process integration. "Best practice."

Re-express own processes at application level.

Streamlines business processes and ensures easy system integration

Data Model

Imposed data model covering CRM and ERP.

Imposed data model covering CRM.

Designed to fit established data model(s).

Some impose own data model. Others fit to established data model(s).

Builds on established data model(s).

Builds on established data model(s).

ValueProposition

Provide an integrated companywide suite from a single platform.

Most breadth of CRM functionality in a single suite.

Freedom to control own architecture and differentiate processes.

Best functionality for a department.

Freedom to control own architecture. Suites too expensive and do not fit. No other option.

Web-hosted solutions with access from anywhere, anytime

RepresentativeVendors

Intentia, Microsoft, Oracle, PeopleSoft, SAP.

E.piphanyOnyx Software, Pivotal, Siebel Systems.

AIT Group, Chordiant Software, Graham Technologies, Pegasystems.

Comergent Technologies, NCR, Selectica, Unica.

Software infrastructure vendors (BEA Systems, IBM, Microsoft, Oracle, Sun) and ESPs.

ESP = External Service Provider

SFDC, Siebel OnDemand, Saleslogix, Salesboom

Integrated ERP CRM

CRM Suite CRM Frameworks

Best of Breed

Build It Yourself

CRM On Demand

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October 7, 2010

Infrastructure Input

Operational and Process

CustomerStrategic

Corporate

Stakeholder Focus

Employees Efficiency

ManagementEffectiveness

ExecutivesFeedbackon Strategy

Shareholders

Bottom-LineResults

Level

8. CRM Performance Metrics Hierarchy

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October 7, 2010

Call Answering Times Response Times Staff QualificationsCustomer Data "Do Not Mail" Staff SicknessAccuracy Markers

Corporate

Increase shareholder value (external)

CustomerStrategic

Enhance customer value (external)

Operational

Effective strategy implementation (internal)

Infrastructure

Process optimisation (internal)

Market Share Profit Growth Cost RatiosRevenue Growth Margin Growth Customer Loyalty

Lifetime Value Acquisition Risk ProfileCustomer Profitability Development Staff SatisfactionCost to Serve Retention

Response Levels Complaints Cross-Sell RatioRFM Measures NPD Times Recommendation

LevelsConversion Ratios Staff Turnover Channel-Specific

Measures

Objective:

Objective:

Objective:

Objective:

Acronym KeyNPD = new product development RFM = recency, frequency, monetary

8. CRM Performance Metrics Hierarchy : Few Examples ...

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October 7, 2010

Recommendations Vision: Define CRM, find a leader, answer "why," set the CVP

Strategy: Develop the customer base as an asset, answer "how," set objectives, seek to align with broader strategies

Customer Experience: Design, then refine constantly based on feedback

Organisational Collaboration: Change organisational structures, skills, incentives and the company culture to deliver the customer experience

Processes: Re-engineer to meet customers' expectations, provide competitive differentiation and work from the outside inward

Information: Treat customer information as an asset and a "blood supply," focus on tighter integration between operational and analytical systems

Technology: Outline the company's CRM architecture first, consider CRM as one large integration exercise, assess the best style of CRM application for the company

Metrics: Set CRM metrics at multiple levels. Consider this the most difficult part; without performance management, a CRM strategy will fail

31

October 7, 2010

• Introduction

• Building Blocks of CRM

• Benefits of CRM

• CRM Market

• CRM Success Factors

Agenda

32

October 7, 2010

Benefits of CRM : 1+1=3!

Business Unitor Functional

Benefits

CRM

Call PatternAnalysis

Sales OrderConfiguration

CustomerProfitability

ShortenSales Cycles

CampaignMgt.

Channel &CampaignAnalysis

CustomerSegmentation &

Targeting

IntegrateSales

Channels

E-CommerceTransactions

IncreasedCustomer

Knowledge

Complete Viewof Customer

UniqueCRM Benefits

ChannelOptimizing

OpportunityManagement

Call CenterEfficiency

Reductionof “Talk Time”

E-BusinessEnablement

DemandChain Mgmt.

