El nuevo orden cósmico

A Teradata platform for data management and analytics is key to the company's winning ways.

More than two years into a five-year CRM program, Fernando Ricardo has good reason to feel happy. Westpac Banking Corporation's Program Reach, of which Ricardo is director, is ahead of schedule, ahead on anticipated benefits and right on budget. In fact, Ricardo believes the program has exceeded expectations, which he attributes to state-of-the-art technology, personnel experienced in CRM and, most importantly perhaps, the right corporate culture and buy-in across the organization. "It's been a very good first two years. We don't have any particular issues. Everything that we have done to date is working fine. I can't see any scenario where things could have gone better," he reflects.

Founded in 1817 as the Bank of New South Wales, Westpac is Australia's oldest bank. It provides banking and financial services for nearly 8 million personal, business and institutional customers in Australia, New Zealand and the Pacific region. It operates more than 1,000 branches and agencies, has offices in key financial centers around the world and employs more than 26,700 people.

Launched in 2002, Program Reach's principal business driver was to provide Westpac's staff with better information about customers. Such information would allow staff to proactively approach customers as well as reactively satisfy their needs. As Ricardo puts it, Westpac wanted "to provide the right tools for our staff to better service customers and have relevant conversations with them."

The program gives bankers concrete information about what customers need, enabling them to offer to customers the right kinds of products and services rather than blindly suggesting something.

"You don't want to be offering credit cards to young teenagers or to someone who already has two or three of your credit cards," Ricardo explains. "But if you have a home loan with us and you don't have insurance, it makes sense to talk to you about insurance."

The ability to know the difference is a key advantage in a highly competitive industry. "Systems in banks worldwide are still very much product-centric. Most banks don't have a single view of the customer and cannot determine and act upon what needs (their customers) may have," Ricardo says.

Ricardo gained oversight of Program Reach in September 2002, bringing nine years experience in analytics and strategic marketing for National Australia Bank, which used Teradata. In December 2002, after extensive investigation, Westpac selected Teradata CRM technology for its Westpac Leads engine—which is the heart of its cross-channel, integrated customer management and event-based customer contact system.

Building a system

Through its data warehouse, Westpac Leads draws data from Westpac's source systems. At the front-end, or presentation layer, are Relationship Builder (Siebel 7.5) and the Reach Dashboard (Siebel Analytics). Modeling is performed using SAS Enterprise Miner.

Relationship Builder provides a fast, browser-based, holistic view of customers, enabling a continuous conversation with customers through multiple channels. It is a powerful sales management tool that records referrals, service requests and opportunities, and it allows bankers to manage this information.

The Reach Dashboard provides sales management information about activities spanning from the call center to the executive level. Through real-time visual reporting, a manager can monitor the sales pipeline and focus on coaching or other sales activities as indicated by the Dashboard.

Sales leads, referred to as Westpac Leads because they are generated in that system, are delivered from Teradata CRM to Relationship Builder as opportunities for bankers to make proactive customer contact. Profile information and future opportunities recorded in Relationship Builder can be used to trigger a future Westpac Lead.

For example, an outbound caller employed by Westpac who is targeting potential customers via Relationship Builder is sent a Westpac Lead regarding a specific campaign and a specific customer. This can trigger discussion about other future needs. During the conversation, the caller might discover that the customer has a term deposit with another institution that will expire in four months. When the banker records this as part of the customer's profile, a Westpac Lead will be triggered in time for the banker to contact the customer with an appropriate Westpac offer.

Ricardo says that prior to Teradata and Program Reach, Westpac could not deliver consistent or "next best" offers, which enable a relevant, timely lead to be attached to

the customer's record within Relationship Builder. Without that information, bankers had a hard time targeting customers' needs with appropriate product or service offers. Now, in addition to outbound callers being sent leads, customer service staff can see relevant sales or service offers against a customer's record. With the scripting capabilities of Relationship Builder, any banker can easily introduce a relevant offer to the customer, and thanks to Westpac Leads' modeling capabilities, the likelihood of the offer being accepted is high.

The right offer at the right time

While there are a number of platforms available on which to do data management and analytics, Ricardo believes Teradata is one of the most potent. It is also the only platform optimized to run a campaign-management system on top of it.

One of the biggest benefits Westpac reaps from Teradata is the ability to analyze billions of rows of data in a very short period and gain quick access to the most recent information in order to leverage it across millions of customers.

"In terms of performance and speed of data analytics, Teradata has no real competition. It has the ability to trawl through billions of rows in a table very quickly and do it thousands of times in a few seconds," Ricardo says.

