Design Thinking - The new resolution to design

In week 10, Rob discussed the emerging role called 'Design Thinking' and its connection to CRM development and use.

First of all, the term Design Thinking can be defined as a design strategy that would allow realignment of needs between both individuals and companies. The concept is very simple, where it would greatly rely on empathy that is placing yourself (designer) into the customers' shoe.

The importance of empathy can be seen in many types of organizations (from hospital to furniture) where the designer should opt in understanding what the customers' really feel and what do they really need and design something that would target their needs and wants.

An interesting example was presented in a TED conference, where the answer of the question "What is our patients experience?" does not require a complex graphs, Data Flow Diagram, Flow Charting, and/or other complex drawings but instead it should give visualization on how the patients really feel when they are hospitalized and unable to move. From the findings, it appears that patients tend to look at hospital ceilings when they are hospitalized. This may be very simple findings and require very simple solutions, such as: re-decorate the ceilings, re-decorate the hospital floor to make it feel more comfortable. This small solutions could make huge amount of impact to the company. The needs of both customers and companies are addressed thus creating a win-win situation.

When 'Design Thinking' is applied to enhance the development and use of Customer Relationship Management, it is important that company should view it through the lens of both employees and customers.

Employees

Why employees? simply because they are the one who will utilize the system. The needs of individual employees should not be ignored. For an example, the designer should put himself in the employees' shoe. If I am in Sales Department what would I want my dash board to be like? say the employee would like to have sales figures yearly to be displayed on the front page of the CRM software. This of course differs to the expectations and needs of other employees working in other departments.

Salesforce.com, one of online CRM vendor provides an exceptionally amazing approach as it enables its users to customize their page according to their needs and wants.

That simple approach to design in my opinion is very critical due to the fact that people in different departments are most likely to analyze different things. They may based their analysis on one source data but what they analyze would be different to each other. Thus, providing them with a flexible software that would enable them to perform their tasks effectively can be seen as vital.

Customers

Why customers? the target of organizations CRM activity is Customers. and the main issue with customers is that they are very aware of Privacy issues. It is important that organizations must acknowledge and understand that there are different types of customers in the market. There is one that would divulge the information presented to the organization, there is one that would refuse the collection of personal information, and there is one that would happily provide information to the organizations as long as there is clear benefit for them in doing so.

Understanding of these types of customers and linking business strategies to meet their expectations can be seen as vital to the effectiveness of CRM strategy as it would help the organization in capturing the essential information about the customers that would assist long-term relationship maintenance and thus boost the organizations' profitability in the industry.

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The beauty of Synchronized Company

This post will be based on a weekly reading, entitled "Don't Homogenise, Synchronise".

This reading draws a line between product-centric and customer-centric companies. While product-centric companies focus on the individual products, customer-centric companies think beyond their product boundaries by integrating their customers into the equation.

The author also claimed that when companies are moving towards customer-centric approach, they will be able to reap more benefit. This is shown in the example, where 3M company decision to synchronized its company change the way it operates.
previously, the company could not assess how important each customer was to the company and there was also a huge cost penalty (maintaining redundant databases, maintaining separate information systems, Inaccurate database, duplicative tasks which also prone to errors). The problem arose when the company moved onto the WWW technology. Its unsynchronized information was reflected in the design of the database, where a customers who would like to buy separate products from different departments have to log in to different systems and given different ID and Password combinations.
When the company decided to sync its operations through the creation of Data Warehouse, it finally has allowed 3M company to present a unified information to the customers. Not only it minimized or even eliminate penalty costs, such as: maintaining duplicate databases, performing duplicative tasks, and etc, it is also allowed the company to respond to customers' inquiry quickly and seamlessly.

