Building a Customer-Centric Business Via Integrated Information ManagementTools and techniques for increasing customer loyalty and lifetime value by meeting the needs of today’s more empowered and digitally savvy consumers.

Executive SummaryThe way companies must interact with their customers has changed, irrevocably. New com-munication channels have provided organizations with unprecedented opportunities that, if tapped carefully, could provide a much-needed edge for dealing with increasingly empowered mobile customers in today’s highly competitive market-place.

These emerging customer touchpoints have also altered customer expectations and purchasing behaviors. For instance, the average response rate for traditional marketing-led advertis-ing is declining quickly1 as consumers increas-ingly turn to the always accessible Internet and trusted social networks for knowledge and advice. Moreover, data privacy issues are also increasing, leading to consumer concerns if not managed properly. In addition, with the emergence of new social media channels that enable customers to pose questions and voice complaints, companies must be prepared to proactively respond to issues before they escalate or, failing that, repair the damage to their brand equity.

Customers increasingly expect companies to have a much better understanding of them as individuals, as well as more timely apprecia-tion of their specific needs. To satisfy this new breed of demanding and empowered customers, companies must have the right processes and information available to deliver customized and targeted product and service offerings that keep them engaged and loyal. The emergence of loca-tion-based services offers a tool for combining customer behavior (historical and predictive) with real-time marketing opportunity.

It is not just the external environment that is changing. As the “millennial” generation grows in stature (i.e., consumption) and influence in the workplace, their expectations for streamlined processes, intuitive systems and real-time infor-mation access must be accommodated. If orga-nizations do not adequately meet these expec-tations, they will find it increasingly difficult to attract talent and, more important, deliver quality customer experiences that drive behaviors conducive to business success.

• Cognizant 20-20 Insights

cognizant 20-20 insights | june 2012

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As a result, companies must reinvent their cus-tomer-centric business processes to ensure better targeting and revenue generation. Improved customer insight is, therefore, critical to ensuring that the needs of today’s younger, more social and mobile consumer are met.

This whitepaper lays out the tools and techniques for transcending the rhetoric and helping companies embrace true customer-centricity. It provides actionable recommendations for building an integrated architecture that spans customer touchpoints, automates key business processes and delivers a single version of the truth that can result in substantial increases in customer lifetime value. Finally, we offer a tangible example from the retail banking industry that demonstrates how specific processes can be transformed to become more customer-centric.

The Changing EcosystemThere has been significant and ongoing change in the global market and consumer landscapes. Incumbent players across industries are struggling to protect their margins in the face of ever-increasing competition. This has resulted in a tremendous need for business model and process change. For example, merger and acquisi-tion activity is increasing as companies seek to consolidate with the competition, expand their global presence or expand their offerings.

For example, pharmacy benefits manager Express Script’s push to merge with prescription management and health information firm Medco highlights ongoing consolidation efforts within the healthcare industry.2 The healthcare merger and acquisition market in 2011 generated 980 deals worth $227.4 billion, an increase of 9% over 2010.3

Many industries are additionally facing regulatory changes with stricter norms and compliance

policies. The Health Information Technology for Economic and Clinical Health (HITECH) Act in the U.S. healthcare industry4 and the Basel III compliance standards and Foreign Account Tax Compliance Act (FATCA) for the global banking industry are just two examples.

Business agility today is seen as a necessary step to increasing the bottom line. This is evidenced by organizations investing in on-demand services and cloud-based solutions to increase IT agility, reduce time-to-market and enhance profitability.

These investments, applied across business lines, provide organizations with the power to compete in the market. However, many companies still lack the much-needed edge to grab a bigger slice of the pie in today’s hyper-competitive global marketplace. Increasingly, organizations are realizing that to achieve top-line growth, they need to increase the lifetime value (LTV) of their customers.

First Step Toward Customer CentricityTo successfully transition from a product-centric architecture to a customer-centric business, orga-nizations must first identify their key objectives. This will ensure expectation setting and the necessary business buy-in, which are crucial for any IT-focused transformational exercise.

For instance, depending on the circumstances for change, some organizations we have worked with have highlighted the following objectives when embarking on a customer-centric journey:

• Realize a “one-organization” structure follow-ing M&A activity. Use of unified, enterprise-wide customer information is a step toward realizing this goal.

