It's the Process, Man - Customer Relationship Management

Just because you’ve bought into the idea of integrating business processes into your data systems, or because you’re investigating best practices for use in your business, doesn’t mean that business processes just fall into place without any effort. They are not devoid of context. They are not universally applicable. You can incorporate the wrong business processes into your enterprise. You can add best practices for your industry that turn out to be the worst possible practices for your particular company and proceed to damage the company. Processes that make sense for one department might be affecting processes and damaging another department and possibly the company as a whole.

I had a mid-sized client with an accounting process they had developed that was saving them an estimated $40, 000 per year. After a few years of self-satisfied tummy patting, they decided to incorporate e-commerce into their work. But because of the way the process had been created and because of the processes that had been incorporated into their e-commerce site, there was an “interdepartmental” glitch that caused the customers to enter some of their data twice into the system to satisfy the site. The company tried to technically correct it, but it didn’t work without eliminating the accounting process—the one saving them $40, 000 per year.

What would you have done here?(Play Jeopardy theme while answers are written down.)

You’re right. That’s what they did. They eliminated the process. Despite its monetary efficiency, they understood that it had a negative impact on the customers and that was worth a lot more than $40, 000 per year to correct.

Processes may be nonspecific to customers, but they aren’t agnostic. They are an integrated part of an enterprise that deals with customers, and therefore there will be some sort of impact. So identifying the efficiencies of a business process isn’t necessarily the only way to think about it. Effectiveness and impact on the customer should be integral parts of your process design.

Customer-Centric Business Processes—Don’t Be Agnostic
While not every business process is going to be customer-centric, all of them have to at least concern themselves with the impact they are going to have on the customer.

Here is what you should worry about when it concerns a modern business process for those of you who ordinarily couldn’t care less but are now getting interested because your business or your job depends on having optimized practices that are focused around these incredibly demanding social customers of yours.

Managing Business Processes
Business process management (BPM) is now a mainstream methodology for designing which processes are going to be applied where inside your enterprise. It’s an important part of strategic planning. Even with an economic downturn, redesign of the processes is an important way to improve the effectiveness of your CRM deployment without spending a lot of money. Gartner Group CRM vice president Scott Nelson, in a report released in May 2009, identified five cheap ways to improve your CRM program. Business process redesign was one of them. According to Nelson:

Process is often an overlooked part of CRM, and in many cases all that CRM technologies have done is taken out old, broken processes and made them run more efficiently. Now is an excellent time to study customer processes with a view to redesigning them and creating a win/ win situation for both the company—which gets greater efficiency— and the customer—who gets a “partner” that interacts with them in a meaningful way.

This is congruent with not just a recession, but also with changes in how the customers interact with you;resulting changes in your organizational structure and business model;and changes in your priorities in how you handle your customers. After all, if you are designing a CRM initiative or have one in place, and you have to change the way you do business, your processes will have to change.

This reflects the fundamental shift toward cross-functional processes (across multiple applications) that come with a business ecosystem dependent on a collaborative value chain. It is no longer useful to have packaged software silos in conflict with each other.

Luckily, from an architectural standpoint, web services provide a common language to bridge the operational gaps and the external interactions with the customers. They can provide seamless and standardized interactions between the process/business layers and the application layers and between multiple business layers. They make the task of evolving appropriate processes a lot easier than it used to be, whether internal or customer-facing. Changes to processes when made customer-friendly can have powerful benefits for a customer. Envision a mortgage company, a long time ago and far, far away, that saw its volume of work with loan origination increase by many times, because of the number of homes being refinanced to take advantage of the extraordinary low interest available. A seven-day decisionmaking cycle on loans was absolutely unacceptable, because of brutal competition for these home owners. By a thorough examination of the processes that were involved and a look at what benefited the customer for each step of the process, the mortgage company was able to reduce the cycle time to 48 hours, which in turn reduced the transaction cost from $250 to $60 per loan. This saved the company $50 million over a year, and the customer was thrilled with a 48-hour decision on the refinancing or financing of their house.

How do you identify these customer-friendly processes and manage them within your overall CRM strategy? I thought you’d never ask.

Trying to manage customer-based CRM processes is not the easiest task. Since it is not strictly an internal effort, all kinds of problems exist. Just dealing with efficiency improvements or deficiencies doesn’t cut it in a CRM environment. When done well, customer-directed BPM links all of a process’s internal and external participants-clients, employees, partners, suppliers, and vendors-through rules, work- flow, processes, and hopefully, best practices. The payoffs are a smooth flow between all processes across departments and through applications. Manual and automated tasks work well together—at best, seamlessly. With the right framework, you can continually model new processes and test them easily, without disrupting workflow or the existing processes. You can measure how effectively the processes are working, using the analytics that are present in the best of the BPM frameworks. Customer-directed BPM can also:

  • Standardize enterprise best process practices across all organizations
  • Establish a powerful workflow that can move work to the appropriate next participant in the business process
  • Gather, format, and present information applicable to each task activity in multiple formats
  • Produce notices, correspondence, and communications to parties related to each process
  • Manage service standard activity deadlines and constraints and automatically carry out the prescribed corrective actions when they have been exceeded
  • Reduce process inefficiencies automatically by using business rules to eliminate valueless tasks, unique process by process
  • Log, monitor, and report processing progress and logistics
  • Automate and manage customer-specific process variations

Close Your Eyes and Visualize . . . Process Maps
It isn’t just me who believes this. Michael Webb is a highly respected business process expert who, despite my general dislike of Six Sigma, has created a version of that efficiency-obsessed defect reduction methodology that is genuinely focused around improving customer effectiveness—meaning providing value to the customer by a wellfunctioning process at work inside a company.

