Accenture Case Study-Solution 3

Managing Customer Relationship At Bank ABC XY

Accenture Do You now Competition

High Performance. Delivered

The Question

ABC XY Bank combined customer base reaches more than 3 million customers in more than 650 branches. The bank now operates double the volume and at the minimum, needs to maintain its customer base. Your team is asked to evaluate current service operations, segment and analyze the customer base and devise a customer contact blueprint that balances the cost of service with the current and potential value of customer relationships. What would you propose?

Case Definition

ABC XY Bank is the result from merger between Bank X and Bank Y by ABC financial group in Indonesia. The business and IT solutions have been in place and now ABC XY Bank has been ready to operate in a new business, with its vision to be Southeast Asia’s most valued universal bank. But, after the integration, Bank ABC XY is facing complex organizational and workforce transition which cause Bank ABC XY’s performance to be at the minimum and risk to many negative impacts (which is popularly known as valley of despair event). This valley of despair event also reduce Bank ABC XY’s reliability and capability for the customers.

 In the other side, since Bank ABC XY is the result of the merger between two banks, its customers are significantly increased until double volume. After the merger, Bank ABC XY has 3.3 million customers in total, but as has been explained in the first paragraph, Bank ABC XY’s performance is still at the minimum. The change management strategy has been applied to help Bank ABC XY getting out from the valley of despair event, but somehow it will still need some time until Bank ABC XY can totally get out from the valley of despair event. The problem starts here. The condition where Bank ABC XY’s performance, reliability, and capability are at the minimum, combined with the condition where Bank ABC XY is having double amount of customer (reaching 3.3 million customers) makes Bank ABC XY difficult to maintain its customer base. Bank ABC XY’s difficulty to maintain its customer base is the main problem to be solved in this 3^rd case.

The Challenge

The challenge is to help ABC XY Bank creating a customer relationship management strategy to help eliminating Bank ABC XY’s difficulty to maintain its customer base. The customer relationship management strategy is expected to maintain the current potential value customer relationships with the lowest cost of service. Mainly, the strategy will be about analyzing and designing an effective customer relationship management process, transforming the process into a CRM SAP (Customer Relationship Management System, Application, Product), implementing and testing the CRM SAP, providing training about the CRM SAP to Bank ABC XY’s employees, migrating the previous customer relationship management datas from Bank X and Bank Y which are required into the CRM SAP, launching the CRM SAP (Go-Live), and finally supporting the use of CRM SAP after the launching (Post Go-Live). In the consulting world, this kind of strategy is often called customer relationship management strategy.  

The Key Areas

In creating customer relationship management strategy for ABC XY Bank, there are three key areas to be prioritized, those are:

A.      Designing Bank ABC XY’s value-oriented strategic customer relationship management process which can maintain the current potential value of customer relationships.

B.      Transforming the customer relationship management process into a reliable CRM SAP

C.      Implementing the CRM SAP to maintain and even increase the value of customer relationships

The Requirements Analysis

Several requirements that have to be analyzed to create the effective customer relationships management strategy are:

A.      Maintaining customer base and its potential value

Since Bank ABC XY is the result of the merger between Bank X and Bank Y, in order to maintain its high-value customer base, the new design of the customer relationship management process for Bank ABC XY must be able to provide consistent-satisfactory products and services for two market segments. Those market segments are corporate market base which was Bank X’s main customer base and consumer & commercial market base which was Bank Y’s main customer base. Besides that, Bank ABC XY’s new customer relationship management process has to maximize the use of currently available products, services, and channels (650 branches, 1267 ATM, and 237 SST).   

B.      Evaluating current service operations

Current service operations of Bank ABC XY is still disintegrated since the integration process between Bank X and Bank Y service operations system is still in the beginning phase. Besides that, Bank X’s service operations system is totally different with Bank Y’s service operations system. The system’s difference is mainly caused by the difference in market segments, the difference in the legacy systems for credit card business alignment, and the difference in network architectures. The IT strategy has been applied to integrate the system, but again since it is still in the beginning phase, the current service operations is still disintegrated. Thus, the new customer relationship management process has to minimize the negative impacts from this disintegrated system to be able to deliver consistent and satisfactory results to the customers.    

C.      Segmenting and analyzing the customer base

Currently, there are two main market segments for Bank ABC XY, those are corporate market segment and consumer & commercial market segment. These market segments are the biggest customer base for Bank ABC XY, thus they must be the main focus in the new customer relationship management process.

