International Journal of Productivity and Performance Management

Customer centric business processing

Mike Bolton
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Mike Bolton, (2004),"Customer centric business processing", International Journal of Productivity and
Performance Management, Vol. 53 Iss 1 pp. 44 - 51
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IJPPM
53,1 Customer centric business
processing
Mike Bolton
44 Explored Futures, Ilkley, UK
Keywords Customer relations, Business policy, Business process reengineering
Abstract The last decade has seen the emergence of customer relationship management (CRM)
as a technique to underpin organisational performance improvement in improving customer
retention, customer satisfaction and customer value. However, evidence suggests that many CRM
initiatives fail. Suggests that CRM does not go far enough in changing the underlying culture and
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systems of an organisation. What is needed is complete customer-centric business processing

(CCBP), whereby all business processes and all individuals are focused on identifying and meeting
the needs of customer. Explains the concepts behind CCBP and describes the key organisational
changes that are needed to underpin CCBP.

International Journal of Productivity
and Performance Management
Vol. 53 No. 1, 2004
pp. 44-51
# Emerald Group Publishing Limited
1741-0401
DOI 10.1108/17410400410509950
Introduction
The last decade has seen a rise in activity which goes under the banner of
``customer relationship management'' (CRM). Organisations that adopt CRM
may do so for a variety of reasons principally improving customer retention
and customer satisfaction but the key driver is to find out more about
customers and the way they interact with the organisation. This ``relationship''
can then be exploited by cross-selling (of products or services that the customer
has not yet bought from the organisation), by extension selling (of products or
services that relate to those already bought) or by some other transaction
offering additional revenue to the organisation. It is clear that in most CRM
implementations, it is the organisation rather than the customer who stands
to gain from the CRM.
Alternative approaches to improving the ``value'' obtained from individual
customers exist. Perhaps the most transparent of these is customer value
management (CVM) which explicitly attempts to measure and exploit customer
value. This overlaps with CRM in that there are essentially two different
approaches to CVM (Evans, 2002).
The first seeks to identify the ``value'' perceived by customers of the
organisation's goods and/or services. Where such value is ``better'' or ``higher''
than the perceived value of competitors' offerings, the organisation has the
potential to succeed in the marketplace. However, where customers' place a
higher value on competitors' offerings, the organisation needs to take some
action to maintain competitiveness.
The second approach is to measure the value that a customer (or a category
of customer) brings into the organisation and use this as the basis of, for
example, targeted marketing campaigns. This is the territory of CRM but is
perhaps more ``honest'' in its aims and methodology.
 Of course, the best CRM implementations offer advantages to both the Business
organisation and its customers. Supermarket loyalty schemes, for example, processing
may offer targeted discounts based on previous buying habits. A bank might
use CRM to help identify that a customer has a large current account balance, a
savings account, a mortgage and a personal loan, and therefore probably
deserves customer service which recognises this so that, for example, a slight
temporary overdraft on the current account does not result in a letter of 45
admonishment. Of course, e-business with its rapid turn-round times and
strong data-gathering abilities offers additional opportunities for companies to
really get to know their customers behaviour patterns (Imhoff et al., 2001).
However, it would be stretching reality a little too far in many of these
CRM/e-services implementations to claim that they do in fact manage
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``relationships''.
Some of the limits of CRM were identified and discussed by Molineux (2002)
who also uses the term ``customer-managed relationships'' to describe an
extended and enhanced form of CRM which allows customers to take some
control over the way in which the ``relationship'' develops. Customers, he
suggests, are increasingly setting the terms by which they will do business
with companies: how, when and at what price.
CRM is often built around a ``CRM system''. This can be anything from
salesforce automation to help-desk support depending on what part of the
CRM spectrum is being covered. The unfortunate result of this is that most
CRM projects are regarded as IT projects implying the adoption of a technical
means of tracking, monitoring and analysing customer behaviours and
relationships put the system in and we have CRM. Simple! In reality, of
course, system implementation is rarely simple. It is important to have
appropriate information about customers and CRM demands that
information is coherent, co-ordinated and up-to-date. Going back to the
example of the bank mentioned above if the bank's systems relating to
various types of accounts and services did not recognise that the same
customer interacted with the bank in a number of ways, relating to different
services of the bank, it would not be possible to take a complete view of the
customer and his/her value to the bank. The term 360 degree customer view
has been coined to refer to this need for a view of the complete set of
interactions between an organisation and its customers.
However, important though they may be, many of the early CRM
implementations seem to have failed. The easy thing to do under such a
situation is to blame the software system blame Oracle, or Siebel or whoever.
Though I hold no particular affection for software companies, such blame is
rarely fair. Most implementations fail because the organisation fails to adopt a
clear strategy and fails to make appropriate changes to its business processes.
Small organisations are often simple their business processes are simple and
all key staff can maintain an interaction indeed, a ``relationship'' with
customers. Large organisations (the kind that adopt CRM) have many, complex
business processes. Many staff are not in regular, or even occasional, contact
 IJPPM with customers their customers are internal . . . other departments, and may
53,1 not be seen as ``customers'' at all.
Thus, a project aimed at improving relationships between customers and the
organisation should essentially be one of ensuring that all key business
processes are ``customer-centric''. This might involve the adoption of new or
amended system support, but this must be seen as secondary arising from,
46 rather than driving, the business process change.

