Integrate Physical Security and Information Security

Securing information security, physical security, or personnel security in silos may not secure much

Analyst Perspective

Ensure integrated security success with close and continual collaboration

From physical access control systems (PACS) such as electronic locks and fingerprint biometrics to video surveillance systems (VSS) such as IP cameras to perimeter intrusion detection and prevention to fire and life safety and beyond: physical security systems pose unique challenges to overall security. Additionally, digital transformation of physical security to the cloud and the convergence of operational technology (OT), internet of things (IoT), and industrial IoT (IIoT) increase both the volume and frequency of security threats.

These threats can be safety, such as the health impact when a gunfire attack downed wastewater pumps at Duke Energy Substation, North Carolina, US, in 2022. The threats can also be economic, such as theft of copper wire, or they can be reliability, such as when a sniper attack on Pacific Gas & Electric’s Metcalf Substation in California, US, damaged 17 out of 21 power transformers in 2013.

Considering the security risks organizations face, many are unifying physical, cyber, and information security systems to gain the long-term overall benefits a consolidated security strategy provides.

Ida Siahaan

Research Director, Security and Privacy Practice
Info-Tech Research Group

Executive Summary

Info-Tech Insight

An integrated security architecture, including people, process, and technology, will improve your overall security posture. These benefits are leading many organizations to consolidate their siloed systems into a single platform across physical security, cybersecurity, HR, legal, and compliance.

Existing information security models are not comprehensive

Current security models do not cover all areas of security, especially if physical systems and personnel are involved and safety is also an important property required.

• The CIA triad (confidentiality, integrity, availability) is a well-known information security model that focuses on technical policies related to technology for protecting information assets.
• The US Government’s Five Pillars of Information Assurance includes CIA, authentication, and non-repudiation, but it does not cover people and processes comprehensively.
• The AAA model, created by the American Accounting Association, has properties of authentication, authorization, and accounting but focuses only on access control.
• Donn Parker expanded the CIA model with three more properties: possession, authenticity, and utility. This model, which includes people and processes, is known as the Parkerian hexad. However, it does not cover physical and personnel security.

CIA Triad

Parkerian Hexad

Sources: Parker, 1998; Pender-Bey, 2012; Cherdantseva and Hilton, 2015

Adopt an integrated security model

The security ecosystem is shifting from segregation to integration

Sources: Cisco, n.d.; Preparing for Technology Convergence in Manufacturing, Info-Tech Research Group, 2018

Physical security includes:

• Securing physical access,
  e.g. facility access control, alarms, surveillance cameras
• Securing physical operations
  (operational technology – OT), e.g. programmable logic controllers (PLCs), SCADA

Info-Tech Insight

Why is integrating physical and information security gaining more and more traction? Because the supporting technologies are becoming more matured. This includes, for example, migration of physical security devices to IP-based network and open architecture.

Reactive responses to physical security incidents

April 1995

Target: Alfred P. Murrah Federal Building, Oklahoma, US. Method: Bombing. Impact: Destroyed structure of 17 federal agencies, 168 casualties, over 800 injuries. Result: Creation of Interagency Security Committee (ISC) in Executive Order 12977 and “Vulnerability Assessment of Federal Facilities” standard.
(Source: Office of Research Services, 2017)

April 2013

Target: Pacific Gas & Electric’s Metcalf Substation, California, US. Method: Sniper attack. Impact: Out of 21 power transformers, 17 were damaged. Result: Creation of Senate Bill No. 699 and NERC- CIP-014 standard.
(Source: T&D World, 2023)

Sep. 2022

Target: Nord Stream gas pipelines connecting Russia to Germany, Baltic sea. Method: Detonations. Impact: Methane leaks (~300,000 tons) at four exclusive economic zones (two in Denmark and two in Sweden). Result: Sweden’s Security Service investigation.
(Source: CNBC News, 2022)

Dec. 2022

Target: Duke Energy Substation, North Carolina, US. Method: Gunfire. Impact: Power outages of ~40,000 customers and wastewater pumps in sewer lift stations down. Result: State of emergency was declared.
(Source: CBS News, 2022)

Info-Tech Insight

When it comes to physical security, we have been mostly reactive. Typically the pattern starts with physical attacks. Next, the impacted organization mitigates the incidents. Finally, new government regulatory measures or private sector or professional association standards are put in place. We must strive to change our pattern to become more proactive.

Physical security market forecast and top physical security challenges

Physical security market forecast
(in billions USD)

A forecast by MarketsandMarkets projected growth in the physical security market, using historical data from 2015 until 2019, with a CAGR of 6.4% globally and 5.2% in North America.

Source: MarketsandMarkets, 2022

Top physical security challenges

An Ontic survey (N=359) found that threat data management (40%) was the top physical security challenge in 2022, up from 33% in 2021, followed by physical security threats to the C-suite and company leadership (35%), which was a slight increase from 2021. An interesting decrease is data protection and privacy (32%), which dropped from 36% in 2021.

Source: Ontic Center for Protective Intelligence, 2022

Info-Tech Insight

The physical security market is growing in systems and services, especially the integration of threat data management with cybersecurity.

Top physical security initiatives and operations integration investments

We know the physical security challenges and how the physical security market is growing, but what initiatives are driving this growth? These are the top physical security initiatives and top investments for physical security operations integration:

Top physical security initiatives

A survey by Brivo asked 700 security professionals about their top physical security initiatives. The number one initiative is integrating physical security systems. Other initiatives with similar concerns included data and cross-functional integration.

Source: Brivo, 2022

Top investments for physical security operations integration

An Ontic survey (N=359) on areas of investment for physical security operations integration shows the number one investment is on access control systems with software to identify physical threat actors. Another area with similar concern is integration of digital physical security with cybersecurity.

Source: Ontic Center for Protective Intelligence, 2022

Evaluate security integration opportunities with these guiding principles

Opportunity focus

• Identify the security integration problems to solve with visible improvement possibilities
• Don’t choose technology for technology’s sake
• Keep an eye to the future
• Use strategic foresight

Piece by piece

• Avoid taking a big bang approach
• Test technologies in multiple conditions
• Run inexpensive pilots
• Increase flexibility
• Build a technology ecosystem

Buy-in

• Collaborate with stakeholders
• Gain and sustain support
• Maintain transparency
• Increase uptake of open architecture

Key Recommendations:

Focus on your master plan

Build a technology ecosystem

Engage stakeholders

Info-Tech Insight

When looking for a quick win, consider learning the best internal or external practice. For example, in 1994 IBM reorganized its security operation by bringing security professionals and non-security professionals in one single structure, which reduced costs by approximately 30% in two years.

Sources: Create and Implement an IoT Strategy, Info-Tech Research Group, 2022; Baker and Benny, 2013; Erich Krueger, Omaha Public Power District (contributor); Doery Abdou, March Networks Corporate (contributor)

Case Study

4Wall Entertainment – Asset Owner

4Wall Entertainment is quite mature in integrating its physical and information security; physical security has always been under IT as a core competency.

4Wall Entertainment is a provider of entertainment lighting and equipment to event venues, production companies, lighting designers, and others, with a presence in 18 US and UK locations.

After many acquisitions, 4Wall Entertainment needed to standardize its various acquired systems, including physical security systems such as access control. In its integrated security approach, IT owns the integrated security, but they interface with related entities such as HR, finance, and facilities management in every location. This allows them to obtain information such as holidays, office hours, and what doors need to be accessed as inputs to the security system and to get sponsorship in budgeting.

In the past, 4Wall Entertainment tried delegating specific physical security to other divisions, such as facilities management and HR. This approach was unsuccessful, so IT took back the responsibility and accountability.

Currently, 4Wall Entertainment works with local vendors, and its biggest challenge is finding third-party vendors that can provide nationwide support.

In the future, 4Wall Entertainment envisions physical security modernization such as camera systems that allow more network accessibility, with one central system to manage and IoT device integration with SIEM and MDR.

Results

Lessons learned in integrating security from 4Wall Entertainment include:

• Start with forming relationships with related divisions such as HR, finance, and facilities management to build trust and encourage sponsorship across management.
• Create policies, procedures, and standards to deploy in various systems, especially when acquiring companies with low maturity in security.
• Select third-party providers that offer the required functionalities, good customer support, and standard systems interoperability.
• Close skill gaps by developing training and awareness programs for users, especially for newly acquired systems and legacy systems, or by acquiring expertise from consulting services.
• Complete cost-benefit analysis for solutions on legacy systems to determine whether to keep them and create interfacing with other systems, upgrade them, or replace them entirely with newer systems.
• Delegate maintenance of specific highly regulated systems, such as fire alarms and water sprinklers, to facilities management.

Tracking progress of physical and information security integration

Physical security is often part of facilities management. As a result, there are interdependencies with both internal departments (such as IT, information security, and facilities) and external parties (such as third-party vendors). IT leaders, security leaders, and operational leaders should keep the big picture in mind when designing and implementing integration of physical and information security. Use this checklist as a tool to track your security integration journey.

Plan

• Engage stakeholders and justify value for the business.
• Define roles and responsibilities.
• Establish/update governance for integrated security.
• Identify integrated elements and compliance obligations.

Enhance

• Determine the level of security maturity and update security strategy for integrated security.
• Assess and treat risks of integrated security.
• Establish/update integrated physical and information security policies and procedures.
• Update incident response, disaster recovery, and business continuity plan.

Monitor & Optimize

• Identify skill requirements and close skill gaps for integrating physical and information security.
• Design and deploy integrated security architecture and controls.
• Establish, monitor, and report integrated security metrics on effectiveness and efficiency.

Benefits of the security integration framework

Today’s matured technology makes security integration possible. However, the governance and management of single integrated security presents challenges. These can be overcome using a multi-phased framework that enables a modular, incremental, and repeatable integration process, starting with planning to justify the value of investment, then enhancing the integrated security based on risks and open architecture. This is followed by using metrics for monitoring and optimization.

1. Modular

   • Implementing a consolidated security strategy is complex and involves the integration of process, software, data, hardware, and network and infrastructure.
   • A modular framework will help to drive value while putting in appropriate guardrails.

2. Incremental

   • Integration of physical security and information security involves many components such as security strategy, risk management, and security policies.
   • An incremental framework will help track, manage, and maintain each step while providing appropriate structure.

3. Repeatable

   • Integration of physical security and information security is a journey that can be approached with a pilot program to evaluate effectiveness.
   • A repeatable framework will help to ensure quick time to value and enable immediate implementation of controls to meet operational and security requirements.

Potential risks of the security integration framework

Just as medicine often comes with side effects, our Integration of Physical and Information Security Framework may introduce risks too. However, as John F. Kennedy, thirty-fifth president of the United States, once said, "There are risks and costs to a program of action — but they are far less than the long-range cost of comfortable inaction."

Plan Phase

• Lack of transparency in the integration process can lead to lack of trust among stakeholders.
• Lack of support from leadership results in unclear governance or lack of budget or human resources.
• Key stakeholders leave the organization during the engagement and their replacements do not understand the organization’s operation yet.

Enhance Phase

• The risk assessment conducted focuses too much on IT risk, which may not always be applicable to physical security systems nor OT systems.
• The integrated security does not comply with policies and regulations.

Monitor and Optimize Phase

• Lack of knowledge, training, and awareness.
• Different testing versus production environments.
• Lack of collected or shared security metrics.

Data

• Data quality issues and inadequate data from physical security, information security, and other systems, e.g. OT, IoT.
• Too much data from too many tools are complex and time consuming to process.

Develop an integration of information security, physical security, and personnel security that meets your organization’s needs

Integrate security in people, process, and technology to improve your overall security posture

Having siloed systems running security is not beneficial. Many organizations are realizing the benefits of consolidating into a single platform across physical security, cybersecurity, HR, legal, and compliance.

Plan and engage stakeholders

Assemble the right team to ensure the success of your integrated security ecosystem, decide the governance model, and clearly define the roles and responsibilities.

Enhance strategy and risk management

Strategically, we want a physical security system that is interoperable with most technologies, flexible with minimal customization, functional, and integrated, despite the challenges of proprietary configurations, complex customization, and silos.

Monitor and optimize

Find the most optimized architecture that is strategic, realistic, and based on risk. Next, perform an evaluation of the security systems and program by understanding what, where, when, and how to measure and to report the relevant metrics.

Focus on master plan

Identify the security integration problems to solve with visible improvement possibilities, and don’t choose technology for technology’s sake. Design first, then conduct market research by comparing products or services from vendors or manufacturers.

Build a technology ecosystem

Avoid a big bang approach and test technologies in multiple conditions. Run inexpensive pilots and increase flexibility to build a technology ecosystem.

Deliverables

Each step of this framework is accompanied by supporting deliverables to help you accomplish your goals:

Integrate Physical Security and Information Security Requirements Gathering Tool

Map organizational goals to IT goals, facilities goals, OT goals (if applicable), and integrated security goals. Identify your security integration elements and compliance.

Integrate Physical Security and Information Security RACI Chart Tool

Identify various security integration stakeholders across the organization and assign tasks to suitable roles.

Key deliverable:

Integrate Physical Security and Information Security Communication Deck

Present your findings in a prepopulated document that summarizes the work you have completed.

Plan

Planning is foundational to engage stakeholders. Start with justifying the value of investment, then define roles and responsibilities, update governance, and finally identify integrated elements and compliance obligations.

Plan

Engage stakeholders

• To initiate communication between the physical and information security teams and other related divisions, it is important to identify the entities that would be affected by the security integration and involve them in the process to gain support from planning to delivery and maintenance.
• Possible stakeholders:
  • Executive leadership, Facilities Management leader and team, IT leader, Security & Privacy leader, compliance officer, Legal, Risk Management, HR, Finance, OT leader (if applicable)
• A successful security integration depends on aligning your security integration initiatives and migration plan to the organization’s objectives by engaging the right people to communicate and collaborate.

Info-Tech Insight

It is important to speak the same language. Physical security concerns safety and availability, while information security concerns confidentiality and integrity. Thus, the two systems have different goals and require alignment.

Similarly, taxonomy of terminologies needs to be managed,¹ e.g. facility management with an emergency management background may have a different understanding from a CISO with an information security background when discussing the same term. For example:

In emergency management prevention means “actions taken to eliminate the impact of disasters in order to protect lives, property and the environment, and to avoid economic disruption.”²

In information security prevention is “preventing the threats by understanding the threat environment and the attack surfaces, the risks, the assets, and by maintaining a secure system.”³

Sources: ¹ Owen Yardley, Omaha Public Power District (contributor); ² Translation Bureau, Government of Canada, n.d.; ³ Security Intelligence, 2020

Map organizational goals to integrated security goals

1. As a group, brainstorm organization goals.
   • Review relevant corporate, IT, and facilities strategies.
2. Record the most important business goals in the “Goals Cascade” tab of the Integrate Physical Security and Information Security Requirements Gathering Tool. Try to limit the number of business goals to no more than ten goals. This limitation will be critical to helping focus on your integrated security goals.
3. For each goal, identify one to two security alignment goals. These should be objectives for the security strategy that will support the identified organization goals.

Download the Integrate Physical Security and Information Security Requirements Gathering Tool.

Record organizational goals

Refer to the Integration of Physical and Information Security Framework when filling in the table.

1. Record your identified organizational goals in the “Goals Cascade” tab of the Integrate Physical Security and Information Security Requirements Gathering Tool.
2. For each organizational goal, identify IT alignment goals.
3. For each organizational goal, identify OT alignment goals (if applicable).
4. For each organizational goal, identify Facilities alignment goals.
5. For each organizational goal, select an integrated security goal from the drop-down menu.

Justify value for the business

Facilities in most cases have a team that is responsible for physical security installations such as access key controllers. Whenever there is an issue, they contact the provider to fix the error. However, with smart buildings and smart devices, the threat surface grows to include information security threats, and Facilities may not possess the knowledge and skills required to deal with them. At the same time, delegating physical security to IT may add more tasks to their already-too-long list of responsibilities. Consolidating security to a focused security team that covers both physical and information security can help.1 We need to develop the security integration business case beyond physical security "gates, guns, and guards" mentality.2

An example of a cost-benefit analysis for security integration:

Sources: 1 Andrew Amaro, KLAVAN Security Services (contributor); 2 Baker and Benny, 2013;
Industrial Control System Modernization, Info-Tech Research Group, 2023; Lawrence Berkeley National Laboratory, 2021

Plan

Define roles and responsibilities

Many factors impact an organization’s level of effectiveness as it relates to integration of physical and information security. How the team interacts, what skill sets exist, the level of clarity around roles and responsibilities, and the degree of executive support and alignment are only a few. Thus, we need to identify stakeholders that are:

• Responsible: The person(s) who does the work to accomplish the activity; they have been tasked with completing the activity and/or getting a decision made.
• Accountable: The person(s) who is accountable for the completion of the activity. Ideally, this is a single person and is often an executive or program sponsor.
• Consulted: The person(s) who provides information. This is usually several people, typically called subject matter experts (SMEs).
• Informed: The person(s) who is updated on progress. These are resources that are affected by the outcome of the activities and need to be kept up to date.

Download the Integrate Physical Security and Information Security RACI Chart Tool

Define RACI chart

Define Responsible, Accountable, Consulted, Informed (RACI) stakeholders.

1. Customize the Work Units to best reflect your operation with applicable stakeholders.
2. Customize the Action rows as required.

Sources: ISC, 2015; ISC, 2021

Info-Tech Insight

The roles and responsibilities should be clearly defined. For example, IT Security should be responsible for the installation and configuration of all physical access controllers and devices, and facility managers should be responsible for the physical maintenance including malfunctioning such as access device jammed or physically broken.

Plan

Establish/update governance for integrated security

HR & Finance

HR provides information such as new hires and office hours as input to the security system. Finance assists in budgeting.

Security & Privacy

The security and privacy team will need to evaluate solutions and enforce standards on various physical and information security systems and to protect data privacy.

Business Leaders

Business stakeholders will provide clarity for their strategy and provide input into how they envision security furthering those goals.

IT Executives

IT stakeholders will be a driving force, ensuring all necessary resources are available and funded.

