The benefits – to companies and customers – of KAM are fairly clear, partic- ularly when strategy is based on a well-thought-out model of KAM and when the implementation programme is carefully planned and managed.
However, few companies anywhere have overcome the technical barriers to achieving the full potential of KAM. From a systems point of view, the key is integration of the many systems that a company uses to manage different aspects of its relationship with customers (and increasingly that customers use to manage their relationships with the company). Integration allows data arising and used in many different types of interaction, in many channels and for different products and services to be brought together and transformed into valuable and accessible customer information. The reason for this is that many companies develop their IT infrastructures organically over decades, adding systems to meet particular business needs as they arise. This means that many companies have systems that were conceived during the 1980s or even earlier, running alongside ones implemented in the 21st century. The older ones are usually referred to as ‘legacy systems’, although in many cases they are critical operational systems without which the business would collapse. The technologies and computer languages that these use are completely different, and there are formidable obstacles that make it very difficult for these systems to communicate with each other.
To improve the consistency, productivity and benefit of KAM, data must be derived from many incompatible systems and turned into useful infor- mation that can be used to build a complete picture of each customer. It requires specialist knowledge, combined with experience of previous projects, to transform data resident in many systems into actionable infor- mation that can be used when managing a particular customer. The infor- mation is used to ensure that:
• The right product is offered to the right customer at the right time.
• Where the product can be customized in any way (eg features, pricing), it is done in such a way as to optimize the customer’s lifetime value and profitability to the company.
• The business has the resources, at that moment, to close and fulfil all the deals that will flow from the offer.
• Customers are managed in a way that optimizes the cost-effectiveness of each channel.
• Senior and middle managers always have what they need to make the best-informed strategic decisions more quickly than their competitors.
• In its most advanced form, that customer knowledge is used by every layer of management, from the CEO for strategy development, across sales, marketing, operations and financial management, uniquely Preparing for key account management
providing an integrated approach to KAM from the CEO right through to the database administrators who enable all the above to work.
• Collaborative working takes place across departments and channels, espe- cially in areas such as customer retention and new product development.
Integration involves more than unlocking data imprisoned in many legacy systems. Just as important is the ability to move current data around the business. Particularly now, with customers being offered and choosing to use a variety of touch points, it is important that some forms of data are updated instantly. Of course, not all areas of business are time-critical, requiring immediate access to up-to-the-minute information. For example, data can be batch-processed using traditional ETL (extract, transform and load) tech- niques. But where KAM requires a customer view that is correct up to the minute, it is important to make sure that, say, the sales office, the call centre and the website all show the same information at any given moment.
The process of migrating, integrating and consolidating data is littered with obstacles. It often causes serious slippage in project timetables – and equally harmful budget overspend. Frequently, projects fail to deliver the anticipated business benefits, simply because the quality of the data they produce is too suspect to be useful. Worse, some projects are never completed at all. The reason for much of this is unpredictability of the inte- gration process. Until recently, the investment in time and money required to assess the issues involved has been so great that it has been unfeasible to gain a full understanding of a project’s scope and scale until the migration and integration team is well into its work. Even then, there was no guar- antee that unwelcome difficulties would not arise unexpectedly. What is certain is that often up to 50 per cent of a project’s cost and time can be taken up by the data migration and integration effort.
A primary objective of a KAM systems initiative is to build as clear a picture as possible of each customer (including customer value) through a continuing process of acquiring and using information. For most projects, the richest source of start-up information is the historical data stored in the company’s legacy systems. These databases may contain transaction histories for different sorts of products or services (including ones for which the customer is no longer active), responses to various marketing offers, customer service queries (complaints, requests for information), core customer data, product holding/purchase records, and so forth. Generally speaking, all of the different sources of data are likely to have been constructed at different times, for different purposes, and often using different technologies. The challenges of transforming such varied data into usable and valuable information are formidable. Conflicts can be as basic as having the same data presented in different-length fields in different databases. More seriously, data with the same meaning may be
What will it take? Processes and systems
Data where it’s needed… when it’s needed
When theory meets practice
When you can’t start from scratch
recorded differently in various systems, resulting in varying degrees of reli- ability. Some data may not even match their original document description.
When such ‘semantic drift’ and ‘data mutation’ arise, assessing the value to be placed on each source takes on a central significance.
Integrated systems are required to support integrated business capabilities for KAM. New capabilities can be added alongside existing systems and inte- grated to provide improved ability to gain return on investments. These developments can be prioritized and carried out in stages if a consistent approach is deployed that reuses skills, methods and tools against a common architecture and roadmap. A closed-loop operation can be developed in one business area or for one KAM objective and extended to others. Over time the KAM ecosystem is developed by combining collaborative (multi-channel) and analytical capabilities through operational integration.
Preparing for key account management