With the world focusing ever more closely on the customer and an improving business outlook encouraging investment in technology to drive growth, companies continue to look at customer relationship management (CRM) solutions as the answer to performance improvement.

As a result, worldwide CRM software revenues, up by nearly 14 per cent in 2005, continue to grow strongly. And some two thirds of companies in a recent IBM Global CEO Study look to CRM to deliver revenue growth, by improving customer experience and retention and influencing the development of new products and services.

Yet are such organisations once again doomed to disappointment? Just like an earlier generation of users, are many of them destined to spend huge sums on much trumpeted CRM solutions, only to find the benefits fall well short of expectations?

CRM can only go so far in understanding the customer and meeting their needs and expectations. By contrast, rules-based Customer Process Management (CPM) goes one crucial step further, in differentiating the product/service offering and enabling a truly positive customer experience — the keys to customer retention and growth.

As industry analyst, Forrester Research, puts it: “CRM is becoming customer process management. Process innovation is key to delivering a ‘branded’ customer experience that will differentiate your company from competitors.”

Data ‘intelligence’

In exploring CRM’s high profile in recent years, it is not hard to see why such technologies have taken such a hold on the corporate consciousness. For more than a decade, the concept of ‘customer as king’ was little more than empty management-speak, a mantra observed more in the breach than the observance.

Yet more recently, in the face of tougher global market and greater product commoditisation, companies have recognised the need to better understand their customers and prospects if they are to improve their competitiveness.

And on the face of it, CRM technologies appear to offer the answer. For, at the point where the customer comes face-to-face with the company’s brands and values, it pulls together the knowledge on each customer gleaned from every sales, marketing and service interaction, both inbound and outbound.

Yet despite investing in often-costly CRM solutions, there have been many highly publicised failures. In some cases this has been the result of putting the technology in place before defining an effective customer strategy: in others, it has been due to the failure to align the rest of the organisation to the new CRM imperatives.

Yet the principal reason why so many CRM implementations disappoint is clear. The CRM concept typically focuses primarily on ‘data’ — in short, the more you know about your customers, the more you are likely to win.

However, by itself this is simply not enough. In introducing intelligent business process management (BPM), the focus switches to process and the intelligent use of that data. Suddenly, and for the first time, it becomes possible to create a customised process based on each individual customer and their circumstances.

New commercial equation

In a typical CRM implementation, much of the investment is targeted at creating a fully-functional underlying database to capture and retain huge volumes of customer data, which in turn results in a significant overhead for the business. What this lacks, however, are systems that use the data to automate decision-making and complex service transactions.

By contrast, an intelligent and intuitive CPM solution puts process first, requiring only the data specifically needed to support each process. The result is much more powerful, as it can interrogate existing applications within the business fast and effectively, creating bespoke processes ‘on demand’ - in real time - that are right for the customer and right for the business.

And, at a time when business requirements are changing ever more frequently in response to competition and regulation, it presents a straightforward yet telling equation: CRM + BPM = CPM.

Personalised customer service

An organisation faces a number of challenges in realising its customer service vision: it must retain its most valuable customers; automate work, increase productivity and reduce costs; and rapidly introduce new products and services.

In delivering against these objectives, rules-based CPM is much more than a customer service desk top. It provides the ability to manage customer service across the enterprise, with tools for handling multiple channels, marketing and service fulfilment, as well as for monitoring, designing and developing enhancements for any organisation’s customer service operations.

Its ‘intent driven’ approach to customer service thus becomes the key to achieving mass personalisation, for so long the holy grail of customer management — previously tantalisingly out of reach, but now an attainable goal in the increasing battle to achieve differentiation in tough, international markets.

By putting in place the right customer facing personnel with the right tools to improve ‘first pass’ rates, quality of service and productivity will rise as costs fall. Critically, the answer lies not in managing the data, but in managing the rules. And, by putting control back within the business, this is precisely what rules-based CPM delivers.

In a world where everyone is trying to figure out how to sell more to each customer, a satisfied client is more likely to stay loyal and respond positively to attempts to cross-sell and up-sell. Win/win.

David Wells, 40, vice president and managing director, Pegasystems EMEA, is a recognised thought leader in the BPM industry, with a wealth of practical business development and operational experience in Pegasystem's target markets. He joined the company in 1994 to establish and develop Pegasystems' European sales operation, before taking on his current broader senior management role in [year?]. Under his leadership, the European operation has grown significantly and now represents almost one third of Pegasystems' global business. A business graduate from the Bristol Business School, David began his career at Wang in systems analysis, project management and sales: he then moved to Bull Information Systems, where he had senior sales management responsibility for both public and private sector clients. Pegasystems