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The Internet has had fundamental impacts on the enterprise. Web-based
customer access, lower transaction costs, and new entrants have all
challenged the status quo and at the same time created new opportunities.
The next major challenge is to enhance the customer's experience, whether
he/she chooses to interact over the Web, over the telephone, via
fax/e-mail, or in person. IT managers are under enormous pressure to
introduce new applications and reduce operational costs in an ever-growing
and highly competitive global economy. They are faced with expanding their
multi-channel delivery systems while rolling out CRM systems for improved
customer satisfaction, customer retention, and new sources of revenue.
They have to deliver mainframe and telephony-like predictability and
reliability to their IP networks, while continuing to evolve the reach and
capacity of the networking infrastructures. Critical to this strategy is
the ability to leverage networking technology to build business-class
networks, for C2B (consumer-to-business) and B2B (business-to-business)
e-business applications and end users.
INTEGRATING BRICKS AND CLICKS -- A DAUNTING TASK
The integration of multi-channel front office and multi-product back
office systems, customer and financial databases, and networking and
software infrastructures into a reliable, scalable, high performance
e-business system is a daunting task. What key steps might some of the
enterprises take?
While some enterprises, such as many financial institutions and dot-com
companies, would say they have already embraced relationship or value
management, they may not be effective in practicing what they preach.
Customer loyalty may be low and full revenue potential may be unrealized.
In addition, traditional metrics (e.g., for agent productivity) may still
drive the institution. The first step in becoming proactive in a
customer-driven environment is to clearly establish CRM as your business
strategy, with the goal of maximizing the lifetime value of the customer
while optimizing the cost of servicing that individual.
The second major step is to establish a dynamic data warehouse that
allows you not only to bring together the wealth of information that you
already have on your customers, but also to capture in real-time every
move of every customer, from financial goals to channel usage and
preferences. Online analytics allow you to leverage this knowledge in
order to identify ways to deepen the relationship and serve the customer
better. A flexible data model is required that allows you to mine the
wealth of information that you have about your customers and to deliver it
to the various customer touch points for action, including up-selling and
cross-selling opportunities.
The third major step is the establishment of a front-end channel
management system, which not only addresses the Web and contact centers,
but remote office/branch environments as well. Being always available when
a customer needs you -- with consistency, quality, and timeliness of
information -- creates a seamless experience for your customers and builds
loyalty. This channel management front end provides customer
authentication, routing and handling of all information queries and
transactions based on value and priority, tracking of interactions
(directly or via legacy systems), close coordination of self service and
assisted channels, intuitive assistance as the customer moves from one
channel to the next, and multi-channel collaboration tools.
A highly flexible, open, standards-based e-business architecture allows
enterprises to understand, anticipate, and personalize all interactions
across multiple touch points, and automates and empowers both employees
and customers to ensure consistent experience and a single view of
customer life cycles.
MAXIMIZING INVESTMENT IN BRICKS
Even as Internet-based e-commerce is exploding, enterprises in a broad
range of industries are continuing to invest in retail outlets and
branches -- places that allow customers face-to-face interactions. For
example, in the retail banking sector, 50 to 70 percent of the IT
operating budget is still targeted at branch networks, though all the
growth is in electronic channels. As a result, one of the larger
challenges that you are faced with is to provide seamless service, whether
the customer walks into a retail outlet or communicates through some
electronic means. Effective retail outlet strategies have two major
objectives: expense reduction and improved revenue generation. Bandwidth,
real estate, and staff in the branch are big components of the expense,
while attracting new customers and expanding services are the catalysts
for new revenues.
To these ends, the three major components of a branch networking
strategy that you should consider are:
- Transforming the branch into an integral part of the institution's
customer-driven strategy. This extends the branch to be an entry point
into the multiple service delivery system, and delivers the maximum
benefits of CRM deployment.