Facilities/ Operations

Operational plans will include asset management, monitoring, and support to meet functional goals and manage throughout the asset lifecycle.

Infrastructure & Enterprise Architects

Each solution added to the environment will need to be chosen and architected to meet business goals and security functions.

Info-Tech Insight

Assemble the right team to ensure the success of your integrated security ecosystem and decide the governance model, e.g. security steering committee (SSC) or a centralized single structure.

Adapted from Create and Implement an IoT Strategy, Info-Tech Research Group, 2022

What does the SSC do?

Ensuring proper governance over your security program is a complex task that requires ongoing care and feeding from executive management to succeed.

Your SSC should aim to provide the following core governance functions for your security program:

1. Define Clarity of Intent and Direction

   How does the organization’s security strategy support the attainment of the business, IT, facilities management, and physical and information security strategies? The SSC should clearly define and communicate strategic linkage and provide direction for aligning security initiatives with desired outcomes.

2. Establish Clear Lines of Authority

   Security programs contain many important elements that need to be coordinated. There must be clear and unambiguous authority, accountability, and responsibility defined for each element so lines of reporting/escalation are clear and conflicting objectives can be mediated.

3. Provide Unbiased Oversight

   The SSC should vet the organization’s systematic monitoring processes to ensure there is adherence to defined risk tolerance levels and that monitoring is appropriately independent from the personnel responsible for implementing and managing the security program.

4. Optimize Security Value Delivery

   Optimized value delivery occurs when strategic objectives for security are achieved and the organization’s acceptable risk posture is attained at the lowest possible cost. This requires constant attention to ensure controls are commensurate with any changes in risk level or appetite.

Adapted from Improve Security Governance With a Security Steering Committee , Info-Tech Research Group, 2018

Plan

Identify integrated elements and compliance obligations

To determine what elements need to be integrated, it’s important to scope the security integration program and to identify the consequences of integration for compliance obligations.

INTEGRATED ELEMENTS

What are my concerns?

Process integrations

Determine which processes need to be integrated and how

• Examples: Security prevention, detection, and response; risk assessment

Software and data integration

Determine which software and data need to be integrated and how

• Examples: Threat management tools, SIEM, IDPS, security event logs

Hardware integration

Determine which hardware needs to be integrated and how

• Examples: Sensors, alarms, cameras, keys, locks, combinations, and card readers

Network and infrastructure

Determine which network and infrastructure components need to be integrated and how

• Example: Network segmentation for physical access controllers.

COMPLIANCE

How can I address my concerns?

Regulations

Adhere to mandatory laws, directives, industry standards, specific contractual obligations, etc.

• Examples: NERC CIP (North American Utilities), Network and Information Security (NIS) Directive (EU), Health and Safety at Work etc Act 1974 (UK), Occupational Safety and Health Act, 1970 (US), Emergency Management Act, 2007 (Canada)

Standards

Adhere to voluntary standards and obligations

• Examples: NIST Cybersecurity Framework (CSF), The Risk Management Process for Federal Facilities: An Interagency Security Committee Standard (US), Cybersecurity Maturity Model Certification (CMMC), Service Organization Control (SOC 1 and 2)

Guidelines

Adopt guidelines that can improve the integrated security program

• Examples: Best Practices for Planning and Managing Physical Security Resources (US Interagency Security Committee), Information Security Manual - Guidelines for Physical Security (Australian Cyber Security Centre), 1402-2021-Guide for Physical Security of Electric Power Substations (IEEE)

Record integrated elements

Refer to the “Scope” tab of the Integrate Physical Security and Information Security Requirements Gathering Tool when filling in the following elements.

1. Record your integrated elements, i.e. process integration, software and data integration, hardware integration, network and infrastructure, and physical scope of your security integration, in the “Scope” tab of the Integrate Physical Security and Information Security Requirements Gathering Tool.
2. For each of your scoping give the rationale for including them in the Comments column. Careful attention should be paid to any elements that are not in scope.

Record your compliance obligations

Refer to the “Compliance Obligations” tab of the Integrate Physical Security and Information Security Requirements Gathering Tool.

1. Identify your compliance obligations. These can include both mandatory and voluntary obligations. Mandatory obligations include:
   • Laws
   • Government regulations
   • Industry standards
   • Contractual agreements
   Voluntary obligations include standards that the organization has chosen to follow for best practices and any obligations that are required to maintain certifications. Organizations will have many different compliance obligations. For the purposes of your integrated security, include those that include physical security requirements.
2. Record your compliance obligations, along with any notes, in your copy of the Integrate Physical Security and Information Security Requirements Gathering Tool.
3. Refer to the “Compliance DB” tab for lists of standards/regulations/ guidelines.

Remediate third-party compliance gaps

If you have third-party compliance gaps, there are four primary ways to eliminate them:

1. Find a New, Compliant Partner

   Terminate existing contract and find another organization to partner with.

2. Bring the Capability In-House

   Expense permitting, this may be the best way to protect yourself.

3. Demand Compliance

   Tell the third party they must become compliant. Make sure you set a deadline.

4. Accept Noncompliance and Assume the Risk

   Sometimes remediation just isn’t cost effective and you have no choice.

Follow Contracting Best Practices to Mitigate the Risk of Future Third-Party Compliance Gaps

1. Perform Initial Due Diligence: Request proof of third-party compliance prior to entering into a contract.
2. Perform Ongoing Due Diligence: Request proof of third-party contractor compliance annually.
3. Contract Negotiation: Insert clauses requesting periodic assertions of compliance.

View a sample contract provided by the US Department of Health and Human Services.

Source: Take Control of Compliance Improvement to Conquer Every Audit, Info-Tech Research Group, 2015

Pitfalls to avoid when planning security integration

• No Resources Lineups

  Integration of security needs support from leadership, proper planning, and clear and consistent communication across the organization.

• Not Addressing Holistic Security

  Create policies and procedures and follow standards that are holistic and based on threats and risks, e.g. consolidated access control policies.

• Lack of Governance

  While the IT department is a critical partner in cybersecurity, the ownership of such a role sits squarely in the organizational C-suite, with regular reporting to the board of directors (if applicable).

• Overlooking Business Continuity Effort

  IT and physical security are integral to business continuity and disaster recovery strategies.

• Not Having Relevant Training and Awareness

  Provide a training and awareness program based on relevant attack vectors. Trained employees are key assets to the development of a safe and secure environment. They must form the base of your security culture.

• Overbuilding or Underbuilding

  Select third-party providers that offer systems interoperability with other security tools. The intent is to promote a unified approach to security to avoid a cumbersome tooling zoo.

Sources: Real Time Networks, 2022; Andrew Amaro, KLAVAN Security Services (contributor)

Enhance

Enhancing is the development of an integrated security strategy, policies, procedures, BCP, DR, and IR based on the organization’s risks.

Enhance

Determine the level of security maturity and update the security strategy

• Before updating your security strategies, you need to understand the organization’s business strategies, IT strategies, facilities strategies, and physical and information security strategies. The goal is to align your integrated security strategies to contribute to your organization’s success.
• The integrated security leaders need to understand the direction of the organization. For example:
  • Growth expectation
  • Expansions or mergers anticipation
  • Product or service changes
  • Regulatory requirements
• Wise security investments depend on aligning your security initiatives to the organization’s objectives by supporting operational performance and ensuring brand protection and shareholder values.

Sources: Amy L. Meger, Platte River Power Authority (contributor); Baker and Benny, 2013; IFSEC Global, 2023; Security Priorities 2023, Info-Tech Research Group, 2023; Build an Information Security Strategy, Info-Tech Research Group, 2020; ISC, n.d.

Understanding security maturity

Maturity models are very effective for determining security states. This table provides examples of general descriptions for physical and information security maturity levels.

Determine which framework is suitable and select the description that most accurately reflects the ideal state for security in your organization.

Sources: ¹ Fennelly, 2013; ² Build an Information Security Strategy, Info-Tech Research Group, 2020

Enhance

Assess and treat integrated security risks

The risk assessment conducted consists of analyzing existing inherent risks, existing pressure to the risks such as health and safety laws and codes of practice, new risks from the integration process, risk tolerance, and countermeasures.

• Some organizations already integrate security into corporate security that consists of risk management, compliance, governance, information security, personnel security, and physical security. However, some organizations are still separating security components, especially physical security and information security, which limits security visibility and the organization’s ability to complete a comprehensive risks assessment.
• Many vendors are also segregating physical security and information security solutions because their tools do well only on certain aspects. This forces organizations to combine multiple tools, creating a complex environment.
• Additionally, risks related to people such as mental health issues must be addressed properly. The prevalence of hybrid work post-pandemic makes this aspect especially important.
• Assess and treat risks based on the organization’s requirements, including its environments. For example, the US federal facility security organization is required to conduct risk assessments at least every five years for Level I (lowest risk) and Level II facilities and at least every three years for Level III, IV, and V (highest risk) facilities.

Sources: EPA, n.d.; America's Water Infrastructure Act (AWIA), 2018; ISC, 2021

“In 2022, 95% of US companies are consolidating into a single platform across physical security, cybersecurity, HR, legal and compliance.”

Source: Ontic Center for Protective Intelligence, 2022; N=359

Example risk levels

The risk assessment conducted is based on a combination of physical and information security factors such as certain facilities factors. The risk level can be used to determine the baseline level of protection (LOP). Next, the baseline LOP is customized to the achievable LOP. The following is an example for federal facilities determined by Interagency Security Committee (ISC).

Source: ISC, 2021

Example assets

It is important to identify the organization’s requirements, including its environments (IT, IoT, OT, facilities, etc.), and to measure and evaluate its risks and threats using an appropriate risk framework and tools with the critical step of identifying assets prior to acquiring solutions.

Info-Tech Insight

Certain exceptions must be identified in risk assessment. Usually physical barriers such as gates and intrusion detection sensors are considered as countermeasures,1 however, under certain assessment, e.g. America's Water Infrastructure Act (AWIA),2 physical barriers are also considered assets and as such must also be assessed.

Compromising a fingerprint scanner

An anecdotal example of why physical security alone is not sufficient.

Image by Rawpixel.com on Freepik

Lessons learned from using fingerprints for authentication:

• Fingerprint scanners can be physically circumvented by making a copy an authorized user’s fingerprint with 3D printing or even by forcefully amputating an authorized user’s finger.
• Authorized users may not be given access when the fingerprint cannot be recognized, e.g. if the finger is covered by bandage due to injury.
• Integration with information security may help detect unauthorized access, e.g. a fingerprint being scanned in a Canadian office when the same user was scanned at a close time interval from an IP in Europe will trigger an alert of a possible incident.

Info-Tech Insight

In an ideal world, we want a physical security system that is interoperable with all technologies, flexible with minimal customization, functional, and integrated. In the real world, we may have physical systems with proprietary configurations that are not easily customized and siloed.

Source: Robert Dang, Info-Tech Research Group

Use case: Microchip implant

Microchip implants can be used instead of physical devices such as key cards for digital identity and access management. Risks can be assessed using quantitative or qualitative approaches. In this use case a qualitative approach is applied to impact and likelihood, and a quantitative approach is applied to revenue and cost.

Asset: Microchip implant

Benefits

Risks

Sources: Business Insider, 2018; BBC News, 2022; ISC, 2015

Enhance

Update integrated security policies and procedures

Global policies with local implementation

This model works for corporate groups with a parent company. In this model, global security policies are developed by a parent company and local policies are applied to the unique business that is not supported by the parent company.

Update of existing security policies

This model works for organizations with sufficient resources. In this model, integrated security policies are derived from various policies. For example, physical security in smart buildings/devices (sensors, automated meters, HVAC, etc.) and OT systems (SCADA, PLCs, RTUs, etc.) introduce unique risk exposures, necessitating updates to security policies.

Customization of information security policies

This model works for smaller organizations with limited resources. In this model, integrated security policies are derived from information security policies. The issue is when these policies are not applicable to physical security systems or other environments, e.g. OT systems.

Sources: Kris Krishan, Waymo (contributor); Isabelle Hertanto, Info-Tech Research Group (contributor); Physical and Environmental Security Policy Template, Info-Tech Research Group, 2022.

Enhance

Update BCP, DR, IR

• Physical threats such as theft of material, vandalism, loitering, and the like are also part of business continuity threats.
• These threats can be carried out by various means such as vehicles breaching perimeter security, bolt cutters used for cutting wire and cable, and ballistic attack.
• Issues may occur when security operations are owned separately by physical security or information security, thus lacking consistent application of best practices.
• To overcome this issue, organizations need to update BCP, DR, and IR holistically based on a cost-benefit analysis and the level of security maturity, which can be defined based on the suitable framework.

Sources: IEEE, 2021; ISC, 2021

“The best way to get management excited about a disaster plan is to burn down the building across the street.”

Source: Dan Erwin, Security Officer, Dow Chemical Co., in Computerworld, 2022

Optimize

Optimizing means working to make the most effective and efficient use of resources, starting with identifying skill requirements and closing skill gaps, followed by designing and deploying integrated security architecture and controls, and finally monitoring and reporting integrated security metrics.

Optimize

Identify skill requirements and close skill gaps

• The pandemic changed how people work and where they choose to work, and most people still want a hybrid work model. Our survey in July 2022 (N=516) found that 55.8% of employees have the option to work offsite 2-3 days per week, 21.0% can work offsite 1 day per week, and 17.8% can work offsite 4 days per week.
• The investment (e.g. on infrastructure and networks) to initiate remote work was huge, and the costs didn’t end there; organizations needed to maintain the secure remote work infrastructure to facilitate the hybrid work model.
• Moreover, roles are evolving due to convergence and modernization. These new roles require an integrative skill set. For example, the grid security and ops team might consist of an IT security specialist, a SCADA technician/engineer, and an OT/IIOT security specialist, where OT/IIOT security specialist is a new role.

Strategic investment in internal security team

Internal security governance and management using in-house developed tools or off-the-shelf solutions, e.g. security information and event management (SIEM).

Security management using third parties

Internal security management using third-party security services, e.g. managed security service providers (MSSPs).

Outsourcing security management

Outsourcing the entire security functions, e.g. using managed detection and response (MDR).

Sources: Info-Tech Research Group’s Security Priorities 2023, Close the InfoSec Skills Gap, Build an IT Employee Engagement Program, and Grid Modernization

Select the right certifications

What are the options?

• One issue in security certification is the complexity of relevancy in topics with respect to roles and levels.
• The European Union Agency for Cybersecurity (ENISA) takes the approach of analyzing existing certifications of ICS/SCADA professionals' cybersecurity skills by orientation, scope, and supporting bodies that are grouped into specific certifications, relevant certifications, and safety certifications (ENISA, 2015).
• This approach can also be applied to integrated security certifications.

Physical security certification

• Examples: Industrial Security Professional Certification (NCMS-ISP); Physical Security Professional (ASIS-PSP); Physical Security Certification (CDSE-PSC); ISC I-100, I-200, I-300, and I-400

Cyber physical system security certification

• Examples: Certified SCADA Security Architect (CSSA), EC-Council ICS/SCADA Cybersecurity Training Course

Information security certification

• Examples: Network and Information Security (NIS) Driving License, ISA/IEC 62443 Cybersecurity Certificate Program, GIAC Global Industrial Cyber Security Professional (GICSP)

Safety Certifications

• Examples: Board of Certified Safety Professionals (BCSP), European Network of Safety and Health Professional Organizations (ENSHPO)

Optimize

Design and deploy integrated security architecture and controls

• A survey by Brivo found that 38% of respondents have partly centralized security platforms, 25% have decentralized platforms, and 36% have centralized platforms (Brivo, 2022; N=700).
• If your organization’s security program is still decentralized or partly centralized and your organization is planning to establish an integrated security program, then the recommendation is to perform a holistic risk assessment based on probability and impact assessments on threats and vulnerabilities.
• The impacted factors, for example, are customers served, criticality of services, equipment present inside the building, personnel response time for operational recovery and the mitigation of hazards, and costs.
• Frameworks such as Sherwood Applied Business Security Architecture (SABSA), Control Objectives for Information and Related Technologies (COBIT), and The Open Group Architecture Framework (TOGAF) can be used to build security architecture that aligns security goals with business goals.
• Finally, analyze the security design against the design criteria.

Sources: ISA and Honeywell Integrated Security Technology Lab, n.d.; IEEE, 2021

“As long as organizations treat their physical and cyber domains as separate, there is little hope of securing either one.”

Source: FedTech magazine, 2009

Analyze architecture design

Cloud, on-premises, or hybrid? During the pandemic, many enterprises were under tight deadlines to migrate to the cloud. Many did not refactor data and applications correctly for cloud platforms during migration, with the consequence of high cloud bills. This happened because the migrated applications cannot take advantage of on-premises capabilities such as autoscaling. Thus, in 2023, it is plausible that enterprises will bring applications and data back on-premises.

Below is an example of a security design analysis of platform architecture. Design can be assessed using quantitative or qualitative approaches. In this example, a qualitative approach is applied using high-level advantages and disadvantages.

Info-Tech Insight

It is important for organizations to find the most optimized architecture to support them, for example, a hybrid architecture of cloud and on-premises based on operations and cost-effectiveness. To help design a security architecture that is strategic, realistic, and based on risk, see Info-Tech’s Identify the Components of Your Cloud Security Architecture research.

Sources: InfoWorld, 2023; Identify the Components of Your Cloud Security Architecture , Info-Tech Research Group, 2021

Analyze equipment design

Below is an example case of a security design analysis of electronic security systems. Design can be assessed using quantitative or qualitative approaches. In this example a qualitative approach is applied using advantages and disadvantages.

Info-Tech Insight

Once the design has been analyzed, the next step is to conduct market research to analyze the solutions landscape, e.g. to compare products or services from vendors or manufacturers.

Sources: IEEE, 202; IEC, n.d.; IEC, 2013

Analyze off-the-shelf solutions

Criteria to consider when comparing solutions:

Visibility and Asset Management

Passively monitoring data using various protocol layers, actively sending queries to devices, or parsing configuration files of physical security devices, OT, IoT, and IT environments on assets, processes, and connectivity paths.

