How BPM Benefits Customer Relationship Management

CRM is the next frontier for business performance management software.

Like a person with poor sight putting on glasses for the first time -- that's the analogy some finance executives use to describe what happens when a company leverages its business performance management (BPM) software to analyze data from its customer relationship management (CRM) tool. Gone is the fuzziness that usually surrounds customer profitability metrics; gone too are distorted perceptions of customer behavior that arise from using disparate data sources.

"It has changed our view of our customers from a fragmented one to a consolidated, comprehensive look at them," says Mike Smith, chief administrative officer and CFO of Lincoln Financial Distributors, a wholesaler of mutual funds, life insurance and variable annuities based in Philadelphia. "Two years ago, we began feeding customer data from a myriad of old CRM legacy systems into the BPM solution we bought from Actuate. As a result, now we have a better understanding of the breadth of our relationship with each customer we serve and how to leverage those relationships."

In addition, the new system has given Lincoln Financial Distributors "a better handle on which products are the most profitable for us," says Smith. And it has enabled the company "to set our own performance targets in a more meaningful way," he adds.

Can't CRM-enabled companies realize those benefits just as easily without a BPM system? The answer, in general, is no. Some CRM software packages offer only transactional customer data. Others provide fair-ly comprehensive customer analytics, but finance executives seeking to leverage that data must answer a critical question: How does it fit into the big picture? Specifically, how does the information relate to the organization's key performance drivers? How much emphasis should the company give to, say, customer satisfaction metrics compared with employee satisfaction and operational quality measures? By providing a broad context for customer data, BPM software helps finance executives answer these questions.

"Over the years, companies have faced frustrations in looking at large amounts of data from ERP [enterprise resource planning] systems and CRM systems because they haven't been able to link that data to their strategies," observes Brian McCarthy, Atlanta-based senior manager with Accenture's finance and performance management service line. "Now -- with BPM -- companies can make that connection, and they can give CRM some foundation and context."

Organizations that combine their CRM and BPM capabilities can also achieve more efficient distribution of critical data, according to Scott Nelson, Waukesha, Wis.-based vice president and distinguished analyst with Gartner Inc. "The key with analytics isn't the tool; it's how you move information through the system -- how you're able to get the information to the right people when they need it," he says. "BPM serves as that communication tool. So ideally, what forward-looking companies want is a mix of CRM and BPM."