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Ubiquitous Organization: A New Paradigm for CRM

Ubiquitous Organization: A New Paradigm for CRM. Presented by: Rado Kotorov, Ph.D. M. F. Smith & Associated, Inc. 1201 Mt. Kemble Ave. Morristown, NJ 07960 Tel.: 973-425-4912 Fax: 973-425-0800 E-mail: rkotorov@mfsmith.com www.mfsmith.com. CRM - What is it?.

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Ubiquitous Organization: A New Paradigm for CRM

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  1. Ubiquitous Organization:A New Paradigm for CRM Presented by: Rado Kotorov, Ph.D. M. F. Smith & Associated, Inc. 1201 Mt. Kemble Ave. Morristown, NJ 07960 Tel.: 973-425-4912 Fax: 973-425-0800 E-mail: rkotorov@mfsmith.com www.mfsmith.com

  2. CRM - What is it? • The concept of customer relationship management is very old. As soon as markets emerged, the customers became the patrons of the vendors. • The goal of CRM has remained the same throughout the centuries: ATTRACT AND RETAIN CUSTOMERS! • 80/20 Rule: 20% OF THE CUSTOMERS CONTRIBUTE 80% OF THE REVENUES • The CRM Value Formula: RETENTION REPUTATIONATTRACTION • You already have significant CRM experience and knowledge in your field, so, why are we here?

  3. Cost to Snag a Single Sale • Amazon.com $103 • Bluefly.com $245 • Garden.com (gone) $71 • Pets.com (gone) $200 • Furniture.com (gone) $500 • Shoebuy.com $15 Source: Inc. Tech 2001, No. 1, E-Tailing by the Numbers

  4. CRM (IT) - How IT Changed CRM? • CRM (IT) Defined: CRM (IT) is the use of information and communication technology to expand the scope and scale of customer service. • Examples: 8 hours of banking >>> 24 hours of banking Checking Account >>> Add>>>> Brokerage • Cost has remained the same! How?

  5. What is the ROI of IT? The ROI of IT is realized by reductions in TRANSACTION COSTS. Transaction cost is the cost of conveying information to the customer, negotiating with the customer, making the contract, enforcing the contract. Example: Delivery Mechanism Transaction Costs In- Branch teller 1.20 ATM 0.40 Telephone 0.30 PC Banking 0.20 Internet Banking0.01

  6. The Impact of IT • The difference between In-branch teller and Internet banking is that by using Internet banking one can give the customer 120 times more transaction capabilities for the same price as before. • By offering multiple channels the customer benefits either from the savings or from the increased transaction capabilities.

  7. Some transactions produce saving only - Invoicing Invoice delivery On- line $1.65 Manual $5.00 Dispute resolution E-mail $10.00 Phone $20.00 Fund Transfer Electronic $1.90 Check $5.00 FedEx Shipping Charges $20,000 annually Source: PC World, April 20. Manage Your Invoices Over the Internet, by Jennifer deJong

  8. Three Questions That Concerned Executives Ponder • What are the emerging technologies? • How would the emerging technologies change customer behavior? • How would the emerging technologies change our social organizations?

  9. Emerging Technologies (ET) • Until 1980 the emerging technologies were product focused: • The assembly line (Ford) • Industrial robots (Fanuc) • The newly emerging technologies, however, are collaboration and customer focused: • KM • e-CRM and predictive-CRM

  10. How Would ET Change the Corporation • The emerging corporation is ubiquitous. • Many technologies have evolved to become ubiquitous: • The electric motor operates hidden in almost every appliance • The microchip obscurely controls and monitors how our appliances perform • Organizations follow the same evolutionary path.

  11. The Profound Change In CRM is: Service Everywhere, Everything, Every-way • Anywhere: Multiple channels - personal contact, web, phone, web phone, etc (Merita Bank, Finland). • beware of channel conflicts (Charles Schwab) • Anytime: • On Demand: Have a 360 view of the customer - needs, preferences, expectations. Manage information to anticipate and predict customer changes (AXA Inc.). • beware of privacy issues, don’t be obtrusiveness • beware of information overload and confusion (AT&T).

  12. It Is Already Happening: Stock Brokerage • A person can access a transaction processing engine/technology from a personal computer, PDA, phone, etc. • Transactions can be completed from anywhere, at any time, and instantaneously. • Service is offered and delivered continuously and unobtrusively on demand.

  13. It Is Already Happening: Kinko’s • Promotional materials can be uploaded on a server from anywhere and at anytime. • Promotional materials can be accessed, modified, printed and delivered simultaneously to multiple locations. • Service is offered and delivered continuously and unobtrusively on demand.

  14. The Efficiency Paradox • Corporations are designed for growth, and not for the customers. • Horizontal and vertical segmentation increase productivity, lower prices, but also make the labyrinth bigger. • Efficiency paradox: It takes less time produce a product than to service it (mass production), but this is not valid formula for products with layered information services.

  15. Evolution of CRM • Generation I CRM: 100 Focus on the customer - mostly contact data. • Customer recognition and low level service personalization. • Generation II CRM: 360 Degrees view of the customer -full descriptive profile. • Learn more about the customer and develop expectations of the customer’s future needs. • Generation III CRM: Ubiquitous organization. • Be the customer’s genie.

  16. Core CRM Concept: 100% Focus on the Customer

  17. Core CRM Concept: 360 Degree View of the Customer

  18. Core CRM Concept: Ubiquitous Organization

  19. Organizational Changes • Generation I and II do not require organizational changes: • Add information technology • Add analytics and predictive software • Generation III cannot be achieved without organizational and technological transformation.

  20. Processing Mechanism External Functional Overview Transaction Flow Customer Vendor Data Flow Access Mechanism Emergency Services

  21. CRM Organizational Design Benchmarks • The customer-end architecture is a mirror view of the CEO-end architecture. • A cross-functional process service layer is added, analogous to the functional layer underneath the CEO, with the purpose to: • Design self-service processes. • Broker in real-time services not handled by a self-service processes.

  22. CEO/President Functional Areas (Finance/Planning) Efficiency Layers CEO View Div 1 Div 2 Div 3 Div 4 Customers view is a mirror image of CEO view Cross Functional Service Provision Effectiveness Layers Customer View Self-Service Design Self-Service Real Time Internal Service Brokerage Customer

  23. Business Drivers • The more ubiquitous the organization, the more desirable its services become. • The more customers demand, the more diverse needs they express. • The more diverse demands, the more other companies seek alliances and revenue sharing with the ubiquitous organization.

  24. CEO/President Functional Areas (Finance/Planning) Alliance Partners Div 1&2 Internal Integration Div 3 Div 4 Shared Revenue Sources Revenue Sources Cross Functional Service Provision Customer

  25. Sources of Revenue Growth Shared Revenues Growth Revenue Growth

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