CRM Solutions in Regulated Industries

In a conversation with an executive of a medical device manufacturer I asked the question, " What keeps you up at night?" He thought for a moment and replied, "Operations, Profits, Equipment Performance and last but not least Regulatory Compliance." I could certainly understand where the conversation was going. Who isn't interested in profits, uptime and regulatory compliance? I knew that with an integrated front office, such as implemented with enterprise-level Customer Relationship Management (CRM), companies and employees have the tools needed to maximize each customer encounter, monitor equipment performance, streamline operations, increase customer satisfaction and reduce operational costs. Additionally, an integrated front office using enterprise CRM provides traceability across the entire customer and product lifecycle to assist in regulatory compliance.

The front office can be considered to include all of the operational groups that touch the customer. These include: Marketing, Sales, Professional Services, Field Services, Depot Services, Contact Center and support functions such as materials management/logistics and contract management. Essentially, the front office pulls together an entire organization to deliver the agreed customer response while managing the interdependent systems, personnel, procedures, products, partners and business processes. Needs for enterprise CRM prevail throughout business processes that retard productivity and customer focus, and by extension depress profitability and revenue growth. Problem areas generally include:

At the Enterprise level
Multiple discrete databases and dependence on manual processes

  • Duplicate data entry
  • Increased opportunities for manual errors
  • Multiple, segregated, unsynchronized views of customers
  • Inefficient utilization of employee and material resources
  • Impaired capabilities for prompt response to customer issues
  • Paper reporting
Lack of systems integration among departments
  • Uncoordinated business processes and objectives
  • Inefficient sales-to-service handoff
  • Poor contract management and warranty tracking
  • Missed opportunities to bill for services, merchandise and expenses not covered by warranty or service contract
  • Delayed customer billing, impacting revenue recovery and cash flow
  • Billing disputes
  • Uncoordinated manufacturing and service parts inventories
Field Service
Insufficient tracking of profitability by job
  • Materials, time and expenses
  • Unwarranted service not billed
  • Missed opportunities for field service sales
Service parts inventory management (field service and depot repair)
  • Over stocking and high carrying costs overhead
  • Under stocking and high parts purchasing costs
  • Insufficient tracking of stock movements and usage at all levels (warehouses, sites, vehicles, repair chain)
Unnecessary service visits
  • Poor call avoidance
  • Poor logistics
  • Poor communications between dispatch and field force
  • Poor tracking of field force skills, availability and location
  • First-time-fix rate less than 100%
Other customer satisfaction issues
  • Contracted minimum response times
  • Minimal equipment downtime
  • Routine periodic maintenance of equipment
Contact Center/ Help Desk
Slow call handling and response to customer requests
First-call problem resolution less than 100%
Inadequate or not readily available problem resolution tools
  • Customer data, site configurations and histories
  • Product data
  • Billing data
  • Warranties and service level agreements
  • Scripted responses
  • Repair histories
  • Knowledge bases
Missed opportunities for sales at call center level
  • Pricing data
  • Marketing campaigns
  • Prompts and scripts to up sell and cross sell
  • Returns, exchanges, trade-ins processing
  • Knowledge bases
No facility to coordinate response via multiple customer contact methods
  • Voice
  • Fax
  • Email
  • Internet
Sales and Marketing
Mix of sales force automation tools impairs sales direction and productivity
  • Different contact management products used by field sales force
  • No data uniformity and data sharing
  • Difficult for management to collect, consolidate and analyze forecasts
  • Difficult for management to implement and modify sales methodologies
  • Few tools to prompt for Sales effectiveness
  • Difficult for management to monitor opportunities and pipelines
  • Inadequate capabilities for collaboration and team selling
Administrative tasks impacting time that should be spent selling
  • Sales reporting and forecasting
  • Expense reporting
  • Trip planning
  • Correspondence and literature fulfillment
  • Proposal generation and RFP responses
No integrated access to related enterprise functions
  • Marketing campaigns
  • Post-sale customer records and histories
  • Post-sale customer interactions (call center, field service, self-service, etc.)
Now before everyone runs up to me to see where he or she can sign-up for such a solution, we must first realize that there are a couple of flavors of these systems. There are data-driven systems and process-driven systems. At first glance, they may seem to provide the same value proposition but they are actually very different in their approach to problem-solving. Data-driven systems are designed for the delivery of decision-support data and work instruction based upon events or programmatic logic. These systems often require a lot of professional services and customization to embed business processes. Data-driven systems help to personalize data and work instruction to empower users with the information they need to perform their job functions. This decision-support can be categorized and scheduled to the personal work habits of the user.

