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Complete CRM Solutions Require DW

Published
  • July 01 1999, 1:00am EDT
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Every few years, there's a hot new breakthrough in the IT world. Just over a decade ago, relational databases were the topic of the day. Then came client/server architectures, and GUIs hit the scene at roughly the same time. Prepackaged ERP solutions came next. And, of course, more recent additions include Web-enablement and e-commerce.

We now need to add customer relationship management (CRM) solutions to the list. At this point, it is clear that these solutions will impact the IT world as have the other breakthroughs. Since we're in the early days of the CRM movement, it's still anyone's guess as to what the IT world will look like once this market matures. However, I feel fairly comfortable stating what it won't look like. It won't look like the ERP solutions market to which the CRM market is often compared. In the ERP world, prepackaged applications are generically considered the entire solution. In fact, for many, ERP=SAP. As much as Siebel (the current 800-pound gorilla in the prepackaged CRM applications market) would like you to believe CRM=Siebel, that just isn't going to happen.

Why not? Because a CRM solution is much more than just an application. It's really more of a business strategy ­ a philosophy regarding what's most important in the way you do business. The CRM philosophy states that what's most important is obtaining and retaining customers. In general, CRM solutions most directly affect the sales, marketing and customer service organizations; but as a business strategy it needs to permeate the whole enterprise and must address people, process and technology issues. It means everyone must focus on the customer and recognize that a loyal customer is a valuable and powerful asset.

Some might say that CRM is just the latest management fad in the corporate world. Even if they're right (I don't think they are), so what? It is currently the most effective way of competing in business. Years ago, the focus was on just-in- time manufacturing as a competitive advantage. Then, it was total quality management, where the quality of your product or service was the most important competitive differentiator. Now, the customer is king with CRM. If you don't adopt CRM strategies in some way, I doubt your organization will be around to see the next "fad."

The key to succeeding with a CRM strategy is to understand as much as possible about the customers. Those who think this means just knowing which sales people have called on a customer, which marketing brochures have been sent to them and the reasons why they called customer service are being short-sighted. Yes, clearly this is all important information; and, in most organizations, this information isn't very well integrated. Hence, prepackaged CRM solutions that help collect and integrate this information are an important component of a complete CRM strategy. But, we need to recognize that they are just a component of the solution, and not the whole solution unto themselves. There are vast quantities of important customer information being collected by other applications in our organizations. We have customer history files, demographic information and all types of transactional histories scattered throughout numerous systems and applications. We need to integrate this information into our picture of a customer as well.

For example, this means we need to integrate data from operational systems. (Can you see where I'm going with this?) These are the systems that produce products for our customers, take orders from our customers, ship products or help us deliver services to our customers and request payment from our customers ­ there are many of these customer "touchpoints" throughout our operational infrastructure. The information collected from these touchpoints is critical if we truly want to create a holistic view of our customers.

So, think of prepackaged CRM applications as just one of many whose data will benefit from being integrated with data from other sources. Optimally, a complete CRM solution (from a technology standpoint only ­ people and processes still need to be addressed) will integrate these prepackaged CRM applications with our traditional operational systems, e-commerce applications and even workflow technologies (which help speed the processing of customer requests and reduce processing errors, thereby helping to keep your customers happy).

Hopefully, by now I've made the point that it's critical to integrate customer information from many disparate applications. This is exactly what data warehouses excel at doing. By building a data warehouse infrastructure to serve as the information backbone for our CRM solution, we have a flexible, scalable way to integrate all relevant information about our customers. Once the warehouse is built, we can then work toward building an organization where all our operational applications, CRM applications and business intelligence applications are leveraging a consistent, unified view of our customers.

There was a period of time a few years ago when data warehousing was considered a solution by itself. In reality, data warehousing is an enabling architecture on which other solutions are built. We need to think of a warehouse as a battery. By itself, it's not that useful. But, when other things are attached to it, voilà! Impressive things can happen. If you want a truly integrated CRM solution, use the power of a data warehouse as your information backbone.

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