Functionality and Delivery of CRM at Verizon Using Cloud Computing Research Proposal

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Functionality and Delivery of CRM at Verizon Using Cloud Computing

Company Background

Business Problems

Verizon's Enterprise Systems

Detailed Options/Solutions

High-level Implementation Plan

Functionality and Delivery of CRM at Verizon Using Cloud Computing

Verizon's continued growth in consumer and business-based subscriber levels can be attributed to the depth of customer insight and intelligence the company has operated with, in addition to their unique approach to selling services contracts. Cellular and telecommunication services providers must balance a transaction focus to sell more with a relationship focus to keep customers signing up year after year. Many businesses rely on Customer Relationship Management (CRM) systems to manage this balance between transactions and relationship-based selling (Chen, Popvich, 2003). Verizon is a sales-driven company that has grown quickly through mergers, acquisitions and alliances, and as a result, a transaction mentality pervades the company. The combination of the mergers, acquisitions and alliances and the priority put on new business over renewals has made Verizon suffer at building and maintaining relationships with customers. The company has a disjointed, disconnected series of customer processes that need to be unified through a Cloud-based CRM system.

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Research Proposal on Functionality and Delivery of CRM at Verizon Using Cloud Computing Assignment

Verizon (NYSE:VZ) is one of the leading providers of cellular and telecommunications services globally, operating in 150 countries with 92.2 million customers globally. During their latest full fiscal year (FY), the company reporting $110B in revenues, an increase of 4% of their previous full fiscal period. Verizon attained a $12.8B operating profit in their latest fiscal year, which was a decrease of 12.1%. Net Profit during these two time periods also decreased by 5.7% during these fiscal years as well, with the company reporting $2.4B in FY2011. As with many cellular and telecommunications services providers, Verizon has gone through several reorganizations, each being focused on making the company more efficient at driving top-line revenue growth. The strategy has worked to this point and today the company has two globally-based business divisions, Verizon Wireless and Wireline. Verizon generates the majority of their revenues from the consumer segment, the majority of profits from the business and government sectors. In these latter segments it is more difficult to displace a cellular or telecommunication provider once contracts and service agreements are in place. This strategy of lock-in in the business and government sectors have compensated for the exceptionally high churn with consumers and small businesses, a problem hat a CRM system could solve.

Business Problems

Verizon today operates in 150 nations has partnerships in place with Cellco and Vodafone globally at the service provider level of their business. Verizon also has hundreds of partnerships with local cell phone, cellular equipment and enterprise networking companies as well. The two dominant divisions, Verizon Wireless and Wireline, rely on a procurement and supply chain management system that has over time been customized to the unique requirements of the company. The procurement and supply chain management systems are disconnected form the over two dozen CRM systems in the company as of 2012, which makes it nearly impossible for sales representatives, managers and senior managers to see what equipment they have available for sale. Instead, Verizon has integrated their procurement and supply chain management systems to their catalog management systems first. This is ideally used in a more inventory-based approach to selling which does not take into account customer needs first. Instead, Verizon sales reps are told to sell the products and services that are the most profitable without regard to customer needs. While this approach has been exceptionally successful in driving top-line revenue growth it has not yielded a high level of customer satisfaction. One of the most critical success factors of a CRM system is designing its many attributes to reflect what customers expect to be a successful interaction and relationship (Hsin, 2007). Verizon has today created the integration of their procurement, supply chain and catalog management systems to their many CRM systems for transaction efficiency first. Designing a CRM system for customer satisfaction first and transactions second or even third is critical to meeting and exceeding customer expectations on a consistent basis (Adalikwu, 2012).

Not only is the Verizon CRM system focused more on transactions than relationships, the sheer diversity of them and their lack of integration also has led to the company experiencing an exceptionally high level of customer churn. Estimates as high as 67% of customer churn pervade the cellular and telecommunications industry and Verizon is at the upper end of this scale (McKay, 2008). The CRM systems inside Verizon typify worst practices in relationship management in that they are designed to drive transaction size and velocity, not create more effective relationships throughout each of the three dominant customer bases of the company (Sanchez, Sanchez, 2005).

High-level Solution

As Verizon is a globally-based cellular and telecommunication service provider and they have over two dozen CRM systems installed as of 2012, the lack of integration across these many platforms is causing the company to churn customers. Second, the lack of integration of procurement and supply chain status to the business and government sales teams is causing significant cost overruns in sales as the sales teams are quoting products that are not in stock and often must be expedited. The lack of supply chain and catalog management integration to these enterprise sales forces is slowing down the largest sales in enterprise and government accounts.

At a strategic or high level, Verizon needs to concentrate on creating a unified CRM system that can span across the over two dozen existing legacy CRM systems in place that today aren't connected to each other. Verizon also needs to take into account the enterprise customers' needs for quotes and bids that elect accurately that the company can provide. The quoting process, typically part of a CRM system, is not present in the Verizon system architecture at this point. The quoting and bidding process needs to also see the procurement and supply chain status including inventory so that only those products in stock and that can be profitably sold can be included. It is a best practice to move beyond just quoting pricing on bids and quotes to include available-to-promise and delivery dates with high levels of precision, especially for enterprise and government customers (Hsin, 2007).

These two high-level solutions of a unified CRM system architecture and the real-time integration to procurement and supply chain management both need to share a common data platform. This common data platform must also have real-time integration to procurement and supply chain management systems as well, to support a more effective bidding and sales quoting process. Of the many approaches to accomplishing this, the most cost-effective will be using a Cloud-based architecture were each of these applications can be delivered as a service using the Software-as-a-Service (SaaS) foundation inherent in cloud computing. Cloud-based CRM systems have progressed to the point of providing a highly effective platform for consolidating previous generation CRM systems while also providing the integration support for procurement, supply chain and transaction-based Enterprise Resource Planning (ERP) systems (Hsin, 2007).

Approach

A Cloud-based CRM system provides Verizon with the flexibility to create a single, unified global system of record with regard to customer relationships, while also being able to tailor the system to specific requirements in the 120 countries it competes in. A SaaS-based CRM system also solves the most difficult problem for any CRM system, and this is how to gain greater adoption (Limbasan, Rusu, 2011). Conservative estimates of the cost of CRM implementations indicate that nearly 80% of their cost is associated with adoption and tailoring the system to the specific needs of users (Hsin, 2007). The Cloud-based architecture supporting the CRM also provides Verizon with a stable platform for integrating their procurement, supply chain management and back-office ERP links to ensure bidding and quoting workflows are accurate and only providing the most profitable, in-stock products on enterprise and government quotes. (Hsin, 2007). Verizon must concentrate on creating a highly reliable knowledge-based CRM system if they are going to be able to stop the customer churn and gain greater profitability (Lin, Su, Chien, 2006)

Verizon's Enterprise Systems

Verizon relies on the following CRM and ERP systems today to operate their global enterprise. It is significant to note that the majority of these systems are not integrated with each other, and many are on-premise, residing on servers in their Verizon it department:

1. Siebel CRM -- Verizon invested heavily in Siebel CRM as a means to integrate their business divisions during the early 2000 timeframe. Today they have 10,000 seats active and are now paying maintenance to Oracle, who purchased Siebel shortly after the implementation as complete at Verizon. Oracle has been very slow to keep the Siebel CRM systems current and as a result they are not well designed to support cloud computing at this time. In late 2012 CEO Larry Ellison finally defined the cloud computing strategy of the company at their annual event, Oracle OpenWorld. For Verizon, these 10,000 seats have become a symbol of all that is wrong in their CRM strategy.… [END OF PREVIEW] . . . READ MORE

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