Unisys' Crystal Ball Shows CRM-ERP Integration and a Push for Metrics in 2005: An Interview with Rich Jaso

In an unusual move for a CRM technology and services firm, Unisys announced predictions for the CRM industry. The company not only publicized the predictions but also will use them to structure its approach for its CRM business. Gwynne Young, managing editor of CRMGuru.com, met with Rich Jaso, managing partner for Unisys North American CRM practice, Jan. 19, 2005, to talk about the predictions and what prompted Unisys to puts its overall CRM direction on the line.

The following interview was edited for length and clarity.

Gwynne Young
Rich, tell us a little bit about yourself and what you do with Unisys.

Rich Jaso
Sure. I'm the Managing Partner of North America for Unisys CRM Practice. I have responsibility for CRM and business intelligence services in North America for the Unisys Company. We focus on a variety of industry verticals, bring consultative services, technology implementations, outsourcing services, and hardware and software products to our clients, where appropriate.

Gwynne Young
We are talking about the predictions that Unisys sent out in November, looking ahead at 2005. I'd like you very briefly to discuss the predictions, and then we'll go back and talk about some of them. What are the six predictions Unisys made?

Rich Jaso
As we began planning for 2005, six things really jumped out at us as practices and technologies:

• The first was a move toward the integration of CRM, ERP, supply-chain focus and data points.
  
  
• The second was a growing demand by companies for statistically validated metrics relative to best practices.
  
  
• The third was an expansion of business intelligence tools, including customized applications that will be pushed to the mobile worker via PDAs, in addition to their laptops.
  
  
• The fourth was that we've seen advances in call center productivity using voice over IP (VoIP) technology, such that it's beginning to be widely adopted in infrastructures and call centers throughout the world. We've also seen an increase in global resourcing and outsourcing models over the past couple of years and think that will continue dramatically.
  
  
• The fifth is the integration of radio frequency identification technologies into retail operations, moving beyond the defense industry and other government types of activities.
  
  
• Last, there's a growing adoption of CRM by local governments, particularly in the area of 311 programs; 311 programs are those programs that are non-mission-critical to the citizenry. The citizenry today calls 911 for emergency services, 311 for non-emergency.
  
  

Gwynne Young
Has Unisys always made annual predictions?

Rich Jaso
Actually, in the area of CRM, this is our first year of issuing predictions. A variety of the industry groups within Unisys have published predictions annually, and they do track how the predictions unfold on an annual basis. We decided to make predictions this year for a variety of reasons. It appears that in the CRM business segment, specifically, there are a number of technologies, as well as an economic climate today, that are dictating the need for change. As a result, it became pretty clear that there are some key things that are going to happen in 2005 and 2006 that we had to anticipate and do something about if we were to be more effective as a marketer of products and services. Therefore, it just seemed obvious to put it into a prediction form, and we'll grade our reliability on these predictions come the end of the year. We do plan on doing this again next year.

Gwynne Young
That will be interesting.

Rich Jaso
Yeah, it will be.

Gwynne Young
I'd like to know which prediction stands out for you and why.

Metrics and opportunism

Rich Jaso
I think all of them are intriguing, first of all, but some are more what I call "opportunistic. " Voice over IP, as an example, is something that most companies can take advantage of immediately and realize immediate benefits. There are some predictions that are much more strategic in their orientation, and one I'd like to highlight is the demand for statistically validated metrics on best practices. I think this issue has some wide-ranging ramifications for the way companies think about solving their business problems and what they expect from outside consulting groups who are providing services to them.

Gwynne Young
Can I interrupt you a little bit before you go into it?

Rich Jaso
Sure.

Gwynne Young
What jumped out at me when you talk about the demand for metrics is I always think that all businesses have a certain handle on metrics. Are you saying that they haven't—or they haven't been serious about it in the past?

Rich Jaso
Companies struggle, not to collect their own metrics, but to understand how those metrics compare to other relevant constituencies, be they competitors or companies that use the same kind of business model, and then compare their performance to others. One of the reasons people use outsiders like consultants in the first place, is because they acknowledge that they don't know what they don't know. They look for outside entities to come in and try to give them some perspective.

