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Tales from an MDM Roadtrip Canadian Tire Financial Services

Tales from an MDM Roadtrip Canadian Tire Financial Services . Ed Unrau, Information Management ed.unrau@ctfs.com Canadian Tire Financial Services. Network of 5 Distinct, Yet Interrelated Businesses….

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Tales from an MDM Roadtrip Canadian Tire Financial Services

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  1. Tales from an MDM RoadtripCanadian Tire Financial Services Ed Unrau, Information Management ed.unrau@ctfs.com Canadian Tire Financial Services

  2. Network of 5 Distinct, Yet Interrelated Businesses… Canadian Tire offers a range of products and services that meet life’s everyday needs for people of all ages CTR Petroleum Financial Services PartSource Mark’s Ultimate goal of Customer Centric and Customer Data Integration is to enable better customer experiences across all businesses

  3. Canadian Tire Interrelated Businesses Canadian Tire Retail • 477 Store Locations – Canada’s most shopped retailer; offering automotive parts, service and accessories, sports and leisure, and garden and home products • Over 80% of Canadians have shopped at Canadian Tire in the last year PartSource • 71 Locations – Automotive parts specialty chain Petroleum • 266 Locations – Canada’s largest independent gasoline retailer • Mark’s Work Warehouse • 358 Store Locations – Men’s and Women’s specialty clothing retailer Canadian Tire Bank • Approx $4 billion (CDN) in managed receivables • Approx 2 million active credit cards with variety features – discount on retail purchases, gas, cash rebates, vacation, low rate etc • Line of credit, loans, high interest savings, mortgages • Insurances – credit protection, extended warranty, life, accident, auto club

  4. Customer Centric at Financial Services • Canadian Tire Financial Services was ready for Customer Centricity. • Growth slowed. • Customer satisfaction was not being met. • Losing customers across stages of the life cycle. • Out of alignment with our customers. • Multiple systems. • Mixed messages. • Credit Risk was ready for Customer Centricity. • A new credit card is opened without considering all information available. • Two collection calls to same person on same day for different accounts. • One collection call uses a light approach while the other account is being sent to an agency. • Unable to monitor total unsecured credit for a single customer . • Customer request for a credit limit increase does not consider all information available. • Inconsistent decisions; e.g. Increase interest rate on one card, credit limit increase on another. • Models of risk, revenue and propensity to buy built on information from one product. More Products = More Platforms = More Problems

  5. CTFS Statement of Purpose • We are committed to building lifetime relationships with Canadian Tire customers. • From a customers perspective there is only one Canadian Tire, so we will work as partners with Canadian Tire Retail, Canadian Tire Petroleum, PartSource, Mark’s Work Warehouse and the Dealers to deliver what our shared customers value most. Within this partnership, we will become a world-class provider of customer-focused services. • We will differ from the competition by providing a higher standard of service, quality, value and brand inter-relatedness. We will grow byincreasing the number of services we offer and the number of customers using our services.

  6. Customer Centric Benefits Benefits calculations were estimated after conducting brainstorming sessions with key business units. “What would you do differently if you had a more complete view of the customer?” “What was considered in that view that you don’t have today?” Benefits • Applied to many areas • In many categories • Start small, grow over time • Require assumptions to estimate Sample benefits calculation Out of 1000 decisions • 10% have additional info = 100 (eg have another card) • 5% additional info results in different decision or action = 5 • 60% better result = 3 • .3% improvement overall

  7. Product Evaluation • Selected InfoSphere MDM Server* software from IBM to form the foundation of our customer hub • DWL wastop choice from previous evaluations • Proven data model for Financial Services business • Service Oriented Architecture • Market leader • IBM had retained individuals with product knowledge InfoSphere MDM Server* selected top Customer Data Integration software by Gartner and Forester. * Previously named WebSphere Customer Center

  8. The Business Case Breakeven with initial implementation and create scalable platform for the future • Spend $2 to save $3 in bad debt expense over 4 years Create infrastructure that will enable customer centricity to become competitive advantage • Improve our customer risk and marketing strategies • Lower operating costs, reduce compliance risk, lower development costs • Provide improved standard of customer service and quality • Create more value for customers • Increase the number of customers who highly value our services • Higher utilization, higher satisfaction, more customers with multiple products

  9. Customer Centric Information Flow • Primary components are an Operational Customer View and Analytical View Daily batch updates Integration layer retrieves detailed info real time as required Better decisions knowing worst risk score, total credit limit and balance etc • Consuming SOR’s use their own customer or account ID to inquire Better decisions knowing other accounts are delinquent, total balance or credit limit > threshold amounts Party ID identifies customer to product relationship • Integration layer plays a critical role - Get additional information to provide complete view of customer to requesting system

  10. Timeline • ON BUDGET … but a little late • 10 months elapsed time to complete and approve business case • Exploring optimal requirements/design/price combinations was part of developing the business case • Original target was 2007 completion • No contingency to reflect degree of unknown • Misunderstandings and revisiting design on hand offs • Resource and data flow conflicts with higher priority projects • Optimized our use of resources by holding cost steady, adjusting scope and date

