Don’t box me in

At a time when progressively stringent regulations and an increasingly demanding customer base are creating a fiercely competitive industry, it has never been more imperative that financial institutions differentiate themselves. As FST discovered when we spoke with Onyx Software’s Janice Anderson, flexible and customized customer relationship management (CRM) software is one route to achieving that all important competitive edge.

FST. What do you see as the key ways your financial services customers can achieve that business edge?
JA. We believe that there are four factors essential to creating competitive advantage, that our clients can achieve with Onyx. The first is in developing a complete customer profile that supports multiple business units and products. For example, when a customer with a saving account enquires about a home loan, a full-service financial services company would want their customer-facing employee, whether in the branch or contact center, to recognize that there is an opportunity to cross-sell a home insurance policy to the customer. Having a complete customer profile also enables you to quickly identify key attributes about a customer, such as someone who has multiple accounts with a bank and is a customer you don’t want to lose.

Secondly is having the ability to customize your solution to address your unique business needs. Many of our customers, especially those competing with larger organizations, tell us that they win and keep customers because they leverage their in-depth knowledge about the client to offer more personalized service. They don’t want an out-of-the-box solution that looks and acts like the same customer management system that their competitor down the street uses. Rather, they want a flexible solution that they can tailor to their products, services and business operations.

Thirdly, it is essential to have the ability to adapt to customer and market changes. Most traditional enterprise CRM offerings require you to write lots of expensive, time-consuming custom software as part of their deployment. This, however, often creates two problems. Firstly, some customers find that by the time they had completed the development cycle and were ready to roll out the software, something in their business had changed (a new competitor had entered the market, they had been involved in a merger, they decided to add or drop a new product line, etc.). They may find themselves stuck using the old model and needing to go through another long, expensive development cycle to add the changes they needed.

The second issue is that these customized environments can be very difficult to upgrade when the vendor comes out with a new release of their software. Onyx is addressing these problems through the use of visual business process management software. Customers can use our process management software to create new business processes without writing any code. When they need to make changes to the processes, they can make changes using our visual tools and deploy the modified process quickly and easily. We are also going to launch a new version of Onyx Customer Management later this year that will make it much easier for customers to carry their customizations forward when they upgrade.

The last factor is the ability to integrate in real time with other complex systems. I’m sure your readers will be nodding their heads when I say we often find as many as 15 systems in our client’s back offices that have data that they need to integrate with Onyx. Some of these systems go back a decade or more. Again, we find that the mega-vendors often want you to rip-and-replace your entire IT infrastructure with their software stack. Our clients tell us that they view their legacy systems as mission-critical and require a CRM solution that will protect their investment by plugging into their existing infrastructure.

FST. Have you seen an increase in investment in CRM solutions? If so, what do you think is driving this?
JA. We are definitely seeing a resurgence of interest in CRM. Our clients want to grow their revenue from new and current customers. They therefore have a strong need to share customer data across multiple business units, which enables them to deliver a wide variety of services to customers, and to enhance their ability to cross-sell or up-sell. For example, one of our customers, a major international insurance company, had many distinct lines of insurance products with no common customer database. They found themselves calling on the same accounts in an uncoordinated manner, which was not only costly and inefficient, but also created a great deal of customer dissatisfaction. By implementing a solution that reflected their strategy to market more than one product to the right customers they were able to improve revenues while, at the same time, driving down their costs.

Another driver is the need to enforce consistency across the enterprise. When a customer is talking with a bank, they expect similar treatment, regardless of who they are interacting with. The combination of customer information, dynamic scripting, and built-in process management helps to ensure this consistent customer treatment.

Finally, as the old saying goes, you can’t manage what you can’t measure. Our customers are investing in reporting and analytics so they can analyze who their clients are and what’s happening in their markets.

FST. The CRM software industry seems to be diverging into two camps – into large vendors, which have been consolidating heavily over the past few years, and smaller companies, in particular, newer on-demand vendors. How do you differentiate yourself in this market?
JA. Onyx’s sweet spot is the mid-to-large services company looking for a comprehensive solution that can be customized to support the organization’s unique attributes, and which can be quickly integrated with existing applications.

The large vendors, SAP in particular, tend to take the approach that they want to run everything throughout the organization. This is not a viable approach for many because it’s risky, expensive and doesn’t leverage current investments. SAP also specializes in manufacturing industries, which have business processes that are completely different than those used by financial services organizations.

Oracle, on the other hand, has accumulated five separate CRM applications and their Fusion roadmap is still unclear. Customers on older versions of Siebel and Peoplesoft CRM, for instance, are concerned about the future of their applications.

We’re watching the on-demand market very closely, but so far we see the on-demand vendors primarily selling to smaller companies that don’t need or want strong integration or customization capabilities.

FST. Can you explain how your technologies enhance growth in the financial services sector?
JA. Since the latter part of 2004, companies have begun to shift their emphasis from cost cutting to growing revenue and market share. One outcome of this trend is a renewed interest in using CRM to enhance sales. When implemented correctly, CRM can help companies to identify and target their best sales opportunities, manage the sales process to close those opportunities, and deliver the goods and services that customers want and are willing to pay for.

Because CRM touches so many parts of business, it can have a major impact on both costs and revenue. Improving the marketing and sales process can bring in new revenue, while enhancing contact center productivity can drive down the cost of servicing the customer. One of our banking customers used Onyx to cut the time required to issue a new credit card by more than 99 percent, from 2-3 weeks to 20-30 minutes. Another major insurance customer reported a 20 percent increase in productivity in their contact center after implementing Onyx, as it enabled them to better communicate to their customers, and enhanced their ability to sell additional products and services at lower cost.

FST. How are your systems managed, assessed, reviewed and updated?
JA. We are continually working on new updates and capabilities. We tend to roll out at least one major and one minor release every year, although that varies from year to year, depending on the scope of any particular release cycle. For example, we’re planning a major release of Onyx Customer Management in Q3 of this year, which will be approximately 18 months since the last major release.

FST. How important is it to establish long-term partnerships with your clients?
JA. It’s absolutely essential. Onyx has a reputation of delivering high levels of customer satisfaction, which we regard as vital to keep our customers making progress as we come out with new features and capabilities. Recently, for example, we were ranked in a survey conducted by CRMguru.com as the CRM vendor that demonstrated the highest level of concern that our customers be successful. We judge our success based on our customers’ success so this is an important part of our business.

FST. How important are advances in technology to improving business growth?
JA. Technology has become, at a very fundamental level, the foundation for continued business and economic growth. I can’t visualize how any modern economy can growth without relying on advances in technology, and I think it’s even more important in the financial services industry, which historically has had a very high level of investment, relative to revenue.

The internet, of course, has become a major factor that any financial services organization must take into account when considering its future plans. The internet makes outsourcing more viable for many organizations, by making it easier to focus on their core competency, and to shed non-core functions (such as software development, human resources management, marketing, etc). The emergence of software-as-a-service is one example of this. The ubiquitous availability of broadband and wireless internet services will also have a profound impact on how services-oriented companies deliver services to their customers.

Finally, the technology used to create applications is changing. I noticed that you recently published an interview with the CTO of Iona, talking about the importance of service-oriented architecture or SOA. We agree that SOA makes a lot of sense, and several years ago we completely rearchitected our product to make it SOA-compliant. As a result, we are now reaping the benefits of that investment, since our clients can now easily and quickly integrate Onyx with their other systems, even older legacy ones, that support the SOA integration protocols.