D.      Devising a customer contact blueprint

Customer contact blueprint is very essential to maintain the customer base. Customer contact blue print can be devised by creating a structured customer data management. The customer data management will include past business and transaction data of Bank ABC XY’s 3.3 million customer accounts. It will become the element of customer insight for Bank ABC XY. This customer data management will equip Bank ABC XY with the ability to understand customer needs and accurately predict customer behavior. This ability is very essential to capture critical customer data and analyze that data to create deep insights into how Bank ABC XY’s customers behave, how they would like to interact with the Bank ABC XY, and what they truly want and need from the Bank ABC XY. In turn, these insights will determine how Bank ABC XY must interact with its 3.3 million customers in the future, such as what offers/programs to make and what service options to provide. Thus, a structured customer data management must be equipped in the new customer relationship management process and it should be available to any organizational units that have contact with the customer.

The Solution

Figure 1: Impact of Implementing Change Management Strategy

Currently, Bank ABC XY’s customer relationship management’s maturity is still poor (in the red zone). The solution will be applying an effective customer relationship management strategy to improve Bank ABC XY’s customer relationship management’s maturity from poor (red zone) to excellent (green zone). The strategy is consisted of five main steps:

A.      Designing the customer relationship management process

B.      Transforming the designed customer relationship management process into CRM SAP

C.      Preparing for the implementation of the CRM SAP

D.      Launching the implementation of the CRM SAP (Go-Live)

E.       Supporting the implementation of the CRM SAP (Post Go-Live Support)

The strategy must also include how to maximize the utilization of the existing system for an efficient result. Customer relationship management aims to retain and gain more customers without increasing cost, and the strategy should produce that outcome also. Studies show that retaining customers is lesser cost than attracting new ones. It is better to focus on keeping current customers satisfied first because in the long run, when customer loyalty is built, they could help the company attract new customers via word-of-mouth. The proposed customer relationship management strategy will absolutely help Bank ABC XY retaining its current 3.3 million customers and it will even help attracting new customers via word-of mouth.

The Change Management Framework

          Figure 2: Ross Dawson Transformational Customer Relationship Management Methods Framework

The Customer Relationship Management Strategy (The 5 Main Steps)

(In this case, writer will act as the leader for Accenture Customer Relationship Management Team)

The 5 main steps of customer relationship management strategy is created based on Ross Dawson Transformational Customer Relationship Management Methods Framework. The simplification of Ross Dawson Framework is shown in figure 3.

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Figure 3: The simplification of Ross Dawson Framework

The customer relationship management strategy is classified into five main steps, those are:

1.       DESIGNING THE CUSTOMER RELATIONSHIP MANAGEMENT PROCESS

The first phase is about designing the customer relationship management process. Leader will lead a group of business consultants to design the process. Bank ABC XY’s customer relationship management process will be designed based on the results from the requirements analysis which includes the aspect of: maintaining customer base & its potential value, evaluating current service operations, segmenting & analyzing customer base, and devising customer contact blueprint. The process design will also involve every business and organizational aspects which are related to the customer relationship management process. Since the process is required to maintain the customer base and the value of the customer relationship, the process must protect the customer loyalty.

       Figure 4: Customer loyalty protection methods framework

In order to protect the customer loyalty, the process design should also consider the customer loyalty protection methods framework shown in figure 4. Finally, the most important point is that the process must be based on Bank ABC XY’s value and it must be able to achieve the highest customer relationship value with the lowest possible cost of service. This customer relationship process design is the most critical and determining phase in the customer relationship management strategy, thus it should be carefully designed. Milestones and budget management will be set to keep the project on the track.

2.      TRANSFORM THE DESIGNED CUSTOMER RELATIONSHIP MANAGEMENT PROCESS INTO SAP

As the next step, leader will lead a group of system integration and technology consultants to transform the process which has been designed into a CRM SAP. Leader will divide the group of system integration and technology consultants into two group. The first group will be assigned to handle the functional design and the second group will be assigned to handle the technical design. The system integration and  technology group will be responsible to transform the process into a correct and reliable CRM SAP. Milestones and budget management will be regulated to keep the project on the track.

3.       PREPARING FOR THE IMPLEMENTATION OF THE SAP

After the correct CRM SAP is produced, the leader will assigned a group to create user manuals for using the CRM SAP. The user manual will be the guidance for Bank ABC XY’s employees who have not been accustomed to use the CRM SAP. Instead of providing user manual, the leader will also provide training about how to use the CRM SAP to Bank ABC XY employees. Training will be given continuously until all of Bank ABC XY’s employees understand well about how to use the CRM SAP. In the end of each training session, there will be an evaluation about the materials taught. The score of the evaluation will be used to determine whether the employees have understood the materials or not.