One of the issues in today's marketplace is that the guidance you get from service providers, consultant companies and the like is typically exclusively experience-based, so it's based on the observations of the group you bring in for help. This notion of observed best practice is not statistically validated and may not apply to the specific company that you're providing services to, based on the business model, the size of the business, the geography and the like. One of the issues that I've observed is if you ask any three consultants to list their top 10 best practices for a specific type of business, seven of the 10 will differ.

Gwynne Young
Oh, that's interesting.

Rich Jaso
Yeah, and that's because this notion of best practices is an experiential-based set of recommendations that we, as service providers, have all formulated. If you went to large consulting companies and asked them about best practices in a specific area, each of the consultants would probably give you a different view. So what companies are beginning to cry out for is a more factual-based level of understanding of what works, and they've begun investing in quality programs in the form of Six Sigma and the like to attempt to provide fact-based comparisons of their business practices to others.

Part of the foundation associated with that is the need to go out and try to interact with other companies, to try to truly formulate what works, what doesn't work, why it works, why it doesn't work. I think there's some frustration by many companies in the advice and guidance they receive from outside service providers, because they don't have a good handle on the validity of these recommendations.

Gwynne Young
They want something more measurable.

Rich Jaso
They want something more measurable, and they want it relevant to them. They want to know what they're doing today that's different from what leading companies are doing, at a tactical level. And they want to understand, if they were to change what it is they do, what kind of value would be associated with the change. So I think clients today are looking for a much greater level of detail and facts associated with what constitutes best practices vs. mediocrity, in their business segment. Did you ask a question, Gwynne, of what this means for Unisys?

Gwynne Young
Right.

Benchmarks

Rich Jaso
As clients began asking for a greater level of statistical validity in sales, marketing and services recommendations we began investing in providing a mechanism to deliver on those requests. Specifically, we've invested in the creation of benchmarks aimed at all of the components of CRM. There will be a benchmark in marketing, sales and customer service, including call centers and in field support.

We're in the process of reaching out to some 60 or 70 companies to pilot and participate in this benchmark data collection activity so that associated with those responses we receive from 400 or 500 questions we ask about performance objectives, business processes that they use, process measurements and supporting processes, we can then analyze the data using business intelligence and pinpoint the actual processes that work in a variety of businesses, and are statistically validated as factors that improve performance.

Gwynne Young
So, we can get past everyone bandying about the idea that CRM is prone to failure.

Rich Jaso
Yes. In fact, we'll be able to pinpoint the use of CRM by leading companies, the processes they use, what modules of what software they use and how they go about implementing their CRM programs. We'll also be able to highlight what CRM Practices are being used by average performing companies and compare the two. Then, clients can understand what factors leading companies employ that are different than your average performing company. Does that make sense?

Gwynne Young
Oh, it makes perfect sense. I think we could spend the whole time on this demand for metrics—

Rich Jaso
We could.

Gwynne Young
—measurable comparison. But, two of the things that jumped out at me for different reasons were the idea of a fact-based approach to CRM and perhaps, that segue's right into the demand for metrics. What do you mean by fact-based? Is that the same thing, where you have a measurable quantitative—

Rich Jaso
What I mean by fact-based is when, in a consultative engagement, you make a recommendation that somebody adopt a certain approach, process or business model, you have the analytically- and statistically-proven facts that by adapting that kind of model in that kind of business, other companies have seen a specific level of success. Then you would correlate your current position, compared to theirs, analyze the gap associated with it and then address that gap to realize a level of quantifiable benefit. That's what I mean by a fact-based approach.

Gwynne Young
So, even more than facts, you're getting different businesses on the same board, to have comparisons across board.

Rich Jaso
Yes, absolutely, and by using a good business intelligence infrastructure to enable the analysis, it doesn't necessarily always have to be a competitor. You can measure components of call centers across industries, across geographies, and learn things as a byproduct of that effort. It takes what people are trying to do, informally, in Six Sigma-type benchmarking and moves to a much higher level of statistical validation across a much larger sample size.

VoIP

Gwynne Young
I am intrigued by, I think, every single one of the six predictions. But the other one that I want to discuss in-depth is the Voice over Internet Protocol, mostly because our contact center guru, Donna Fluss, came out several months ago saying this was going to be the key trend for call centers. And yet, when I talked to other analysts in the field, they said, "Well, it's going to be a key trend, but it's not going to be revolutionary. It's just something there." So, with Unisys' prediction, that voice over IP is finally emerging, what's its significance? Is it going to mean more profit? Is it just going to be more pervasive? Is it going to allow businesses to cut some of their workforce and expenses?

