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Summary
It’s indisputable that customers are the number-one asset for most companies. Without them there would be no sales, and so eventually no business.  The idea behind customer relationship management (CRM) was to manage customer relationships in a personalized manner, across the enterprise and throughout the lifetime of the customer. In truth, though, the manner in which many businesses operate, as a collection of separate business units with the associated politics, often gets in the way. For CRM to work, companies must bring together a number of disparate processes, systems and types of data, regardless of where they reside, to deliver an integrated, unified view of the customer that drives a consistent approach to interactions that is proactive as well as reactive. They key is a strong business intelligence (BI) focus on customer information. Once this exists, customer information, wherever it resides, will be available for analysis to provide insights and guide interactions across the enterprise.

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There are four major stumbling blocks to realizing the CRM dream: Multiple lines of business are involved, but processes rarely flow seamlessly across departmental boundaries. Departments need to share customer information, an act that can be both technically difficult and politically sensitive. Departments often have their own systems, and sometimes multiple versions of systems, housing customer data that should be common across departments and systems. Finally, many companies rely on their Web site to provide customers with information or to support customer self-service, but the site often is managed by yet another department, adding to the difficulty of keeping information up-to-date and consistent across all the various departmental systems. 

In separate research programs, Ventana Research found several underlying reasons why these issues exist. We found, for example, that around 80 percent of companies have both enterprise resource planning (ERP) and CRM systems that contain core customer data. More than 40 percent of companies have three or more instances of their ERP system (6 percent have more than 100 instances!). Despite the fact that most companies see customer data as the most important type of data, this dispersion makes it unlikely that they have consistent customer data across all systems.

One of the most common tactical ways of overcoming this issue is to implement a centralized data warehouse, which our research shows is the case in nearly two-thirds (65 percent) of companies. But we estimate that only 24 percent of companies have mature data integration processes and systems in place, with the result that only three in 10 (31 percent of respondents) said they believe they have clean customer data. We conclude that with the warehouse being populated from so many disparate and unsynchronized systems, there is a good chance that the old saying “garbage in, garbage out” will apply and the output reports and analysis will not be reliable.

Another popular approach is to treat customer data as master data; 21 percent of companies regard customer data as their top priority master data to manage. The idea of master data is that one source (or system) is specified as the master set, and all other systems must either use the same set or be synchronized with the master set. As a result, companies would have a single set of customer data that would always be up-to-date and trustworthy. Practically, however, only 14 percent completely trust the quality of their key master data. And we found that only 4 percent of companies have successfully completed any master data management (MDM) project, let alone one focused on customer data. One-third do have an MDM project in progress. It remains to be seen how successful they will be, but with new vendors entering this market with promising offerings, MDM tools increasingly will be available to help organizations accomplish what they previously addressed with costly custom-built applications and cumbersome, insecure spreadsheets.

As usual, technology alone is not the answer. To be sure, technology issues such as incompatible tools, multiple and unsynchronized metadata stores and an inability to audit the lineage of data can be a barrier to achieving reliable customer data. But equally, companies must address process issues, and they need to pay more attention to data stewardship and governance. We found that more than half (58 percent) of companies leave data stewardship to their IT department, and less than one-third (31 percent) involve their business units. This partly explains the low number (only 36 percent) of companies that publish their governance polices – after all, if only IT deals with it, why bother? Until the fundamentals of enterprise data governance are in place, even the best technology is unlikely to produce a “single source of the truth” for customer data.

There is in the contact center another significant issue: unstructured data. One-fourth of companies have experienced a 40 percent increase in the amount of unstructured data they have to manage and analyze, and nowhere is this more true than in the contact center. Centers have never been able to make full use of their primary source of data – recorded calls – simply because they are not structured in a form that information systems can interpret. To say this has hampered customer relationships is more than an understatement: These calls contain the reasons why customers are in touch, details about their concerns, how they were treated and even how satisfied they were as indicated by their choice of words and the pitch and tone of their voice. New technologies now available go one step further by analyzing these calls in a way that can predict future customer behaviors, which opens up the possibility of proactively managing the relationship. In practice, however, many companies struggle simply to extract data from all the structured sources they have in the center, with only 34 percent able to derive analytics from multiple data sources.

Assessment
In looking toward the future of customer relationship management, Ventana Research sees a need for convergence of customer-focused MDM, data integration, data quality and analytics – a need, in other words, for the creation of BI-based customer information management. Better use of technology must be coupled with companies paying more attention to data governance and the processes that impact the management of customer data. And more companies need to apply root cause analysis that takes into account all sources of data, structured and unstructured. Once in place, this capability will provide insight into the real reasons why customers are calling, allowing organizations to position themselves to improve their processes and truly manage customer relationships going forward.