Interestingly, Vodafone (one of the biggest telephone company in Australia) has not consider synchronization as a way to conduct its business. It is reflected in their approach to customers, where it requires customer to talk to different people from different departments and to present the same information to get things done. This is my own experience with Vodafone when I asked them about my billing details.
When I first called Vodafone, I am asked by Lara (a computer generated voice) to key in my 4 digit password. Then, I am transfered to one of the sales representatives. The sales representatives then asked my 4 digit password (again!) and as I'm aware that I'm on a public place disclosing my password out loud wont be the best solution. I talked to her, "I am on a public place and I've keyed in my password when lara asked me to". Then she said, "it is a procedure". I said, "ok" and gave her my password. As my previous billing account was overdue, I am transferred to another sales rep who is from different department. When I talked to her, I am asked whats my 4 digit password (again, for the third times!). I said to her, Ive given the password to the previous sales rep and she replied in an unfriendly way, this is different department I cant proceed without you giving me your password. Avoiding further conflict, I gave her the password and get the information I need. From this experience, I felt terrible, a bit angry and disappointed to the service provided by Vodafone. This is my point of view. How about other customers who are treated the same way that I do..how would they feel?
In my opinion, companies should consider synchronizing all their data so that all departments can relate to their customers better. In the case of Vodafone, if the company synchronize its database, the customer would not need to present the same information to the sales representatives in order to get things done.

Sawhney (2001) added that "the disjunction between how customers think and how companies organize themselves is what leads to inefficiencies and missed opportunities, and that's exactly the problem that synchronization solves".

From the above statement, Top level managers (C - level) must understand the value and benefit that synchronization would bring to the company. It is important that a fully committed top level managers is one of the key factors in ensuring project success.

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Reflection 6 - CRM in Organizations

In lecture 6, Rob discussed 3 major topics in relation to CRM. They are:

1. The application of Data Mining Tools in the Industry
2. How to best select CRM tools
3. The implementation of CRM in Organizations, which is reflected in 2 case studies.

Firstly, CRM can be defined as an overall business strategy that needs to be implemented in order to have better understanding about the customers. In order to achieve its objective, it must incorporate some of the following:

1. Customer Data Collection and warehousing
2. Data Mining
3. Sales automation (electronic ordering)
4. Marketing automation
5. Call centre management
6. E-mail tracking

To integrate Data Mining capability in order to support an effective CRM, Oracle launched its product entitled "Siebel Campaign Management Software". As advertised by Oracle, its campaign management software will seek to automate and integrate planning, execution, assessment, as well as refinement of marketing campaigns. It is presented in the form of Workflow, dashboard, and easy-to-read report to allow users to have better understanding of the situation which would therefore improve the analysis for better marketing.

However, software selection must not heavily rely on vendors' advertisement as they are most likely to oversell the product. To avoid future conflict, it is therefore advised to ask vendors to perform demonstration of software prototypes using your own data sets. This strategy is crucial to be implemented as vendors will be more comfortable in working with their sets of data due to their familiarity of the scenarios which would therefore allow them to easily navigate their data as well as to market their product to their prospective customers.

In my opinion, this is one of the main issues that should not be ignored by organizations as they might get caught by the professionality of the vendors as well as the functionality of the technology during the software presentation. One possible issue that may emerge from this situation is when the promised functionality do not work as intended using the organizations' sets of data which will then cause disappointment or possibly termination of the overall project that can be very costly (waste of Money, Time, and Resources).

Before the end of the lecture, Rob told us an interesting example of Failed CRM Implementation in City Council in UK.

According to my opinion, failed implementation of CRM in City Council was driven by lack of focus and commitment from the senior management. It is clearly depicted in the scenario, where there were 2 clashing goals from both business-people and IT-people. Accordingly, IT-related people had a vision that is to integrate the legacy system in order to minimize overall management as well as to achieve a coordinated Enterprise system. It differs to what the business-related people had in mind, as they were more concern with "answering calls" as opposed to the Integration idea. Moreover, with the Change of CIO in 2001, the project became more business focus, resulting in lack of commitment with overall integration of the system and thus become more focus on collecting lots of data about customers and using that data to shape services in the future.

The second major issue relates to the use of Outsourcing strategy. As noted in the case study, there are several problems with City Council CRM Implementation Outsourcing strategy.

1. Little consultation about outsourcing strategy with internal departments.
2. Lack of in-house expertise. This would create major problem as outsource expertise does not know how the organization operates, the reporting structure within the organization, as well as the knowledge of data that is kept and presented to the users.
3. Lack of communication between internal employees and external employees.
4. Lack of knowledge in relation to the integration tool to support communication between both CRM software and back-end systems.
   

