Customer Relationship Management

I am getting pulled into quite a few opportunities in the telecom vertical dealing with Incentive Compensation. This post is a collection of observations and thoughts about the drivers of incentive compensation in this vertical.

Large Sales Force- This is a common feature in many companies in this vertical. The customers are widespread and millions in number and this in turn leads to large sales teams and a higher sales hierarchy. There are also partners, dealers, distributors, retailers in the sales channel. To control the behavior of a large sales force, incentive compensation becomes an important weapon using which a manager can control and direct the performance of a large span. This is why many telecom companies seem to be going for the best in breed incentive compensation systems.

Customer Types- in the Telecom vertical could be both retail and corporate and different incentive compensation policies may be required to motivate the sales force to service them in an ideal fashion.

The corporate customers might require dedicated sales/service personnel for their account. They may work with service level agreements. Performance and costs could be the key areas of concern for them. In such a scenario, it is not illogical to find that the commissions for salesreps servicing corporate accounts could be based on the Usage value of the corporate accounts.

The salesreps servicing the retail customers should be more concerned about his or her productivity, selling the right mix of profitable products and helping his team meet their targets. The commissions here could be based on sales value achieved vis a vis the targets along with product specific targets where required.

System Performance- A low value product in most cases and a high customer base usually leads to a high volume to transactions to be processed by the incentive compensation system. It is not unusual to find a system requirement which says that it should be able to process a million transactions in a month. Telecom companies and consulting professionals should take this important requirement into consideration when selecting their product and designing the solution.

System Integration- Typically you don’t find incentive compensation products to be from the same product family as the CRM and Billing products. There are inevitable needs for medium to complex integration requirements. An understanding of this inevitability should be known upfront even while estimating the effort involved in the project else this could lead to pitfalls later in the implementation stage.

Comments invited.

Posted by Anand Bharadwaj at 6:29 AM | Permalink | Comments (0) | TrackBacks (0)

Recently, I have been involved in few client engagements where they want to retire legacy customer systems and replace them with new products and technologies. In all such experiences I noticed that retiring a legacy application is not as simple as it may sound. Below are some of my observations when I started digging into it.

Why legacy applications become legacy? Some may try to answer this question by saying that an application is legacy if it has gone through multiple cycles of enhancements, numerous bug fixes carried out, heavily customized time to time to meet business requirements, developed number of integration points supporting multiple internal and external processes, IT department is well aware of its idiosyncrasies and the ways to work around them etc. 

Isn’t it hard to think of retiring an application with such a historical background? Well…It is…!!! But there comes a time when it becomes harder to bear the high maintenance and customizations costs of such legacy systems. You cannot decide to maintain or retire a legacy application without conducting a cost-benefit analysis and looking at different factors viz. maintenance cost, integration cost and enhancements cost.

Do you easily get people skilled on outdated software to maintain your legacy applications? The most probable answer to this question may be “No”. Even if you find one, you may be paying lot more bucks than skilled people available in newer technologies. You may find more such instances where there might be a scope of reducing the cost. Another example could be the “application outage” or in other words “downtime”. This outage or downtime may be costing you certain amount. Now think about using all this extra money you are spending to use for deploying a new application. The cost of deploying a new application is high but you may not be paying less for maintaining your legacy application.  A thorough cost-benefit analysis is must before you can reach to conclusion. Recently, I have come across many such clients where they either want to consolidate many systems storing redundant information or they just want to get away from their legacy applications because of some of the reasons I mentioned above.

Do you also want to modernize your target application? Being visionary and modernizing your target application is another factor to be considered in cost-benefit analysis. SOA is one such capability favoring modernization as it supports the reuse of code across multiple distribution channels. Talking in the context of banking, there can be multiple channels like ATM, Internet Banking, teller in braches etc. that you can use to interact. SOA can work as a middle man and can help organizations maintain legacy applications while providing that extra bit of flexibility as you may not need to build individual applications to serve these distinct distribution channels.

So, can you make a binary decision of retiring legacy applications? Certainly not…!!! There is a gamut of questions you may need to answer which spread across categories from maintenance to integration to modernization…!!!

Posted by Sandeep Gandhi at 2:41 AM | Permalink | Comments (11) | TrackBacks (0)

Software as a Service (SaaS) exploded into the market during the early 2000, however only non -core application have sufficient level of traction using the SaaS model. During the nascent phase of the SAAS buzz cycle, many CIO’s jumped into the band wagon hoping to reduce the Total Cost of Ownership (TCO) by going for a subscriber model or license fee (based on volumes) based model for utilizing non-core application E.g. Marketing life cycle management, Partner Accreditation System, Human resource and performance management, CRM solutions etc. However with the advent of Sarbanes Oxley and the need for transparency of data updates (organizational data hosted within organization and by SAAS providers) along with rampant case of Security breach of critical data during data management (storage, transmission and hosting from the organization to the SAAS provider) many organization has planned to manage such processes internally or have plans of pulling back SAAS implementation in-house.

However in the case of Small and Medium business, there has been sufficient level of traction especially within the Hi-Tech, Pharmacy, Retail and Manufacturing industry. The major drivers for going toward a SAAS model is
1) Focus on core competency and core system.
2) Outsource IT operation and hosting discrete applications to third party SAAS provider.
3) Manage the customer life cycle management and employee performance management externally etc.