Threat Detection, Mitigation, and Response (+ Hunting)

Automation of threat analysis (signature-based, specification-based, anomaly-based, flow-based, content-based, sandboxing) not only in IT but also in relevant environments, e.g. physical, IoT, IIoT, and OT on assets, data, network, and orchestration with threat intelligence sharing and analytics.

Risk Assessment and Vulnerability Management

Risk scoring approach (qualitative, quantitative) based on variables such as behavioral patterns and geolocation. Patching and vulnerability management.

Usability, Architecture, Cost

The user and administrative experience, multiple deployment options, extensive integration capabilities, and affordability.

Source: Secure IT/OT Convergence, Info-Tech Research Group, 2022

Optimize

Establish, monitor, and report integrated security metrics

Security metrics serve various functions in a security program.1 For example:

• As audit requirements. For integrated security, the requirements are derived from mandatory or voluntary compliance, e.g. NERC CIP.
• As an indicator of maturity level. For integrated security, maturity level is used to measure the state of security, e.g. C2M2, CMMC.
• As a measurement of effectiveness and efficiency. Security metrics consist of operational metrics, financial metrics, etc.

Safety

Physical security interfaces with the physical world. Thus, metrics based on risks related to safety are crucial. These metrics motivate personnel by making clear why they should care about security.
Source: EPRI, 2017

Business Performance

The impact of security on the business can be measured with various metrics such as operational metrics, service level agreements (SLAs), and financial metrics.
Source: BMC, 2022

Technology Performance

Early detection leads to faster remediation and less damage. Metrics such as maximum tolerable downtime (MTD) and mean time to recovery (MTR) indicate system reliability.
Source: Dark Reading, 2022

Security Culture

Measure the overall quality of security culture with indicators such as compliance and audit, vulnerability management, and training and awareness.

Info-Tech Insight

Security failure can be avoided by evaluating the security systems and program. Security evaluation requires understanding what, where, when, and how to measure and to report the relevant metrics.

Related Info-Tech Research

Secure IT/OT Convergence

The previously entirely separate OT ecosystem is migrating into the IT ecosystem, primarily to improve access via connectivity and to leverage other standard IT capabilities for economic benefit.

Hence, IT and OT need to collaborate, starting with communication to build trust and to overcome their differences and followed by negotiation on components such as governance and management, security controls on OT environments, compliance with regulations and standards, and establishing metrics for OT security.

Preparing for Technology Convergence in Manufacturing

Information technology (IT) and operational technology (OT) teams have a long history of misalignment and poor communication.

Stakeholder expectations and technology convergence create the need to leave the past behind and build a culture of collaboration.

Build an Information Security Strategy

Info-Tech has developed a highly effective approach to building an information security strategy – an approach that has been successfully tested and refined for over seven years with hundreds of organizations.

This unique approach includes tools for ensuring alignment with business objectives, assessing organizational risk and stakeholder expectations, enabling a comprehensive current-state assessment, prioritizing initiatives, and building a security roadmap.

Bibliography

"1402-2021 - IEEE Guide for Physical Security of Electric Power Substations." IEEE, 2021. Accessed 25 Jan. 2023.

"2022 State of Protective Intelligence Report." Ontic Center for Protective Intelligence, 2022. Accessed 16 Jan. 2023.

"8 Staggering Statistics: Physical Security Technology Adoption." Brivo, 2022. Accessed 5 Jan. 2023.

"America's Water Infrastructure Act of 2018." The United States' Congress, 2018. Accessed 19 Jan. 2023.

Baker, Paul and Daniel Benny. The Complete Guide to Physical Security. Auerbach Publications. 2013

Bennett, Steve. "Physical Security Statistics 2022 - Everything You Need to Know." WebinarCare, 4 Dec. 2022. Accessed 30 Dec. 2022.

"Best Practices for Planning and Managing Physical Security Resources: An Interagency Security Committee Guide." Interagency Security Committee (ISC), Dec. 2015. Accessed 23 Jan. 2023.

Black, Daniel. "Improve Security Governance With a Security Steering Committee." Info-Tech Research Group, 23 Nov. 2018. Accessed 30 Jan. 2023.

Borg, Scott. "Don't Put Up Walls Between Your Security People." FedTech Magazine, 17 Feb. 2009. Accessed 15 Dec. 2022.

Burwash, John. “Preparing for Technology Convergence in Manufacturing.” Info-Tech Research Group, 12 Dec. 2018. Accessed 7 Dec. 2022.

Carney, John. "Why Integrate Physical and Logical Security?" Cisco. Accessed 19 Jan. 2023.

"Certification of Cyber Security Skills of ICS/SCADA Professionals." European Union Agency for Cybersecurity (ENISA), 2015. Accessed 27 Sep. 2022.

Cherdantseva, Yulia and Jeremy Hilton. "Information Security and Information Assurance. The Discussion about the Meaning, Scope and Goals." Organizational, Legal, and Technological Dimensions of IS Administrator, Almeida F., Portela, I. (eds.), pp. 1204-1235. IGI Global Publishing, 2013.

Cobb, Michael. "Physical security." TechTarget. Accessed 8 Dec. 2022.

“Conduct a Drinking Water or Wastewater Utility Risk Assessment.” United States Environmental Protection Agency (EPA), n.d. Web.

Conrad, Sandi. "Create and Implement an IoT Strategy." Info-Tech Research Group, 28 July 2022. Accessed 7 Dec. 2022.

Cooksley, Mark. "The IEC 62443 Series of Standards: A Product Manufacturer's Perspective." YouTube, uploaded by Plainly Explained, 27 Apr. 2021. Accessed 26 Aug. 2022.

"Cyber and physical security must validate their value in 2023." IFSEC Global, 12 Jan. 2023. Accessed 20 Jan. 2023.

"Cybersecurity Evaluation Tool (CSET®)." Cybersecurity and Infrastructure Security Agency (CISA). Accessed 23 Jan. 2023.

"Cybersecurity Maturity Model Certification (CMMC) 2.0." The United States' Department of Defense (DOD), 2021. Accessed 29 Dec. 2022.

“Cyber Security Metrics for the Electric Sector: Volume 3.” Electric Power Research Institute (EPRI), 2017.

Czachor, Emily. "Mass power outage in North Carolina caused by gunfire, repairs could take days." CBS News, 5 Dec. 2022. Accessed 20 Jan. 2023.

Dang, Robert, et al. “Secure IT/OT Convergence.” Info-Tech Research Group, 9 Dec. 2022. Web.

"Emergency Management Act (S.C. 2007, c. 15)." The Government of Canada, 2007. Accessed 19 Jan. 2023.

"Emergency management vocabulary." Translation Bureau, Government of Canada. Accessed 19 Jan. 2023.

Fennelly, Lawrence. Effective physical security. Butterworth-Heinemann, 2013.

Ghaznavi-Zadeh, Rassoul. "Enterprise Security Architecture - A Top-down Approach." The Information Systems Audit and Control Association (ISACA). Accessed 25 Jan. 2023.

"Good Practices for Security of Internet of Things." European Union Agency for Cybersecurity (ENISA), 2018. Accessed 27 Sep. 2022.

"Health and Safety at Work etc Act 1974." The United Kingdom Parliament. Accessed 23 Jan. 2023.

Hébert, Michel, et al. “Security Priorities 2023.” Info-Tech Research Group, 1 Feb. 2023. Web.

"History and Initial Formation of Physical Security and the Origin of Authority." Office of Research Services (ORS), National Institutes of Health (NIH). March 3, 2017. Accessed 19 Jan. 2023.

"IEC 62676-1-1:2013 Video surveillance systems for use in security applications - Part 1-1: System requirements - General." International Electrotechnical Commission (IEC), 2013. Accessed 9 Dec. 2022.

"Incident Command System (ICS)." ICS Canada. Accessed 17 Jan. 2023.

"Information Security Manual - Guidelines for Physical Security." The Australian Cyber Security Centre (ACSC), Dec. 2022. Accessed 13 Jan. 2023.

"Integrated Physical Security Framework." Anixter. Accessed 8 Dec. 2022.

"Integrating Risk and Security within a TOGAF® Enterprise Architecture." TOGAF 10, The Open Group. Accessed 11 Jan. 2023.

Latham, Katherine. "The microchip implants that let you pay with your hand." BBC News, 11 Apr. 2022. Accessed 12 Jan. 2023.

Linthicum, David. "2023 could be the year of public cloud repatriation." InfoWorld, 3 Jan. 2023. Accessed 10 Jan. 2023.

Ma, Alexandra. "Thousands of people in Sweden are embedding microchips under their skin to replace ID cards." Business Insider, 14 May 2018. Accessed 12 Jan. 2023.

Mendelssohn, Josh and Dana Tessler. "Take Control of Compliance Improvement to Conquer Every Audit." Info-Tech Research Group, 25 March 2015. Accessed 27 Jan. 2023.

Meredith, Sam. "All you need to know about the Nord Stream gas leaks - and why Europe suspects 'gross sabotage'." CNBC, 11 Oct. 2022. Accessed 20 Jan. 2023.

Nicaise, Vincent. "EU NIS2 Directive: what’s changing?" Stormshield, 20 Oct. 2022. Accessed 17 Nov. 2022.

"NIST SP 800-53 Rev. 5 Security and Privacy Controls for Information Systems and Organizations." The National Institute of Standards and Technology (NIST), 13 Jul. 2022. Accessed 27 Jan. 2023.

"North American Electric Reliability Corporation Critical Infrastructure Protection (NERC CIP) Series." NERC. Accessed 23 Jan. 2023.

"North America Physical Security Market - Global Forecast to 2026." MarketsandMarkets, June 2021. Accessed 30 Dec. 2022.

"NSTISSI No. 4011 National Training Standard For Information Systems Security (InfoSec) Professionals." The United States Committee on National Security Systems (CNSS), 20 Jun. 1994. Accessed 23 Jan. 2023.

"Occupational Safety and Health Administration (OSH) Act of 1970." The United States Department of Labor. Accessed 23 Jan. 2023.

Palter, Jay. "10 Mistakes Made in Designing a Physical Security Program." Real Time Networks, 7 Sep. 2022. Accessed 6 Jan. 2023.

Parker, Donn. Fighting Computer Crime. John Wiley & Sons, 1998.

Pathak, Parag. "What Is Threat Management? Common Challenges and Best Practices." Security Intelligence, 2020. Accessed 5 Jan. 2023.

Pender-Bey, Georgie. "The Parkerian Hexad." Lewis University, 2012. Accessed 24 Jan. 2023.

Philippou, Oliver. "2023 Trends to Watch: Physical Security Technologies." Omdia. Accessed 20 Jan. 2023.

Phinney, Tom. "IEC 62443: Industrial Network and System Security." ISA and Honeywell Integrated Security Technology Lab. Accessed 30 Jan. 2023.

"Physical Security Market, with COVID-19 Impact Analysis - Global Forecast to 2026." MarketsandMarkets, Jan. 2022. Accessed 30 Dec. 2022.

"Physical Security Professional (PSP)" ASIS International. Accessed 17 Jan. 2023.

"Physical Security Systems (PSS) Assessment Guide" The United States' Department of Energy (DOE), Dec. 2016. Accessed 23 Jan. 2023.

"Policies, Standards, Best Practices, Guidance, and White Papers." Interagency Security Committee (ISC). Accessed 23 Jan. 2023.

"Profiles, Add-ons and Specifications." ONVIF. Accessed 9 Dec. 2022.

"Protective Security Policy Framework (PSPF)." The Australian Attorney-General's Department (AGD). Accessed 13 Jan. 2023.

"Satellites detect methane plume in Nord Stream leak." The European Space Agency (ESA), 6 oct. 2022. Accessed 23 Jan. 2023.

""Satellites detect methane plume in Nord Stream leak." The European Space Agency (ESA), 6 oct. 2022. Accessed 23 Jan. 2023.

Satgunananthan, Niru. "Challenges in Security Convergence?" LinkedIn, 8 Jan. 2022. Accessed 20 Dec. 2022.

Sooknanan, Shastri and Isaac Kinsella. "Identify the Components of Your Cloud Security Architecture." Info-Tech Research Group, 12 March 2021. Accessed 26 Jan. 2023.

"TC 79 Alarm and electronic security systems." International Electrotechnical Commission (IEC), n.d. Accessed 9 Dec. 2022.

"The Risk Management Process for Federal Facilities: An Interagency Security Committee Standard." Interagency Security Committee (ISC), 2021. Accessed 26 Jan. 2023.

"The Short Guide to Why Security Programs Can Fail." CyberTalk, 23 Sep. 2021. Accessed 30 Dec. 2022.

Verton, Dan. "Companies Aim to Build Security Awareness." Computerworld, 27 Nov. 2022. Accessed 26 Jan. 2023.

"Vulnerability Assessment of Federal Facilities." The United States' Department of Justice, 28 Jun. 1995. Accessed 19 Jan. 2023.

"What is IEC 61508?" 61508 Association. Accessed 23 Jan. 2023.

Wolf, Gene. "Better Include Physical Security With Cybersecurity." T&D World 5 Jan. 2023. Accessed 19 Jan. 2023.

Wood, Kate, and Isaac Kinsella. “Build an Information Security Strategy.” Info-Tech Research Group, 9 Sept. 2020. Web.

Woolf, Tim, et al. "Benefit-Cost Analysis for Utility-Facing Grid Modernization Investments: Trends, Challenges, and Considerations." Lawrence Berkeley National Laboratory, Feb. 2021. Accessed 15 Nov. 2022.

"Work Health and Safety Act 2011." The Australian Government. Accessed 13 Jan. 2023.

Wu, Jing. “Industrial Control System Modernization: Unlock the Value of Automation in Utilities.” Info-Tech Research Group, 6 April 2023. Web.

Research Contributors and Experts

Amy L. Meger, IGP

Information and Cyber Governance Manager
Platte River Power Authority

Andrew Amaro

Chief Security Officer (CSO) & Founder
KLAVAN Security

Bilson Perez

IT Security Manager
4Wall Entertainment

Dan Adams

VP of Information Technology
4Wall Entertainment

Doery Abdou

Senior Manager
March Networks Corporate

Erich Krueger

Manager of Security Engineering
Omaha Public Power District

Kris Krishan

Head of IT
Waymo

Owen Yardley

Director, Facilities Security Preparedness
Omaha Public Power District

Optimize Lead Generation With Lead Scoring

In today’s competitive environment, optimizing Sales’ resources by giving them qualified leads is key to B2B marketing success.

EXECUTIVE BRIEF

Analyst Perspective

Improve B2B seller win rates with a lead scoring methodology as part of your modern lead generation engine.

As B2B organizations emerge from the lowered demands brought on by COVID-19, they are eager to convert marketing contacts to sales-qualified leads with even the slightest signal of intent, but many sales cycles are wasted when sellers receive unqualified leads. Delivering highly qualified leads to sellers is still more art than science, and it is especially challenging without a way to score a contact profile and engagement. While most marketers capture some profile data from contacts, many will pass a contact over to Sales without any engagement data or schedule a demo with a contact without any qualifying profile data. Passing unqualified leads to Sales suboptimizes Sales’ resources, raises the costs per lead, and often results in lost opportunities. Marketers need to develop a lead scoring methodology that delivers better qualified leads to Field Sales scored against both the ideal customer profile (ICP) and engagement that signals lower-funnel buyer interest. To be successful in building a compelling lead scoring solution, marketers must work closely with key stakeholders to align the ICP asset/activity with the buyer journey. Additionally, working early in the design process with IT/Marketing Operations to implement lead management and analytical tools in support will drive results to maximize lead conversion rates and sales wins.

Jeff Golterman

Managing Director

SoftwareReviews Advisory

Executive Summary

Your Challenge

The affordability and ease of implementation of digital marketing tools have driven global adoption to record levels. While many marketers are fine-tuning the lead generation engine components of email, social media, and web-based advertising to increase lead volumes, just 32% of companies pass well-qualified leads over to outbound marketers or sales development reps (SDRs). At best, lead gen costs stay high, and marketing-influenced win rates remain suboptimized. At worst, marketing reputation suffers when poorly qualified leads are passed along to sellers.

Common Obstacles

Most marketers lack a methodology for lead scoring, and some lack alignment among Marketing, Product, and Sales on what defines a qualified lead. In their rush to drive lead generation, marketers often fail to “define and align” on the ICP with stakeholders, creating confusion and wasted time and resources. In the rush to adopt B2B marketing and sales automation tools, many marketers have also skipped the important steps to 1) define the buyer journey and map content types to support, and 2) invest in a consistent content creation and sourcing strategy. The wrong content can leave prospects unmotivated to engage further and cause them to seek alternatives.

Info-Tech’s Approach

To employ lead scoring effectively, marketers need to align Sales, Marketing, and Product teams on the definition of the ICP and what constitutes a Sales-accepted lead. The buyer journey needs to be mapped in order to identify the engagement that will move a lead through the marketing lead generation engine. Then the project team can score prospect engagement and the prospect profile attributes against the ICP to arrive at a lead score. The marketing tech stack needs to be validated to support lead scoring, and finally Sales needs to sign off on results.

SoftwareReviews Advisory Insight:

Lead scoring is a must-have capability for high-tech marketers. Without lead scoring, marketers will see increased costs of lead gen, decreased SQL to opportunity conversion rates, decreased sales productivity, and longer sales cycles.

Who benefits from a lead scoring project?

This Research Is Designed for:

• Marketers and especially campaign managers who are:
• Looking for a more precise way to score leads and deploy outbound marketing resources to optimize contacts-to-MQL conversion rates.
• Looking for a more effective way to profile contacts raised by your lead gen engine.
• Looking to use their lead management software to optimize lead scoring.
• Starting anew to strengthen their lead generation engine and want examples of a typical engine, ways to identify buyer journey, and perform lead nurturing.

This Research Will Help You:

• Explain why having a lead scoring methodology is important.
• Identify a methodology that will call for identifying an ICP against which to score prospect profiles behind each contact that engages your lead generation engine.
• Create a process of applying weightings to score activities during contact engagement with your lead generation engine. Apply both scores to arrive at a contact/lead score.
• Compare your current lead gen engine to a best-in-class example in order to identify gaps and areas for improvement and exploration.

