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Summary
Today’s markets are more competitive than ever. It continues to grow easier for customers to move to a competitor or a new market entrant, or simply go to the Web and trade online. It seems long overdue that companies wake up and change their operational focus from internal to the customer. However, recent research by Ventana Research showed that only 34 percent of companies can even produce a business-related customer scorecard. We believe that many companies are struggling because they have multiple siloed repositories of data about customers, a situation that makes it extremely hard to get that elusive 360-degree view. But we think help is at hand as vendors serving this market turn to master data management (MDM).

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By definition, a customer-centric organization focuses not on internal issues but on the customer. However, in reality most companies remain organized in business units. Each business unit has its own terms of reference, ways of working (business processes) and measures of success. The result is that managers and individuals focus on achieving their own targets and results, which makes it hard to keep overall business objectives in mind – let alone the customer.

The situation is further exacerbated because IT departments lost control of the overall systems architecture when business units began buying their own systems, and individuals began using laptops and stand-alone spreadsheets to process data.

The situation is particularly acute when it comes to customer data. Most midsize to large companies have multiple computer systems containing customer data. For example, a telecommunications company typically stores customer data in billing, accounting, customer relationship management (CRM), network control, trouble-ticketing and call-recording systems. In any one of these, the same customer may appear multiple times with slightly different names or spellings. Data across systems will show even greater variations and inconsistencies.

Companies largely have chosen two solutions to data consistency issues: metadata management and the enterprise data warehouse. Metadata management – not to be confused with master data management – tries to establish a single definition of any given item of data; for example, a customer name will always have the same definition and characteristics. The enterprise data warehouse, which depends on having metadata for every data element, is a repository where operational data can be stored for subsequent analysis across applications and across business units. But neither addresses the key issue of ensuring that data is up-to-date and consistent across all applications.

Assessment
Ventana Research believes that to become customer-centric, companies have to rethink their entire customer relationship strategy. They need to mature beyond metadata management and the enterprise data warehouse, stop believing that a single application such as CRM will solve the problem and build an enterprise information strategy that has the customer at its center. Such a strategy must involve processes that transcend business boundaries and align all individual actions to the corporate goals. It should be built on a systems and information architecture that ensures that all master data – about customers, products, reporting structures and the rest - is managed consistently throughout the company. To do that, we believe that companies need to evaluate products in the emerging fields of master data management and customer data integration (CDI) that support processes and technologies to ensure there is a single source of the truth about customers. And finally it has to include a hierarchy of performance metrics that align to the different levels of users within the organization.

Adopting this strategy and such applications is competitively necessary. But it alone will not achieve the ultimate goal unless companies also put in place a process that proactively sets goals, measures whether those goals are achieved, analyzes gaps in achievement and initiates actions to change the root causes of those gaps. This means that every customer interaction is handled within the context of all the customer’s previous interactions with the company and in accordance with the goals set for the customer segment in which they are included.