In addition, other issues such as: improper staff management along with possible political issue had proven to highly contribute the failed implementation of City Council CRM system.

From the above insights, it can be concluded that there are several basic things that must be considered to prevent CRM project failure. They are:

1. Overall commitment from Senior Management (Define the goal of CRM system, state it in the project vision, Implement it properly)
2. Balance the team (External from outsourcing department and internal. Ensure active communications between two groups).
3. Proper staff management (staff must be treated properly to ensure project success)
4. Minimize and try to resolve promptly any political issues emerged.

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Reflection 5 -- The use of Data Mining tools

In Lecture 4, we understand that Data Mining plays an important role in shaping better Customer Relationship Management (CRM) analysis. Accordingly, businesses should consider the use of Data Mining to enhance their CRM capabilities in order to be competitive globally.


However, in Lecture 5, Dr. Jagielska further assessed Data Mining in a more technical sense, where she used both Neural Networks as well as Decision Tree as the tools. In my opinion, there are 2 general issues related to the use of Data Mining tools, which will be evaluated below:


1. Privacy Issue
Privacy Issue may emerged as most customers are reluctant to give their personal information to the organization unless there are benefits for them in doing so. As a result, they may not participate or at most may even give misleading information that would directly affect the level of accuracy of the analysis.

2.Knowledge Issue
Within an organization, you can not expect an employee to be able to instantly understand how Data Mining tools operate due to the complexity of the software usage as well as the analysis that would be performed. As an example: To have high accuracy of analysis using a neural network software, an employee must have prior knowledge on how the Neural Network should be trained (This require thorough understanding on the arrangement of data, numbers of layers, and many more), what the input and output should be, and etc. To achieve best analysis with Neural Network software, companies must then spent a considerable amount of time and money in order to train the employee in using the software which would in turn enable organizations to make good decisions.

Now the main question would be: "Is it worth the cost?"

Both readings entitled "Rules are much more than decision tree" as well as "an overview of the CART Methodology" provided us with the insight on how both Neural Network and Decision Tree can be applied in the real world examples.

In my opinion, finding pattern of Data and/or predicting information using Decision Tree would be much simpler, easily understood and implemented as opposed to the Neural Networks. However, it is important to note that the Decision Tree would perform well when it is presented with little data. Accordingly, if the Decision Tree is given too much information, the level of the tree will be unmanageable where it would reduce the capability of Decision Maker to digest information in order to make good decisions.


Unlike Decision Tree, Neural Networks can be more complex to be implemented. However, when it is compared to the Decision Tree, the Neural Network would be more suitable for complex Data analysis due to its ability to process/analyze large amount of Data (Imagine creating Decision Tree with hundreds or thousands of Data). With Neural Network, a considerable amount of time and money need to be spent in training as it would require the analyst to have background understanding of Neural Network, how to best design its algorithm, as well as how to train and maintain them in order to have high accuracy when they are presented with sets of data that require analysis.

Both tools (Neural Networks and Decision Tree) have been adopted by several Large Organizations such as: Telephone Industry, Banking & Finance, as well as for Medical purposes. Looking at their future, further enhancement needs to be done in order to enable them to work efficiently and accurately when presented with events (such as: credit risk assessment, Health Assessment, and etc).

Feel free to comment on this post :)