• Align marketing strategy and sales force effort with client needs and expectations.

Key Challenges and Consequences of the Changing Ecosystem

Figure 1

Shift in Focus

CEO Challenges: 2011-2012

• Identify growth areas in volatile economy• Cut operation costs• Reduce cost via greater efficiency• Source fresh capital• Ensure regulatory compliance

CEO Challenges: 2012-2013

• Understand the customer is boss and must be treated like that• Attract new customers and expand into global markets• Keep up with changing technology• Embrace social media• Ensure regulatory compliance

g

• U

Attnto global markets

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• Enhance customer experience through channel integration, faster request resolution and need-based offerings.

• Identify and utilize cross-selling and up-selling opportunities, improved customer intelligence, targeted marketing and better response rate per dollar of advertising revenue spent.

• Improve operational efficiency and transpar-ency using end-to-end monitoring and process automation.

• Optimize service through multiple channels and by addressing customer preferences.

• Create a strategic business and IT architec-ture to manage risk and quickly adapt to ever-changing regulatory compliance requirements.

While customer centricity remains the primary focus, other important considerations also play a role when considering a transformational project. They include:

• Evaluating the return on investment on technology dollars spent.

• Leveraging existing solutions before making buy vs. build decisions.

• Rationalize and simplify the system architecture.

• Use agile frameworks, modern technology and cloud-based solutions and invest in open and easily upgraded IT solutions.

Business Transformation Through Focused IT StrategiesFor organizations to be customer-centric, they need a clear long-term strategic view of the customer. Organizations should evaluate their existing business processes and metrics and

develop organizational abilities to proactively understand how the customer relationship has evolved. This will enable them to offer customized products and services that positively motivate the customer and increase customer LTV.

Customer centricity is not just a front-office activity. Organiza-tions cannot manage a complex customer relationship without a smooth integration among

various business functions such as finance, legal, supply chain, etc. Not all of these functions have a customer relationship management (CRM)

system, and it would be impractical to put CRM everywhere. However, a comprehensive customer management solution should encompass more than just the CRM system; it needs to incorpo-rate other inter-related components, including business process management (BPM) and master data management (MDM). BPM helps with process automation, while MDM ensures that a complete, 360-degree view of important data domains, such as customer, product, etc., is available to all concerned parties.

This combined solution approach helps organiza-tions gain valuable insights into customer require-ments across the entire organization and various touchpoints, giving them an edge over their com-petitors. (These concepts are further defined and explained in subsequent sections.)

Solution Components To achieve customer centricity, organizations need to consider implementing the following:

• A unified and enriched user experience through an enhanced customer interaction platform:

> Contemporary user interface technologies and consolidated information to provide a superior customer experience via both self-service portals and interactions with cus-tomer service representatives.

> A single platform across all service envi-ronments to deliver 360-degree insights to sales, marketing and customer service.

> Closed-loop marketing, starting from cam-paign design, launch, feedback collection, sales planning and enablement, through campaign result analysis.

> Real-time and effective decision-making and marketing strategy formulation, based on data analytics.

> Consistency among customer channels, in-cluding the various social media platforms.

• End-to-end front-office to back-office integration:

> Unified sales and multi-channel-enabled customer service platform.

> Seamless BPM across vertical functions.

> Operational efficiencies by automating and optimizing business processes.

> Visibility of business process performance, status monitoring and alerts.

Organizations cannot manage a complex

customer relationship without smooth

integration among various business

functions such as finance, legal, supply

chain, etc.

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• Realizing a “single-organization“ vision through enterprise information management:

> Seamless exchange of data (customer, product, account) between processes and systems.

> Multichannel integration capabilities.

> Single customer view across lines of busi-ness (LOBs) and applications with one ver-sion of the truth (i.e., MDM).

> Customer lifecycle management.

> Effective risk and exposure management by aggregation, hierarchy and relationship mapping.

• Common processes and functions across products and LOBs:

> Common business and data services.

> Workflow and business rule automation.