4.       LAUNCHING THE IMPLEMENTATION OF THE SAP (GO-LIVE)

When the correct and reliable CRM SAP has been produced and all of Bank ABC XY’s employees have understood about how to use it, the implementation of the SAP can be launched, which is also known as Go-Live.

5.       SUPPORTING THE IMPLEMENTATION OF THE SAP (POST GO-LIVE SUPPORT)

After the CRM SAP has been implemented (which is known as Post Go-Live), leader will assigned some consultants to monitor and support the implementation of the CRM SAP for several months, depending on the needs. These consultants will be responsible for ensuring that the CRM SAP implementation running well and help solving problems if there are problems with the CRM SAP implementation. Besides that, they are also responsible to help Bank ABC XY’s employees being accustomed to use the CRM SAP. The leader will also try to counter resistance and fear from Bank ABC XY’s employees about the use of CRM SAP by assigning the consultants to provide counseling to Bank ABC XY’s employees if needed.

References

Freeland, John G. Customer Relationship Management: Is It Worth It?. New York: Accenture

https://microsite.accenture.com/DoYouKnow/Blog-University-Students-Competition (accessed on February 7^th 2011 21:50)

www.accenture.com (accessed on February 7^th 2010 21:00)

www.bcg.com (accessed on February 7^th 2010 21:00)

http://www.fpc.fujitsu.com/downloads/fs_SAP%20CRM%20Services.pdf (accessed on February 7^th 2011 21:00)

http://searchcrm.techtarget.com/feature/SAP-CRM-Sales-strategy-with-SAP-CRM-4-0 (accessed on February 7^th 2011 21:00)

http://www.freesaptutorial.com/difference-between-crm-system-and-crm-strategy/ (accessed on February 7^th 2011 20:30)

http://www.experts-exchange.com/Database/Software/ERP/SAP_ERP/Q_21288992.html (accessed on February 7^th 2011 20:30)

Accenture. 2010. Beijing Telecom: Customer Relationship Management. USA: Accenture

http://www.experts-exchange.com/Database/Software/ERP/SAP_ERP/Q_21288992.html (accessed on February 7^th 2011 20:30)

Keenan, Perry & Harold L. Sirkin. 2001. A Road Map for Change. USA: BCG

Accenture. 2003. Managing Change at HP Norway. USA: Accenture

Wells, Denise Lindsey. Strategic Management for Senior Leaders: A Handbook for Implementation. Virginia: The TQL Office

http://www.ipsos.be/loyalty.html (accessed on February 7^th 2011 23:30)

http://www.accenture.com/us-en/Pages/service-health-customer-relationship-management-payer-summary.aspx (accessed on February 7^th 2011 23:50)

                                                                                           

 

Case Study

Managing a Merger for a Regional Bank

Background

ABC Group is the fifth largest financial services provider in Southeast Asia by total assets, with a vision to be "Southeast Asia's most valued universal bank". It offers consumer banking, investment banking, Islamic banking, asset management and insurance products and services. Its key regional offices are located in Malaysia, Singapore, Indonesia and Thailand.

ABC Group acquired two banks in Indonesia: Bank X and Bank Y. In term of assets, Bank X was the sixth largest bank in Indonesia whereas Bank Y was the tenth. To comply with the Indonesia Central Bank's "single presence policy", ABC embarked on a plan to merge these two banks. The merger would create the fifth largest bank (ABC XY Bank) by total assets of more than USD 10 billion and also among the top five in terms of distribution network in Indonesia.

Challenges

Due to the nature of the banking business, two of the most important aspects of a bank merger is managing its people and the IT and operations merger integration.

The speed of completing the merger depends on the speed of the IT & Operations integration, whereas true "one-bank" service happens only upon completion of the IT & operations integration. The IT & Operations integration timeline will also drive the timeline for most other activities.