Data-driven CRM systems also enable data sharing across multiple work groups, support teams as well as business systems. Data-driven systems tend to focus on the user and then work to bring data to that user as needed. In contrast, Business Process-driven CRM systems usually come out-of-the-box with business process models that are vertical market-centric.

A true Business Process-driven system leverages the business process to both empower the user while managing the interdependent data, processes, users, etc. This approach provides more out-of-box operational functionality and traceability when properly integrated with other existing and supportive business systems. By correlating business processes and data models with the rules of customer engagement, companies can maximize business opportunities, simplify traceabilty and streamline operations. Multidimensional data integration and decision support with business process-driven CRM provide traceablity across employees, partners, products, genealogy, components, customers, skills etc..

Let's begin to break down the areas of traceability. 'As designed' data correlates design specifications with the components/processes used during production. 'As built' data identifies processes, quality procedures, personnel, components, warranties, contracts, and customers with finished products for lifecycle asset management. 'As delivered' data correlates finished materials with project implementation tasks, quality procedures, implementation services, partners, contract requirements, change orders, project orders, sales/marketing organization, customer care/contact center, as well as field/depot service organizations. 'As maintained' data correlates customer agreements with lifecycle support organizations, account management and customer care organizations.

Delivering this functionality across the enterprise requires a distributed architecture that can support various users interface (UI) types across various user communities. An 'N-tiered' distributed, network-centric architecture is preferred. This solution must also support various UI types such as PocketPC, Web Browsers and Application 'Content'. By providing ubiquitous user access, information can be added and retrieved across the enterprise while in the performance of job functions thus digitizing and collapsing multiple interdependent business processes. This is where the areas for return on investment in CRM begin to show themselves. Some of these include:

Customer service rep / Service agent / Technician productivity

  • Efficiency in technician scheduling and utilization
  • Reduced repeat calls (first call resolution saves on truck rolls)
  • Reduced service visits due
  • More efficient handling of call center (workforce and call management)
  • More calls coming in via the web, both submitting new calls and checking status on calls
  • Automated controls to reduce management distraction
Improvements in profitability on fixed-price contracts
  • Better management and analysis of margins
  • Improved renewal management
  • Improved management and tracking of Service Level Agreements
Staff levels
Reduction of back office staff due to automated processes
  • Automated job dispatch
  • Streamlined billing procedures
  • Reduced or no double entry of data
  • Improved data access using Customer Center
  • Reduced admin staff required to handle reporting of time and resolution of call via phone
Reduction of inventory administration & holding costs
  • Reduced stock outs
  • Control of van stock
  • Streamlined warehouse operations
  • Improved stock take procedures
  • Control over rotating spares
  • Improved control over vendor warranty claims
  • Reduction in price premiums and shipping costs for emergency spares
  • Reduction of costs for inventory holdings
Improved billing procedures
  • Faster invoicing through automation
  • Tracking profitability to highlight anomalies
  • Tracking problem debtors
  • Reduced customer queries
  • Reduced days outstanding for invoices due to more accurate billing
Other benefits
  • Improved time and expense recording
  • Improved customer relations
  • Reduced staff turnover due to higher job satisfaction
  • Greatly improved management control due to better reporting options
  • Predictable, automated escalation procedures
  • Enforced rules of customer engagement
  • Improved customer retention due to higher quality service
  • Improved traceability
As we distribute the enterprise-wide front office system to field users on a platform such as PocketPC's, other areas for financial returns emerge. As long as these applications support untethered use, technicians and project personnel have access to all of the information they need whether they are working in a hospital, sub-basement or atop a cooling tower. Field users can complete work orders, take payment, receive customer signature and transmit all of the associated data for billing and revenue recognition automatically. Sales personnel can update sales forecasts and sales methodology progress as well as decision influence information immediately after prospect/customer meetings, as they walk back to their car. Project managers can check the status of project tasks, approve time or expense sheets as well as trigger milestone billing, all from the palm of their hand.

The overall goal of the ubiquitous UI approach is to insure that information is made available to every user as needed and in the format best suited for that user as a byproduct of job performance. This results in a structure that provides lifecycle traceability. Lifecycle traceability is key for several factors. These include risk mitigation, customer intelligence, product quality intelligence, market/demographic intelligence as well as overall regulatory compliance. The intelligence data can be considered as part of an organization's knowledge bank. Napoleon Hill once stated that, "Knowledge is power when it is directed toward a worthwhile goal." Hence, data is of value when it is propagated through business rules and delivered as timely decision support.