Rich Jaso
For those people who have been in the call center business a while, when voice over IP first came onto the radar screen, there was a notion that it was going to be revolutionary and that you were going to have people talking to PC monitors, which, at the time, people thought was rather far-fetched. But, as you know, voice over IP has suffered from quality issues for the longest time.

There has been a frame of mind that said, "if you're going to incur the benefits of voice over IP, you're going to have to compromise and put up with some of the quality issues like slurred speech, choppy images, if you are using video and the like." So, those are things that caused people to resist the early adoption of the technology.

What I'll tell you is that over the last five years or so, the whole digital technology area has advanced such that voice over IP now has very high quality both in terms of voice and images. The speed of transmission of data now allows you to conduct voice over IP types of activities in a very high-quality fashion.

The other thing I would highlight is that, thanks to things like iPods and cell phones, we've become a society that's used to throwing on a headset, talking into the headset, and plugging that headset into a variety of mechanisms. So the notion of having to have a phone attached to your ear is no longer a pervasive thought.

My view is that voice over IP is a technology whose time has come, for a variety of reasons:

• First, it just provides a huge amount of savings to a company. By reducing your voice infrastructure, you can save a lot of money. Companies will begin moving to voice over IP in a big way.
  
  
• Secondly, what voice over IP allows you to do is increase your level of flexibility immensely. There's a wonderful opportunity for service providers, like Unisys, to help guide clients into thinking through how to take some of the flexibility associated with voice over IP and really exploit the technology.
  
  For example, now that voice and data are digital and can be transferred anywhere, you have the ability of rethinking this whole notion of centralized call centers. You can move call centers to be decentralized, all the way to the point that you provide facilities for your employees to do their work at home and have calls routed to them transparently. Nobody would ever know where the call was going. You could reroute calls, should you have a disaster in a geography, where a call center is located, and continue to provide service. That has huge ramifications on companies. ”
  
  One example I would give you is this: Years ago, I worked with L. L. Bean At Christmastime, they had a call center of some 4,000 people up in Freeport, Maine, that was operating with the acknowledgement that if they had a huge snowstorm, their business would be impacted dramatically. Well with voice over IP, they could dynamically reroute those calls to other call centers throughout the world, or if the employees had to stay at home, they could continue to take calls through the voice over IP infrastructure.
  
  
• Lastly, what the digital image allows you to do is recognize voices as they come in. You could even do voice verification, so that when Rich Jaso's voice comes in, voice over IP and other digital technologies would say, "Yep, that indeed is Rich." It would allow the system to reroute or route the call to the people who work with Rich and know Rich well and do it much faster. Not only is there an expense dimension associated with voice over IP, but this flexibility issue will allow companies to be more service-oriented, provide better service and save money at the same time. I think you will see companies moving very rapidly to voice over IP.
  
  

Gwynne Young
You said Unisys decided to put out predictions in CRM when you were attempting to come up with benchmarks, internally. How are you using this internally?

Rich Jaso
These six predictions that we've highlighted are incorporated into our entire go to market planning and solution development plans. So across all six, you will see Unisys developing solutions and intellectual property to address these areas. We've changed some organizational structures, for example.

One area we didn't talk about in great detail, but that Unisys is focused on, is: We see CRM functions, ERP functions and supply chain-oriented types of activities being focused on from an end-to-end standpoint. As a result, we've reorganized ourselves so that our ERP supply chain and CRM entities all report to the same organizational structure and are beginning to work on consultative solutions that focus across all of those business areas simultaneously. This way, we're not only fixing a small piece of the business, we are fixing the entire demand chain.

Gwynne Young
So you might take the word, "prediction," out of there and say, "These are six things we're banking on as a company."

Rich Jaso
I would say six things we're banking on as a strategic services component of Unisys, absolutely.

Rich Jaso is the North American leader for customer relationship management at Unisys. Jaso is a 25-year veteran with broad experience in major facets of CRM, including market research, campaign development, sales force effectiveness and field service. Before joining Unisys in June 2004, Jaso worked at Answerthink, Inc.