Westpac has successfully deployed Program Reach to its small and medium enterprise (SME) customer base. Around 5,000 staff members use Program Reach in Westpac's business call centers and branch network. According to Ricardo, the feedback and impact on customer and staff satisfaction have been extremely positive. Westpac has made significant gains in SME market share over the last few years, although Ricardo does not attribute this solely to Program Reach.

The bank is progressively rolling out the solution to its consumer and wealth management customer segments. Five full-time Teradata Professional Services associates will remain on-site as the deployment continues. After that phase, Westpac plans to integrate the system with ATMs, the Internet, short message service (SMS) and interactive voice response (IVR) systems.

While Program Reach's aim is to deliver the right offer to the right customer via the right channel at the right time, every time, Ricardo admits such things do not happen in two years. However, if progress continues, irrelevant offers should be a thing of the past by the program's fifth year.

Smartly planned moves

According to Ricardo, the principal challenge in the project has been to avoid the mistakes that others have made with CRM.

"CRM is a bit like chess. The players who win are those who execute better by making fewer mistakes. Normally in chess it is not the great moves that win games; it's the bad moves that lose games," he says. He has sought to make careful and thoughtful moves along the way.

For example, Ricardo believes most CRM projects fail because the organizations did not spend enough time on people issues. In Program Reach, however, 20% to 30% of the total program effort has been focused on training staff, which he thinks is unique in Australia.

"Ten years ago, all of my peers were spending 1% to 2% on people; the rest was on technology. Everybody thought that the technology was the silver bullet (that) would fix everything and is so easy to use. A decade on, we all know that the most important piece in the puzzle is not the technology. It's what people feel about the technology and how they use it," he says.

Another potential barrier for other organizations is lack of senior support for the project. Program Reach has been well sponsored, initially by Westpac's group executive for business and technology because the first 12 months or so essentially involved technology and building the necessary infrastructure. Now that the SME pilot is up and running, the sponsor is the group executive of the retail bank for Westpac in Australia.

Another reason Ricardo thinks IT-related projects fail is that they are overly ambitious. Westpac's approach, however, has been to undertake small pieces of the program at a time, starting with defining and addressing the bank's top 20 types of customer interactions.

A large proportion of executives around the world believe that CRM doesn't work because they are not made an integral part of the process. Ricardo advocates clear communication about what is taking place, when it will happen, what value CRM will add in terms of profitability and customer and staff satisfaction, and when there will be a visible return.

"I spend a lot of time articulating to the frontline staff, the marketing staff, the technology staff and the executives exactly what we are doing, so there are never any surprises for anybody," he says.

The Westpac way

Ricardo believes three qualities differentiate Westpac's CRM strategy and focus from that of its competitors.

First, he says the bank is deploying current technology that is much more mature than it was 10 or 15 years ago. Ricardo thinks that many of the companies that first attempted CRM in the early 1990s found themselves dealing with highly customized applications and are now struggling to upgrade to browser-based applications. He also believes that these days there is much less need to customize CRM solutions and consequently lock oneself out of an upgrade path.

"We are deploying existing browser-based technology and setting up an infrastructure that will survive the next decade or so because it's geared up for the future while I think a lot of our competitors in Australia will incur significant expenditure in migrating to existing and future technologies," he says.

The second differentiator is that Westpac's sales and corporate culture is unrivaled in Australia, according to Ricardo. The bank has been recognized with global and national awards for social responsibility and customer focus. Having this environment as well as a balance between the interests of shareholders, staff and customers puts Westpac in a unique position.

"That cultural fabric of the company provides a fertile ground for these things to work," Ricardo explains. "The lack of cultural alignment between the various stakeholders has been one of the causes of the many failures of CRM projects."

He continues, "This is also a place where the focus on the customer exists as a natural part of the company's fiber. We're not using technology to help our staff to focus on customers; they are already focused on customers. This is really not as hard as it would have been in other companies where customer service, customer satisfaction and doing the right thing for the customer are not core business (directives) like they are here."

Finally, Ricardo and others on the project have been able to bring their prior experience with CRM to bear so that Westpac will not have to start from scratch. This accelerates the speed of execution and the quality of the outcome while reducing the number of failures in technology, training and process reengineering.

"Combined, these three things provide us with a unique opportunity to do well. I think the big difference for Westpac is that Westpac is going straight to the nuggets without spending a lot of time mining in areas where there is no gold," Ricardo says.