Cheers, Yovita

Reflection 3 - Managing customer satisfaction through CRM

Lecture 3 was quite fun, as Rob explained about the customer data warehouse to facilitate the analytical Customer Relationship Management in order to have better customer management which therefore in turn creates profit for the company.
Customer Data Warehouse can be developed in 2 ways, where it follows either Chris Todman or Kimball’s dimensional approach.
An interesting seminar was also presented by Barry Schwartz at a TED conference who is apparently the author of Paradox of Choice. The main idea of the seminar was to highlight a major issue, where in today’s era of globalisation, many companies are focusing too much in providing more varieties to customers in order to compete with each other and to become profitable in the market. However, Barry understands the situation and therefore confidently presented a totally different approach where it highlights the understanding that more products or choices available in the market do not relate to higher customer satisfaction.
This brings us to another issue, where what if the company must have different kinds of products that they wanted to sell. For example: Phone Company (Telstra, Optus, Vodafone, etc), Clothing stores, and etc. In my opinion, a good CRM will be very helpful to be applied in this kind of situation. Why a good CRM is helpful?
Lets just imagine a big telephone company with a lot of plan – Home plan (with so many varieties), Mobile plan (again so many varieties to choose from – $29 dollars Cap, $79 dollars Cap, $150 dollars Cap, and etc). When a customer enters the store, they might have an idea on what type of plan they are looking for. In this scenario, let just say that the customer would like to have a mobile plan, but is confused on the type of mobile phone he wanted to get – the type of plan he wanted to have or etc. In this situation the role of CRM is critical. Instead of marketing the entire mobile plan deals that they have in the store, the sales assistant might start with questions in order to know the customer a little bit better. What type of mobile phone are you looking? Do you use the mobile frequently? Do you prefer to sms or call the person? Have you ever joined us for other mobile phone deals or is it the first time?. If the customer explained that he/she has joined up for mobile phone deal and was dissatisfied, the sales assistant may ask the reason why. This will continue until the sales assistant has the background understanding on what mobile phone deal is suitable for that particular customer.
Say the customer is a student, female, would like a stylish phone, excessive use of mobile phone and prefers to call rather than sms. The sales assistant can therefore choose a Motorola phone which comes up with a $79 dollar monthly cap and the customer get to spend $500 on the telephone call.
Here the role of CRM is highly important as the company would be able to filter many products to several that is best suited to the customer, making them less confused and therefore increases their personal level of satisfaction. With a good analytical CRM, the company can even record the customer information to the system which is then Extracted, Transformed, cleansed, and Loaded into the Customer Data Warehouse for better customer analysis.
In conclusion, a good understanding of the role of CRM is critical as to guide companies in marketing their products to their customers, which is clearly depicted in the mobile phone scenario above. As a result, companies with massive type of products can still reap high amount of profitability that is to be able to sell a product with high level of customer satisfaction.

Reflective 2 - Analytical CRM

During lecture 2, Rob explained the technologies that are needed to sustain a good and proper Customer Relationship Management (CRM). However, it is important that these technologies must be viewed as tools which are only intended for medium to large businesses to operate and compete globally. This can be seen in SAS whitepaper, entitled “Implementing the Customer Relationship Management Foundation – Analytical CRM”, where it highlights corporate competitions as opposed to the general low-level type of competitions in the marketplace. Thus, having analysed this situation it is important that we should not get confused on the type of organization that it targets to utilize these advanced tools such as: Data Warehousing, Data Mining and OLAP, as well as Advanced Decision Support and Reporting tools.

There is no denial with the statement that an effective CRM depends on Data. The author of SAS whitepaper also elaborated that the data collected will cover areas such as: who the customers are; their preferences, their behaviour, their status with the company, their purchase history and also their classification based on demographic and psychographic information. Moreover, the author also stated that “A repository of customer data must be created within a single, customer centric Data Warehouse”. However, according to my personal opinion, a Data Warehouse shall not be viewed as a “must” to all medium – large organizations who want to be competitive globally. Although, there is no denial that incorporating it to support a good CRM can be viewed as an advantage as long as it has the support of Board of Directors, a good and suitable data to support Data Warehousing, appropriate Data Extract, Transform, Cleansing, and Load process, the technical knowledge of Data Warehousing technology within the company, as well as the organizations’ ability to provide intensive trainings to managers and board of directors as needed. If an organization does not have all the qualifications as mentioned above and still forced itself to develop a Data Warehouse Technology for the sake of following other organizations success, then it is better for the company to think twice before it begins the costly and complex development process.