This Research Will Also Assist:

• CMOs, Marketing Operations leaders, heads of Product Marketing, and regional Marketing leads who are stakeholders in:
  • Finding alternatives to current lead scoring approaches.
  • Altering current or evaluating new marketing technologies to support a refreshed lead scoring approaches.

This Research Will Help Them:

• Align stakeholders on an overall program of identifying target customers, building common understanding of what constitutes a qualified lead, and determining when to use higher-cost outbound marketing resources.
• Deploy high-value applications that will improve core marketing metrics.

Insight summary

Continuous adjustment and improvement of your lead scoring methodology is critical for long-term lead generation engine success.

• Building a highly functioning lead generation engine is an ongoing process and one that requires continual testing of new asset types, asset design, and copy variations. Buyer profiles change over time as you launch new products and target new markets.
• Pass better qualified leads to Field Sales and improve sales win rates by taking these crucial steps to implement a better lead generation engine and a lead scoring methodology:
• Make the case for lead scoring in your organization.
• Establish trigger points that separate leads to ignore, nurture, qualify, or outreach/contact.
• Identify your buyer journey and ICP through collaboration among Sales, Marketing, and Product.
• Assess each asset and activity type across your lead generation engine and apply a weighting for each.
• Test lead scenarios within our supplied toolkit and with stakeholders. Adjust weightings and triggers that deliver lead scores that make sense.
• Work with IT/Marketing Operations to emulate your lead scoring methodology within your marketing automation/campaign management application.
• Explore advanced methods including nurturing.
• Use the Lead Scoring Workbook collaboratively with other stakeholders to design your own methodology, test lead scenarios, and build alignment across the team.

Leading marketers who successfully implement a lead scoring methodology develop it collaboratively with stakeholders across Marketing, Sales, and Product Management. Leaders will engage Marketing Operations, Sales Operations, and IT early to gain support for the evaluation and implementation of a supporting campaign management application and for analytics to track lead progress throughout the Marketing and Sales funnels. Leverage the Marketing Lead Scoring Toolkit to build out your version of the model and to test various scenarios. Use the slides contained within this storyboard and the accompanying toolkit as a means to align key stakeholders on the ICP and to weight assets and activities across your marketing lead generation engine.

What is lead scoring?

Lead scoring weighs the value of a prospect’s profile against the ICP and renders a profile score. The process then weighs the value of the prospects activities against the ideal call to action (CTA) and renders an activity score. Combining the profile and activity scores delivers an overall score for the value of the lead to drive the next step along the overall buyer journey.

EXAMPLE: SALES MANAGEMENT SOFTWARE

• For a company that markets sales management software the ideal buyer is the head of Sales Operations. While the ICP is made up of many attributes, we’ll just score one – the buyer’s role.
• If the prospect/lead that we wish to score has an executive title, the lead’s profile scores “High.” Other roles will score lower based on your ICP. Alongside role, you will also score other profile attributes (e.g. company size, location).
• With engagement, if the prospect/lead clicked on our ideal CTA, which is “request a proposal,” our engagement would score high. Other CTAs would score lower.

SoftwareReviews Advisory Insight:

A significant obstacle to quality lead production is disagreement on or lack of a documented definition of the ideal customer profile. Marketers successful in lead scoring will align key stakeholders on a documented definition of the ICP as a first step in improving lead scoring.

Use of lead scoring is in the minority among marketers

The majority of businesses are not practicing lead scoring!

Up to 66% of businesses don’t practice any type of lead scoring.

Source: LeadSquared, 2014

“ With lead scoring, you don’t waste loads of time on unworthy prospects, and you don’t ignore people on the edge of buying.”

Source: BigCommerce

“The benefits of lead scoring number in the dozens. Having a deeper understanding of which leads meet the qualifications of your highest converters and then systematically communicating with them accordingly increases both ongoing engagement and saves your internal team time chasing down inopportune leads.”

– Joey Strawn, Integrated Marketing Director, in IndustrialMarketer.com

Key benefit: sales resource optimization

Many marketing organizations send Sales too many unqualified leads

• Leads – or, more accurately, contacts – are not all qualified. Some are actually nothing more than time-wasters for sellers.
• Leading marketers peel apart a contact into at least two dimensions – “who” and “how interested.”
• The “who” is compared to the ICP and given a score.
• The “how interested” measures contact activity – or engagement – within our lead gen engine and gives it a score.
• Scores are combined; a contact with a low score is ignored, medium is nurtured, and high is sent to sellers.
• A robust ICP, together with engagement scoring and when housed within your lead management software, prioritizes for marketers which contacts to nurture and gets hot leads to sellers more quickly.

Optimizing Sales Resources Using Lead Scoring

Lead scoring drives greater sales effectiveness

When contacts are scored as “qualified leads” and sent to sellers, sales win rates and ROI climb

• Contacts can be scored properly once marketers align with Sales on the ICP and work closely with colleagues in areas like product marketing and field marketing to assign weightings to lead gen activities.
• When more qualified leads get into the hands of the salesforce, their win rates improve.
• As win rates improve, and sellers are producing more wins from the same volume of leads, sales productivity improves and ROI on the marketing investment increases.

“On average, organizations that currently use lead scoring experience a 77% lift in lead generation ROI, over organizations that do not currently use lead scoring.”

– MarketingSherpa, 2012

Average Lead Generation ROI by Use of Lead Scoring

Source: 2011 B2B Marketing Benchmark Survey, MarketingSherpa

Methodology: Fielded June 2011, N=326 CMOs

SoftwareReviews’ Lead Scoring Approach

Key Deliverable: Lead Scoring Workbook

The workbook walks you through a step-by-step process to:

• Identify your team.
• Identify the lead scoring thresholds.
• Define your IPC.
• Weight the activities within your lead generation engine.
• Run tests using lead scenarios.

Tab 1: Team Composition

Consider core functions and form a cross-functional lead scoring team. Document the team’s details here.

Tab 2: Threshold Setting

Set your initial threshold weightings for profile and engagement scores.

Tab 3:

Establish Your Ideal Customer Profile

Identify major attributes and attribute values and the weightings of both. You’ll eventually score your leads against this ICP.

Record and Weight Lead Gen Engine Activities

Identify the major activities that compose prospect engagement with your lead gen engine. Weight them together as a team.

Test Lead Profile Scenarios

Test actual lead profiles to see how they score against where you believe they should score. Adjust threshold settings in Tab 2.

Test Activity Engagement Scores

Test scenarios of how contacts navigate your lead gen engine. See how they score against where you believe they should score. Adjust thresholds on Tab 2 as needed.

Review Combined Profile and Activity Score

Review the combined scores to see where on your lead scoring matrix the lead falls. Make any final adjustments to thresholds accordingly.

Several ways we help you build your lead scoring methodology

Guided Implementation

What does a typical GI on this topic look like?

A Guided Implementation (GI) is series of calls with a SoftwareReviews Advisory analyst to help implement our best practices in your organization. For guidance on marketing applications, we can arrange a discussion with an Info-Tech analyst. Your engagement managers will work with you to schedule analyst calls.

Workshop Overview

Accelerate your project with our facilitated SoftwareReviews Advisory workshops

Phase 1

Drive an Aligned Vision for Lead Scoring

This phase will walk you through the following activities:

• Solidify your vision for lead scoring.
• Achieve stakeholder alignment.
• Assess your tech stack.

This phase involves the following stakeholders:

• Field Marketing/Campaign Manager
• CMO
• Product Marketing
• Product Management
• Sales Leadership/Sales Operations
• Inside Sales leadership
• Marketing Operations/IT
• Digital Platform leadership

Step 1.1

Establish a Cross-Functional Vision for Lead Scoring

Activities

1.1.1 Identify stakeholders critical to success

1.1.2 Outline the vision for lead scoring

1.1.3 Select your lead scoring team

This step will walk you through the following activities:

• Discuss the reasons why lead scoring is important.
• Review program process.
• Identify stakeholders and team.

This step involves the following participants:

• Stakeholders
• Project sponsors and leaders

Outcomes of this step

• Stakeholder alignment on vision of lead scoring
• Stakeholders described and team members recorded
• A documented buyer journey and map of your current lead gen engine

1.1.1 Identify stakeholders critical to success

1 hour

1. Meet to identify the stakeholders that should be included in the project’s steering committee.
2. Finalize selection of steering committee members.
3. Contact members to ensure their willingness to participate.
4. Document the steering committee members and the milestone/presentation expectations for reporting project progress and results

SoftwareReviews Advisory Insight:

B2B marketers that lack agreement among Marketing, Sales, Inside Sales, and lead management supporting staff of what constitutes a qualified lead will squander precious time and resources throughout the customer acquisition process.

1.1.2 Outline the vision for lead scoring

1 hour

1. Convene a meeting of the steering committee and initiative team members who will be involved in the lead scoring project.

• Using slides from this blueprint, understand the definition of lead scoring, the value of lead scoring to the organization, and the overall lead scoring process.
• Understand the teams’ roles and responsibilities and help your Marketing Operations/IT colleagues understand some of the technical requirements needed to support lead scoring.
• This is important because as the business members of the team are developing the lead scoring approach on paper, the technical team can begin to evaluate lead management apps within which your lead scoring model will be brought to life.

SoftwareReviews Advisory Insight:

While SMBs can implement some form of lead scoring when volume is very low and leads can be scored by hand, lead scoring and effective lead management cannot be performed without investment in digital platforms and lead management software and integration with customer relationship management (CRM) applications in the hands of inside and field sales staff. Marketers should plan and budget for the right combination of applications and tools to be in place for proper lead management.

Lead scoring stakeholders

Developing a common stakeholder understanding of the ICP, the way contact profiles are scored, and the way activities and asset engagement in your lead generation engine are scored will strengthen alignment between Marketing, Sales and Product Management.

SoftwareReviews Advisory Insight:

Marketers managing the lead scoring initiative must include Product Marketing, Sales, Inside Sales, and Product Management. And given that world-class B2B lead generation engines cannot run without technology enablement, Marketing Operations/IT – those that are charged with enabling marketing and sales – must also be part of the decision making and implementation process of lead scoring and lead generation.

1.1.3 Select your lead scoring team

30 minutes

1. The CMO and other key stakeholders should discuss and determine who will be involved in the lead scoring project.

• Business leaders in key areas – Product Marketing, Field Marketing, Digital Marketing, Inside Sales, Sales, Marketing Ops, Product Management, and IT – should be involved.

• The size of the team will vary depending on your initiative and size of your organization.

Download the Lead Scoring Workbook

Lead scoring team

Consider the core team functions when composing the lead scoring team. Form a cross-functional team (i.e. across IT, Marketing, Sales, Service, Operations) to create a well-aligned lead management/scoring strategy. Don’t let your core team become too large when trying to include all relevant stakeholders. Carefully limit the size of the team to enable effective decision making while still including functional business units.

Step 1.2 (Optional)

Assess Your Tech Stack for Lead Scoring

Our model assumes you have:

1.2.1 A marketing application/campaign management application in place that accommodates lead scoring.

1.2.2 Lead management software integrated with the sales automation/CRM tool in the hands of Field Sales.

1.2.3 Reporting/analytics that spans the entire lead generation pipeline/funnel.

Refer to the following three slides if you need guidance in these areas.

This step will walk you through the following activities:

• Confirm that you have your tech stack in place.
• Set up an inquiry with an Info-Tech analyst should you require guidance on evaluating lead pipeline reporting, CRM, or analytics applications.

This step involves the following participants:

• Stakeholders
• Project sponsors and leaders

Outcomes of this step

• Understanding of what new application and technology support is required to support lead scoring.

SoftwareReviews Advisory Insight:

Marketers that collaborate closely with Marketing Ops/IT early in the process of lead scoring design will be best able to assess whether current marketing applications and tools can support a full lead scoring capability.

1.2.1 Plan technology support for marketing management apps

Work with Marketing Ops and IT early to evaluate application enablement for lead management, including scoring

A thorough evaluation takes months – start early

• Work closely with Marketing Operations (or the team that manages the marketing apps and digital platforms) as early as possible to socialize your approach to lead scoring.
• Work with them on a set of updated requirements for selecting a marketing management suite or for changes to existing apps and tools to support your lead scoring approach that includes lead tracking and marketing funnel analytics.
• Access the Info-Tech blueprint Select a Marketing Management Suite, along with analyst inquiry support during the requirements definition, vendor evaluation, and vendor selection phases. Use the SoftwareReviews Marketing Management Data Quadrant during vendor evaluation and selection.

SoftwareReviews Marketing Management Data Quadrant

1.2.2 Plan technology support for sales opportunity management

Work with Marketing Ops and IT early to evaluate applications for sales opportunity management

A thorough evaluation takes months – start early

• Work closely with Sales Operations as early as possible to socialize your approach to lead scoring and how lead management must integrate with sales opportunity management to manage the entire marketing and sales funnel management process.
• Work with them on a set of updated requirements for selecting a sales opportunity management application that integrates with your marketing management suite or for changes to existing apps and tools to support your lead management and scoring approach that support the entire marketing and sales pipeline with analytics.

Access the Info-Tech blueprint Select and Implement a CRM Platform, along with analyst inquiry support during the requirements definition, vendor evaluation, and vendor selection phases. Use the SoftwareReviews CRM Data Quadrant during vendor evaluation and selection.

SoftwareReviews Customer Relationship Management Data Quadrant

1.2.3 Plan analytics support for marketing pipeline analysis

Work with Marketing Ops early to evaluate analytics tools to measure marketing and sales pipeline conversions

A thorough evaluation takes weeks – start early

• Work closely with Marketing and Sales Operations as early as possible to socialize your approach to measuring the lifecycle of contacts through to wins across the entire marketing and sales funnel management process.
• Work with them on a set of updated requirements for selecting tools that can support the measurement of conversion ratios from contact to MQL, SQL, and opportunity to wins. Having this data enables you to measure improvement in component parts to your lead generation engine.
• Access the Info-Tech blueprint Select and Implement a Reporting and Analytics Solution, along with analyst inquiry support during the requirements definition, vendor evaluation and vendor selection phases. Use the SoftwareReviews Best Business intelligence & Analytics Software Data Quadrant as well during vendor evaluation and selection.

SoftwareReviews Business Intelligence Data Quadrant

Step 1.3

Catalog Your Buyer Journey and Lead Gen Engine Assets

Activities

1.3.1 Review marketing pipeline terminology

1.3.2 Describe your buyer journey

1.3.3 Describe your awareness and lead generation engine

This step will walk you through the following activities:

• Discuss marketing funnel terminology.
• Describe your buyer journey.
• Catalog the elements of your lead generation engine.

This step involves the following participants:

• Stakeholders

Outcomes of this step

• Stakeholder alignment on terminology, your buyer journey, and elements of your lead generation engine

1.3.1 Review marketing pipeline terminology

30 minutes

1. We assume for this model the following:
1. Our primary objective is to deliver more, and more-highly qualified, sales-qualified leads (SQLs) to our salesforce. The salesforce will accept SQLs and after further qualification turn them into opportunities. Sellers work opportunities and turn them into wins. Wins that had first/last touch attribution within the lead gen engine are considered marketing-influenced wins.
2. This model assumes the existence of sales development reps (SDRs) whose mission it is to take marketing-qualified leads (MQLs) from the lead generation engine and further qualify them into SQLs.
3. The lead generation engine takes contacts – visitors to activities, website, etc. – and scores them based on their profile and engagement. If the contact scores at or above the designated threshold, the lead generation engine rates it as an MQL and passes it along to Inside Sales/SDRs. If the contact scores above a certain threshold and shows promise, it is further nurtured. If the contact score is low, it is ignored.
2. If an organization does not possess a team of SDRs or Inside Sales, you would adjust your version of the model to, for example, raise the threshold for MQLs, and when the threshold is reached the lead generation engine would pass the lead to Field Sales for further qualification.

SoftwareReviews Advisory Insight:

Score leads in a way that makes it crystal clear whether they should be ignored, further nurtured, further qualified, or go right into a sellers’ hands as a super hot lead.

1.3.2 Describe your buyer journey

1. Understand the concept of the buyer journey:
1. Typically Product Marketing is charged with establishing deep understanding of the target buyer for each product or solution through a complete buyer persona and buyer journey map. The details of how to craft both are covered in the upcoming SoftwareReviews Advisory blueprint Craft a More Comprehensive Go-to-Market Strategy. However, we share our Buyer Journey Template here (on the next slide) to illustrate the connection between the buyer journey and the lead generation and scoring processes.
2. Marketers and campaigners developing the lead scoring methodology will work closely with Product Marketing, asking them to document the buyer journey.
3. The value of the buyer journey is to guide asset/content creation, nurturing strategy and therefore elements of the lead generation engine such as web experience, email, and social content and other elements of engagement.
4. The additional value of having a buyer persona is to also inform the ICP, which is an essential element of lead scoring.
5. For the purposes of lead scoring, use the template on the next slide to create a simple form of the buyer journey. This will guide lead generation engine design and the scoring of activities later in our blueprint.

2 hours

On the following slide:

1. Tailor this template to suit your buyer journey. Text in green is yours to modify. Text in black is instructional.
2. Your objective is to use the buyer journey to identify asset types and a delivery channel that once constructed/sourced and activated within your lead gen engine will support the buyer journey.
3. Keep your buyer journey updated based on actual journeys of sales wins.
4. Complete different buyer journeys for different product areas. Complete these collaboratively with stakeholders for alignment.

SoftwareReviews Advisory Insight:

Establishing a buyer journey is one of the most valuable tools that, typically, Product Marketing produces. Its use helps campaigners, product managers, and Inside and Field Sales. Leading marketers keep journeys updated based on live deals and characteristics of wins.

