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Lesson 24

Case Study- The ICICI Experience


CRM Solution: CRM Roadmap, Business Transformation, and CRM Business Cycle


• ICICI has transformed itself into a technology intensive financial services group
in the /as: decade. To achieve its long-term goal of being in a position to practice
one to one marketing, ICICI has taken a series of initiatives. As part of the plans,
it is implementing various projects to establish world-class CRM practices, which
would provide an integrated view of its customers to everyone in the organization.
The paper discusses some of the lessons learnt while implementing these projects.

kiosks. mobiles and other hand held devices would perform financial activities while ensuring that customer has multiple options for access and . In addition to the bank. In the last decade it has transformed itself to a technology intensive financial services group. increase customer retention.icicidirect. etc • ICICI Capital Services-to service retail liability products like bonds and deposits • ICICI Web trade-to facilitate end-to-end integrated web based trading service through the web site www. . icicimoneymanager. All these group companies are jointly spearheading ICICI Group's foray into the retail market. The retail strategy revolves around intensive deployment of technology. The first such’ move came in the mid-nineties when ICICI raised debt from the retail market. ICICI has been increasing its reach to this segment in terms of re- sources mobilization. ATMs. Since then. durables finance. it established ICICI Bank as a commercial bank that is flexible. help in cross selling and up selling while improving the process efficiencies. com. Information technology will help reduce cost service. diversified into the retail segment of the financial markets in the early 1990s. its subsidiary. the retail initiatives include— • Prudential ICICI AMC-a tie up with the Prudential Group of UK for its foray into the mutual funds business. Innovative and prompt in meeting customer requirements. contact _enters. automobile • Prudential ICICl Life Insurance-to offer life insurance and • ICICI Lombard General Insurance-the latest venture to offer non-life insurance services This apart the retail initiatives of ICICI also include a plethora of web-based businesses including city portals and various other utility sites such as bill junction. desktops. call centers.INTRODUCTION ICICI. and by offering quality investor service through ICICI Infotech Services. magiccart. among others. In 1994. • ICICI Personal Financial Services (PFS)-to offer retail asset products like home set up as a Development Bank over four decades ago to provide products and services for the corporate segment. THE RETAIL STRATEGY ICICI has ambitious plans for its retail business initiatives. Electronic channels including Internet.

it is implementing various projects to establish world-class CRM practices. it will automate process-flow tracking in the product sales process. and be able to generate customized reports and promote cross selling. As part of the plans. THE CRM ROADMAP CRM. which would provide an integrated view of its customers to everyone in the organization. etc—so as to enable ICICI carry out cradle-to-grave customer management more efficiently. It should allow ICICI to engage in one-to-one marketing by tracking complete customer life-cycle history. web. kiosk. The underlying idea is to enhance every instance of contact with the customer. CRM at ICICI involves increased communication between the virtual universal bank and its customers and prospects. marketing. is viewed as a discipline as well as a set of discrete software technologies. sales associates. fulfillment of financial deals and documentation. the enterprise-wide CRM solution should seamlessly integrate non-transactional related customer information housed in the front office with the transactional information housed in the Back Office. branch. execution and analysis of campaigns.transactions The group has adopted a 'click and brick' strategy to leverage the power of electronic channels and physical presence to ensure rapid product delivery. as well as within the group itself. Hence the pressing need to put in place a technology enabled CRM solution. . call center. customer service and support. From an architecture perspective. The organization aims to achieve the end goal of one-to- one marketing. ICICI believes that a true customer-centric relationship can only be accomplished by considering the unique perspectives of every single customer of the organization. bank. Creating the enterprise CRM strategies required the combination of nine distinct steps as shown below. It will also enable efficient campaign management by providing a software interface for definition. telephone. ATM. at ICICI. which will focus on automating and improving the business processes associated with managing customer relationships in the areas of sales. The CRM software applications will not only facilitate the coordination of multiple business functions but also coordinate multiple channels of communication with the customer-face to face. tracking. To begin with.

