Jun 24, 2004 (10:06 AM EDT)
BI To CRM's Rescue

Read the Original Article at InformationWeek

At first, the problem with customer relationship management was that nobody understood what it meant. Then the problem morphed a bit -- businesses deployed CRM software, but couldn’t get employees who saw no value in it to use the stuff. That problem is still unresolved at many businesses, but now it appears companies are hitting upon another problem: Getting their CRM packages to deliver useful information. That's where business intelligence comes into play.

As Tony Kontzer wrote in a story we ran this week, getting value out of a CRM system requires companies to analyze the various data streams that feed the software. In short, you’ve got to analyze your customers before you can get any value out of "managing" them.

For example, CRM software's classic use is customer attainment and retention. The goal in these cases is usually to bring in and hold onto as many customers as possible. But isn't it possible that some customers actually cost the business money rather than generate revenue? The answer, of course, is yes, and in that case a company's CRM software is inadvertently being used to streamline the status quo, if you will, rather than improve the business.

Adding a BI layer to analyze customer data before it's fed into a CRM system can tell a company, for instance, which customers are the good, revenue-generating ones and which are the bad apples. The ideal process, then, becomes first letting the BI software help the business carry out a little addition-by-subtraction on the customer rolls, and then using the CRM software to successfully manage relationships with the customers who matter.

CRM software still suffers from usability shortcomings, even years now after that problem was first identified. But there's no need to add to the problems that hinder CRM by nurturing useless or even harmful customer relationships. You can get around that unnecessary difficulty by bringing business intelligence into the mix. CRM is just a business process like any other, and like the others, it can be made smarter with BI.