On the Scene: Mapping CRM's Growth Path

The financial services industry is one of the first movers when it comes to CRM implementations. Opinions of CRM may change, however, depending on where a company is in its CRM maturation process. One analyst offers maturing companies some optimism. "CRM continues to evolve. It is reinvigorating more so than ever," said Kimberly Harris-Ferrante, a research vice president at Gartner, in a session at Gartner's Financial Services Technology Summit 2005 in New York. Titled "Relationship Optimization: The New Era of CRM in Financial Services," Harris-Ferrante outlined the stages of CRM maturity: Stage 1: CRM technology is viewed as a magic bullet; companies take a one-size-fits-all approach and solutions are sales force focused. Stage 2: Projects are primarily line of business and single channel. Project failures are due to lack of business vision and recognition that CRM is a business strategy. Solutions are mostly horizontal and retail in nature but are broadened to support service and marketing. Stage 3: Fewer project failures happen, but projects continue to be led by IT. There is improved clarity around intermediary requirements; solutions add vertical functions and address B2B2C models; and there is an increased awareness of data requirements. Stage 4: Companies, especially banks, see improved results and maturity in CRM understanding. Solutions continue to verticalize and add business process management (BPM) capabilities. Stage 5: Despite improved results, negativity remains around CRM, especially among B2B firms. There is a heightened focus on customer information management and security and a slowdown in the solutions market. Harris-Ferrante suggests the next stage, Stage 6, is in relationship optimization, which is not new, but an extension of previous CRM strategies. At this point, companies are focusing on streamlining end-to-end processes and optimizing customer and distributor relationships through the use of various tools and techniques. In this stage, CRM solutions mature and better match segment needs. But most companies aren't there yet, lingering at a Stage 3, 4, or 5. "As we focus on relationship optimization [in Stage 6], the new era of CRM takes what we learned from strategy and technology and puts a new spin on it," Harris-Ferrante said. Relationship optimization blends CRM with business intelligence, BPM, and straight-through processing to support seamless and efficient sales, service, and marketing transactions, which when combined expand CRM beyond technology deployment to include a heightened focus on process and data. The four key elements of relationship optimization are strategy and management, technologies, data, and culture. According to Gartner, the most customer-centric financial services firms are evolving toward relationship optimization, business process management, and intelligent analysis. Firms not there yet tend to be stuck in early CRM development stages. Financial services providers looking to promote relationships need to ensure that their relationship optimization strategy and internal culture match their corporate objectives and brand value. They must assess financial service needs, product gaps, and attitudes of their target market and use this knowledge to create new products and to more effectively market and service customers. Using BPM tools will allow them to automate, manage, and support intelligent processes. An integrated channel platform can help support cross-channel interaction, transactions, collaboration, and intelligent processing. Companies should focus on aligning compensation and incentives for all sales and services channels, as well as partners. Finally, they need to expand their thinking to organization analytics and multidimensional impact analysis. When it comes to the challenges of moving from one generation to the next, the biggest barriers are data quality and political conflicts, Harris-Ferrante said. Especially with organizations that have gone through many mergers and acquisitions, she suggested, "you have to get together and say 'We're one company instead of internal divisions.' It's an internal corporate battle more than anything else."