viz. how we sell to them. Once that is achieved. Business Focus 2. service. CRM will essentially focus on providing optimal value to customers-through the way we communicate with them. and understand what they are saying. recognition and support. price. IMPLEMENTING CRM A very detailed and comprehensive CRM Action Plan was developed based on the under- standing that CRM will require an enterprise wide transformation. and how we service them-as well as through the traditional means of product. Marketing Focus 5. Business Metrics 4. profits begin to follow as optimization techniques are applied. Technology . promotion and place of distribution. Only then will the two crucial goals for a successful business-case driven project be achieved. There are five inter-related areas. and sales. If ICICI can get all of those factors right-consistently-we will be rewarded with ongoing customer loyalty and value. Organizational Structure 3. Customers make buying decisions based on their overarching experience that includes product and price. These include: 1. ICICI recognizes that customers make buying decisions based on more than just price… more than just product.By combining these nine steps can one really start listening to the customers. maybe even in real time. The CRM Business Transformation Map below shows the various aspects of that change.: • Effective change management • Technology-enabled evolution .


this analysis helped identify the CRM organizational holes: • Marketing. capture. all focused on CRM. Interviews with key individuals throughout the organization helped identify different initiatives that have been launched. to identify and specifically describe the gaps. underlying cycle of activity that should drive all CRM initiatives and infrastructure development. While all of these initiatives may have merit. There is a universal. Careful evaluation of the organization's ability to execute this cycle will pinpoint and qualify additional organizational gaps. . The next step in the planning process was a Gap Analysis. All initiatives and infra- structure development should somehow be tied to this core cycle of activity. failure to address the total business transformation requirements can lead to very short-lived success. In addition to the more obvious gaps. This analysis essentially compared current stage against optimal relative to the five aspects of business. processing and deployment of customer information • Distribution and operations effectiveness at customer touch points Another key factor in identifying gaps is to understand how the organization functions relative to the CRM Business Cycle. sales and service practices • Collection.The key to building the CRM action plan was in understanding where the organization stood relative to each of the five aspects of change.

and what they want to buy. any successful CRM initiative is highly dependent on a sound understanding of customers. • Segmentation to identify logical unique groups of customers that tend to look alike and behave in a similar fashion. for any organization.THE CRM BUSINESS CYCLE As shown in the diagram. as well as lifetime value or long . • Customer valuation to understand profitability. business starts with the acquisition of customers. what types of service are important to them. Identification of actionable segments is a practical place to start. UNDERSTAND AND DIFFERENTIATE Organizations cannot have a relationship with customers unless they understand them. While the promise of "one-to-one" marketing sound good. how and when they like ro: interact.: what they value.. However. True understanding is based on a combination sf detailed analysis and interaction.. • Primary research to capture needs and attitudes. we have not seen many organizations that have mastered the art of treating each customer uniquely. Several activities are important: • Profiling to understand demographics. purchase patterns and channel preference.

organizations need to insure that: • All areas of the organization have easy access to relevant. To foster relationships. ICICI is strongly of the opinion that value is not just based on the price of the product or the discounts offered. ICICI Group's customers need to see that the company is differentiating service and communications based both on what they've learned independently and on what the customer has told them. channels and media can be customized based on the needs of quantitative customer segments. INTERACT & DELIVER Interaction is also a critical component of a successful CRM initiative. Most organizations today are not able to cost-effectively customize products for individuals’ customers. organizations will be prepared to steadily increase the value they deliver to customers. In a customer-focused world. Organizations are increasingly developing products and services. It is important to remember that interaction doesn't just occur through marketing and sales channels and media. DEVELOP & CUSTOMIZE In the product-oriented world of yesterday. Value may also be based on the customer's ability or inclination to refer other profitable customers. responsiveness. services. ICICI believes that the extent of . customer perceptions of value are based on a number of factors including the quality of products and services. and even new channels based on customer needs and. including distribution and shipping. ACQUIRE & RETAIN . organizations have to act on what they learn about customers. • All areas are trained how to use customer information to tailor interactions based on both customer needs potential customer value With access to information and appropriate training. differentiation should be based on the value customers are expected to deliver. product and channel development has to follow the customer's lead. However. and service excellence. however. service expectations.customization should be based on the potential value delivered by the customer segment. customer service and online. actionable customer information. companies developed products and services and expected customers to buy them. products. customers interact in many different ways with many different areas of the organization. ease of use. In fact. To create and foster a relationship. term potential. Delivering value is 'a cornerstone of the relationship. speed. are insufficient. At the time. convenience. Analysis and research alone.

