InformationWeek
Defining The Business Value Of Technology
May 17, 1999
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Application integration is key to the customer initiatives of Safeco Life Insurance, a Redmond, Wash., insurance and annuities company that wants to create a single source for customer care. The company increased its IT budget in 1998 by 18.7% over 1997 and is projecting another 12.6% increase this year.
Safeco uses Clarify Inc.'s FrontOffice suite to track customer interactions and handle service calls. Safeco also linked 10 back-end systems holding data and customer records for individual products. "To provide the best service to customers, we have to know what products they have with us," says Chuck Stone, Safeco's VP of IS. "Having all these systems linked gives representatives the best chance of helping that customer with a single call." To integrate the applications, the company used IBM's MQSeries middleware and MQSeries Integrator software. Safeco has tied Clarify to its settlement and annuities applications and plans to integrate its individual life-policy system in June.
For some companies, customer-relationship management packages lay the groundwork for the rest of their customer-centric initiatives. CyberCash's Vantive Enterprise software--which includes support, marketing, sales, quality, and self-service features--replaces a hodgepodge of customer interaction systems and is better equipped to track customer relationships, says Deborah Joseph, project manager. "It removes the walls in the business. Now the data's no longer walking around in someone's head," she says.
No One Solution
Still, truly customer-oriented businesses can't rely on a single type of software--a combination of products is needed. Cymer Inc. sells excimer lasers to 20 of the top 25 integrated circuit makers. And when a Cymer laser is down, it can cost a chip plant $500,000 a day.
To keep its lasers operational, says CIO Roger Green, Cymer is moving its knowledge base and ex-pert systems closest to those who work directly with the customer, the field service engineers. Cymer integrated Inference Knowledge Base software--which uses CASE-based reasoning--with Siebel Systems call-center software's mobile capability, to build an expert system that engineers can access remotely. The technicians replicate the business knowledge base on their notebook PCs--including customer history and the latest research--before they walk into a clean room. No telephones are allowed in a clean room, but engineers can use their PCs to repair the laser, querying the expert system as they would an expert on the phone.
The most forward-thinking companies are pushing their capabilities beyond those included in basic customer-relationship technology. Today's IT environments make it fairly easy to measure certain aspects of customer service: How long did the customer wait on hold before a service rep answered? How long did it take to fulfill an order? More difficult to pin down is the quality: How did the service rep treat the customer? Was placing the order easy enough for the customer?
Centra Health Inc., a health-care organization in Lynchburg, Va., is finding ways to measure customer happiness. The company is boosting its data warehouse and implementing analytical tools from SAS Institute Inc. to analyze business operations, from finances to competitors' performance to patient care. "We need to know more about customer service," says John Wimmer, financial systems project leader. "We know we cost-effectively took care of these people, but did we positively impact their lives?"
One way to determine that will be to survey patients when they come through the facilities. Then Centra will analyze that data--not an easy task. "Quality itself is subjective. You're going to find trends, not perfect answers," says Wimmer. Even so, the company will know far more about its customers than its competitors will know about theirs.
The hardest part of customer centricity for many businesses is often not technical, it's cultural. The executives interviewed by InformationWeek Research strongly support cultural change, with 61% making customer retention a critical business metric, 60% facilitating more interaction between IT, sales, and marketing, 53% empowering front-line representatives to make more customer decisions, and 46% organizing business around customers, not products.
Cultural transformations often go hand-in-hand with technology; front-office packages and decision support software can help with the shift. At People's Bank and Trust, a product-sales approach didn't let the company pick the best products for customers or determine which customers were profitable. "We needed to focus on client relationship selling, as opposed to product sales," says Connors. So the company trained everyone in relationship selling, changed its incentive structure to reward fostering relationships, and now calls all its customers "clients" to emphasize their importance.
Transitions
But the bank realized that culture can't be divorced from technology. "To augment [the cultural changes], we realized that we need to bring better information to the desktop," Connors says. The company began implementing several front-office systems from Fiserv, including a branch-delivery system that acts as an interface for salespeople and tellers, and a contact-management system that stores customer-relationship profiles.
The system holds recent transactions so that People's Bank and Trust knows what its relationship with the client is, and has analysis capabilities that draw on the bank's customer profitability data warehouse to help recommend specific products for a customer. An IBM DB2 database acts as a central repository for information. The company is looking at tying its customer profitability data warehouse to its business profitability data warehouse, so it can judge the impact that relationship selling has on the business.
"Customer service is about building trust between a company and its customers," says Cymer CIO Green. Trust can't be written into software, but technology can help companies keep their commitments.And analysts agree that companies should start developing those trusting relationships now. "If companies don't invest in customer-relationship management, they're losing that competitive edge," says Hurwitz analyst Bonadio. "If you buy it early, you get an advantage early."
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