The Unifying Advantage

A unified solution helps reduce or remove bot-tlenecks in the process flow. Some of the key advantages of each component of this solution include:

• CRM: The CRM solution acts as the custom-er-facing infrastructure, providing multiple touchpoints to address all customer interac-tions across all possible platforms. Along with process optimization, care must be taken to ensure a consistent experience across all

available channels so that the customer sees a harmonious and reliable “face” of the orga-nization.

• BPM: The BPM layer facilitates orchestration of business processes for different functional domains within the enterprise. Some of the key benefits of this layer include increased respon-siveness of IT to business process changes and enhanced productivity through automated process execution. BPM also provides opera-tional flexibility, enabling rapid deployment of business change and better monitoring of business effectiveness.

• MDM: To enable users to realize the full benefits of an automated solution, a complete 360-degree view of customers, products and other key entities is required. MDM helps provide a centralized database with a single version of the truth. Armed with key customer insights across interaction channels, the orga-nization can fully understand customer needs, which helps it transition its processes from product-centric to customer-centric. MDM also enables more targeted and personalized marketing, sales and service offerings through the customer’s preferred channels.

Customer centricity can be realized through an integrated architecture that combines CRM, BPM and MDM disciplines, resulting in a seamless and optimized customer management process (see Figures 2 and 3).

Pillars of Customer Centricity

Figure 2

CRM BPM MDM

• Targeted promotions and e-mail communications

• Sales campaigns

• Send e-mail and track responses

• Sales force automation

• Customer tracking

• Customer history

• Appointment management

• Time management

• Reporting

• Process automation

• Centralized process logic

• Process optimization

• Enterprise-wide and beyond collaboration

• Providing real-time process visibility

• Automation and exception-based processing

• Rule-based workflow management

• Business activity monitoring

• SLA tracking and process analysis

• Event management and notification

• Centralized data acquisition

• Data cleansing, standardization and distribution

• Data model and persistence

• Match and merge

• De-duplication and survivorship

• Cross-reference and hierarchy management

• Data consolidation, harmoniza-tion, alignment and enrichment

• Data stewardship and governance

• Security and entitlement management

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The Unified ViewThe power of the unified solution can be visualized through a redesigned account opening process (see Figure 4). The process begins with the relationship manager using CRM to capture key customer needs stored in the system. The integrated approach relies on automated BPM software, built on a rigorous decision-based

system, to generate a list of suitable products with applicable rates.

The relationship manager then uses the complete view of the customer provided by the MDM system, linked to BPM and CRM, to complete the application. The MDM system also helps obtain the complete credit history and other information required for processing. This expedites account

Integrated Process Architecture

Figure 3

Delivering Customer Centricity

Branch Contact Center Mail

-

Product Portfolio Risk & Exposure

KYC & AML

Multi-Channel Interaction Management

Business Process Orchestration & Automation

Centralized Data Strategy & Multichannel Integration

MDM

Relationship Marketing

Web Self-Service

Mobile Marketing

In-Store Interactions

Meetings & Forums

Campaign Management

Lead Management

Service Request Management

Loyalty Management

Case Management

Real-Time Analytics

Dyn

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Single Customer View

Classification & Segmentation

360-Degree Customer Insight

360-Degree View of Product

360-Degree View of Interaction

Data Security & Privacy

Hierarchy & Relationship

CRM

BP

M

Integrated Solution View

Figure 4

Client - RM Operations

Operations Client - RM Operations Client - RM

CRM

BPM

MDM

RM captures client needs and transmits to decisioning system.

Displays all eligible product offers with accurate rates.

• RM fills out application based on 360-degree client view. • Provides credit offer based on full client relationship.

Reviews application and determines document needs.

• Displays real-time application status. • Routes document automatically to the right person.

• Reviews application and documents. • Updates workflow with approval status.

• RM receives approval status. • Sets closing date. • Client reviews the application.

• Client signs the document online. • Document automatically routed for processing.

Decisioning System

360-Degree Insight

Workflow System

• Views application status online.• Sends all documents required online.

cognizant 20-20 insights 6

opening processing time and reduces manual data entry. The completed form is automatically routed to all concerned parties through process automation, achieved via BPM. The client is able to view her current status online and provide an electronic signature.

