Manage Demand Chain Performance to Derive Greater Business ValueManage Demand Chain Performance to Derive Greater Business Value

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Adoption of performance management principles within most organizations requires that they address information as an applied asset that contributes to change. Operational systems designed to automate or simplify repeatable tasks are not sufficient to foster such process-centric change. Such unrealistic expectations have been routinely placed on operational customer relationship management implementations, often leading to the 'failure' label on CRM. Ventana Research maintains that front office performance improvement and growth initiatives necessitate a broadly defined demand chain approach to marketing, sales and customer service initiatives. We recommend viewing your customer relationship management systems as a foundation layer, a critical source of information that feeds performance management initiatives. Cross-functional integration and coordination will provide greater visibility into customer interactions, enabling insightful customer interaction process optimization and alignment with strategic objectives toward greater achievement.

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As Ventana Research has discovered in its research efforts, the key challenges to adopting performance management principles are 1) a lack of understanding of the potential for what's doable, and 2) dealing with culture shock over issues surrounding information visibility. This being the case, organizations should not expect to foster process change with a reliance solely on an operational systems foundation. Organizations paint themselves into corners when they rely on operational customer relationship management systems to enable front office performance improvement and growth initiatives.

The way we see it, a broader front office perspective in support of customer-facing business processes and an IT infrastructure more aligned to enabling individuals to achieve are vital. As defined by Ventana Research, demand chain management reflects systems that support strategically united front office initiatives that overlay operational execution applications. They enable organizations to maintain consistency in all customer-facing processes and align group and individual performance throughout the front office.

Cross-functional integration and coordination. We are aware that marketing, sales, and service business processes are not as neatly sequential as might be reflected in stated functional business objectives, let alone in practical efforts to enable individuals and processes. Often justified independently, occasionally with functional blinders, support systems frequently operate within their vertical silos without addressing business objectives and actions elsewhere in the front office. Due to this disconnect, organizations are challenged to create systems that consistently deliver robust capability throughout the demand chain — cross-sell efforts systematically coordinated with trouble-ticket resolution and marketing lead-generation execution, for example. Whether through EAI middleware, shared metadata, or common data stores, each system should be automatically updated on activities planned and executed elsewhere. The goal is to manage and deliver information that not only aligns with immediate business activities, but also empowers consistency of messaging, program treatment, priority setting, and execution across marketing, sales, and customer service applications.

Customer interaction optimization. Front office business processes involve dynamic and sometimes unpredictable interactions with customers. Individual talents and circumstances drive tactics that often do not align well with a predetermined set of options or strategies. By definition, such interactions are not well structured. Thus, demand chain enabling technology must have the capacity to bring structure to such tasks, suggesting next steps on the basis of conditional business rules at the very least. In more advanced solutions, fact-based analytical insights are delivered to users in marketing, sales, or customer service roles. Ventana Research expects that optimized applications going forward will routinely provide systematic guidance toward resolution of issues in real time.

Alignment with objective achievement. Many organizations struggle with the task of aligning individual and group operations with enterprise objectives. Business intelligence solutions only begin to address the need with historical reporting on key performance indicators (KPI's) and by providing access to outcomes comparison information (actual vs. budget, for example). Such an information platform is necessary, but certainly insufficient to achieve alignment. In most cases, making the linkage to objectives and drawing conclusions about performance improvement is left to the users' powers of inference. Ventana Research prefers to see demand chain alignment in applications that deliver pointed information which is at least implicitly tied to objectives and initiatives that cleanly traverse the organizational hierarchy. In the best case, the individual user can link each local outcome to its direct impact on goal achievement for his or her organizational groups. Managers should be able to see group impact on performance up and down the organization and across the demand chain.

Assessment

Ventana Research recommends that organizations using, building, or contemplating CRM implementations treat the operational marketing, sales, and service components as a foundation layer. Beyond their providing process support to individuals within the respective business functions, they are a critical source of information to feed greater understanding of cross-functional customer interactions. Make the effort to rise up out of the operational weeds and assess how the underlying application information can optimize customer interactions and deliver aligned performance improvement across the demand chain.

Jack Hafeli is Vice President & Research Director — Customer Intelligence and Demand Chain Performance at Ventana Research, a research and advisory services firm.