The two legacy banks posed several unique challenges that had to be addressed:

• The two legacy banks have similar size customers and transactions that would make the combined banks operate with double the volume.
• Bank X and Y are strong players in their respective market segments. Bank X is a strong corporate market player whereas Bank Y tends to focus more on the consumer and commercial markets.
• The two banks have huge customers base, 3.3 Million customers in total.
• Geographic spread (more than 650 branches, 1267 Automated Teller Machines (ATM), 237 Self Service Terminals (SST) located in across country)
• Distributed and decentralized systems in the two banks (more than 100 applications need to be aligned and integrated or rationalized)
• Need to retain and integrate two different legacy systems for credit card business alignment - Bank Y's merchant acquiring system and Bank X's card issuing system
• Different network architectures (hub & spoke vs. star topology)
• Selection of talented employees to continue the management and operations and how employees would work in a new environment

ABC needed to quickly integrate its new acquisition to realize merger synergies (both cost and revenue) and carry out the merger integration exercise without destroying any value or losing key customers. This process involved the integration of business units, operations and IT of both banks.

You are asked to lead a team that would help ABC XY Bank prepare for changes by managing complex organizational and workforce transitions once the business and IT solution is in place. One of the challenges is to help ABC XY leadership and the integration teams in carrying out an effective transition to a new way of working. How would your team go about doing it?

To help you in making the transition, here is Accenture's Transformational Change Management Framework 


Please visit accenture.com for further references.

Managing Changes At ABC XY Bank Indonesia

Accenture Do You Know Competition

High Performance. Delivered

Case Definition

ABC XY Bank is the result from merger between Bank X and Bank Y by ABC financial group in Indonesia. The business and IT solutions have been in place and now ABC XY Bank has been ready to operate in a new business system with total assets of more than USD 10 billion, very wide distribution network, and very huge number distribution network in Indonesia. ABC XY Bank is the 5^th largest bank in Indonesia whose vision is to be Southeast Asia’s most valued universal bank.

 Now, after the integration takes place, ABC XY Bank management is facing complex organizational and workforce transition. In fact, during the transition period, companies will face an event called valley of despair. Valley of despair is a phenomenon where a company’s performance is declining as a natural reaction to a major change when a new business model or system is implemented. Since ABC XY Bank is implementing a new business model in its operation, ABC XY Bank will face a transition period and valley of despair event.

The Challenge

The challenge is to help ABC XY Bank creating a strategy to manage those complex organizational and workforce transitions. The strategy will be about helping ABC XY leadership creating an effective management system for its organization and workforce so that it can pass through this transition period effectively and minimize negative impacts from valley of despair event. In the consulting world, this kind of strategy is often called change management strategy.  

The Key Areas

In creating change management strategy for ABC XY Bank, there are there are three key areas to be prioritized, those are:

A.      Minimizing the duration of the “valley of despair”

B.      Minimizing the depth of negative impact on performance

C.      Accelerate time to achieve the highest competence/performance

The Main Problems

The combination between Bank X and Bank Y, which are totally different among each other, will result in big changes for Bank X and bank Y itself once they are unified in Bank ABC XY. The problem is that they will not be accustomed to these sudden big changes. As the impact, Bank ABC XY’s performance will be declining and declining until a very worst condition called “valley of despair”. This impact is not good for Bank ABC XY’s performance thus a change management strategy to prevent bank ABC XY from having valley of despair and help Bank ABC XY achieving its highest performance should be carried out. To create the strategy, the main potential problems must be identified. Analyzing from some facts about Bank ABC XY, several main problems to be addressed are identified:  

ü  ABC XY Bank is using new business system/model (the management should be well-fitted with the business model)

ü  ABC XY Bank is having new organization and management structure (the management structure must be able to balance and coordinate Bank ABC XY performance)

ü  ABC XY Bank employees is facing new working condition and culture (the working condition and culture must be suitable for the employees and make them comfort)

ü  ABC XY Bank leadership is including new CEO, top executives, commissioning, and board of directors (the new management system can be easily controlled by the top executives of Bank ABC XY)

ü  ABC XY Bank is having new market products, market branding, market segments, and market share (the new management must be able to handle the keep changing market conditions)

ü  ABC XY Bank is having new customers with double amount (the new management must be capable of providing services for all of the customers)

ü  ABC XY Bank is having new values and vision (the new values and vision must be sustained in the new management system)

ü  ABC XY Bank is having wider distribution network (the new management system must be able to maximize ABC XY Bank’s benefit of having wider distribution network)

The Solution

The solution will be giving an effective change management strategy to Bank ABC XY. Figure 1 illustrate the positive impact of implementing a change management strategy against bank ABC XY performance.

        Figure 1: Impact of Implementing Change Management Strategy

From the graph, it can be seen that implementing change management strategy will help Bank ABC XY achieving the best performance for itself.