The signed form is then sent to the operations team for final processing. Complete automation and transparency is achieved using the combina-tion of the CRM, BPM and MDM systems working together to provide a seamless process flow.

Key Processes Leveraging the Unified SolutionFrom here, we will examine four critical customer management business processes.

Customer Onboarding in Retail Banking Operations

Let’s examine the customer on-boarding process for a typical retail bank (see Figure 5). The process is initiated when an application for a particular product is received at the point of sale and is terminated when the applicant is either denied or converted into a customer. Here’s how our three critical components should be applied:

• CRM receives the application, collects and captures all the necessary information, prompts the customer to choose a product and provides the welcome information and relevant collateral.

• BPM checks to see if the applicant is an existing customer, updates additional information required, gets the basic know-your-customer (KYC) checks verified, defines the eligible product and arranges for customer account creation.

• MDM supports both CRM and BPM by checking data repositories to determine whether the applicant is an existing customer and then creates or updates the customer record, assigns a customer ID and stores information on the products mapped with the customer ID.

Customer Service Request Processing

The process starts with the request reaching the customer service department and finishes when the request is completed and updated in the customer master file (see Figure 6, next page).

• CRM handles the customer service request, captures additional information for authentica-tion and service activation, generates a service request ID, manages turnaround time and updates the customer on service status.

• BPM sends the request for authentication, determines whether fees or charges are required, sends the service request ID to operations for fulfillment and notifies the rela-tionship manager for service completion. MDM ensures whether the customer is genuine, identifies the customer segment or group and updates the customer service portfolio.

Customer Onboarding in Retail Banking Operations

Figure 5

Ris

k &

C

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CRM

BP

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Update KYC

Create customer ID Y

N

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TPP

Receive customer info/application

Receive customer info/application

Capture additional information for authentication

Select product/service

requirement

Send welcome letter/collateral/

service confirmation

Check if existing customer

Send for creating/updating

Send for due diligence

Send for KYC verification Is product

asset/liability or TPP?

Is customer eligible (credit

score)?

Map branch ID to customer

Map assset ID to customer

Map investment product

Create and store bank account/loan account/CC

number/invoice

Is customer KYC compliant?

Create/update customer information

Is customer existing ?

Send for account creation/ID number

generation

cognizant 20-20 insights 7

Loyalty Management

The process begins with the identification of customers who can be offered loyalty benefits (using MDM) and terminates after communicating the loyalty reward structure to customers from CRM and updating them in the MDM customer master database (see Figure 7, next page).

• CRM communicates eligibility norms to the customer for loyalty benefits, notifies customers about their loyalty group and provides collateral and product/service offerings, based on loyalty.

• BPM maintains qualification standards, loyalty segmentation, mapping of customers within the loyalty reward structure and updating the CRM system and sales team on customer activities following loyalty structure mapping.

• MDM contains all the customer information, which it sends to BPM for segmentation, providing a 360-degree view of customers to help create customer loyalty segments, updates the customer master database with the loyalty code and loads the customer’s master file with products and services made available after the customer is awarded loyalty status.

Campaign Management

The process is initiated from the data extracted at the MDM level and ends at the MDM level, again

with updates made to the customer’s master file (see Figure 8, next page).

• CRM runs the campaign on the selected set of customers, manages the response, interacts with customers and notifies them about new products or services.

• BPM manages and designs the campaign, transfers leads to the sales team and archives prospective leads.

• MDM provides the customer data for the campaign, obtains segmentation information, targets a set of customer data and forwards this data to analytics for monitoring and measuring of the campaign’s success. MDM also updates the outcome of the campaign in terms of new products or services in the customer’s master file.

Key Benefits Processes implemented using the proposed solution will promote the re-use of data services and improve overall data quality, while providing business stakeholders with a full view of the customer, enabling the organization to serve customers better. It will also promote business process governance and ensure consistency of data in a multi-system environment. The result has the potential to drive much higher LTV with increased up-sell and cross-sell opportunities, thereby improving top-line growth.