Customer centric business processing

In the past, the strategic focus of product-based companies has been
manufacturing and logistics improving efficiency; the strategic focus of
service companies has been delivering quality services. Customer centric
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business processing (CCBP) is a movement which recognises that core

competencies, though still important, may not be sufficient to keep pace with
change and thrive within an increasingly competitive marketplace.
CCBP is a culturally-focussed approach which genuinely attempts to put the
needs of the customer at the heart of all core business processes. As suggested,
CCBP is at the heart of the best CRM projects but the cultural changes needed
to support CCBP are much more difficult to achieve than the technical changes
to underpin what is usually meant by CRM.
For example, if one looks at the sales literature of CRM system suppliers, it is
evident that much of it is aimed at the marketing and sales departments of an
organisation. Though these are the most obvious parts of the organisation that
interface with customers and the marketplace generally where CCBP differs
from CRM is in recognising that ALL business processes have an impact on
customers. Some obviously such as invoicing and credit control; others
perhaps less obviously because the impact is less direct. But moving to CCBP
should involve the review of all processes.
As ever, there must be a clear set of values and a clear strategy
underpinning any business process review or redesign. If not, at best we simply
make the wrong processes more efficient . . . at worst, we implement the wrong
technology and waste significant investment.
Effective CCBP (i.e. co-ordinated, segmented, integrated) requires
mechanisms to bring about changes in business process design and
implementation, including appropriate changes in underlying technology
support. However, far more importantly a move to CCBP brings about changes
in culture. A side effect may also be changes in organisation structure, but
again these are results not drivers.
The aim of CCBP is to know and understand customers, to treat them as
they expect to be treated, to anticipate their needs and respond positively to
their actions.
In CRM there is (hopefully) a high degree of importance placed on
understanding and exploiting customer behaviour; in CCBP there is a high
degree of respect for customers, which drives business activity. The
 customer-centric organisation provides continuous and consistent high quality Business
experiences to customers over a long time period: processing
. over all customer access points;
. across all marketing, sales, and service programs; and
. throughout all parts of the organisation.
47
Who are our customers?
Effective CCBP relies on underpinning research and ``intelligence''. The first
step is to understand the customer base. Who are the customers of the
organisation? How can they be identified; and how are they best grouped and
segmented? What do we know about such groups and the ways in which they
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are likely to behave? This approach to segmentation and garnering ``customer-

centric intelligence'' recognises that, with the best will in the world, individual
relationships are not often possible. The most effective approach is to have
some kind of group/categorised approach which can then be further
customised on the basis of information about an individual customer.

What do our customers want?