In the course of his discussion on sales process in his book Sals and Marketing the Six Sigma Way, he looks at how mapping customer value at every integral place in your company is a mission-critical step in designing processes that will work for both the company and the customer. In fact, for a detailed look at how to go about mapping sales processes, I would highly recommend this book. Go get it.

When I look at a process map, I’m looking at owners and approvals— meaning which individual or group owns a particular process (e.g., a lead to cash owned by the VP of sales)—but not just that. I’m also examining what the objective is for the success of that process, how it is going to be measured, and what kind of interface is going to be used to execute that process. The most important component of the deconstruction of that process is what contribution it makes to the customer experience and value proposition. Or, by the same token, how does it detract from that customer experience and value proposition? For example, if I know that transparency has to be a part of the outlook for my company because of the newly significant demands of the social customer, I have to figure out the optimal processes to support transparency. When I decide how the company will be transparent, what assets we have to provide, and who will provide those assets to whom, then I have to build processes that work for that. Perhaps it’s a process that provides documents to customers in a more simplified way than in the past or a process that allows customers to reach to higher levels of customer service more directly than in the past.

Customer value must always be assessed when considering the processes that I’m designing or redesigning for or eliminating from my business.

What kind of methodology should be used to make these assessments, to design these processes? Dick Lee, managing principal and founder of High-Yield Methods, is an expert in business process. He’s developed a business process design methodology that takes BP design out of the realm of the super-uber-megaguru’s hands and puts it in the hands of the people who are going to use it—and turns the development of those processes into a collaborative effort. It’s called visual workflow, and here’s Dick to discuss it.

Dick Lee on Process Methodology
Let’s consider one of the most common Social CRM process problems— sending unfiltered web leads straight to sales. What happens as a result? Either sales resources wasted following up garbage inquiries, or marketing resources wasted because the sales force funnels all these inquiries into porcelain bowls, or both.

Going back to CRM 1.0, astonishingly few companies ever figured out the importance of pre-qualifying all advertising and direct mail inquiries before sending them to sales. CRM software was supposed to remedy the situation, but we all know where that went. But along with the move to the Web came a blind supposition that web inquiries are somehow inherently qualified. Hey, we just took our baggage with us when we went to the Web. Why? Because we staunchly resist fixing process problems if we catch even a whiff of potential organizational change. And as you’ll see in a moment, “the fix” here requires far more than cosmetic process change.

However, the cost of not addressing sales lead management process defects far outweighs the cost of leaving the “as-is” as is—which you’ll see explicated by Visual Workflow, a process analysis and design methodology that High-Yield Methods designed specifically for front and back office environments, as opposed to manufacturing.

Here’s the VW drill and the outcomes it produces.
For starters, senior management must mandate that the lead management problem be addressed—and addressed cooperatively by all functions and individual roles involved. Because fixing the problem will require some uncomfortable if not outright painful concessions and responsibility shifting, without this imprimatur, the necessary process changes will almost never occur.

Next, management has to assemble a cross-functional team representing all participants, including customer-facing staff as well as managers. To knit the team together (and avoid bloodshed), management also has to engage a skilled, objective facilitator to guide the team through the assessment and redesign steps. Typically, companies select an outsider because finding internally the requisite level of objectivity and facilitation skills proves difficult.

Now management steps back, and the facilitator leads the team through a thorough assessment of “as-is” workflow and information flow. Tracking the movement of customer information everywhere in the company, from the time the company first becomes aware of a customer until the customer is dead and gone, provides excellent structure for this exercise.

What happens to this tracking info, which facilitators or assistants often capture in magic marker on easel pads? A little magic. Either you or the outsourcer converts these marker maps into “pictograph” maps that rely on representational clip art images to tell the story—and do they ever tell a story. The pictographs present what’s happening now in an undeniable way so the whole team understands what’s going on, rather than just one or two team members who can read symbologyladen process maps that are further obfuscated by terminology from unknown languages.

Everyone gets it, as you’ll see by reviewing this sample “as-is” pictograph, which accurately portrays common lead management practices.

It’s not a question of what’s going wrong. It’s a question of whether anything is going right. The download of inquiries into CRM looks
As-visual workflow process
Figure: As-is Visual Workflow process
okay, but from there the whole thing goes to hell in a handbasket. Fortunately, when most companies come face to face with a mess like this, they understand they have to change. Especially the crossfunctional team members.

On to the hard part. The team has to figure out how to make lead management work—which will require changing roles and responsibilities, requiring new accountabilities, and support from new and/or reconfigured technology, usually with an adult dose of data integration. Sometimes these sessions hurt. But everyone has already “pledged allegiance” to putting the customer’s needs first, then the company’s needs, but not introducing functional aspirations—a.k.a. turf issues. As a result, the peer pressure to “plan by the rules” can be immense.

The sample “to-be” pictograph shows how much should change. Much of the lead management work is now outsourced—important because effective lead management requires time and skill sets rarely found internally. Every inquiry is telequalified, and only ready-to-buy prospects wind up assigned to field sales. And although not shown here for brevity, future potential prospects go into a nurturing queue for periodic contact by phone and/or e-mail until they are ready. Once the now-qualified leads show up on sales reps’ task lists for follow-up, sales has to follow up in a set period or risk having the lead reassigned. Sales quickly develops the habit of reporting outcomes, because reporting compliance is now part of theircomp plan (another key process outcome). And if reps fall off the wagon, the lead management company is right there with friendly “encouragement.” Actually, many sales reps develop very positive, collaborative relationships with lead management account staff, much to the benefit of the lead program.

From here, it’s on to selling management on change and implementing change, technically outside the process realm. However, companies with high-consequence work performed by individuals-banks, for example-may want to drill down to reengineer and map individual work processes that will support redesigned workflow, even going down to the keystroke level. This, by the way, is an excellent way to determine application software requirements.


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