Buyer Journey Template

Personas: [Title] e.g. “BI Director”

[Persona name] ([levels it includes from arrows above]) Buyer’s Journey for [solution type] Vendor Selection

1.3.3 Describe Your Awareness and Lead Gen Engine

1. Understand the workings of a typical awareness and lead generation engine. Reference the image of a lead gen engine on the following slide when reviewing our guidance below:
1. In our lead scoring example found in the Lead Scoring Workbook, tab 3, “Weight and Test,” we use a software company selling a sales automation solution, and the engagement activities match with the Typical Awareness and Lead Gen Engine found on the following slide. Our goal is to match a visual representation of a lead gen and awareness engine with the activity scoring portion of lead scoring.
2. At the top of the Typical Awareness and Lead Generation Engine image, the activities are activated by a team of various roles: digital manager (new web pages), campaign manager (emails and paid media), social media marketer (organic and paid social), and events marketing manager (webinars).
3. “Awareness” – On the right, the slide shows additional awareness activities driven by the PR/Corporate Comms and Analyst Relations teams.*
4. The calls to action (CTAs) found in the outreach activities are illustrated below the timeline. The CTAs are grouped and are designed to 1) drive profile capture data via a main sales form fill, and 2) drive engagement that corresponds to the Education, Solution, and Selection buyer journey phases outlined on the prior slide. Ensure you have fast paths to get a hot lead – request a demo – directly to Field Sales when profiles score high.

* For guidance on best practices in engaging industry analysts, contact your engagement manager to schedule an inquiry with our expert in this area. during that inquiry, we will share best practices and recommended analyst engagement models.

Lead Scoring Workbook

2 hours

On the following slide:

1. Tailor the slide to describe your lead generation engine as you will use it when you get to latter steps to describe the activities in your lead gen engine and weight them for lead scoring.
2. Use the template to see what makes up a typical lead gen and awareness building engine. Record your current engine parts and see what you may be missing.
3. Note: The “Goal” image in the upper right of the slide is meant as a reminder that marketers should establish a goal for SQLs delivered to Field Sales for each campaign.

SoftwareReviews Advisory Insight:

Marketing’s primary mission is to deliver marketing-influenced wins (MIWs) to the company. Building a compelling awareness and lead gen engine must be done with that goal in mind. Leaders are ruthless in testing – copy, email subjects, website navigation, etc. – to fine-tune the engine and staying highly collaborative with sellers to ensure high value lead delivery.

Typical Awareness and Lead Gen Engine

Understand how a typical lead generation engine works. Awareness activities are included as a reference. Use as a template for campaigns.

Phase 2

Build and Test Your Lead Scoring Model

This phase will walk you through the following activities:

1. Understand the Lead Scoring Grid and establish thresholds.
2. Collaborate with stakeholders on your ICP, apply weightings to profile attributes and values, and test.
3. Identify the key activities and assets of your lead gen engine, weight attributes, and run tests.

This phase involves the following participants:

• Field Marketing/Campaign Manager
• Product Marketing
• Sales Leadership/Sales Operations
• Inside Sales leadership
• Marketing Operations/IT
• Digital Platform leadership

Step 2.1

Start Building Your Lead Scoring Model

Activities

2.1.1 Understand the Lead Scoring Grid

2.1.2 Identify thresholds

This step will walk you through the following activities:

• Discuss the concept of the thresholds for scoring leads in each of the various states – “ignore,” “nurture,” “qualify,” “send to sales.”
• Open the Lead Scoring Workbook and validate your own states to suit your organization.
• Arrive at an initial set of threshold scores.

This step involves the following participants:

• Stakeholders

Outcomes of this step

• Stakeholder alignment on stages
• Stakeholder alignment on initial set of thresholds

2.1.1 Understand the Lead Scoring Grid

30 minutes

1. Understand how lead scoring works and our grid is constructed.
2. Understand the two important areas of the grid and the concept of how the contact’s scores will increase as follows:
1. Profile – as the profile attributes of the contact approaches that of the ICP we want to score the contact/prospect higher. Note: Step 1.3 walks you through creating your ICP.
2. Engagement – as the contact/prospect engages with the activities (e.g. webinars, videos, events, emails) and assets (e.g. website, whitepapers, blogs, infographics) in our lead generation engine, we want to score the contact/prospect higher. Note: You will describe your engagement activities in this step.
3. Understand how thresholds work:
1. Threshold percentages, when reached, trigger movement of the contact from one state to the next – “ignore,” “nurture,” “qualify with Inside Sales,” and “send to sales.”

2.1.2 Identify thresholds

30 minutes

We have set up a model Lead Scoring Grid – see Lead Scoring Workbook, tab 2, “Identify Thresholds.”

Set your thresholds within the Lead Scoring Workbook:

• Set your threshold percentages for ”Profile” and “Engagement.”
• You will run test scenarios for each in later steps.
• We suggest you start with the example percentages given in the Lead Scoring Workbook and plan to adjust them during testing in later steps.
• Define the “Send to Sales,” “Qualify With Inside Sales,” “Nurture,” and “Ignore” zones.

SoftwareReviews Advisory Insight:

Clarify that all-important threshold for when a lead passes to your expensive and time-starved outbound sellers.

Lead Scoring Workbook

Step 2.2

Identify and Verify Your Ideal Customer Profile and Weightings

Activities

2.2.1 Identify your ideal customer profile

2.2.2 Run tests to validate profile weightings

This step will walk you through the following activities:

• Identify the attributes that compose the ICP.
• Identify the values of each attribute and their weightings.
• Test different contact profile scenarios against what actually makes sense.
• Adjust weightings if needed.

This step involves the following participants:

• Stakeholders

Outcomes of this step

• Stakeholder alignment on ICP
• Stakeholder alignment on weightings given to attributes
• Tested results to verify thresholds and cores

2.2.1 Identify your ideal customer profile

Collaborate with stakeholders to understand what attributes best describe your ICP. Assign weightings and subratings.

2 hours

1. Choose attributes such as job role, organization type, number of employees/potential seat holders, geographical location, interest area, etc., that describe the ideal profile of a target buyer. Best practice sees marketers choosing attributes based on real wins.
2. Some marketers compare the email domain of the contact to a target list of domains. In the Lead Scoring Workbook, tab 3, “Weight and Test,” we provide an example profile for a “Sales Automation Software” ICP.
3. Use the workbook as a template, remove our example, and create your own ICP attributes. Then weight the attributes to add up to 100%. Add in the attribute values and weight them. In the next step you will test scenarios.

SoftwareReviews Advisory Insight:

Marketers who align with colleagues in areas such as Product Marketing, Sales, Inside Sales, Sales Training/Enablement, and Product Managers and document the ICP give their organizations a greater probability of lead generation success.

Lead Scoring Workbook

2.2.2 Run tests to validate profile weightings

Collaborate with stakeholders to run different profile scenarios. Validate your model including thresholds.

SoftwareReviews Advisory Insight:

Keep your model simple in the interest of fast implementation and to drive early learnings. The goal is not to be perfect but to start iterating toward success. You will update your scoring model even after going into production.

2 hours

1. Choose scenarios of contact/lead profile attributes by placing a “1” in the “Attribute” box shown at left.
2. Place your estimate of how you believe the profile should score in the box to the right of “Estimated Profile State.” How does the calculated state, beneath, compare to the estimated state?
3. In cases where the calculated state differs from your estimated state, consider weighting the profile attribute differently to match.
4. If you find estimates and calculated states off dramatically, consider changing previously determined thresholds in tab 2, “Identify Thresholds.” Test multiple scenarios with your team.

Lead Scoring Workbook

Step 2.3

Establish Key Lead Generation Activities and Assets

Activities

2.3.1 Establish activities, attribute values, and weights

2.3.2 Run tests to evaluate activity ratings

This step will walk you through the following activities:

• Identify the activities/asset types in your lead gen engine.
• Weight each attribute and define values to score for each one.
• Run tests to ensure your model makes sense.

This step involves the following participants:

• Stakeholders
• Project sponsors and leaders

Outcomes of this step

• Final stakeholder alignment on which assets compose your lead generation engine
• Scoring model tested

2.3.1 Establish activities, attribute values, and weights

2 hours

1. Catalog the assets and activities that compose your lead generation engine outlined in Activity 1.3.3. Identify their attribute values and weight them accordingly.
2. Consider weighting attributes and values according to how close that asset gets to conveying your ideal call to action. For example, if your ideal CTA is “schedule a demo” and the “click” was submitted in the last seven days, it scores 100%. Take time decay into consideration. If that same click was 60 days ago, it scores less – maybe 60%.
3. Different assets convey different intent and therefore command different weightings; a video comparing your offering against the competition, considered a down funnel asset, scores higher than the company video, considered a top-of-the-funnel activity and “awareness.”

Lead Scoring Workbook

2.3.2 Run tests to validate activity weightings

Collaborate with stakeholders to run different engagement scenarios. Validate your model including thresholds.

SoftwareReviews Advisory Insight:

Use data from actual closed deals and the underlying activities to build your model – nothing like using facts to inform your key decisions. Use common sense and keep things simple. Then update further when data from new wins appears.

2 hours

1. Test scenarios of contact engagement by placing a “1” in the “Attribute” box shown at left.
2. Place your estimate of how you believe the engagement should score in the box to the right of “Estimated Engagement State.” How does the calculated state, beneath, compare to the estimated state?
3. In cases where the calculated state differs from your estimated state, consider weighting the activity attribute differently to match.
4. If you find that the estimates and calculated states are off dramatically, consider changing previously determined thresholds in tab 2, “Identify Thresholds.” Test multiple scenarios with your team.

Lead Scoring Workbook

Phase 3

Apply Your Model to Marketing Apps and Go Live With Better Qualified Leads

This phase will walk you through the following activities:

1. Apply model to your marketing management/campaign management software.
2. Get better qualified leads in the hands of sellers.
3. Apply lead nurturing and other advanced methods.

This phase involves the following participants:

• Field Marketing/Campaign Manager
• Sales Leadership/Sales Operations
• Inside Sales leadership
• Marketing Operations/IT
• Digital Platform leadership

Step 3.1

Apply Model to Your Marketing Management Software

Activities

3.1.1 Apply final model to your lead management software

This step will walk you through the following activities:

• Apply the details of your scoring model to the lead management software.

This step involves the following participants:

• Stakeholders
• Project sponsors and leaders

Outcomes of this step

• Marketing management software or campaign management application is now set up/updated with your lead scoring approach.

3.1.1 Apply final model to your lead management software

Now that your model is complete and ready to go into production, input your lead scoring parameters into your lead management software.

3 hours

1. Go to the Lead Scoring Workbook, tab 4, “Model Summary” for a formatted version of your lead scoring model. Double-check print formatting and print off a copy.
2. Use the copy of your model to show to prospective technology providers when asking them to demonstrate their lead scoring capabilities.
3. Once you have finalized your model, use the printed output from this tab to ease your process of transposing the corresponding model elements into your lead management software.

Lead Scoring Workbook

Step 3.2

Test the Quality of Sales-Accepted Leads

Activities

3.2.1 Achieve sales lead acceptance

3.2.2 Measure and optimize

This step will walk you through the following activities:

• Suggest that the Inside Sales and Field Sales teams should assess whether to sign off on quality of leads received.
• Campaign managers and stakeholders should now be able to track lead status more effectively.

This step involves the following participants:

• Stakeholders
• Project sponsors and leaders

Outcomes of this step

• Sales leadership should be able to sign off that leads are better qualified.
• With marketing pipeline analytics in place, campaigners can start to measure lead flow and conversion rates.

3.2.1 Achieve sales lead acceptance

Collaborate with sellers to validate your lead scoring approach.

1 hour

1. Gather a set of SQLs – leads that have been qualified by Inside Sales and delivered to Field Sales. Have Field Sales team members convey whether these leads were properly qualified.
2. Where leads are deemed not properly qualified, determine if the issue was a) a lack of proper qualification by the Inside Sales team, or b) the lead generation engine, which should have further nurtured the lead or ignored it outright.
3. Work collaboratively with Inside Sales to update your lead scoring model and/or Inside Sales practice.

SoftwareReviews Advisory Insight:

Marketers that collaborate with Sales – and in this case, a group of sellers as a sales advisory team – well in advance of sales acceptance to design lead scoring will save time during this stage, build trust with sellers, and make faster decisions related to lead management/scoring.

3.2.2 Measure and optimize

Leverage analytics that help you optimize your lead scoring methodology.

Ongoing

1. Work with Marketing Ops/IT team to design and implement analytics that enable you to:
2. Meet frequently with your stakeholder team to review results.
3. Learn from the wins: see how they actually scored and adjust thresholds and/or asset/activity weightings.
4. Learn from losses: fix ineffective scoring, activities, assets, form-fill strategies, and engagement paths.
5. Test from both wins and losses if demographic weightings are delivering accurate scores.
6. Analyze those high scoring leads that went right to sellers but did not close. This could point to a sales training or enablement challenge.

Analytics will also drive additional key insights across your lead gen engine:

• Are volumes increasing or decreasing? What percentage of leads are in what status (A1-D4)?
• What nurturing will re-engage stalled leads that score high in profile but low in engagement (A3, B3)?
• Will additional profile data capture further qualify leads with high engagement (C1, C2)?
• And beyond all of the above, what leads move to Inside Sales and convert to SQLs, opportunities, and eventually marketing-influenced wins?

Step 3.3

Apply Advanced Methods

Activities

3.3.1 Employ lead nurturing strategies

3.3.2 Adjust your model over time to accommodate more advanced methods

This step will walk you through the following activities:

• Apply lead nurturing to your lead gen engine.
• Adjust your engine over time with more advanced methods.

This step involves the following participants:

• Stakeholders
• Project sponsors and leaders

Outcomes of this step

• Marketers can begin to test lead nurturing strategies and other advanced methods.

3.3.1 Employ lead nurturing strategies

A robust content marketing competence with compelling assets and the capture of additional profile data for qualification are key elements of your nurturing strategy.

SoftwareReviews Advisory Insight:

Nurturing success combines the art of crafting engaging copy/experiences and the science of knowing just where a prospect is within your lead gen engine. Great B2B marketers demonstrate the discipline of knowing when to drive engagement and/or additional profile attribute capture using intent while not losing the prospect to over-profiling.

Ongoing

1. The goal of lead nurturing is to move the collection of contacts/leads that are scoring, for example, in the A3, B3, C1, C2, and C3 cells into A2, B2, and B1 cells.
2. How is this best done? To nurture leads that are A3 and B3, entice the prospect with engagement that leads to the bottom of funnel – e.g. “schedule a demo” or “schedule a consultation” via a compelling asset. See the example on the following slide.
3. To nurture C1 and C2, we need to qualify them further, so entice with an asset that leads to deeper profile knowledge.
4. For C3 leads, we need both profile and activity nurturing.

Lead nurturing example

SoftwareReviews Advisory Insight:

When nurturing, choose/design content as to what “intent” it satisfies. For example, a head-to-head comparison with a key competitor signals “Selection” phase of the buyer journey. Content that helps determine what app-type to buy signals “Solution”. A company video, or a webinar replay, may mean your buyer is “educating themselves.

3.3.2 Adjust your model over time to accommodate more advanced methods

When getting started or within a smaller marketing team, focus on the basics outlined thus far in this blueprint. Larger and/or more experienced teams are able to employ more advanced methods.

Ongoing

Advanced Methods

• Invest in technologies that interpret lead scores and trigger next-step actions, especially outreach by Inside and/or Field Sales.
• Use the above to route into nurturing environments where additional engagement will raise scores and trigger action.
• Recognize that lead value decays with time to time additional outreach/activities and to reduce lead scores over time.
• Always be testing different engagement, copy, and subsequent activities to optimize lead velocity through your lead gen engine.
• Build intent sensitivity into engagement activities; e.g. test if longer demo video engagement times imply ”contact me for a demo” via a qualification outreach. Update scores manually to drive learnings.
• Vary engagement paths by demographics to deliver unique digital experiences. Use firmographics/email domain to drive leads through a more tailored account-based marketing (ABM) experience.
• Reapply learnings from closed opportunities/wins to drive updates to buyer journey mapping and your ICP.

Frequently used acronyms

Works cited

Arora, Rajat. “Mining the Real Gems from you Data – Lead Scoring and Engagement Scoring.” LeadSquared, 27 Sept. 2014. Web.

Doyle, Jen. “2012 B2B Marketing Benchmark Report: Research and insights on attracting and converting the modern B2B buyer.” MarketingSherpa, 2012. Web.

Doyle, Jen, and Sergio Balegno. “2011 MarketingSherpa B2B Marketing Benchmark Survey: Research and Insights on Elevating Marketing Effectiveness from Lead Generation to Sales Conversion.” MarketingSherpa, 2011.

Kirkpatrick, David. “Lead Scoring: CMOs realize a 138% lead gen ROI … and so can you.” marketingsherpa blog, 26 Jan 2012. Web.

Moser, Jeremy. “Lead Scoring Is Important for Your Business: Here’s How to Create Scoring Model and Hand-Off Strategy.” BigCommerce, 25 Feb. 2019. Web.

Strawn, Joey. “Why Lead Scoring Is Important for B2Bs (and How You Can Implement It for Your Company.” IndustrialMarketer.com, 17 Aug. 2016. Web.

Build a Strong Technology Foundation for Customer Experience Management

Design an end-to-end technology strategy to enhance marketing effectiveness, drive sales, and create compelling customer service experiences.

ANALYST PERSPECTIVE

Technology is the catalyst to create – and keep! – your customers.

"Customers want to interact with your organization on their own terms, and in the channels of their choice (including social media, mobile applications, and connected devices). Regardless of your industry, your customers expect a frictionless experience across the customer lifecycle. They desire personalized and well-targeted marketing messages, straightforward transactions, and effortless service. Research shows that customers value – and will pay more for! – well-designed experiences.

Strong technology enablement is critical for creating customer experiences that drive revenue. However, most organizations struggle with creating a cohesive technology strategy for customer experience management (CXM). IT leaders need to take a proactive approach to developing a strong portfolio of customer interaction applications that are in lockstep with the needs of their marketing, sales, and customer service teams. It is critical to incorporate the voice of the customer into this strategy.