There is always a danger that marketing is seen simply as being about
``pushing'' products to customers. This many be underpinned by market
research and market planning leading to lead generation. However, in
customer-centric organisations, there is a move towards supporting customer
``pull'' of products and services. This change requires that marketing
departments generate sufficient information to answer the question above,
``Who are our customers?'' and then to extend this to, ``What products or
services do our customers want to buy?'' Whilst marketers may argue that this
is a fundamental marketing activity (and it certainly should be), the reality in
too many organisations is very different.
The information captured or developed should then able the organisation to:
. segment customers;
. forecast accurately against those segments; and
. adjust the product/service development process to ensure that the right
product mix arrives in the marketplace at the right time for the right
customer groups.
(So far, we have perhaps been suggesting that both CRM and CCBP relate only
to the for-profit, commercial sector. However, part of the UK e-Government
agenda for the public sector is to adopt increasingly customer-centric
approaches to the provision of services; CCBP is not sector-dependent.)
With every purchase, a customer provides valuable information that can be
used to refine the organisation's knowledge and understanding about that
customer and the segment(s) to which he/she belongs. Apart from purchases,
though, there are interactions such as general enquiries, product information
 IJPPM requests, surveys and complaints all resulting in customer-related data. This
53,1 data can be used to both inform the organisation about its current customers,
and to help shape offerings to the customer of the future. The data may be
found in unexpected places and organisations that are most successful at CCBP
recognise this. For example, delivery drivers understand much about the real
needs at the crucial point where the product is received by the customer, yet
48 rarely will this knowledge be actively collected and used. interaction frequently
occurs with the customer's finance department over payment issues and
disputes, yet this is rarely used to add to the body of customer data.
Sales people can be supported in their interactions with a customer by the
provision of an account history, a forecast, and detailed information about the
prospect's or customer's current status, as well as specific and detailed
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information needs the buyer may not even recognise the organisation has. This
enables the sales team to use the information to construct offers specifically
tailored to customer wants and needs, thus offering a better service to the
customer and better likelihood of ongoing business for the organisation a true
win-win situation.

Are our customers satisfied?

Fulfillment is the part of the process during which customers become satisfied
or dissatisfied it is here that they measure organisational performance.
Fulfillment is the keeping or the breaking of a promise to the customer the
ordered product is delivered, the utility is turned on, the software is installed or
whatever. Poor fulfillment delays, faults or other problems mean that the
customer is significantly more unlikely to do business with the organisation
again. Since acquiring new customers is generally significantly more difficult
than getting repeat business from existing customers, this has major
implications (Reichheld and Sasser, 1990).
Remember also that satisfaction is a function of both fulfillment
performance and expectation. Customers tend to judge performance by the best
they observe. So, for example, if the performance of your Web site is not
equivalent to that of Amazon, any e-customers may well feel dissatisfied.
Whether or not the fulfillment has been completely successful and the
customer is completely satisfied, information on how well the organisation
delivered on its pledge must be captured. This helps with dealing with that
customer in the future (assuming we can retain him/her) and with improving
the overall ``delivery chain''.
Using the data warehouse to track performance against each customer
segment is critical to the evaluation of an organisation's relationship with a
particular customer group over time. More importantly, this information can
help the organisation identify strategies for future interactions with its
customer groups.
As customer expectations will continue to rise, it is important that CCBP is
regarded as an ongoing project rather than a one-off. This is why the culture
change that sees CCBP as underpinning all that the organisation does is so
 important. It must not be seen as project, an initiative or the chairperson's latest Business
whim. processing
Culture
Customer centric business processes reach every part of an organisation. Each
and every employee should respect the customer and do all they can to preserve
the customer's trust. Those with direct customer contact have a ``special 49
relationship'' and consequently a special responsibility. They should counsel
the customer on the best choice that he/she can make for the long-term good.
These people must be trained and encouraged to think and act always with the
customer's well being and long-term good in mind. This should be true even
where an individual decision that the customer might make is not the optimal
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one for the short-term benefit of the organisation. The employee must
endeavour to become the customer's trusted agent, leading the customer to
where he/she wants to go but just does not know it yet.
The organisation must support these relationships by planning around
customer wants and needs, not around company goals. Promotional activity
changes the organisation must focus on listening to customers, not on forcing
(or even encouraging) them to listen to the organisational ``message''. The
``traditional'' CRM activities database marketing, e-database marketing, etc.
are relegated to a secondary role, in the shadow of informed, informational
dialogue with customers.

