Business Operations and Business Management
In Part 1 (DM Review, November 2000) of this series, we described the customer life cycle concept and presented a generic model from which to start defining your organization's customer life cycle. The Corporate Information Factory provides an architecture suitable for customer relationship management (CRM) initiatives. The three major functions it addresses, as shown in Figure 1, are business operations, business management and business intelligence. This column explains how the business operations and business management components of the Corporate Infor-mation Factory support the customer life cycle. The third part of this series will map the business intelligence components to the customer life cycle.
Figure 1: Corporate Information Factory
Business operations consists of the operational systems that are used to run the company on a day-to-day basis. In addition to the traditional operational systems (sometimes called legacy systems), modern companies contend with enterprise resource planning (ERP) applications, external data and clickstream data, which is the data collected about Internet activity.
Traditionally, these operational systems are developed to address specific business processes. The data structures supporting these systems are often transaction oriented and contain only the customer information that is needed to support these transactions. For example, the billing systems process data at a sales transaction level, and the customer information may be limited to that needed to correctly invoice the customer and to record the payment. Within the Corporate Information Factory, data from these systems is a rich source of data for the operational data store (ODS) and data warehouse providing consolidated customer information. These operational systems also play a significant role in CRM and in support of the customer life cycle. Figure 2 maps some of the operational systems and their roles in the customer life cycle.
Figure 2: Business Operations in the Customer Life Cycle
The primary role of business operations is to register the sale of a product or service (point-of-sale systems) and to retain customers and expand customer relationships by ensuring that orders are properly filled, that customers are properly invoiced and by handling customers' requirements for customization in the products or services. Other operational systems that support the customer life cycle include:
- Financial systems (manage advertising budgets)
- Customer satisfaction systems (collect customer surveys)
- Fulfillment systems (supply promotional material)
- Inventory system (may track product samples)
The operational data store is a key component of the CRM technology environment. Within CRM, the major emphasis is on the customer subject area, since one of the critical success factors for CRM is the ability to have a complete, consistent view of each customer. The customer ODS provides business management capabilities to the organization. It is the vehicle by which analysis performed in the warehouse and data marts is made "actionable" and distributed for use by the customer contact personnel. Figure 3 illustrates the role of business management in the customer life cycle.
Figure 3: Business Management
A customer touch is any interaction between the customer and the organization or someone representing the enterprise. All of the customer touches take place in the customer touch zone, and the operational data store is instrumental in enabling the organization to maintain current, integrated information about the customer. Having this store of information and having it accessible by all of the organization's representatives is at the heart of being able to demonstrate to the customer that the organization listens and learns from what the customer says and does and is positioned to use the gained knowledge to provide superior customer service.
Before the culmination of a sale, the ODS supports campaign management activities. Customers may be selected for a marketing campaign based on information in the data warehouse and data marts. (A further explanation will be provided in Part 3 of this series.) Once selected, the ODS helps an enterprise keep track of each of the contacts made with the customers and the results of those contacts. This capability helps the organization learn about the effectiveness of its campaign so that it can initiate appropriate improvements.
Data is captured in the ODS at the customer moment as well. The customer moment is the point at which a prospect decides to: acquire a product or service from your organization, go to a competitor or not make an acquisition. If the customer is acquiring a product or service from your organization, the details of this acquisition are captured at this point. Migrating that information to the ODS ensures that anyone dealing with the customer is aware of the decision to acquire the product.
Campaign management activities continue after the sale as well. Once the customer has decided to acquire one of our products or services, we need to exert efforts to retain and expand the relationships we have with the customer. Instead of campaigns aimed at the initial acquisition, our campaigns can now shift to nurturing the customer relationship to ensure customer loyalty, and to cross- selling and up-selling opportunities to improve the profitability of the relationship. Another important function of the ODS after the sale is to provide a reliable and streamlined way of maintaining customer information (e.g., single point of entry for an address change). The transaction-processing capabilities of the ODS (transactional interface) support this capability. Representatives of the enterprise – or the customer himself – can be provided access to the ODS for the purpose of maintaining selected customer information. Updates to the ODS can then be electronically transmitted to the operational systems as needed.
Throughout the customer life cycle, the ODS provides current information for measuring performance. Companies establish key performance indicators (KPIs) for sales and marketing activities, and the ODS enables them to track results in a timely manner.
There are three major sets of systems in the Corporate Information Factory, and all support the customer life cycle in different ways. In this column, we covered two of these sets – business operations and business management. Business operations includes the operational systems needed to budget for our marketing activities, to process the actual product and service sales, to fulfill customer orders and to track inventory levels. The operational data store and its transactional interfaces perform business management activities. The ODS provides an integrated, consolidated view of the customer that can be applied for campaign management, customer service, customer relationship expansion and performance measurement. Business intelligence also supports the customer life cycle, and that is the subject of Part 3 of this series which will appear in next month's column.
This column is an excerpt from the authors' upcoming book entitled Building the Customer-Centric Enterprise – Data Warehousing Techniques for Supporting Customer Relationship Management, published by John Wiley & Sons, 2001.
Register or login for access to this item and much more
All Information Management content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access