When developing a technology strategy for CXM, don’t just “pave the cow path,” but instead move the needle forward by providing capabilities for customer intelligence, omnichannel interactions, and predictive analytics. This blueprint will help you build an integrated CXM technology roadmap that drives top-line revenue while rationalizing application spend."

Ben Dickie

Research Director, Customer Experience Strategy

Info-Tech Research Group

Framing the CXM project

This Research Is Designed For:

• IT leaders who are responsible for crafting a technology strategy for customer experience management (CXM).
• Applications managers who are involved with the selection and implementation of critical customer-centric applications, such as CRM platforms, marketing automation tools, customer intelligence suites, and customer service solutions.

This Research Will Help You:

• Clearly link your technology-enablement strategy for CXM to strategic business requirements and customer personas.
• Build a rationalized portfolio of enterprise applications that will support customer interaction objectives.
• Adopt standard operating procedures for CXM application deployment that address issues such as end-user adoption and data quality.

This Research Will Also Assist:

• Business leaders in marketing, sales, and customer service who want to deepen their understanding of CXM technologies, and apply best practices for using these technologies to drive competitive advantage.
• Marketing, sales, and customer service managers involved with defining requirements and rolling out CXM applications.

This Research Will Help Them:

• Work hand-in-hand with counterparts in IT to deploy high-value business applications that will improve core customer-facing metrics.
• Understand the changing CXM landscape and use the art of the possible to transform the internal technology ecosystem and drive meaningful customer experiences.

Executive summary

Situation

• Customer expectations for personalization, channel preferences, and speed-to-resolution are at an all-time high.
• Your customers are willing to pay more for high-value experiences, and having a strong customer CXM strategy is a proven path to creating sustainable value for the organization.

Complication

• Technology is a fundamental enabler of an organization’s CXM strategy. However, many IT departments fail to take a systematic approach to building a portfolio of applications to support Marketing, Sales, and Customer Service.
• The result is a costly, ineffective, and piecemeal approach to CXM application deployment (including high profile applications like CRM).

Resolution

• IT must work in lockstep with their counterparts in marketing, sales, and customer service to define a unified vision, strategic requirements and roadmap for enabling strong customer experience capabilities.
• In order to deploy applications that don’t simply follow previously established patterns but are aligned with the specific needs of the organization’s customers, IT leaders must work with the business to define and understand customer personas and common interaction scenarios. CXM applications are mission critical and failing to link them to customer needs can have a detrimental effect on customer satisfaction – and ultimately revenue.
• IT must act as a valued partner to the business in creating a portfolio of CXM applications that are cost effective.
• Organizations should create a repeatable framework for CXM application deployment that addresses critical issues, including the integration ecosystem, customer data quality, dashboards and analytics, and end-user adoption.

Info-Tech Insight

1. IT can’t hide behind the firewall. IT must understand the organization’s customers to properly support marketing, sales, and service efforts.
2. IT – or Marketing – must not build the CXM strategy in a vacuum if they want to achieve a holistic, consistent, and seamless customer experience.
3. IT must get ahead of shadow IT. To be seen as an innovator within the business, IT must be a leading enabler in building a rationalized and integrated CXM application portfolio.

Guide to frequently used acronyms

CXM - Customer Experience Management

CX - Customer Experience

CRM - Customer Relationship Management

CSM - Customer Service Management

MMS - Marketing Management System

SMMP - Social Media Management Platform

RFP - Request for Proposal

SaaS - Software as a Service

Customers’ expectations are on the rise: meet them!

Today’s consumers expect speed, convenience, and tailored experiences at every stage of the customer lifecycle. Successful organizations strive to support these expectations.

67% of end consumers will pay more for a world-class customer experience. 74% of business buyers will pay more for strong B2B experiences. (Salesforce, 2018)

5 CORE CUSTOMER EXPECTATIONS

1. More personalization
2. More product options
3. Constant contact
4. Listen closely, respond quickly
5. Give front-liners more control

(Customer Experience Insight, 2016)

Customers expect to interact with organizations through the channels of their choice. Now more than ever, you must enable your organization to provide tailored customer experiences.

Realize measurable value by enabling CXM

Providing a seamless customer experience increases the likelihood of cross-sell and up-sell opportunities and boosts customer loyalty and retention. IT can contribute to driving revenue and decreasing costs by providing the business with the right set of tools, applications, and technical support.

Contribute to the bottom line

Cross-sell, up-sell, and drive customer acquisition.

67% of consumers are willing to pay more for an upgraded experience. (Salesforce, 2018)

80%: The margin by which CX leaders outperformer laggards in the S&P 500.(Qualtrics, 2017)

59% of customers say tailored engagement based on past interactions is very important to winning their business. (Salesforce, 2018)

Enable cost savings

Focus on customer retention as well as acquisition.

It is 6-7x more costly to attract a new customer than it is to retain an existing customer. (Salesforce Blog, 2019)

A 5% increase in customer retention has been found to increase profits by 25% to 95%. (Bain & Company, n.d.)

Strategic CXM is gaining traction with your competition

Organizations are prioritizing CXM capabilities (and associated technologies) as a strategic investment. Keep pace with the competition and gain a competitive advantage by creating a cohesive strategy that uses best practices to integrate marketing, sales, and customer support functions.

87% of customers share great experiences they’ve had with a company. (Zendesk, n.d.)

61% of organizations are investing in CXM. (CX Network, 2015)

53% of organizations believe CXM provides a competitive advantage. (Harvard Business Review, 2014)

Top Investment Priorities for Customer Experience

1. Voice of the Customer
2. Customer Insight Generation
3. Customer Experience Governance
4. Customer Journey Mapping
5. Online Customer Experience
6. Experience Personalization
7. Emotional Engagement
8. Multi-Channel Integration/Omnichannel
9. Quality & Customer Satisfaction Management
10. Customer/Channel Loyalty & Rewards Programs

(CX Network 2015)

Omnichannel is the way of the future: don’t be left behind

Get ahead of the competition by doing omnichannel right. Devise a CXM strategy that allows you to create and maintain a consistent, seamless customer experience by optimizing operations within an omnichannel framework. Customers want to interact with you on their own terms, and it falls to IT to ensure that applications are in place to support and manage a wide range of interaction channels.

Omnichannel is a “multi-channel approach to sales that seeks to provide the customer with a seamless transactional experience whether the customer is shopping online from a desktop or mobile device, by telephone, or in a bricks and mortar store.” (TechTarget, 2014)

97% of companies say that they are investing in omnichannel. (Huffington Post, 2015)

23% of companies are doing omnichannel well.

CXM applications drive effective multi-channel customer interactions across marketing, sales, and customer service

The success of your CXM strategy depends on the effective interaction of various marketing, sales, and customer support functions. To deliver on customer experience, organizations need to take a customer-centric approach to operations.

From an application perspective, a CRM platform generally serves as the unifying repository of customer information, supported by adjacent solutions as warranted by your CXM objectives.

CXM ECOSYSTEM

Customer Relationship Management Platform

• Web Experience Management Platform
• E-Commerce & Point of Sale Solutions
• Social Media Management Platform
• Customer Intelligence Platform
• Customer Service Management Tools
• Marketing Management Suite

Application spotlight: Customer experience platforms

Description

CXM solutions are a broad range of tools that provide comprehensive feature sets for supporting customer interaction processes. These suites supplant more basic applications for customer interaction management. Popular solutions that fall under the umbrella of CXM include CRM suites, marketing automation tools, and customer service applications.

Features and Capabilities

• Manage sales pipelines, provide quotes, and track client deliverables.
• View all opportunities organized by their current stage in the sales process.
• View all interactions that have occurred between employees and the customer, including purchase order history.
• Manage outbound marketing campaigns via multiple channels (email, phone, social, mobile).
• Build visual workflows with automated trigger points and business rules engine.
• Generate in-depth customer insights, audience segmentation, predictive analytics, and contextual analytics.
• Provide case management, ticketing, and escalation capabilities for customer service.

Highlighted Vendors

Microsoft Dynamics

Adobe

Marketo

sprinklr

Salesforce

SugarCRM

Application spotlight: Customer experience platforms

Key Trends

• CXM applications have decreased their focus on departmental silos to make it easier to share information across the organization as departments demand more data.
• Vendors are developing deeper support of newer channels for customer interaction. This includes providing support for social media channels, native mobile applications, and SMS or text-based services like WhatsApp and Facebook Messenger.
• Predictive campaigns and channel blending are becoming more feasible as vendors integrate machine learning and artificial intelligence into their applications.
• Content blocks are being placed on top of scripting languages to allow for user-friendly interfaces. There is a focus on alleviating bottlenecks where content would have previously needed to go through a specialist.
• Many vendors of CXM applications are placing increased emphasis on strong application integration both within and beyond their portfolios, with systems like ERP and order fulfillment.

Link to Digital Strategy

• For many organizations that are building out a digital strategy, improving customer experience is often a driving factor: CXM apps enable this goal.
• As part of a digital strategy, create a comprehensive CXM application portfolio by leveraging both core CRM suites and point solutions.
• Ensure that a point solution aligns with the digital strategy’s technology drivers and user personas.

CXM KPIs

Strong CXM applications can improve:

• Lead Intake Volume
• Lead Conversion Rate
• Average Time to Resolution
• First-Contact Resolution Rate
• Customer Satisfaction Rate
• Share-of-Mind
• Share-of-Wallet
• Customer Lifetime Value
• Aggregate Reach/Impressions

IT is critical to the success of your CXM strategy

Technology is the key enabler of building strong customer experiences: IT must stand shoulder-to-shoulder with the business to develop a technology framework for CXM.

Top 5 Challenges with CXM for Marketing

1. Maximizing customer experience ROI
2. Achieving a single view of the customer
3. Building new customer experiences
4. Cultivating a customer-focused culture
5. Measuring CX investments to business outcomes

Top 5 Obstacles to Enabling CXM for IT

1. Systems integration
2. Multichannel complexity
3. Organizational structure
4. Data-related issues
5. Lack of strategy

(Harvard Business Review, 2014)

Only 19% of organizations have a customer experience team tasked with bridging gaps between departments. (Genesys, 2018)

IT and Marketing can only tackle CXM with the full support of each other. The cooperation of the departments is crucial when trying to improve CXM technology capabilities and customer interaction and drive a strong revenue mandate.

CXM failure: Blockbuster

CASE STUDY

Industry Entertainment

Source Forbes, 2014

Blockbuster

As the leader of the video retail industry, Blockbuster had thousands of retail locations internationally and millions of customers. Blockbuster’s massive marketing budget and efficient operations allowed it to dominate the competition for years.

Situation

Trends in Blockbuster’s consumer market changed in terms of distribution channels and customer experience. As the digital age emerged and developed, consumers were looking for immediacy and convenience. This threatened Blockbuster’s traditional, brick-and-mortar B2C operating model.

The Competition

Netflix entered the video retail market, making itself accessible through non-traditional channels (direct mail, and eventually, the internet).

Results

Despite long-term relationships with customers and competitive standing in the market, Blockbuster’s inability to understand and respond to changing technology trends and customer demands led to its demise. The organization did not effectively leverage internal or external networks or technology to adapt to customer demands. Blockbuster went bankrupt in 2010.

Customer Relationship Management

• Web Experience Management Platform
• E-Commerce & Point of Sale Solutions
• Social Media Management
• Customer Intelligence
• Customer Service
• Marketing Management

Blockbuster did not leverage emerging technologies to effectively respond to trends in its consumer network. It did not optimize organizational effectiveness around customer experience.

CXM success: Netflix

CASE STUDY

Industry Entertainment

Source Forbes, 2014

Netflix

Beginning as a mail-out service, Netflix offered subscribers a catalog of videos to select from and have mailed to them directly. Customers no longer had to go to a retail store to rent a video. However, the lack of immediacy of direct mail as the distribution channel resulted in slow adoption.

The Situation

In response to the increasing presence of tech-savvy consumers on the internet, Netflix invested in developing its online platform as its primary distribution channel. The benefit of doing so was two-fold: passive brand advertising (by being present on the internet) and meeting customer demands for immediacy and convenience. Netflix also recognized the rising demand for personalized service and created an unprecedented, tailored customer experience.

The Competition

Blockbuster was the industry leader in video retail but was lagging in its response to industry, consumer, and technology trends around customer experience.

Results

Netflix’s disruptive innovation is built on the foundation of great CXM. Netflix is now a $28 billion company, which is tenfold what Blockbuster was worth.

Customer Relationship Management Platform

• Web Experience Management Platform
• E-Commerce & Point of Sale Solutions
• Social Media Management Platform
• Customer Intelligence Platform
• Customer Service Management Tools
• Marketing Management Suite

Netflix used disruptive technologies to innovatively build a customer experience that put it ahead of the long-time, video rental industry leader, Blockbuster.

Leverage Info-Tech’s approach to succeed with CXM

Creating an end-to-end technology-enablement strategy for CXM requires a concerted, dedicated effort: Info-Tech can help with our proven approach.

Build the CXM Project Charter

Conduct a Thorough Environmental Scan

Build Customer Personas and Scenarios

Draft Strategic CXM Requirements

Build the CXM Application Portfolio

Implement Operational Best Practices

Why Info-Tech’s Approach?

Info-Tech draws on best-practice research and the experiences of our global member base to develop a methodology for CXM that is driven by rigorous customer-centric analysis.

Our approach uses a unique combination of techniques to ensure that your team has done its due diligence in crafting a forward-thinking technology-enablement strategy for CXM that creates measurable value.

A global professional services firm drives measurable value for CXM by using persona design and scenario development

CASE STUDY

Industry Professionals Services

Source Info-Tech Workshop

The Situation

A global professional services firm in the B2B space was experiencing a fragmented approach to customer engagement, particularly in the pre-sales funnel. Legacy applications weren’t keeping pace with an increased demand for lead evaluation and routing technology. Web experience management was also an area of significant concern, with a lack of ongoing customer engagement through the existing web portal.

The Approach

Working with a team of Info-Tech facilitators, the company was able to develop several internal and external customer personas. These personas formed the basis of strategic requirements for a new CXM application stack, which involved dedicated platforms for core CRM, lead automation, web content management, and site analytics.

Results

Customer “stickiness” metrics increased, and Sales reported significantly higher turnaround times in lead evaluations, resulting in improved rep productivity and faster cycle times.

Follow Info-Tech’s approach to build your CXM foundation

Create the Project Vision

• Identify business and IT drivers
• Outputs:
  • CXM Strategy Guiding Principles

Structure the Project

• Identify goals and objectives for CXM project
• Form Project Team
• Establish timeline
• Obtain project sponsorship
• Outputs:
  • CXM Strategy Project Charter

Scan the External Environment

• Create CXM operating model
• Conduct external analysis
• Create customer personas
• Outputs:
  • CXM Operating Model

• Conduct PEST analysis
• Create persona scenarios
• Outputs:
  • CXM Strategic Requirements

Assess the Current State of CXM

• Conduct SWOT analysis
• Assess application usage and satisfaction
• Conduct VRIO analysis
• Outputs:
  • CXM Strategic Requirements

Create an Application Portfolio

• Map current processes
• Assign business process owners
• Create channel map
• Build CXM application portfolio
• Outputs:
  • CXM Application Portfolio Map

Develop Deployment Best Practices

• Develop CXM integration map
• Create mitigation plan for poor data quality
• Outputs:
  • Data Quality Preservation Map

Create an Initiative Rollout Plan

• Create risk management plan
• Identify work initiative dependencies
• Create roadmap
• Outputs:
  • CXM Initiative Roadmap

Confirm and Finalize the CXM Blueprint

• Identify success metrics
• Create stakeholder communication plan
• Present CXM strategy to stakeholders
• Outputs:
  • Stakeholder Presentation

Info-Tech offers various levels of support to suit your needs

DIY Toolkit

“Our team has already made this critical project a priority, and we have the time and capability, but some guidance along the way would be helpful.”

Guided Implementation

“Our team knows that we need to fix a process, but we need assistance to determine where to focus. Some check-ins along the way would help keep us on track.”

Workshop

“We need to hit the ground running and get this project kicked off immediately. Our team has the ability to take this over once we get a framework and strategy in place.”

Consulting

“Our team does not have the time or the knowledge to take this project on. We need assistance through the entirety of this project.”

Diagnostics and consistent frameworks used throughout all four options

Build a Strong Technology Foundation for CXM – project overview

Workshop overview

Contact your account representative or email Workshops@InfoTech.com for more information.

Phase 1

Drive Measurable Value With a World-Class CXM Program

Build a Strong Technology Foundation for Customer Experience Management

Phase 1 outline

Complete these steps on your own, or call us to complete a guided implementation. A guided implementation is a series of 2-3 advisory calls that help you execute each phase of a project. They are included in most advisory memberships.

Guided Implementation 1: Drive Measurable Value With a World-Class CXM Program

Proposed Time to Completion: 2 weeks

Step 1.1: Create the Project Vision

Start with an analyst kick-off call:

• Review key drivers from a technology and business perspective for CXM
• Discuss benefits of strong technology enablement for CXM

Then complete these activities…

• CXM Fireside Chat
• CXM Business and Technology Driver Assessment
• CXM Vision Statement

With these tools & templates:

• CXM Strategy Stakeholder Presentation Template

Step 1.2: Structure the Project

Review findings with analyst:

• Assess the CXM vision statement for competitive differentiators
• Determine current alignment disposition of IT with different business units

Then complete these activities…

• Team Composition and Responsibilities
• Metrics Definition

With these tools & templates:

• CXM Strategy Project Charter Template

Phase 1 Results & Insights:

• Defined value of strong technology enablement for CXM
• Completed CXM project charter

Step 1.1: Create the Project Vision

Phase 1

1.1 Create the Project Vision

1.2 Structure the Project

Phase 2

2.1 Scan the External Environment

2.2 Assess the Current State of CXM

2.3 Create an Application Portfolio

2.4 Develop Deployment Best Practices

Phase 3

3.1 Create an Initiative Rollout Plan

3.2 Confirm and Finalize the CXM Blueprint

Activities:

• Fireside Chat: Discuss past challenges and successes with CXM
• Identify business and IT drivers to establish guiding principles for CXM

Outcomes:

• Business benefits of a rationalized technology strategy to support CXM
• Shared lessons learned
• Guiding principles for providing technology enablement for CXM

Building a technology strategy to support customer experience isn’t an option – it’s a mission-critical activity

• Customer-facing departments supply the lifeblood of a company: revenue. In today’s fast-paced and interconnected world, it’s becoming increasingly imperative to enable customer experience processes with a wide range of technologies, from lead automation to social relationship management. CXM is the holistic management of customer interaction processes across marketing, sales, and customer service to create valuable, mutually beneficial customer experiences. Technology is a critical building block for enabling CXM.
• The parallel progress of technology and process improvement is essential to an efficient and effective CXM program. While many executives prefer to remain at the status quo, new technologies have caused major shifts in the CXM environment. If you stay with the status quo, you will fall behind the competition.
• However, many IT departments are struggling to keep up with the pace of change and find themselves more of a firefighter than a strategic partner to marketing, sales, and service teams. This not only hurts the business, but it also tarnishes IT’s reputation.