  11. Customer Centric Roadtrip

  12. Success Factors • One Business owner • Credit Risk with a clear focus on delivering business benefits within budget • Detailed benefits calculations helped to manage scope • Project Management • Phased approach trying to keep it simple and focused • Iterative development of requirements and design with IT partners • Overall accountability for optimizing trade offs between scope, cost, quality and timing • Get into the detail to help negotiate and find the 80/20 • Help IT say NO to the business by being able to say NO on behalf of the business • Key Decisions • Registry style with an integration layer • Use of Party ID limited to establishing the cross reference between products • Consuming SOR’s reference customer hub using their own customer or account ID • Batch instead of real time update • Customer Risk Index first, more complex interfaces later • IBM used as system integrator • Product knowledge • Stake in our success • Working in partnership

  13. Other factors Other factors to consider when evaluating relevance of our approach to other situations • Organizational Support • People at all levels wanted this to work • Believed there will be more phases, which made it easier to hold back requirements, keep it simple • Modeling and Analytics • Analytically driven approach in place • Good internal modeling capability • Strategy and Execution • Analytically driven approach and tools in place • Ability to track results • Support for customer interaction • Desktop UI or CRM interface to guide customer interaction • Organizational Design • Minimum change required • Created the Manager Customer Centric role • Executive Support • High strategic priority, lower tactical priority • Data Quality • Relatively clean • Who owns the customer? • Didn’t have to address this • Data definitions • Limited structured knowledge • Extensive subject matter experience • Data Stewardship and Data Governance • Basic data stewardship process was in place • Data quality fairly good • Problem Complexity • Relatively low • Level of Resources • Relatively low • Shelley, Cindy, Arnold, Mark, Alex and John

  14. Approach to Data Quality • Focus on solving problems that are impacting benefits • Manage the customer / product cross reference in the Customer Hub • Fix data issues at source and let them work there way through the system • Track type of error and volumes to justify fixes to limit or eliminate at source • Ensure good monitoring and control of data interfaces • Process to gather feedback from Customer Service Reps and Collectors • Be aware of under or over investing • What is the impact of bad data on business benefits?

  15. Customer Centric Phase 1 • We achieved our objectives! • High potential to exceed the business case. Approach and platform are scalable. • “CTFS in partnership with IBM has built a sound system with a good technical design.” • confirmed with two external sources • Plans for 2009 • Improve customer treatment at more touch points • Implement supporting infrastructure enhancements that are low cost and quick payback • Build the more detailed roadmap for the future • “Extending the reach of customer centricity significantly beyond credit risk requires detailed planning, enhancements to technical infrastructure, new roles and responsibilities, addressing data quality”

  16. Reinventing the CTFS Business Model The Customer Centric/Value Business Model In order to ... … CTFS must be able to ... Manage Quality Customer Data Deepen Customer Insight Predict Customer Behavior Profile and Segment Customers Improve Customer Treatment Engage High Potential Customers Manage and Optimize Strategies Measure, Report, Learn Improve Organizational Performance Expand Skills Adjust Org Design

  17. Organizational Approach CTFS Executive Customer Value Management Council AVP CVM Steering Committee Business Council Channels Product Marketing ProductMgt Customer Insight & Analytics Credit Risk Customer Marketing Analytics Modeling & Analytics Collections Operational Analytics Financial Analytics Customer Service Compliance & Governance Customer Level Marketing Introduce more and better customer information into more decisions through analytics CTFS organization design will remain product centric. Customer Centric oversight will be addressed at the executive committee level. Customer Analytics to provide the customer insights and coordinate activities across product, channel, function 17

  18. Customer Segmentation Customer Segmentation provides a single lens focused on customer value relevant across all business relationships • 40 performance metrics used to differentiate customers based on value • eg % and type of credit card spend at CTire retail stores helps differentiate total contribution • The objective is to consider impact on value in more decisions. • CTFS perspective to start with focus is on service capabilities that target high value opportunities. • Learn and grow with intent to look beyond card related products to the customer’s whole experience.

  19. Customer Steering Committee Customer steering committee role is to manage the balance between customer and product, or customer and functional objectives, short term vs long If we balance customer and product well Maximize Portfolio Value • Add customer information to product or functional decisions • Steering committee required when scope and complexity of issues exceed business owners authority or view to solve; eg tradeoffs between products • Tradeoffs between product sold vs activity vs handle time vs customer value vs risk • Good escalation – Describe the conflict and possible solutions, just neither authorized to make that decision • Conflict revolves around objectives or accountabilities, not style, personality • By organizing by product • Focused marketing • Clear, measurable accountability • In depth expertise • `By understanding customer • Customer feels known and valued • Right offer, right channel, right time • Better response Higher margins Customer Product • Overemphasize product at expense of customer • Products not fully developed • Confused accountability and organization • Overemphasize product at expense of customer • Conflict for leads • Confuse, even alienate customers • Missed opportunities If we don’t balance well Lower Growth and Margins

  20. Customer Centricity Prioritizing the Roadmap We are only as strong as the weakest link • Organizational effectivenessis critical success factor • Crossing divisional boundaries adds benefit and complexity at every level

  21. Customer Centricity Prioritizing the Roadmap Only as strong as the weakest link

  22. Customer Centric Summary • Objective – Create a more valuable, defendable, expandable customer portfolio • Approach – Improve capability to focus on the customer, differentiate customer treatment • and create exceptional customer experiences • 2008 • Delivered quantifiable benefits on a scalable infrastructure • 2009 • Continuous improvement in Credit Risk • Deliver quick wins for Customer Service, Marketing, Operations, Compliance • Increase influence of Customer Segmentation Value • Develop detailed roadmap • Strengthen overall infrastructure Expand Customer Centricity to truly exploit the potential of the 5 distinct yet interrelated businesses

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