CustomerService

Marketing

Sales

Source: Gartner

33

October 7, 2010

Mutual

•Improved Product and Service offerings

•Improved quality of products and service

•Better quality at a reduced price

•Prompt service

•Superior Customer Lifecycle Support & Service

•Improved Customer Satisfaction

•Increased Sales Revenue

•Decreased Sales & Marketing Administrative Costs

•Increased Productivity

•Increased Win rate

•Increased Margins

•Improved Customer Satisfaction Ratings

•Increased Market Share

•Faster Decision Making

Benefits of CRM

B

e

n

e

f

i

t

s

$

Mutual

Mutual

34

October 7, 2010

• Introduction

• Building Blocks of CRM

• Benefits of CRM

• CRM Market

• CRM Success Factors

Agenda

35

October 7, 2010

CRM : Industry Relevance

The Industries that are benefited most from CRM are the ones that havehigh ability to gather & process customer information and generate value

Banking & Financial Services can benefit the most from CRM

VA

LU

E G

EN

ER

AT

ED

ABILITY TO GATHER & PROCESS CUSTOMER INFORMATION

LOW HIGH

Car Manufacturers

Banking & Financial ServicesRetail

White Goods Manufacturers

Direct Marketing Companies

Consumer Goods Manufacturers

Telecommunication

LOW

HIGH

Source: McKinsey & Co.

36

October 7, 2010

CRM Products AvailableD

egre

e o

f C

ust

om

izat

ion

Out-of-the-Box

Custom Build

Compose

Deployment Options

On Premise Hosted

-mySAP-Oracle-PeopleSoft-Clarify-E.epiphany -Siebel

- Siebel OnDemand- SFDC- SalesLogix

-J2EE-ASP.net-C#.net

-Chordiant

Source: Gartner

37

October 7, 2010

CRM Software Revenue by Function Areas

CRM Total Software Revenue by Functionality, 2005-2010

0.0

1,000.0

2,000.0

3,000.0

4,000.0

5,000.0

2004 2005 2006 2007 2008 2009 2010

Mill

ion

US

D

Sales Marketing Customer Service and Support

CRM Software Market share based on functionality, 2005

Sales39%

Marketing21%

Customer Service and

Support40%

• By 2010, ‘Marketing’ is expected to increase its market share from 21% to 26% (CAGR of 15.9%)

• The Market Share of ‘Customer Service’ is expected to drop from 40% to 32% (CAGR of 6.2%)

• ‘Sales’ is expected to grow at a CAGR of 13.1%

CRM Software Market share based on functionality,2010

Sales42%

Marketing26%

Customer Service and

Support32%

Source: Gartner

38

October 7, 2010

CRM Software Revenue by Geography

• North America is expected to maintain its position as biggest market for CRM Software with 56% market share for 2004-2010 (CAGR of 12%)

• Asia Pacific is going to be the fastest growing region increasing its market share from 5% to 7% (CAGR of 17.9%)

• The slowest growing region is Japan (CAGR of 4.2%)

CRM Software Market share based on region, 2010

Latin America2%

Europe31%

North America

56%

Middle East and Africa

1%

Asia/Pacific7% Japan

3%

CRM Software Market share based on region, 2005

Latin America2%

Europe34%

North America54%

Japan4%

Asia/Pacif ic5%Middle East and

Africa1%

Source: Gartner

39

October 7, 2010

Overall CRM Software Market Forecast 2004-2010

• Expected CAGR for 2005 - 2010 is 11.2%• The YoY growth rate is expected to be highest in 2006 at 14.1% • The YoY growth rate is expected to fall below 10% by 2010

CRM Software Revenue Forcast for 2005-2010 ($M)

5,012.85,698.0

6,500.17,244.8

7,986.08,830.3

9,691.6

0.0

2,000.0

4,000.0

6,000.0

8,000.0

10,000.0

12,000.0

2004 2005 2006 2007 2008 2009 2010

Source: Gartner

40

October 7, 2010

CRM Services - Market Segmentation

By ServicesBy Geography

Source: TCS Consolidated Market View 07 Source: TCS Consolidated Market View 07

Development & Integration

56%Consulting19%

IT Management11%

Software Support

14%Americas

44%

Europe26%

APAC11%

UK11%

Ibero5%

MEA2%

India1%

By Product SAP26%

Siebel17%

Others37%

Oracle (Including

PeopleSoft)6%

Salesforce.com5%

Amdoc5%

Microsoft1%

SAS3%

Source: Gartner, September 2006

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October 7, 2010

CRM Services - Market Size

Worldwide CRM Services Revenue

by Engagement Type, ($B)