An aligned, optimized CX strategy is:

Rapid: to intentionally and strategically respond to quickly-changing opportunities and issues.

Outcome-based: to make key decisions based on strong business cases, data, and analytics in addition to intuition and judgment.

Rigorous: to bring discipline and science to bear; to improve operations and results.

Collaborative: to conduct activities in a broader ecosystem of partners, suppliers, vendors, co-developers, and even competitors.

(The Wall Street Journal, 2013)

Info-Tech Insight

If IT fails to adequately support marketing, sales, and customer service teams, the organization’s revenue will be in direct jeopardy. As a result, CIOs and Applications Directors must work with their counterparts in these departments to craft a cohesive and comprehensive strategy for using technology to create meaningful (and profitable) customer experiences.

Fireside Chat, Part 1: When was technology an impediment to customer experience at your organization?

1.1.1 30 minutes

Input

• Past experiences of the team

Output

• Lessons learned

Materials

• Whiteboard
• Markers

Participants

• Core Team

Instructions

1. Think about a time when technology was an impediment to a positive customer experience at your organization. Reflect on the following:
   • What frustrations did the application or the technology cause to your customers? What was their reaction?
   • How did IT (and the business) identify the challenge in the first place?
   • What steps were taken to mitigate the impact of the problem? Were these steps successful?
   • What were the key lessons learned as part of the challenge?

Fireside Chat, Part 2: What customer success stories has your organization created by using new technologies?

1.1.2 30 minutes

Input

• Past experiences of the team

Output

• Lessons learned

Materials

• Whiteboard
• Markers

Participants

• Core Team

Instructions

1. Think about a time when your organization successfully leveraged a new application or new technology to enhance the experience it provided to customers. Reflect on this experience and consider:
   • What were the organizational drivers for rolling out the new application or solution?
   • What obstacles had to be overcome in order to successfully deploy the solution?
   • How did the application positively impact the customer experience? What metrics improved?
   • What were the key lessons learned as part of the deployment? If you had to do it all over again, what would you do differently?

Develop a cohesive, consistent, and forward-looking roadmap that supports each stage of the customer lifecycle

When creating your roadmap, consider the pitfalls you’ll likely encounter in building the IT strategy to provide technology enablement for customer experience.

There’s no silver bullet for developing a strategy. You can encounter pitfalls at a myriad of different points including not involving the right stakeholders from the business, not staying abreast of recent trends in the external environment, and not aligning sales, marketing, and support initiatives with a focus on the delivery of value to prospects and customers.

Common Pitfalls When Creating a Technology-Enablement Strategy for CXM

Senior management is not involved in strategy development.

Not paying attention to the “art of the possible.”

“Paving the cow path” rather than focusing on revising core processes.

Misalignment between objectives and financial/personnel resources.

Inexperienced team on either the business or IT side.

Not paying attention to the actions of competitors.

Entrenched management preferences for legacy systems.

Sales culture that downplays the potential value of technology or new applications.

IT is only one or two degrees of separation from the end customer: so take a customer-centric approach

IT →Marketing, Sales, and Service →External Customers

Internal-Facing Applications

• IT enables, supports, and maintains the applications used by the organization to market to, sell to, and service customers. IT provides the infrastructural and technical foundation to operate the function.

Customer-Facing Applications

• IT supports customer-facing interfaces and channels for customer interaction.
• Channel examples include web pages, mobile device applications and optimization, and interactive voice response for callers.

Info-Tech Insight

IT often overlooks direct customer considerations when devising a technology strategy for CXM. Instead, IT leaders rely on other business stakeholders to simply pass on requirements. By sitting down with their counterparts in marketing and sales, and fully understanding business drivers and customer personas, IT will be much better positioned to roll out supporting applications that drive customer engagement.

A well-aligned CXM strategy recognizes a clear delineation of responsibilities between IT, sales, marketing, and service

• When thinking about CXM, IT must recognize that it is responsible for being a trusted partner for technology enablement. This means that IT has a duty to:
  • Develop an in-depth understanding of strategic business requirements for CXM. Base your understanding of these business requirements on a clear conception of the internal and external environment, customer personas, and business processes in marketing, sales, and customer service.
  • Assist with shortlisting and supporting different channels for customer interaction (including email, telephony, web presence, and social media).
  • Create a rationalized, cohesive application portfolio for CXM that blends different enabling technologies together to support strategic business requirements.
  • Provide support for vendor shortlisting, selection, and implementation of CXM applications.
  • Assist with end-user adoption of CXM applications (i.e. training and ongoing support).
  • Provide initiatives that assist with technical excellence for CXM (such as data quality, integration, analytics, and application maintenance).
• The business (marketing, sales, customer service) owns the business requirements and must be responsible for setting top-level objectives for customer interaction (e.g. product and pricing decisions, marketing collateral, territory management, etc.). IT should not take over decisions on customer experience strategy. However, IT should be working in lockstep with its counterparts in the business to assist with understanding business requirements through a customer-facing lens. For example, persona development is best done in cross-functional teams between IT and Marketing.

Activity: Identify the business drivers for CXM to establish the strategy’s guiding principles

1.1.3 30 minutes

Input

• Business drivers for CXM

Output

• Guiding principles for CXM strategy

Materials

• Whiteboard
• Markers

Participants

• Project Team

Instructions

1. Define the assumptions and business drivers that have an impact on technology enablement for CXM. What is driving the current marketing, sales, and service strategy on the business side?

Activity: Identify the IT drivers for CXM to establish the strategy’s guiding principles

1.1.4 30 minutes

Input

• IT drivers for CXM

Output

• Guiding principles for CXM strategy

Materials

• Whiteboard
• Markers

Participants

• Project Team

Instructions

1. Define the assumptions and IT drivers that have an impact on technology enablement for CXM. What is driving the current IT strategy for supporting marketing, sales, and service initiatives?

Activity: Use IT and business drivers to create guiding principles for your CXM technology-enablement project

1.1.5 30 minutes

Input

• Business drivers and IT drivers from 1.1.3 and 1.1.4

Output

• CXM mission statement

Materials

• Whiteboard
• Markers

Participants

• Core Team

Instructions

1. Based on the IT and business drivers identified, craft guiding principles for CXM technology enablement. Keep guiding principles in mind throughout the project and ensure they support (or reconcile) the business and IT drivers.

2. Summarize the guiding principles above by creating a CXM mission statement. See below for an example.

Example: CXM Mission Statement

To ensure our marketing, sales and service team is equipped with tools that will allow them to reach out to a large volume of contacts while still providing a solution-selling approach. This will be done with secure, on-premise systems to safeguard customer data.

Ensure that now is the right time to take a step back and develop the CXM strategy

Determine if now is the right time to move forward with building (or overhauling) your technology-enablement strategy for CXM.

Not all organizations will be able to proceed immediately to optimize their CXM technology enablement. Determine if the organizational willingness, backbone, and resources are present to commit to overhauling the existing strategy. If you’re not ready to proceed, consider waiting to begin this project until you can procure the right resources.

Do not proceed if:

• Your current strategy for supporting marketing, sales, and service is working well and IT is already viewed as a strategic partner by these groups. Your current strategy is well aligned with customer preferences.
• The current strategy is not working well, but there is no consensus or support from senior management for improving it.
• You cannot secure the resources or time to devote to thoroughly examining the current state and selecting improvement initiatives.
• The strategy has been approved, but there is no budget in place to support it at this time.

Proceed if:

• Senior management has agreed that technology support for CXM should be improved.
• Sub-divisions within IT, sales, marketing, and service are on the same page about the need to improve alignment.
• You have an approximate budget to work with for the project and believe you can secure additional funding to execute at least some improvement initiatives.
• You understand how improving CXM alignment will fit into the broader customer interaction ecosystem in your organization.

If you want additional support, have our analysts guide you through this phase as part of an Info-Tech workshop

Book a workshop with our Info-Tech analysts:

• To accelerate this project, engage your IT team in an Info-Tech workshop with an Info-Tech analyst team.
• Info-Tech analysts will join you and your team onsite at your location or welcome you to Info-Tech’s historic Toronto office to participate in an innovative onsite workshop.
• Contact your account manager (www.infotech.com/account), or email Workshops@InfoTech.com for more information.

The following are sample activities that will be conducted by Info-Tech analysts with your team:

1.1.3; 1.1.4; 1.1.5 - Identify business and IT drivers to create CXM guiding principles

The facilitator will work with stakeholders from both the business and IT to identify implicit or explicit strategic drivers that will support (or pose constraints on) the technology-enablement framework for the CXM strategy. In doing so, guiding principles will be established for the project.

Step 1.2: Structure the Project

Phase 1

1.1 Create the Project Vision

1.2 Structure the Project

Phase 2

2.1 Scan the External Environment

2.2 Assess the Current State of CXM

2.3 Create an Application Portfolio

2.4 Develop Deployment Best Practices

Phase 3

3.1 Create an Initiative Rollout Plan

3.2 Confirm and Finalize the CXM Blueprint

Activities:

• Define the project purpose, objectives, and business metrics
• Define the scope of the CXM strategy
• Create the project team
• Build a RACI chart
• Develop a timeline with project milestones
• Identify risks and create mitigation strategies
• Complete the strategy project charter and obtain approval

Outcomes:

CXM Strategy Project Charter Template

• Purpose, objectives, metrics
• Scope
• Project team & RACI
• Timeline
• Risks & mitigation strategies
• Project sponsorship

Use Info-Tech’s CXM Strategy Project Charter Template to outline critical components of the CXM project

1.2.1 CXM Strategy Project Charter Template

Having a project charter is the first step for any project: it specifies how the project will be resourced from a people, process, and technology perspective, and it clearly outlines major project milestones and timelines for strategy development. CXM technology enablement crosses many organizational boundaries, so a project charter is a very useful tool for ensuring everyone is on the same page.

Sections of the document:

1. Project Drivers, Rationale, and Context
2. Project Objectives, Metrics, and Purpose
3. Project Scope Definition
4. Project Team Roles and Responsibilities (RACI)
5. Project Timeline
6. Risk Mitigation Strategy
7. Project Metrics
8. Project Review & Approvals

INFO-TECH DELIVERABLE

CXM Strategy Project Charter Template

Populate the relevant sections of your project charter as you complete activities 1.2.2-1.2.8.

Understand the roles necessary to complete your CXM technology-enablement strategy

Understand the role of each player within your project structure. Look for listed participants on the activities slides to determine when each player should be involved.

Info-Tech Insight

Do not limit project input or participation to the aforementioned roles. Include subject matter experts and internal stakeholders at particular stages within the project. Such inputs can be solicited on a one-off basis as needed. This ensures you take a holistic approach to creating your CXM technology-enablement strategy.

Activity: Kick-off the CXM project by defining the project purpose, project objectives, and business metrics

1.2.2 30 minutes

Input

• Activities 1.1.1 to 1.1.5

Output

• Drivers & rationale
• Purpose statement
• Business goals
• Business metrics
• CXM Strategy Project Charter Template, sections 1.0, 2.0, and 2.1

Materials

• Whiteboard
• Markers

Participants

• Project Sponsor
• Project Manager
• Business Lead
• Steering Committee

Instructions

Hold a meeting with IT, Marketing, Sales, Service, Operations, and any other impacted business stakeholders that have input into CXM to accomplish the following:

1. Discuss the drivers and rationale behind embarking on a CXM strategy.
2. Develop and concede on objectives for the CXM project, metrics that will gauge its success, and goals for each metric.
3. Create a project purpose statement that is informed by decided-upon objectives and metrics from the steps above. When establishing a project purpose, ask the question, “what are we trying to accomplish?”

• Example: Project Purpose Statement
  • The organization is creating a CXM strategy to gather high-level requirements from the business, IT, and Marketing, Sales, and Service, to ensure that the selection and deployment of the CXM meets the needs of the broader organization and provides the greatest return on investment.

Info-Tech Insight

Going forward, set up a quarterly review process to understand changing needs. It is rare that organizations never change their marketing and sales strategy. This will change the way the CXM will be utilized.

Establish baseline metrics for customer engagement

In order to gauge the effectiveness of CXM technology enablement, establish core metrics:

1. Marketing Metrics: pertaining to share of voice, share of wallet, market share, lead generation, etc.
2. Sales Metrics: pertaining to overall revenue, average deal size, number of accounts, MCV, lead warmth, etc.
3. Customer Service Metrics: pertaining to call volumes, average time to resolution, first contact resolution, customer satisfaction, etc.
4. IT Metrics: pertaining to end-user satisfaction with CXM applications, number of tickets, contract value, etc.

Understand the importance of setting project expectations with a scope statement

Be sure to understand what is in scope for a CXM strategy project. Prevent too wide of a scope to avoid scope creep – for example, we aren’t tackling ERP or BI under CXM.

In Scope

Establishing the parameters of the project in a scope statement helps define expectations and provides a baseline for resource allocation and planning. Future decisions about the strategic direction of CXM will be based on the scope statement.

Scope Creep

Well-executed requirements gathering will help you avoid expanding project parameters, drawing on your resources, and contributing to cost overruns and project delays. Avoid scope creep by gathering high-level requirements that lead to the selection of category-level application solutions (e.g. CRM, MMS, SMMP, etc.), rather than granular requirements that would lead to vendor application selection (e.g. Salesforce, Marketo, Hootsuite, etc.).

Out of Scope

Out-of-scope items should also be defined to alleviate ambiguity, reduce assumptions, and further clarify expectations for stakeholders. Out-of-scope items can be placed in a backlog for later consideration. For example, fulfilment and logistics management is out of scope as it pertains to CXM.

Activity: Define the scope of the CXM strategy

1.2.3 30 minutes

Input

• N/A

Output

• Project scope and parameters
• CXM Strategy Project Charter Template, section 3.0

Materials

• Whiteboard
• Markers

Participants

• Project Sponsor
• Project Manager
• Business Lead

Instructions

1. Formulate a scope statement. Decide which people, processes, and functions the CXM strategy will address. Generally, the aim of this project is to develop strategic requirements for the CXM application portfolio – not to select individual vendors.
2. Document your scope statement in Info-Tech’s CXM Strategy Project Charter Template in section 3.0.

To form your scope statement, ask the following questions:

• What are the major coverage points?
• Who will be using the systems?
• How will different users interact with the systems?
• What are the objectives that need to be addressed?
• Where do we start?
• Where do we draw the line?

Identify the right stakeholders to include on your project team

Consider the core team functions when composing the project team. Form a cross-functional team (i.e. across IT, Marketing, Sales, Service, Operations) to create a well-aligned CXM strategy.

Info-Tech Insight

Don’t let your project team become too large when trying to include all relevant stakeholders. Carefully limiting the size of the project team will enable effective decision making while still including functional business units such as marketing, sales, service, and finance, as well as IT.

Activity: Create the project team

1.2.4 45 minutes

Input

• Scope Statement (output of Activity 1.2.3).

Output

• Project Team
• CXM Strategy Project Charter Template, section 4.0

Materials

• Whiteboard
• Markers

Participants

• Project Manager
• Business Lead

Instructions

1. Review your scope statement. Have a discussion to generate a complete list of key stakeholders that are needed to achieve the scope of work.
2. Using the previously generated list, identify a candidate for each role and determine their responsibilities and expected time commitment for the CXM strategy project.
3. Document the project team in Info-Tech’s CXM Strategy Project Charter Template in section 4.0.

Define project roles and responsibilities to improve progress tracking

Build a list of the core CXM strategy team members, and then structure a RACI chart with the relevant categories and roles for the overall project.

Responsible - Conducts work to achieve the task

Accountable - Answerable for completeness of task

Consulted - Provides input for the task

Informed - Receives updates on the task

Info-Tech Insight

Avoid missed tasks between inter-functional communications by defining roles and responsibilities for the project as early as possible.

Benefits of Assigning RACI Early:

• Improve project quality by assigning the right people to the right tasks.
• Improve chances of project task completion by assigning clear accountabilities.
• Improve project buy-in by ensuring that stakeholders are kept informed of project progress, risks, and successes.

Activity: Build a RACI chart

1.2.5 30 minutes

Input

• Project Team (output of Activity 1.2.4)

Output

• RACI chart
• CXM Strategy Project Charter Template, section 4.2

Materials

• Whiteboard
• Markers

Participants

• Project Manager
• Business Lead

Instructions

1. Identify the key stakeholder teams that should be involved in the CXM strategy project. You should have a cross-functional team that encompasses both IT (various units) and the business.
2. Determine whether each stakeholder should be responsible, accountable, consulted, and/or informed with respect to each overarching project step.
3. Confirm and communicate the results to relevant stakeholders and obtain their approval.
4. Document the RACI chart in Info-Tech’s CXM Strategy Project Charter Template in section 4.2.

Activity: Develop a timeline in order to specify concrete project milestones

1.2.6 30 minutes

Input

• N/A

Output

• Project timeline
• CXM Strategy Project Charter Template, section 5.0

Materials

• Whiteboard
• Markers

Participants

• Project Manager
• Business Lead

Instructions

1. Assign responsibilities, accountabilities, and other project involvement to each project team role using a RACI chart. Remember to consider dependencies when creating the schedule and identifying appropriate subtasks.
2. Document the timeline in Info-Tech’s CXM Strategy Project Charter Template in section 5.0.