To back up the main argument that I’ve made above, let me tell you a story about a company named PT. Dyandra Promosindo. In December 2006, I had an internship in this company and I was amazed on how they deal with their customers regardless on their minimal use of technology (such as: data warehouse, data mining, as well as business intelligence). Headquartered in Jakarta – Indonesia, Dyandra Promosindo is a leading professional event organizer with massive amount of customers. As a proven example of its success, the company has conducted over 200 exhibitions in Jakarta as well as other cities in Indonesia. Over 1000 exhibitor participate each year and they had a good time exhibiting and promoting their products successfully. Year after year, Dyandra Promosindo has been earning the reputation of “a reliable business partner” while strengthening its initial success through building the so-called “level of exhibition culture” in the country. For more info, you can click the link at (http://www.dyandra.com/content.php?go=profile).

What amazes me that although there is no CRM technology to improve its ongoing customer relationships as there is no customer maintenance through Data Warehousing, Data Mining and OLAP, as well as Decision Support and Reporting tool, and despite its massive customers base (both local and foreigners), Dyandra Promosindo has proven itself to be the best in the field through:

1. Their ability to understand their customer intensively, they are available and can be reached easily to answer all the needs, doubts, and wants experienced by the customers.
2. The reliance on Good Marketing strategies and excellent communication ability to gain and retain their profitable customers.
3. Consistent maintenance of sets of customer information for every exhibition manually and electronically (Through file folders and excel documents).
4. Appointment of a single Project Manager so that whenever customers have any enquiry, they can always talk to the same person. This ensures consistency in managing customers.
5. The nature of All the Project Managers which shows corporation, consistency, and hard work to aim and deliver the best event as possible, creating high satisfaction level for the customers.

In summary, although technology might promise greater benefit to support a good CRM, it is important to note that organization should view it as critical investment. It is also critical that an organization must not believe their consultants or other external vendors 100% as they have the tendency to oversell the technology. Finally, if the organization does not have internal motivation or at least realize that the development of such technology will consume a lot of time, skills, and money and may end up as a failure if not managed properly, then it is better for them to think twice before constructing it.

Reflection 1 – Get Inside the Lives of Your Customers

During Lecture 1, Customer Relationship Management can be viewed as a strategy that is needed to be critically emphasized through obtaining, retaining, and establishing a long term relationship with profitable customers in order to be profitable in the market industry.

In an article entitled “Get Inside the Lives of Your Customers”, which was published in May 2001, Patricia B. Seybold explained the need to focus on “Customer Scenarios” as a tool for CRM where it takes into account broader mindset of an organization in relation the customers’ shopping pattern – How do customers select, buy, and use the products & services. Furthermore, combined with the capability of internet technology as an interactive, effective, and non – costly means of interactions between customers and the organizations, businesses are most likely to reap the long term benefit as experienced by National Semiconductor, Tesco, and Buzzaw.com.

However, although creating customer scenarios may be viewed as a tool which involves designing or following certain steps or specific methodologies, I personally believe that instead of considering it as a tool, customer scenarios must be viewed as a strategy that is supported by various tools such as: Internet Technology, Data Warehouse, and etc. This differentiation is resulted because in my opinion, the word strategy refers to the things that add value to support the conducts of an organization; whereas the word tool refers to the things that provide support to the establishment of the strategy.

It is also quite interesting to note that the author actually viewed the creation of customer scenarios in a quite straightforward and easy to solve environment rather than complex and ever-changing environment. I personally believe that in dealing with customers, people within an organization should be exposed to a complex and unpredictable environment as every customers’ expectations, wants, needs, and therefore shopping patterns are different. Thus, the scenario built must be able to match various customers’ demands exposed.

Another main issue is the fact that the methodology used in creating the customer scenarios did not take into account customers’ point of view in relation to their shopping pattern. Instead, it merely emphasized on peoples ability to be able to put themselves in the customers’ shoes. In my opinion, this statement contradicted the main idea of the article, where it should stressed the needs to analyze customers’ shopping pattern in a broader mindset. Without proper analysis on the users’ purchase pattern, it would be difficult or almost impossible to create a good customer scenarios as a form of strategy to support an appropriate and effective CRM.

Creating customer scenarios can be viewed as one critical strategy that supports a good CRM. But I truly believe that the way to improve CRM is not restricted to the development or creation of customer scenarios. Instead, we should make full use of the technology that is available in today’s world, such as the capabilities of Data Warehouse, Data Mining, and etc to create a prospective strategy that would be useful to support an appropriate and effective CRM.