The Change Management Framework

                Figure 2: Accenture Transformational Change Management Methods Framework

The Change Management Strategy (The 4 Main Steps)

(In this case, writer will act as the leader for Accenture Change Management Team)

The change management strategy is created based on Accenture Transformational Change Management Methods Framework. The change management strategy is classified into four main steps, those are:

1.       NAVIGATE

The leader will plan and manage the move from the existing operating model to one best operating model enabled by Bank ABC XY. In creating the new operating model, Leader will define and monitor business cases and issues, create a detailed roadmap, define the scope for changing the operating model, identify possible risks and how to handle it, and plan for budgeting and cost management. Finally, Leader will create a detailed planning about the new management model, completed with the vision and execution details. This planning will navigate the change management process.

2.       LEAD

Using the planning, Leader, together with the integration team, will ask for support and commitment from Bank ABC XY’s staffs, especially the top executives. Top executives’ involvement is very important. Leader will mainly plan the management vision and journey together with the top executives. Leader will communicate frequently with the top executives so the top executives must commit and support Leader. Leader will have to ensure that the top executives agree, commit, and want to support the new management operating model proposed. Leader will function the top executives as role models for the new management operating model proposed. This role models mechanism is intended to spread the new management model to other employees of Bank ABC XY. Leader will lead the integration team to drive the CEO to keep focusing on the three critical dimensions that drive success for Bank ABC XY: time to results and critical milestones to keep Bank ABC XY’s program on track, financial impact and the leading indicators that show progress toward the desired results, and behavior that supports the project’s goals or puts the project at risk. By focusing on these three areas, Bank ABC XY will gain the visibility, accountability, and transparency needed to track progress and identify risks early on—and their leaders are able to lead more effectively thus Bank ABC XY will be able to achieve high performance in doing its business.

3.       ENABLEMENT

After the new management model is established and supported by the top executives, Leader will try to enable its application in Bank ABC XY. The enablement will be mainly about putting the right tools in place to provide Bank ABC XY’s organization employees with appropriate knowledge, skills, and support to perform their work successfully after the new management model is fully applied. Enablement process will involve organization design, resource management, stakeholder identification, employees training and education, effective communication design, and performance management. Besides that, Leader will also build a disciplined reporting system to enable the CEO to control the new management model in a good manner.

4.       OWNERSHIP & COMMITMENT

After the new management model/system is applied and running well, Leader will try to develop and manage change management network, implement and manage communication plans, and measure the effectiveness of the change effort through sustainable surveys and reports. This step is intended to develop a shared sense of ownership and commitment for the new management/organization model so the management model application will be sustainable. The Leader will try to counter resistance and fear from Bank ABC XY’s employees about the new management/organization model and align them to overall strategic direction of the organization. If it is required, personal counseling can be held to alleviate any management-change related fears. Finally, to keep the new management sustainable, a monitoring and fine tuning will be done.

References

www.accenture.com (accessed on January 9^th 2010 20:00)

www.bcg.com (accessed on January 9^th 2010 20:00)

https://microsite.accenture.com/DoYouKnow/Blog-University-Students-Competition (accessed on January 9^th 2010 20:00)

http://www.peoplesoft-planet.com/ERP-Implementations-and-The-Valley-of-Despair.html (accessed on January 9^th 2010 20:00)

http://www.strategyexecutionblog.com/2007/09/the-valley-of-d.html (accessed on January 9^th 2010 20:00)

http://www.leaderx.com/multimedia/Valley_of_Despair_(Team).pdf (accessed on January 9^th 2010 20:00)

http://www.isixsigma.com/index.php?option=com_k2&view=item&id=105:ways-to-shorten-the-trip-through-the-valley-of-despair&Itemid=156 (accessed on January 9^th 2010 20:00)

http://www.conduitblog.com/conduit/2008/01/the-valley-of-d.html (accessed on January 9^th 2010 20:00)

http://www.time.com/time/magazine/article/0,9171,907420,00.html (accessed on January 9^th 2010 20:00)

Keenan, Perry & Harold L. Sirkin. 2001. A Road Map for Change. USA: BCG

Accenture. 2003. Managing Change at HP Norway. USA: Accenture

Wells, Denise Lindsey. Strategic Management for Senior Leaders: A Handbook for Implementation. Virginia: The TQL Office

Accenture Do You Know Competition 2011

Kind regards,

Hendra Kwik