Successful customer retention is based very simply on the organization's ability to constantly deliver on three principles: • Maintain interaction. • Feasibility-based on organization readiness. right product. Those are the customers and customer segments a company will want to clone in its prospecting and acquisition.. prioritization was critical. • Remember that customers change as they move through differing life stages. right timing and the most relevant message. • Overall benefit-some changes may have larger impacts on the organization's ability to increase customer value and loyalty. right media. The evaluation of each of the strategies identified to resolve the gaps at ICICI were based on: • Cost to implement-including initial one-time costs. As one moves from one stage to the next. be alert for the changes and be prepared to modify the service and value proposition as they change.. Successful customer retention basically involves getting it "right" on an ongoing basis. resource skill sets and a number of other factors. the easier it is to pinpoint those that are producing the greatest value for the organization. And.The more ICICI learns about customers. The plan identified interdependent activities and should . and over time shall become increasingly profitable by doing so. it was based on three-month - phases with clear deliverables that will demonstrate both progress and quick hits or measure of success. • Time required-including the time necessary for training and addressing "cultural” change management issues related to a specific strategy. because they will continue to learn about what is valuable to each segment. While the complete plan might span three or more years. they will be much more likely to score a "win" with the right channel. data and systems support. as well as anticipated ongoing expenses. And so the cycle continues. As a cycle. • Continue to deliver on the customer's definition of value. The organization shall become increasing - sophisticated in the implementation of CRM processes. PRIORITIZING THE CHANGES Because there might be many gaps. CREATING AN ACTION PLAN The next step in the planning process was the development of a very detailed action. ICICI Group hopes to gains insight and uncle!' standing that enhance the subsequent efforts. never stop listening. and that is exactly what ICICI Group aims to achieve out of its CRM initiatives. and therefore many changes that an organization will need to make. the stages are interdependent and continuous. right offer. plan. efforts.

It created additional strategies by identifying specific leadership actions necessary to lead the organizational change. executives were able to identify their roles and responsibilities. Based on discussions with a . another set of criteria was drawn to shortlist the prospective product providers. Advancing on the CRM Transformation Map required significant organization change. ERP providers having moved: into the CRM space in recent times) . The global CRM product market space was scanned to shortlist about 15 large players from a very fragmented market comprising of over 150 players claiming to have some sort of CRM capability. and the actions necessary to eliminate barriers and to nurture change. SELECTING AND IMPLEMENTING A TECHNOLOGY BASED SOLUTION Technology The success of the CRM initiatives was contingent on various decisions pertaining to technology. it was decided to purchase an off-the-shelf CRM solution and customize it to suit ICICl's requirements (b) From whom to buy .comprehensively detail the time and resources required for each activity. global technological analysis group. This part of the action plan helped assess the drivers and restraints of this change and the organization's readiness to embrace the change.Once the decision to buy was made. the installed system should be able to take into its fold the in- creased functionalities • Commercial impact-evaluated in terms of the life time of the solution Taking into account all the above factors. This included: • CRM expertise • Retail finance expertise. The criteria set included the following: • Functionality • Flexibility in incorporating changes • Scalability-with growth • Fit with existing architecture (legacy systems) • Fit with global best practices • Upgradability--which basically means that if the technology that enables CRM advances tomorrow. As a result. the next step was to identify the product seller and the system integrator. Another key factor for the planning process was the Leadership Action Plan. Some of the key issues were: a) Make or Buy-The decision to buy was based on an evaluation of an identified set of criteria. • Implementation worldwide especially in Asia Pacific • Company focus on CRM (specially important in the context of many large.