Customer Service Request Processing

Figure 6

CRM

BP

M

Pro

duct

/ S

ervi

ce

Rep

osit

ory

Ope

rati

ons

and

Pro

cess

ing

MDM

YN

Call center (branch) executive receives request

Captures information for authentication

Capture additional information/documents

for service

Inform customer of charges/TAT and take confirmation

Mail/text completion update to customer via preferred contact mode

Create service request ID

Send service completion alert to relationship

manager/CC Send request ID

to operations Send to check fees/charges

Send for verification

Is customer genuine?

Check interaction history (to see if service request

exists in history)

Check customer segment

Check preferred mode of contact

Update customer service portfolio

Check appropriate charge for segment

Add charges to current statement

Process service bucket

cognizant 20-20 insights 8

Figure 7

Loyalty Management

CRM

BP

M

Ana

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Sal

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nd

Mar

keti

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MDM

Y

N

Communicate loyalty structures and

associated benefits

Welcome letter to loyalty club and benefit

structure notified

Send for loyalty segmentation

Does the customer qualify?

Customer mapped with loyalty and reward structure

Update CRM on loyalty code and notify customer

Update sales team on loyalty

structure

Update customer activities post

loyalty structure

New offerings based on loyalty to customers

Analytics rule engine

Create customer loyalty structure

Sales and marketing creates offerings based on loyalty structure

Update customer master with additional product and service

codes post loyalty structure

Update customer master with loyalty code

Active customer information

Create 360-degree view of

customer

Figure 8

Campaign Management

CRM

BP

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Ana

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MDM

Y

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Run campaign

Initial response received

Update customer

Welcome call for new services

Notify customer

Archive leads

Transfer leads to sales

Transfer leads to analytics

Approve campaign

Design campaign

Analyze customer data

Create target groups

Monitor and analyze campaign success

Archive leads for further analytics

Active customer

Sales cycle

Lead qualification

Leads assigned

Define goals and objectives

Customer data

Target set of customer data

Update customer master

Customer interaction

Get segmentation information

About Cognizant

Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process out-sourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50 delivery centers worldwide and approximately 140,500 employees as of March 31, 2012, Cognizant is a member of the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant.

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© Copyright 2012, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to change without notice. All other trademarks mentioned herein are the property of their respective owners.

Raising the Bar on Customer Lifetime ValueIn today’s rapidly changing environment, organi-zations are looking for ways to remain competi-tive, regain traction, enter and expand into new markets and tap all available opportunities. These organizations can benefit significantly by moving from a product-centric to a customer-centric approach.

The unified business transformation solution outlined above can help organizations achieve this customer-centric view. It will help optimize and automate processes toward a “one-organization” view across all channels to achieve a more precise and intimate understanding of the customer. With the combined use of CRM, BPM and MDM, organi-zations can enhance their value to the customer by effectively understanding customer needs and mitigating customer issues, resulting in increased loyalty, enhanced brand reputation and greater lifetime value per customer.

Footnotes 1 The CMO Survey.Org, February 2012, http://www.cmosurvey.org/. 2 Drew Armstrong and Sara Forden, “Express Scripts, Medco Win Approval for $29 Billion Deal,” Bloomberg

Businessweek, April 2, 2012, http://www.businessweek.com/news/2012-04-02/express-scripts-medco-win-approval-for-29-billion-deal.

3 “Healthcare M&A Finishes Strong in 2011,” The Advisory Board Co., Jan. 26, 2012, http://www.advisory.com/Daily-Briefing/2012/01/26/Merger-and-acquisition-activity.

4 “HiTech Act,” HIPAA Survival Guide, http://www.hipaasurvivalguide.com/hitech-act-text.php.

About the AuthorsSouparna Giri is Lead Consultant in Cognizant’s MDM Advisory Service, with eight-plus years of experience in the IT field. Souparna has a bachelor’s degree in mechanical engineering from Bengal Engineering College and an MBA in marketing from Great Lakes Institute of Management. His expertise spans MDM strategy, assessment and roadmap. He can be reached at Souparna.Giri@cognizant.com.

Karmendra Jain is a Business Consultant with Cognizant’s MDM Practice. Karmendra has a bachelor’s degree in computer science from The National Institute of Engineering and an MBA in strategy and IT from the Indian Institute of Management, Calcutta. He can be reached at Karmendra.Jain@cognizant.com.