The value of traceability can be seen in many areas. These can include the intelligence that drives a marketing campaign toward a unique customer program, or the recall of a particular component that is under warranty and must be acted upon within a particular time schedule to both reduce the cost impact as well as meet regulatory obligations. The fact of the matter is that CRM designed as a business process-centric system manages not only the intelligence data but also the associated business rules to direct business processes toward these worthwhile goals.

For the sake of nomenclature, we'd like to coin the phrase 'equipment-centric companies'. These are companies that manufacture, sell and support, or simply sell and support, capital equipment. For these organizations, lifecycle asset traceability is one of the more important and complicated areas for business-process system deployment. It is also one of the greatest areas for Return on Investment (ROI).

All equipment-centric organizations must, of necessity, maintain an inventory of parts that can be sold as product or used in the maintenance of equipment, either on the customer's site, in a depot service, or both. While the structure varies widely from organization to organization, inventory can generally be divided into sales, parts for service, and spare parts. The physical structure of an organization's warehouse system can take many forms. There may be one centralized warehouse or a set of regional warehouses. Service agents may keep a personal inventory of parts in their vehicle, or order only the parts needed for a particular job from the warehouse. At the time when CRM is first installed, the organizational structure of the warehouse is defined in the system's database, as is every item in the inventory.

Day to day activities within the warehouse itself fall into two general categories: maintenance of stock levels and movement of goods into and out of the warehouse. Maintenance of stock levels includes tasks related to ordering and receiving goods to maintain a defined inventory level in the warehouse, such as Replenishment Orders, as well as recording receipt of products into inventory, return of unsatisfactory products to the supplier, stock control and physical counts. All can be managed by an enterprise-level, process-driven CRM system.

Adding New Products Into Inventory: From time to time, warehouse personnel must add new products into inventory. The process begins with creation of a new Product Record and continues with assigning stock levels, defining suppliers (vendors), defining purchasing and replenishment criteria, and requisitioning initial stock.

Inventory Replenishment: Replenishing stock levels in warehouses includes creation of the Replenishment Order, and, during approval of the Replenishment Order, creation of Internal Material Orders and Purchase Requisitions. During approval of the Replenishment Order, the CRM system automatically creates Internal Material Orders and Purchase Requisitions as well as follow-on logistics procedures such as creation of a Pick and/or Pack List, creation of a Shipping List, and updating stock levels upon entry of a Receipt of products in the destination warehouse.

Receiving Goods into the Warehouse: Warehouse personnel enter receipt of ordered goods (through internal transfer between warehouses or delivery from an outside vendor) or goods that are received more informally, such as goods that are picked up by someone while at a vendor's location for another reason.

Customer Returns: Once goods are delivered to the customer, the goods are removed from inventory. Should the customer returns those goods (for example, no one was there at the customer site to receive the shipment), warehouse personnel record the fact that these goods are once more part of the service provider's inventory. Once recorded, the organization has the means to track the location and ultimate disposition of the goods.

Movement of Inventory, on the other hand, involves those processes that involve moving the inventory out of the warehouse to another destination, such as the transfer of goods between warehouses or delivery to a customer site. Normal logistic process requires warehouse personnel to remove the products from the shelves, place into containers for transport, actually ship the products to a final destination, and enter the movement into the CRM system.

Tight inventory, materials, logistics and asset management (through to the end-user) provides regulated equipment-centric organizations the traceability to both meet regulatory obligations as well as differentiate themselves within the market.

Electronic systems when properly implemented and managed can actually provide the basis for tighter compliance of 'Standard Operating Procedures'. While this in and of itself is a valuable proposition for industry it is dwarfed by the value of 'Best Business Practice Procedure' compliance. This is especially true when it incorporates the management of the Customer Relationship. A properly implemented, business process oriented Customer Relationship Management solution can enable organizations to deliver a higher degree of value to their customers. Without such a business system, companies will be hard pressed to move transactional customers to the auspicious position of strategic customers.

Moreover, they will not be able to support the ever-increasing expectations of their strategic customer base. The above statements are predicated upon two points. These include using Business Process oriented CRM systems and a properly implementing them. While this paper has spent some verbiage on the value of business-oriented systems it is important to realize that numerous projects fail due to the lack of needed implementation experience. Selecting a system that meets the needs of your unique business process is as important as selecting the right services vendor. You should be certain that the services vendor thoroughly understands your unique needs, has a proven track record, has a proposed project team that meets with the qualifications needed for your project and can present the quality of documentation required to meet the goals of your quality program. The successful deployment of a 'Business Process Oriented Customer Relationship Management' solution can become your true differentiator across your competitive business-scape.

Astea International Inc.