During the course of the process mapping. • Credentials including financials. timeliness. quality control of customization and post- implementation support. Some of the criteria included • CRM expertise & Retail finance expertise • Focus on CRM • Project team specifics including indicative CVs of project team • Product preferences After short-listing two product vendors and system integrators. etc • Understanding of ICICl's pain points to gauge how well they have been able to comprehend ICICl' s pressing needs and their views on whether the product con- cerned could provide a long-term solution • Preferred implementation partners.g. cost and time overruns. reference calls were made to several of the past clients of all the short listed companies. The DMA also fires a Field Investigation (FI) request from a FI agency.) • The documents collected by them are filed and forwarded to the Credit Processing . and checks on the basic veracity of the statements submitted by the prospect (e. life history. Processes All processes were mapped on to product by understanding the details. scope and scale of implementation • Understanding of ICICl's experience • Suggested solution including implementation time line • Technical handholding expected • Training and maintenance A similar process was followed to shortlist the system integrators. Some of the parameters included strengths and weaknesses of the vendor/system integrator. To illustrate. • Call center personnel passes on this lead to the DMA responsible for the area from where the lead has come in • The DMA contacts the prospect and collects documents. another round of evaluation was done on the basis of : • CRM solution implementation experience • Clientele (specially in Asia Pacific). A detailed Request for Information (RFls) was sent to each of the shortlisted companies After receiving the RFls. and were qualitatively adjudged. Reference calls followed a specific pattern. The FI agency is external to ICICI. several opportunities for improvement were identified and implemented. commitment. training. that he has his own house in New Delhi etc. client list. The. the buying process of a loan product involves the following steps -- • Prospect contacts the call center and leaves details.

The CPA also receives the FI report. price. promotion. Many have confused CRM as a technology initiative. why is it so difficult? CRM is difficult because it is an enterprise-wide initiative. LESSONS SO FAR FROM THE ICICI EXPERIENCE If CRM involves optimizing product. and passes the document to the Credit Buyer. or the solution to successful CRM implementation. The central operations team is also internal to ICICl. or data-driven/database marketing. Agency (CPA). CRM conferences often equate to technology exhibits and demonstrations. • The Credit Buyer (CB) is an ICICI personnel. • The CPA checks for completion of the file. Many organizations have merely equated CRM with customer-focused marketing. . Technology is needed in order to implement CRM-particularly the customization part-but technology is not the driver of CRM. place of distribution. and takes the final call on the loan sanctioning. He in turn passes on the documents to the central operations team for processing. and if not. • CRM is not exclusively a marketing initiative. sales and service. generates a credit scorecard. and assigned the CRM implementation project to their information system or IT group. • CRM is not a technology initiative. why are so many companies struggling? Hasn't anyone really mastered the art and science of CRM.

one area of the organization that is less than committed to CRM. is just one functional area that can benefit from CRM. can make the difference between success and failure. • CRM is not exclusively a sales initiative. s . understanding their needs and wants. it is properly described as an enterprise-wide initiative. . CRM results in more effective. Thus. CRM requires marketing expertise... CRM is often lodged within the sales department. sales. The sales-force. Sales. . However. and that is necessary for effective CRM. as well as the other inner- workings of an organization. is extremely close to their customers . It involves all areas of the organization and all functions of the organization. after all.. Similar to marketing. data-driven marketing efforts. CRM involves marketing. service and technology. customer service is one functional aspect of successful CRM implementation. and it requires all areas of the organization to be working together in harmony. But CRM is not strictly a marketing initiative. but to be working toward the common goal of stronger customer relationships. • CRM is not exclusively a service initiative. and trying to fulfill them. Having even one "broken spoke in the wheel". . But customer service is not the sole driver of the process. CRM requires all areas of the organization too not only exist in harmony. As with sales and marketing.