- Unifying your branch platform to deliver a unified high performance
IP-optimized network infrastructure for omnimedia application
delivery. It must be scalable, secure, reliable, and provide
application differentiation for wired and wireless voice, data, and
video traffic. This will deliver the optimal price/performance over
the WAN and eliminate the branch as a bottleneck for new applications.
- Unifying your operational environment across data, telephony, and
video applications. This simplifies management and lowers Total Cost
of Ownership in hundreds or thousands of sites through protocol
consolidation onto IP, consolidation onto fewer networks (increasingly
leveraging the Internet), consolidation over fewer communications
devices (for voice, data, and video), and unified remote management.
IP NETWORKING FOR E-BUSINESS
Many enterprises have tuned the performance of their traditional channels
to high levels. However, current IP networks are not robust enough and
don't exhibit consistent enough behavior to meet the demands of e-business
applications (such as real-time one-on-one collaboration with customers).
Therefore, IT managers are asking what needs to be done to develop an IP
networking infrastructure which exhibits the reliability and performance
of their other channels. Start by taking an application, rather than
technology-centric, perspective. This ultimately includes defining SLAs
between your IT organization and your business units that own the
application or the customer. The SLA would specify performance guarantees
for consistent, secure, and reliable delivery of connectivity, latency,
and throughput requirements for e-business-critical applications and for
classes of end users and customers (e.g., gold, silver, bronze).
Increased reliability is a key requirement, not just at the
switch-level equipment, but also taking an end-to-end system-level view
for true fault-tolerant open IP networking. Best-effort IP networking
giving equal treatment to all applications won't hack it. Differentiated
treatment via IP quality of service is required, operated under a
closed-loop policy management to ensure application SLAs are met within
the business rules of the corporation. Reliability and traffic management
has to extend beyond the confines of the enterprise campus or remote
office site. Flexibility is a must when extending multiservice IP
networking across the public network with its variety of price/performance
attributes. Of course, internal enterprise initiatives must be taken to
evaluate the adequacies of operational procedures, security policies, and
SLA processes in the new environment. Finally, partnering with the right
vendors is critical to fully leverage technology for business advantage.
All these actions lead to defining an enterprise-wide, high performance
architecture that is an open IP-optimized e-business-grade networking
blueprint, addresses intra-site, inter-site and Internet environments,
supports all client, server, and media types, provides comprehensive
security and QoS, and operates under a consistent directory structure with
end-to-end network, policy, and service management.
MEASURING SUCCESS: RETURN ON RELATIONSHIP
The final step lies in integrating Return On Relationship (ROR) metrics
across all aspects of your business. The ROR model places the focus on the
lifetime of your customer. In other words, the potential dollar value of
repeat and referral business, both over time (throughout the customer's
shifts in age, spending patterns, and other demographic changes) and over
a broad range of products and services. In this business model, you gather
info about your customers, interaction by interaction, and use that
information to personalize how your customers are treated. For example,
you can use ROR to measure the margin from sales divided by interaction
cost, or net revenue plus a portion of the influenced revenue, or the
weighted sum of self-service calls to a service desk and field support
interactions. The value of ROR extends across your organization, improving
efficiency of your decision making process, and measuring the performance
of all customer-facing activities. ROR can be used to:
- Differentiate your service offering by defining different customer
segments and actions based on the results of the analytics. Business
rules could direct workflow and scripts to customize interfaces,
recommend products, or set product discounts.
- Respond to your customers appropriately and immediately, including
automatic invocation of escalation procedures.
- Analyze performance of your service representatives and automated
systems, reporting on cross-selling opportunities.
Moving your enterprise towards a customer-centric environment is a big
task but does not have to be daunting. Establish a clear set of
business-driven strategies, follow a systematic approach to ROR-enabling
your application and business-process environment, and make sure your
network is up to the task.
Tony Rybczynski is director of strategic marketing and technologies
for Nortel Networks' Enterprise Solutions unit. For more information,
visit the company's Web site at www.nortelnetworks.com.
E-mail questions or comments to tonyryb@nortelnetworks.com.
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