Lean Processes in Customer Master Data Management
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1 customer data Management Lean Processes in Customer Master Data Management Dr. Wolfgang Martin, Analyst The customer today has the power. It is now easy to find out about prices and information of products and services from all market players, fast, at any location, at any time, and from just about anywhere. Customers pool their knowledge in social networks and related channels at the speed of light. The company brand and image is no longer in the hands of the company, but instead is at the mercy of opinions circulating in a worldwide network. More than ever before, companies today need deep and comprehensive knowledge about their customers and the customer network. A comprehensive holistic image is necessary, a 360 Customer View. This profound knowledge base must then be effectively implemented to provide the customer with the best possible customer experience. This experience is a valuable enhancement to the actual offer. The customer is enlightened and develops loyalty to the brand and to the provider. This is called customer centricity. The term Lean Processes comes from Lean Production. It can be defined as a process designed to avoid waste from excess production, extended running times or defective products, and to make a company more effective and competitive 1. The term originates from the automobile industry. We use it here as a general principle for business processes and apply it to the processes of customer master data management. This means that these processes should be made lean to support the effectiveness and competitive ability in customer master data management, and in the whole company. In other words, management targets of agility and compliance also apply to managing the processes of customer master data. It all depends on customer master data Customer centricity requires global and local care and use of customer contacts across all channels and in all markets. However, this raises several questions: How can products and services be individually targeted to customers, whilst at the same time reducing costs for such items as communication and marketing? How can up- and cross-selling be optimised and cancellations be avoided? How can a customer be identified fast and reliably in a web shop or another point of sale, and then be served correctly? Finding answers to these questions still represents a major challenge for many companies. Although the customer data required already exists in the form of personal, behavioural, localisation, interaction and transaction data, as 1 See, for example:
2 well as customer characteristics, it can only be exploited to a limited extent because its quality and consistency is below standard. In many cases, the data is scarcely available at all, because it is spread around the company at different locations and in different applications: Customer data is cought in data silos. Consequently, a 360 customer view is not possible and business processes do not target customer needs, simply because the customer is not known and understood at all. This results in poor service annoying customers, cross- and up-selling opportunities not being exploited, and top customers not being identified as such and soon being lost. Compliance challenges, such as data protection, cannot be complied with, because it is seldom clear what customer data is being kept where, and who is actually responsible for it. Managing Customer Master Data There is only one solution: Rigorous and efficient management of customer master data. It begins with a central register in which all customer master data from every channel, organisational area, application, etc. is stored and consolidated. This central register serves as business terminology and should provide both a golden record 2 (i.e. reliable, correct, quality-guaranteed and readily-available customer master data), and a 360 customer view. It continues with extracting and consolidating customer master data from different existing data sources using data integration. Data profiling analyses the data and shows where problems and inconsistencies arise. Data cleansing and data matching guarantee the data quality level. Customer identity management avoids duplicates, and enables a customer to be identified even across all channels. The golden record knows just where the attributes from each master dataset originate in the different data sources. The consistency of all customer master data is guaranteed. Whenever an update is made to an attribute in a particular data source, the same update is synchronised in all other relevant data and sources. Customer data silos are now broken up. Principles of Lean Processes Lean processes have the targets of reducing costs, time, and improving quality. They are pragmatic, straightforward and agile. They follow prescribed individual steps, branch according to defined business rules; they are parallelised and re-join, networked with other steps and when necessary, fed back to eradicate errors. This agility enables rapid changes and adaptation of processes, even dynamically during the execution of processes. Especially important is that each individual step (process activity) produces a well-defined result, i.e. that it achieves its prescribed target. The result must be measurable, therefore predefined metrics must enable target achievement to be measured. The means that the quality and performance of each step of a process are evaluated, as well as the process itself. In other words: Lean processes are the result of professional process management. Definition: Process Management consists of five process groups: The first process group defines the strategy and portfolio of the existing and necessary processes being used in a company. Then follow process design, process implementation, and process operations. Finally, there is the continuous improvement process based on monitoring all processes. 2 See: Wolfgang Martin Processes und Techniken für die Kundenstammdaten, Computerwoche 4 Dec
3 customer data Management Lean processes as part of customer master data management are processes managed in the same way as business processes in sales, marketing, service, etc. by using process management. They require a service-orientated technology platform to apply the same principles and rules applied to business processes, to the processes of data integration, data profiling and data quality management. Service orientation provides agility and enables automation and re-use. Processes involved in customer master data management can be completely redesigned, speeded up considerably, and otherwise changed or adapted as required. The levels of agility and compliance of customer master data management rise. This enables, e.g. fast and secure connection and full exploitation of data sources. It also ensures fast and safe consolidation of customer data following a company takeover, or carce out of appropriate customer data before selling a part of a company. Figure. Customer master data management is considered lean when professional process management is applied to all of its processes. It consists of five process groups: strategy, design, implementation and operations of customer master data management processes, plus overall monitoring and continuous improvement of all processes involved. This model derives from the etom standard of the Telemanagement Forum, and in this context is a process orientated model for management in general terms, and therefore also the model for lean management.