Systems
Though this paper suggests that systems are second-order issues, coming
somewhat significantly lower down the priority list than the cultural and
process changes required, they are important. Integrated, coherent, reliable and
``total'' information about customers underpins CCBP.
Businesses systems traditionally rely on processes and information systems
that are optimised for the management of transactions within departmental or
line of business ``silos''. This was necessary since for the last 20 years or so it
was the sheer volume of transactions that governed the need for ``power'' and
``capacity''. Developing technologies have largely solved the ``capacity'' problem
and systems can now concentrate on effectiveness rather than efficiency. Going
back to the example of our bank, maintaining the processing of cheques,
withdrawals, transfers, etc. is well-established. However it is simply
``transactional''; it has no concept of who is conducting the transaction or
whether that person is an important and valued customer because of a different
relationship that he/she has with a different part of the bank. Organisations
have now recognised such failings and also now have the tools to address them.
The more forward thinking have therefore started to bridge current islands of
automation to achieve a consistent customer view. Furthermore, the increasing
number of mergers and acquisitions are showing the need to consolidate,
migrate and/or integrate disparate core processes and systems with customer
management functionality.
 IJPPM This suggests the need for a data warehouse which brings together
53,1 customer information from disparate operational systems and then resolves,
stores, integrates and reports to support the newly-designed business
processes. In a large organisation this is probably the only way of ensuring that
all parts of the organisation are provided with the same, consistent information.
Customer centric organisations capture information each and every time the
50 customer ``touches'' them (when they buy something, call the help desk,
complain or just visit the company's Web site). They may then supplement
this information with purchased information such as demographics,
psychographics and spatial data to more fully understand key customer
groups.
They also collect data relating to fulfillment so that common issues relating
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to particular areas, customer groups, sub-contractors, hauliers or whatever can

be identified and addressed.
Systems extend to non-computer-based systems so that, for example, CCBP
may result in or be based on reward for effective customer interaction.
Thus, there may be a need for a ``system'' that elicits customer feedback and
creates appropriate metrics.

Structures
As we have seen, CCBP demands different forms and ways of working. The
roles of all departments starting with those that interface directly with end-
customers, should be re-evaluated to identify where they offer value to
customers, and where they do not simply adding cost instead. The
organisation may then have to be re-configured to ensure that:
. it is better placed to listen to, and understand, its customers;
. everything that it does is designed to help customers; and
. nothing gets in the way.
Again, this re-configuration or re-structuring is a consequence of CCBP not an
aim.

Conclusions
CRM in practice normally aims to manage the information transfer between an
organisation and its customers. It does this by recognising the customer as
more than one component of a transaction, rather as a unit of interaction. It
aims to collect data on each interaction and use this data to provide additional
sales leads and options.
CCBP goes further. It is built on a stronger respect for the customer and it
places inherently greater trust in the relationship between organisation and
customer. It recognises that all individuals and all business processes should be
focused on the customer. It demands changes in business processes and an
underlying change in business/organisational culture.
 The customer-centric organisation adopts and continually develops Business
business processes that enable it to move from: processing
. point-in-time interaction (and transaction) with customers to long-term
(``lifetime'') dialogue;
. a focus on operational efficiency to one on business effectiveness;
. managing lines of business to managing customers and customer 51
groups;
. mass-marketing of standard products to customer-based customisation
and personalisation of products; and
. an emphasis on new customer acquisition to an emphasis on
maintaining the loyalty of existing customers.
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If this works across the whole organisation, it replaces departmental

management of customer transactions with enterprise management of
customer relationships. So, CRM is the end-point. Unlike CRM as a
methodology, however, it starts with the business processes that shape and
respond to customer interaction.

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