By: Ciopages Staff Writer
Updated on: Feb 25, 2023
The emergence of social, mobile, cloud and analytics are the drivers for a customer-centric digital transformation of the customer relationship management function. CRM capabilities model (or customer relationship management capabilities map) is an essential tool for understanding what CRM function does and can do and then be able to identify new capabilities as well as enhancement opportunities within the existing capabilities. CRM Capabilities
A CRM capability is an abstraction of the underlying functionality and process and captures what CRM does and can do. A capability is a business architecture term, and a CRM capabilities model is an integral part of the business architecture deliverables.
A CRM capability is a foundational building block, and it establishes a common language between business and IT. Instead of focusing on systems or processes, which are volatile and transient, leveraging CRM business capabilities will help in understanding the current state and envisioning the future state and crafting a capability-centric CRM transformation roadmap.
CRM or customer relationship management is a broad and expansive term, and different companies define the boundaries differently.
Furthermore, if a company has created an enterprise business capabilities map, CRM may be a lower level capability. For example, a snippet of an enterprise business capabilities model may look something like the following:
As you can see CRM is a Level 2 capability. While the level itself may not matter, a robust decomposition of granular CRM capabilities is of paramount importance. However, in some companies, if out of sight is out of mind, elevating the CRM function to a higher level may be appropriate. For example, if enabling omnichannel and enhancing customer experience is the most strategic goal of the enterprise, elevating CRM to a level 1 capability may make sense. Of course, this is optics and sometimes optics matter.
On the other hand, if we took a slightly expanded view of the CRM capabilities and if we were creating a standalone capabilities map to power an impending CRM transformation, here is what we might come up with. (It should be clear by now that the CRM capabilities are not set in stone with regards to position and level. Each enterprise may decompose the CRM capabilities differently reflecting the norms in the sector/industry, geography, and the company itself.
Then each of these can be decomposed to a further level of granularity. How deep you go depends on the specific purpose of the capabilities will be used. Furthermore, the CRM business capabilities model components may be different for each company, based on the industry, the business model, and the sales and service model.
For example, the CRM business capabilities map between a B2B company will vary from the core CRM capabilities of a B2B company, and indeed a B2B2C company may be a hybrid of the other two.
In the sample CRM capabilities model we are using, if we take the “Client Segmentation” capability, it now decomposes further into:
And the “Opportunity-based Segmentation” CRM capability drills down into:
There is quite a bit of confusion amongst practitioners about what is a capability and what is not and also what is the difference between a CRM capability, CRM competence, CRM Process, and a CRM System. Let’s walk through a simple example to grasp these concepts, which are all different, even though they are related.
“Dispute Management” is a CRM business capability.
“Dispute Submission” is one of the CRM processes.
“Dispute resolution” may be a competency of a group of people in the company.
“Dispute Resolution Policy” is a business rule set or an SOP (Standard Operating Procedure.)
“ZenDesk,” for example, is the case management and customer support software. (Or any other myriad software solutions.)
So, how do you use the CRM capabilities in your CRM transformation journey?
If you wish to jumpstart the CRM capabilities mapping exercise, consider a ready-to-customize CRM business capabilities model.
If you need professional services to help customize or to custom build a CRM capabilities model, please contact our Advisory Services team.
To learn how to build, manage and harness business capabilities mapping and business architecture, please consider Capstera’s Business Capabilities Mapping software.
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