Now let us look at a quick overview of the major players within the SaaS model are
1)      CRM – Salesforce.com and Siebel on Demand
2)      HR applications – Performance management using Workday
3)      Partner management solution for Hi-Tech industry - JobPartners
4)      Hosted application for patient management in the Health industry.
5)      Customer interaction hub – Rightnow

Various Opportunity spaces have been identified a few of this is listed below.
1)      Research content – RSS feed or Webservices feed similar to credit history feed – Banks, small time investors and portfolio managers, brokering firms may require such data. This is a huge opportunity space.
2)      XBRL based reporting – with the economic downturn, trust based financial decision making requires reporting of all financial facts based on extensible Business Reporting Language (XBRL). Can a SaaS provider obtain the required data from a vendor and publish the data in this format?
3)      Can a certification and capability management vendor offer package certification as SaaS?
4)      Investment banking space and Customer centric operations irrespective of industry or domain?
5)      Human resource performance management and performance management of sales force would require targets and performance measure to be managed by third party (transparency)?

Market research firms such as Forrester Research have come up with Maturity model to address client requirements in terms of addressing a road map view for implementing SaaS or in various stage of implementing SaaS. Forrester’s SaaS Maturity Model was published in the August 2008 report “Forrester's SaaS Maturity Model”. Forrester Analyst Stefan Reid, author of the report, also discussed the model in his personal blog (http://www.stefan-ried.de/2008/09/24/forresters-saas-maturity-model/).  A quick overview of the SaaS maturity model is depicted below (http://blogs.msdn.com/architectsrule/archive/2008/08/18/saas-maturity-model-according-to-forrester.aspx). Forrester classifies the maturity of SaaS solutions on six levels. We define each level according to its answer to the question of who provides what to whom (see Figure 1).

Level 0: Outsourcing is not SaaS.
 Level 1: Manual ASP business models target midsize companies.
Level 2: Industrial ASPs cut the operating costs of packaged applications to a minimum.
Level 3: Single-app SaaS is an alternative to traditional packaged applications.
Level 4: Business-domain SaaS provides all the applications for an entire business domain.
Level 5: Dynamic Business Apps-as-a-service is the visionary target.
 
Source: http://www.forrester.com/Research/Document/0,7211,46817,00.html
Many players within the SaaS implementation space can now utilize the SAAS Maturity model to 
a) Evaluate which stage they need to adopt for implementation a SaaS model?
b) What state they are within the SaaS implementation model? 
As an organization evaluating SaaS for your business processes, what would be your determinants to make this choice?

Posted by Jairaj Asok Kumar at 3:32 AM | Permalink | Comments (2) | TrackBacks (0)

I was browsing our internal Blog community and came across some interesting points penned down by Khanchana on the relevance of CRM investments in the current economic scenario. Here are some interesting excerpts to take away from her blog.

Notes from Khanchana Nagaraj – Senior Consultant with the Infosys CRM Practice on CRM investments in the current economic scenario.

I have been pondering about the increased need for organizations to invest in CRM now amidst the financial crisis as the customers are keeping a tight stringed purse where every penny needs to be judiciously spent. This situation creates a pronounced need to have convincing campaigns, innovative offers/ promotions, new incentive models for sales force and partners with impeccable customer service.

Focus may need to move away from attracting new customers to retaining and graduating the existing customer base in the value/sales chain through cross-sell and up-sell mechanisms. The importance of motivating Sales and Resellers (Partners) in both B2B and B2C scenarios is critical during this phase.

What are the CRM Focus areas during this crisis period?

Your primary objective is to convince the customer of receiving value for his every dollar. This can be accomplished through well sketched marketing campaigns. But there is a challenge. The internal Marketing budgets themselves coming under the axe, the key is to do judicious and focused marketing efforts. Hence the best place to start is the Install Base of existing customers. Identify the Customers who have significant potential / tendency to purchase based on Up sell/ Cross –Sell tele-campaign.

Pronounce the pain-point and highlight how your offering (product/services) would address his need/pain point of the hour. Ex: One gets to observe that even FMCGs are resorting to justifying RoI of their short-lived products ranging from cosmetics to perishables!!! Recent ads to woo the buyers about the longevity of the soaps / bulk purchase offers to clear stocks and cut storage and logistics costs are just the beginning of survival mechanism we are observing in the market. One word of caution is to watch out for brand dilution as you may be running a risk of exposing your erst-while project margins by deep discounts you are able to provide now. This, once the market booms, may cause serious repercussions to sales. So a knee-jerk reaction must be avoided and a much thought –out, far-looking strategy must be laid out.

B2B marketers have a different challenge as the revenue stream can be strengthened by investing in relationships with partners/re-sellers. The partner management components of a CRM Package would be key in this juncture. A quarterly or a half-yearly incentive plans to motivate increased selling efforts by resellers would do wonders in the time of recession. Rewarding him more for the greater challenges in market place would help him go the extra mile to win the customer/new deal that you are vying for.

Incentive Compensation can be put to best use now to come up with attractive incentive plans for your sales folks. Analysis of plans that resulted in maximum sales performance and impact can be done from reports and decisions made to roll-out new plans.

Customer Service Modules can help you gauge the customers who were the happiest and the most piqued. Address both of them earlier with newer focused campaigns and later with promotions/free offer to not lose as you would be spending many times more to gain a new customer than to retain existing one.

Online web store presence can be best leveraged as maintaining offshore presence would become more and more expensive with skyrocketing realty prices and labor and space related overheads, transportation, logistics and storage costs.

Have new mechanisms to incentivize and motivate customers to buy online. It helps customers save on their fuel bills by getting the goods with a click. LEAN should be the key word now as demand is reduced and storage costs higher. Newer methods need to be invented to tackle pressures on revenue stream.

Establish new vendor relationships to deliver efficiently and effectively online /off-the-web and trade management and partner management modules can help you achieve this purpose.

Posted by Haresh Parmar at 5:50 AM | Permalink | Comments (5) | TrackBacks (0)