CRM Business Transformation Process:

In most companies, the business focus, organization structures and related business metrics are the biggest inhibitors of CRM initiatives. All areas of the organization will have to change, in order to truly support and foster CRM initiatives.

The CRM Business Transformation Map below shows the various aspects of that change.

There are five inter-related areas. These include:

• Business Focus
• Organisation structure
• Business Metrics
• Marketing Focus
• Technology

Business Focus: Product	Sales	Channel	Marketing	Service	Customer
Organization structure: Product Management	Place Management	Promotion Management	Channel Management	Contact management	Customer Management
Business Metrics: Product performance	Place performance	Program Performance	Customer Revenues	Customer Patterns & Profitability	Customer Lifetime value & Loyalty
Marketing Focus: Mass Advertising	Sales Promotion	Marketing Campaigns	Integrated Marketing  Communication	Segmentation Specific Marketing	Customer Relationship Management
Technology: Transaction Processing	Data Maintenance	Data Access	Data Warehouse	Data Marts	Customer Touch point Systems

Five Core Areas of Business Transformation

The Chart depicts typical stages of transformation within established organizations. The stages of transformation proceed from left to right i.e from product to customer. it is important to note that movement from one stage to another does not equate to abandoning the previous stage. Rather, it is a matter of an organization shifting its emphasis over time.

Transforming the Business Focus of an organization essentially means getting the organization to buy in the customer-focused paradigm. The business focus may shift from “How can we increase the sales of our products” to “what our customer needs?” There may be stages of sales, channel, marketing and service focus during the transformation process. The Business Focus transformation is obviously critical to the success of any CRM initiative.

Changing the organizational structure of a company goes hand in hand with the changes in business focus. Most organizations today retain a product focus with product managers driving business decisions. The transformation to a customer focused organization should lead to literally organizing around your customers., assigning customer segment manager’s responsibility for acquisition, retention and growth of different segments of customers. This is a major hurdle for most organizations, as it often means augmenting their existing product or channel structure with customer management staff and additional headcount.

Transforming the Business Metrics should be a by-product of the changes noted above .In this case, the shift is from a single focus on product performance. and /or promotion performance, or decentralized views of these metrics, to a focus on customer lifetime value and loyalty. Rather than simply measuring response rates and product profitability, they’re asking the critical questions “Do we have profitable relationship with our customers? How can we make these relationships more profitable?” Once again there is a gradual shift, they don’t abandon the product, place, program and revenue measures immediately, but they do begin to shift some of the focus to the ultimate question of customer relationships.

Changing the Market Focus of the organization from mass to interactive dialogue is essential. This transformation seems to receive the most attention, in many marketing circles today. It is important to note that while companies are increasingly investing in one-to one dialogue, mass marketing communication still plays an important role in generating broad-scale awareness and interest.

Finally, there is a Technology Transformation. As with marketing focus, this area has received a great deal of attention in data base marketing areas. It seems that everyone has a CRM to sell. CRM technology must support and enable meaningful customer dialogued at all points of contact. Technology is actually the easiest of the areas to change. Companies can “buy their way” over to the right hand side of the transformation map. Because of this, technology often gets ahead of the other areas of transformation. Technology plays a critical support role, but should not be the driver of CRM initiatives.