Worldwide CRM Services Revenue

by Geographic Region, ($B)

Source: Yankee Group 2009

Worldwide CRM Services Market Size

20.5 21.824.0

26.429.0

31.634.4

-5.0

10.015.020.025.030.035.040.0

2004 2005 2006 2007 2008 2009 2010

Year

Mar

ket

Siz

e ($

B)

By Services CY11 CRM Market

Size (USD bn) %

Consulting 6.336 18%

Development and Integration 20.416 58%

IT Management 3.872 11%

Software Support 4.756 13%

TOTAL 35.2 100%

Geography

Telecom CRM Market

(CY10)

Telecom CRM Market

(CY11)

North America 1258.1 1447.7

APAC 511 570.5

EMEA 1179.6 1400.7

LATAM 189.6 211.7

Total

3138.4 3630.6

Source: Gartner 2009

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October 7, 2010

CRM Service Providers - Competitive Environment

Source: Gartner

43

October 7, 2010

• Introduction

• Building Blocks of CRM

• Benefits of CRM

• CRM Market

• CRM Success Factors

Agenda

44

October 7, 2010

Demystifying CRM

• Myth: CRM is just another Technology

Reality: It is a strategy composed of tactics, processes and people (employees, customers )

• Myth: Successful CRM initiatives are driven by ITReality: Successful CRM is driven by business in conjunction with IT

• Myth: Executives buy-in of CRM initiatives is a keyReality: Top Management, Customers, Employees, Partners buy-in is a key

• Myth: CRM is Call centerReality: CRM is about Marketing, Sales and Service across multiple channels

• Myth: Implementation of CRM is the goal

Reality: Implementation of CRM is a mile stone. Goal is to continuously work towards true customer-centric organization

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October 7, 2010

CRM Success factors

• Establish measurable business goals– Define the specific business benefits that are expected from the CRM project– Prioritize the objectives

• Align business and IT operations– Select your CRM technology based on the established measurable business goals

• Get executive support up front– Top executives, from the CEO down, must drive that message.

• Let business goals drive functionality– Just as a CRM project must be driven by business goals, so must every

configuration decision.

• Minimize customization by leveraging out-of-the-box functionality– Never over-customize as it may lead to budget overruns and missed deadlines– Understand the CRM application’s existing functionality before customizing

Source: Oracle: Siebel

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October 7, 2010

CRM Success factors (contd…)

• Use trained, experienced consultants– Select trained, certified and experienced consultants

• Actively involve end users in solution design– Incorporate the knowledge of the end users into the system design

• Invest in training to empower end users– Training should teach employees how to effectively execute the business

processes enabled by the CRM system.

• Use a phased rollout schedule– Phase your deployment schedule each based on the CRM objectives– Each successive phase leverages the work and experience from prior phases to

produce a “quick win”

• Measure, monitor, and track– Once a CRM system goes live, the organization must measure, monitor, and track

the system’s effectiveness, with an eye to continuously improving performance.

Source: Oracle: Siebel

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October 7, 2010

CRM Resources

Websiteswww.crmguru.com

www.destinationcrm.comwww.crmdaily.com

www.searchcrm.comwww.crm-forum.comwww.crmassist.com

www.crmsupersite.comwww.crmproject.com

www.crmxchange.com

Magazines & JournalsCIO Magazine (www.cio.com)Customer Relationship Management (www.crmmagazine.com)Information Week (www.informationweek.com)

BooksDyche, Jill. The CRM Handbook. Pearson Education 2004Keer, Anderson. Customer Relationship Management. TMHThe One to One Manager: An Executive’s Guide to Customer Relationship Management. New York: Random House, 1999

Web

Res

ou

rces

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October 7, 2010

Glossary of Terms

• QM: Quality Management• PM: Project Management• PRM: Partner Relationship Management• ROI: Return on Investment• ROR: Return of Relationship• CVP: Customer Value Proposition• TCO: Total Cost of Ownership• CAGR: Compounded Annual Growth Rate• ESP: External Service Provider• NPD: New Product Development

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October 7, 2010

Thank You