4 To summarise, the architecture of technology platforms supporting lean customer master data management should be service orientated for achieving agility. Such a platform recently introduced to the market is the Customer Data Hub (CDH), from the German company Uniserv. The Uniserv CDH is a platform for managing customer master data in all scenarios where customer data is the central focus. As a hosted solution the operation runs through a secure internet computer centre with access only possible using standardised security interfaces. The Uniserv CDH can also be operated in a private cloud environment. Benefits of Lean Customer Master Data Management Agility and compliance in customer master data management are the foundations and critical success factors of managing customer processes. They provide a sustainable solution, which not only gives savings on time and resources, but also allows flexible reactions to changes in data structures: data sources are created and run dry; companies amalgamate or split up into different organisations. Because of its agility, lean customer master data management can provide major advantages and many uses: Its service-orientated technology platform enables creation of the required 360 customer view; fast, secure and reliably. New data sources can be integrated easily and fast during running operations, and data no longer required can be separated out without difficulty. This provides the best foundations for analysing customer segments and behaviour, and for developing lean customer processes for gaining new customers, enhancing customer relationships, creating a positive customer experience, and ensuring customer loyalty. Lean processes in customer master data management are the best prerequisites for lean processes in sales, marketing, service, and more... It creates trustworthy data. Customer processes always have the right data and therefore the right information at the right time - reliable, secure and correct based on agile processes in customer master data management. This ensures that customer processes always run fast, because of the agility gained in the customer master data management, they can be dynamically adapted. They also run smoothly at all times without delays or stoppages, not even in the case a company takeover or sale of a company. This creates a concrete time advantage; an extremely important aspect of customer centricity: The customer receives the correct information faster; the decision is made faster; the delivery is made faster, and the invoice can be presented faster. This relates to the well-known principle of time is money. The best prerequisite once again is lean processes in customer master data management. It creates a joint terminology, so that for example a particular order means the same for everybody involved in the customer process: the right customer, the right product, the right quantity, the right prices, the right delivery, and the right invoice. This avoids mistakes, which in turn means saving costs, because later complaints are avoided, cancellations are reduced, and returned deliveries reduce to a minimum. Many business risks can be avoided right from the start; and based upon the lean processes in customer master data management, this advantage is sustainable because of the high levels of agility and compliance gained - even when structures change in processes and markets.
5 customer data Management It makes results audit-proof. The Auditor can issue attestations quickly and without problem, because everything is in order; additional auditing costs are avoided and everything runs smoothly. This is also decisive for the company image and reputation. The foundation for compliance and data protection in customer processes is firmly laid with lean customer master data management. Last but not least - Lean Integration: Many projects for introducing centralised customer master data management fail because of their very size, and therefore cause their own failure. However, if a lean approach is used not only in later operations, but also during the implementation phase, the advantages of agility and compliance will be available immediately during the introductory phase and enable a noticeably earlier roll-out of customer master data management. Conclusion: In today s Age of the Customer, companies must be customer centric, i.e. make the customer the focal point of company activities, whereby customer master data is particularly important. The target of customer master data management is to create a 360 customer view, and thereby to know and comprehend the customer in a holistic form. In today s multiply-fragmented IT landscapes with their high volume of data, this can be quite a big challenge, especially because customer master data is lodged in various, differing data silos, which have to be dismantled and dissolved in order to enable one central company terminology. The customer master data then available is based on quality-guaranteed, cleansed, correct, safe and reliable information; and thereby provides the holistic 360 view required. Lean customer master data management goes even further. It pursues the targets of making customer master data management agile and compliant from the very start, i.e. during implementation. This enables, for example, fast and safe integration or separation of data sources, as well as consolidation of customer data sets in the case of company takeovers or sales of partial company divisions. Lean processes in customer data management are processes that are professionally managed by process management.
6 customer data Management Dr Wolfgang Martin Dr Wolfgang Martin is an internationally recognised, independent analyst and expert in the fields of: BI / PM (Business Intelligence / Performance Management), Analytics and Big Data Business Process Management, Information Management and Governance SOA (Service-Oriented Architecture) CRM (Customer Relationship Management) His specialist fields are the reciprocal effects of technological innovation in business and the resultant organisation, corporate culture, business architectures and business processes. UNISERV GmbH Rastatter Str. 13, Pforzheim, Deutschland, T: F: , E: info@uniserv.com, Uniserv GmbH, Pforzheim, All rights reserved
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