CRM – Why are we still talking about it?

By Jeffrey F Tintle, Sr, Senior Vice President, Baker Hill

For years, the acronym CRM has sent a shiver down the spine of many an executive. For them, instead of meaning ‘Customer Relationship Management’, CRM meant “unlimited Cash, excessive Resources and tons of Misery’! No doubt, many executives have their horror stories over failed CRM deployments. So, why are we still talking about it?

Custom versus configurable
Software providers did a great job selling ‘blue sky’ – in other words, ‘Tell us what you want and we will build it’. They played to large financial institutions that felt they needed to have a solution that matched unique, often antiquated or inefficient relationship management processes. This approach wasted a lot of time and money and resulted in failed deployments. Automating those processes was not practical and consequently, time to market was exponentially elongated, to never.

But software has matured since the 1990s. Traditionally, banks had two choices when it came to CRM: engage in significant customization of existing CRM solutions, retrofitting them to support banking processes, or manipulate internal processes to fit the business-to-business CRM model. The emergence of providers that understood the unique financial services niche resulted in configurable solutions that incorporated best practices into standard banking-specific offerings. The solutions were architecturally designed to aggregate data from internal and external systems into one database. More importantly, they considered total process workflow from all aspects of the client lifecycle. In addition, because they are configurable, they deployed quickly and saved lots of money.

Still using big iron?
CRM solutions of old required multiple in-house servers or ‘big iron’, as well as an exhaustive effort by internal IT, programming and project management staffs. Extensive planning and testing were also needed. Disaster recovery plans and sites had to be put into place, which equated to lots of time, money and delays.

Today, on-demand computing managed by application service providers delivers CRM solutions as a service via the web. The on-demand model shifts the burden of deployment to the vendor. The most notable benefit of on-demand is speed of deployment, removing IT’s need to spend time building the hardware and software infrastructure typically required for complex, server-based applications. A Midwest-based, super-regional bank recently deployed a complex loan origination solution in just 76 days. This speed to market allowed the bank to be very responsive to its customers. In the bank’s words: “The deployment was a ‘no-brainer’ – absolutely worth it from an ROI perspective.”

On-demand solutions are secure, available nearly 24/7, and can be accessed anywhere, anytime. These features are a real boon for today’s mobile workforce, from the front office to operations.

Leverage data across the lifecycle — past, present and future
Access to data and leveraging data are two different things. CRM systems of old required a lot of jockeying to access data, interpret it and then actually utilize it effectively. It was a painful process at best.

Like software, data capabilities have evolved since the 1990s. You now can access more reliable business and consumer data that has been independently corroborated rather than self-reported. It is commonplace for data to be tightly integrated into mission-critical software solutions used across the bank to more completely support relationship management and portfolio decisions. Lastly, providers who truly understand how financial institutions use data to support banking processes have made it easy to leverage business analytics from start to finish.

Today, configurable CRM solutions are delivering valuable business analytics to a relationship manager’s desktop ‘on demand’. A customer’s credit history and current behavior patterns are helping to predict future risks and opportunities at every stage of the customer lifecycle – targeting, acquiring, managing and maximizing relationships.

A US$180 billion bank recently deployed a portfolio monitoring solution that leverages its internal and external data, such as credit scores, to serve as an early warning system of portfolio risk. The bank also is using the external data to intelligently develop a calling program based on industry, client interests, location and creditworthiness.

Still not done
All the software, technology and data changes in the world won’t make your CRM project successful if you overlook this last step. Poor internal processes or cultural resistance to change will minimize your ROI. Even the best technology won’t overcome either. A US$6.7 billion west coast bank is doing it right by investing more than US$1 million to perform bank-wide, activity-based costing to fine tune its internal processes and full-time equivalents (FTE) utilization. Pricey? Maybe. Worth it? Absolutely.

While CRM will never be plug and play, the probability of success has increased dramatically. That success is impacted because these solutions now are configurable, are available on demand, are supported by thoughtful process change and include excellent data analytics. To learn more, visit www.usfst.com and read the additional online editorial.