Assess project-associated risk by understanding common barriers and enablers

Common Internal Risk Factors

Activity: Identify the risks and create mitigation strategies

1.2.7 45 minutes

Input

• N/A

Output

• Risk mitigation strategy
• CXM Strategy Project Charter Template, section 6.0

Materials

• Whiteboard
• Markers

Participants

• Project Manager
• Business Lead
• Project Team

Instructions

1. Brainstorm a list of possible risks that may impede the progress of your CXM project.
2. Classify risks as strategy based (related to planning) or systems based (related to technology).
3. Brainstorm mitigation strategies to overcome each risk.
4. On a scale of 1 to 3, determine the impact of each risk on project success and the likelihood of each risk occurring.
5. Document your findings in Info-Tech’s CXM Strategy Project Charter Template in section 6.0.

Likelihood:

1 - High/Needs Focus

2 - Can Be Mitigated

3 - Unlikely

Impact

1 - High Impact

2 - Moderate Impact

3 - Minimal Impact

Example: Risk Register and Mitigation Tactics

Activity: Complete the project charter and obtain approval

1.2.8 45 minutes

Input

• N/A

Output

• Project approval
• CXM Strategy Project Charter Template, section 8.0

Materials

• Whiteboard
• Markers

Participants

• Project Manager
• Business Lead
• Project Team

Instructions

Before beginning to develop the CXM strategy, validate the project charter and metrics with senior sponsors or stakeholders and receive their approval to proceed.

1. Schedule a 30-60 minute meeting with senior stakeholders and conduct a live review of your CXM strategy project charter.
2. Obtain stakeholder approval to ensure there are no miscommunications or misunderstandings around the scope of the work that needs to be done to reach a successful project outcome. Final sign-off should only take place when mutual consensus has been reached.
   • Obtaining approval should be an iterative process; if senior management has concerns over certain aspects of the plan, revise and review again.

Info-Tech Insight

In most circumstances, you should have your CXM strategy project charter validated with the following stakeholders:

• Chief Information Officer
• IT Applications Director
• CFO or Comptroller (for budget approval)
• Chief Marketing Office or Head of Marketing
• Chief Revenue Officer or VP of Sales
• VP Customer Service

If you want additional support, have our analysts guide you through this phase as part of an Info-Tech workshop

Book a workshop with our Info-Tech analysts:

1.2.2 Define project purpose, objectives, and business metrics

Through an in-depth discussion, an analyst will help you prioritize corporate objectives and organizational drivers to establish a distinct project purpose.

1.2.3 Define the scope of the CXM strategy

An analyst will facilitate a discussion to address critical questions to understand your distinct business needs. These questions include: What are the major coverage points? Who will be using the system?

1.2.4; 1.2.5; 1.2.6 Create the CXM project team, build a RACI chart, and establish a timeline

Our analysts will guide you through how to create a designated project team to ensure the success of your CXM strategy and suite selection initiative, including project milestones and team composition, as well as designated duties and responsibilities.

Phase 2

Create a Strategic Framework for CXM Technology Enablement

Build a Strong Technology Foundation for Customer Experience Management

Phase 2 outline: Steps 2.1 and 2.2

Call 1-888-670-8889 or email GuidedImplementations@InfoTech.com for more information.

Complete these steps on your own, or call us to complete a guided implementation. A guided implementation is a series of 2-3 advisory calls that help you execute each phase of a project. They are included in most advisory memberships.

Guided Implementation 2: Create a Strategic Framework for CXM Technology Enablement

Proposed Time to Completion: 4 weeks

Step 2.1: Scan the External Environment

Start with an analyst kick-off call:

• Discuss external drivers
• Assess competitive environment
• Review persona development
• Review scenarios

Then complete these activities…

• Build the CXM operating model
• Conduct a competitive analysis
• Conduct a PEST analysis
• Build personas and scenarios

With these tools & templates:

CXM Strategy Stakeholder Presentation Template

Step 2.2: Assess the Current State for CRM

Review findings with analyst:

• Review SWOT analysis
• Review VRIO analysis
• Discuss strategic requirements for CXM

Then complete these activities…

• Conduct a SWOT analysis
• Conduct a VRIO analysis
• Inventory existing applications

With these tools & templates:

CXM Strategy Stakeholder Presentation Template

Phase 2 outline: Steps 2.3 and 2.4

Call 1-888-670-8889 or email GuidedImplementations@InfoTech.com for more information.

Complete these steps on your own, or call us to complete a guided implementation. A guided implementation is a series of 2-3 advisory calls that help you execute each phase of a project. They are included in most advisory memberships.

Guided Implementation 2: Create a Strategic Framework for CXM Technology Enablement

Proposed Time to Completion: 4 weeks

Step 2.3: Create an Application Portfolio

Start with an analyst kick-off call:

• Discuss possible business process maps
• Discuss strategic requirements
• Review application portfolio results

Then complete these activities…

• Build business maps
• Execute application mapping

With these tools & templates:

CXM Portfolio Designer

CXM Strategy Stakeholder Presentation Template

CXM Business Process Shortlisting Tool

Step 2.4: Develop Deployment Best Practices

Review findings with analyst:

• Review possible integration maps
• Discuss best practices for end-user adoption
• Discuss best practices for customer data quality

Then complete these activities…

• Create CXM integration ecosystem
• Develop adoption game plan
• Create data quality standards

With these tools & templates:

CXM Strategy Stakeholder Presentation Template

Phase 2 Results & Insights:

• Application portfolio for CXM
• Deployment best practices for areas such as integration, data quality, and end-user adoption

Step 2.1: Scan the External Environment

Phase 1

1.1 Create the Project Vision

1.2 Structure the Project

Phase 2

2.1 Scan the External Environment

2.2 Assess the Current State of CXM

2.3 Create an Application Portfolio

2.4 Develop Deployment Best Practices

Phase 3

3.1 Create an Initiative Rollout Plan

3.2 Confirm and Finalize the CXM Blueprint

Activities:

• Inventory CXM drivers and organizational objectives
• Identify CXM challenges and pain points
• Discuss opportunities and benefits
• Align corporate and CXM strategies
• Conduct a competitive analysis
• Conduct a PEST analysis and extract strategic requirements
• Build customer personas and extract strategic requirements

Outcomes:

• CXM operating model
  • Organizational drivers
  • Environmental factors
  • Barriers
  • Enablers
• PEST analysis
• External customer personas
• Customer journey scenarios
• Strategic requirements for CXM

Develop a CXM technology operating model that takes stock of needs, drivers, barriers, and enablers

Establish the drivers, enablers, and barriers to developing a CXM technology enablement strategy. In doing so, consider needs, environmental factors, organizational drivers, and technology drivers as inputs.

CXM Strategy

• Barriers
  • Lack of Resources
  • Cultural Mindset
  • Resistance to Change
  • Poor End-User Adoption
• Enablers
  • Senior Management Support
  • Customer Data Quality
  • Current Technology Portfolio
• Business Needs (What are your business drivers? What are current marketing, sales, and customer service pains?)
  • Acquisition Pipeline Management
  • Live Chat for Support
  • Social Media Analytics
  • Etc.
• Organizational Goals
  • Increase Profitability
  • Enhance Customer Experience Consistency
  • Reduce Time-to-Resolution
  • Increase First Contact Resolution
  • Boost Share of Voice
• Environmental Factors (What factors that affect your strategy are out of your control?)
  • Customer Buying Habits
  • Changing Technology Trends
  • Competitive Landscape
  • Regulatory Requirements
• Technology Drivers (Why do you need a new system? What is the purpose for becoming an integrated organization?)
  • System Integration
  • Reporting Capabilities
  • Deployment Model

Understand your needs, drivers, and organizational objectives for creating a CXM strategy

Info-Tech Insight

A common organizational driver is to provide adequate technology enablement across multiple channels, resulting in a consistent customer experience. This driver is a result of external considerations. Many industries today are highly competitive and rapidly changing. To succeed under these pressures, you must have a rationalized portfolio of enterprise applications for customer interaction.

Activity: Inventory and discuss CXM drivers and organizational objectives

2.1.1 30 minutes

Input

• Business needs
• Exercise 1.1.3
• Exercise 1.1.4
• Environmental factors

Output

• CXM operating model inputs
• CXM Strategy Stakeholder Presentation

Materials

• Info-Tech examples
• Whiteboard
• Markers

Participants

• Project Team

Instructions

1. Brainstorm the business needs, organizational drivers, technology drivers, and environmental factors that will inform the CXM strategy. Draw from exercises 1.1.3-1.1.5.
2. Document your findings in the CXM operating model template. This can be found in the CXM Strategy Stakeholder Presentation Template.

Understand challenges and barriers to creating and executing the CXM technology-enablement strategy

Take stock of internal challenges and barriers to effective CXM strategy execution.

Example: Internal Challenges & Potential Barriers

Activity: Identify CXM challenges and pain points

2.1.2 30 minutes

Input

• Challenges
• Pain points

Output

• CXM operating model barriers
• CXM Strategy Stakeholder Presentation

Materials

• Info-Tech examples
• Whiteboard
• Markers

Participants

• Project Team

Instructions

1. Brainstorm the challenges and pain points that may act as barriers to the successful planning and execution of a CXM strategy.
2. Document your findings in the CXM operating model template. This can be found in the CXM Strategy Stakeholder Presentation Template.

Identify opportunities that can enable CXM strategy execution

Existing internal conditions, capabilities, and resources can create opportunities to enable the CXM strategy. These opportunities are critical to overcoming challenges and barriers.

Example: Opportunities to Leverage for Strategy Enablement

Activity: Discuss opportunities and benefits

2.1.3 30 minutes

Input

• Opportunities
• Benefits

Output

• Completed CXM operating model
• CXM Strategy Stakeholder Presentation

Materials

• Info-Tech examples
• Whiteboard
• Markers

Participants

• Project Team

Instructions

1. Brainstorm opportunities that should be leveraged or benefits that should be realized to enable the successful planning and execution of a CXM strategy.
2. Document your findings in the CXM operating model template. This can be found in the CXM Strategy Stakeholder Presentation Template.

Ensure that you align your CXM technology strategy to the broader corporate strategy

A successful CXM strategy requires a comprehensive understanding of an organization’s overall corporate strategy and its effects on the interrelated departments of marketing, sales, and service, including subsequent technology implications. For example, a CXM strategy that emphasizes tools for omnichannel management and is at odds with a corporate strategy that focuses on only one or two channels will fail.

Corporate Strategy

• Conveys the current state of the organization and the path it wants to take.
• Identifies future goals and business aspirations.
• Communicates the initiatives that are critical for getting the organization from its current state to the future state.

CXM Strategy

• Communicates the company’s budget and spending on CXM applications and initiatives.
• Identifies IT initiatives that will support the business and key CXM objectives, specific to marketing, sales, and service.
• Outlines staffing and resourcing for CXM initiatives.

Unified Strategy

• The CXM implementation can be linked, with metrics, to the corporate strategy and ultimate business objectives.

Info-Tech Insight

Your organization’s corporate strategy is especially important in dictating the direction of the CXM strategy. Corporate strategies are often focused on customer-facing activity and will heavily influence the direction of marketing, sales, customer service, and consequentially, CXM. Corporate strategies will often dictate market targeting, sales tactics, service models, and more.

Review sample organizational objectives to decipher how CXM technologies can support such objectives

Identifying organizational objectives of high priority will assist in breaking down CXM objectives to better align with the overall corporate strategy and achieve buy-in from key stakeholders.

Activity: Review your corporate strategy and validate its alignment with the CXM operating model

2.1.4 30 minutes

Input

• Corporate strategy
• CXM operating model (completed in Activity 2.1.3)

Output

• Strategic alignment between the business and CXM strategies

Materials

• Info-Tech examples
• Whiteboard
• Markers

Participants

• Project Team

Instructions

1. Brainstorm and create a list of organizational objectives at the corporate strategy level.
2. Break down each organizational objective to identify how CXM may support it.
3. Validate CXM goals and organizational objectives with your CXM operating model. Be sure to address the validity of each with the business needs, organizational drivers, technology drivers, and environmental factors identified as inputs to the operating model.

Amazon leverages customer data to drive decision making around targeted offers and customer experience

CASE STUDY

Industry E-Commerce

Source Pardot, 2012

Situation

Amazon.com, Inc. is an American electronic commerce and cloud computing company. It is the largest e-commerce retailer in the US.

Amazon originated as an online book store, later diversifying to sell various forms of media, software, games, electronics, apparel, furniture, food, toys, and more.

By taking a data-driven approach to marketing and sales, Amazon was able to understand its customers’ needs and wants, penetrate different product markets, and create a consistently personalized online-shopping customer experience that keeps customers coming back.

Technology Strategy

Use Browsing Data Effectively

Amazon leverages marketing automation suites to view recent activities of prospects on its website. In doing so, a more complete view of the customer is achieved, including insights into purchasing interests and site navigation behaviors.

Optimize Based on Interactions

Using customer intelligence, Amazon surveys and studies standard engagement metrics like open rate, click-through rate, and unsubscribes to ensure the optimal degree of marketing is being targeted to existing and prospective customers, depending on level of engagement.

Results

Insights gained from having a complete understanding of the customer (from basic demographic characteristics provided in customer account profiles to observed psychographic behaviors captured by customer intelligence applications) are used to personalize Amazon’s sales and marketing approaches. This is represented through targeted suggestions in the “recommended for you” section of the browsing experience and tailored email marketing.

It is this capability, partnered with the technological ability to observe and measure customer engagement, that allows Amazon to create individual customer experiences.

Scan the external environment to understand your customers, competitors, and macroenvironmental trends

Do not develop your CXM technology strategy in isolation. Work with Marketing to understand your STP strategy (segmentation, targeting, positioning): this will inform persona development and technology requirements downstream.

Market Segmentation

• Segment target market by demographic, geographic, psychographic, and behavioral characteristics
• What does the competitive market look like?
• Who are the key customer segments?
• What segments are you going to target?

Market Targeting

• Evaluate potential and commercial attractiveness of each segment, considering the dynamics of the competition
• How do you target your customers?
• How should you target them in the future?
• How do your products/services differ from the competition?

Product Positioning

• Develop detailed product positioning and marketing mixes for selected segments
• What is the value of the product/service to each segment of the market?
• How are you positioning your product/service in the market?

Info-Tech Insight

It is at this point that you should consider the need for and viability of an omnichannel approach to CXM. Through which channels do you target your customers? Are your customers present and active on a wide variety of channels? Consider how you can position your products, services, and brand through the use of omnichannel methodologies.

Activity: Conduct a competitive analysis to understand where your market is going

2.1.5 1 hour

Input

• Scan of competitive market
• Existing customer STP strategy

Output

• Strategic CXM requirements
• CXM Strategy Stakeholder Presentation

Materials

• Whiteboard
• Markers

Participants

• Project Team
• Marketing SME

Instructions

1. Scan the market for direct and indirect competitors.
2. Evaluate current and/or future segmentation, targeting, and positioning strategies by answering the following questions:

• What does the competitive market look like?
• Who are the key customer segments?
• What segments are you going to target?
• How do you target your customers?
• How should you target them in the future?
• How do your products/services differ from the competition?
• What is the value of the product/service to each segment of the market?
• How are you positioning your product/service in the market?
• Other helpful questions include:
  • How formally do you target customers? (e.g. through direct contact vs. through passive brand marketing)
  • Does your organization use the shotgun or rifle approach to marketing?
    • Shotgun marketing: targets a broad segment of people, indirectly
    • Rifle marketing: targets smaller and more niche market segments using customer intelligence

Activity: Conduct a competitive analysis (cont’d)

2.1.5 30 minutes

Input

• Scan of competitive market

Output

• Competitive analysis
• CXM Strategy Stakeholder Presentation

Materials

• Whiteboard
• Markers

Participants

• Project Team
• Marketing SME (e.g. Market Research Stakeholders)

Instructions

1. List recent marketing technology and customer experience-related initiatives that your closest competitors have implemented.
2. For each identified initiative, elaborate on what the competitive implications are for your organization.
3. Document your outputs in the CXM Strategy Stakeholder Presentation Template.

Example: Competitive Implications

Conduct a PEST analysis to determine salient political, economic, social, and technological impacts for CXM

A PEST analysis is a structured planning method that identifies external environmental factors that could influence the corporate and IT strategy.

Political - Examine political factors, such as relevant data protection laws and government regulations.

Economic - Examine economic factors, such as funding, cost of web access, and labor shortages for maintaining the site(s).

Technological - Examine technological factors, such as new channels, networks, software and software frameworks, database technologies, wireless capabilities, and availability of software as a service.

Social - Examine social factors, such as gender, race, age, income, and religion.

Info-Tech Insight

When looking at opportunities and threats, PEST analysis can help to ensure that you do not overlook external factors, such as technological changes in your industry. When conducting your PEST analysis specifically for CXM, pay particular attention to the rapid rate of change in the technology bucket. New channels and applications are constantly emerging and evolving, and seeing differential adoption by potential customers.

Activity: Conduct and review the PEST analysis

2.1.6 30 minutes

Input

• Political, economic, social, and technological factors related to CXM

Output

• Completed PEST analysis

Materials

• Whiteboard
• Markers

Participants

• Project Team

Instructions

1. Identify your current strengths and weaknesses in managing the customer experience.
2. Identify any opportunities to take advantage of and threats to mitigate.

Example: PEST Analysis

Political

• Data privacy for PII
• ADA legislation for accessible design

Economic

• Spending via online increasing
• Focus on share of wallet

Technological

• Rise in mobile
• Geo-location based services
• Internet of Things
• Omnichannel

Social

• Increased spending power by millennials
• Changing channel preferences
• Self-service models

Activity: Translate your PEST analysis into a list of strategic CXM technology requirements to be addressed

2.1.7 30 minutes

Input

• PEST Analysis conducted in Activity 2.1.6.

Output

• Strategic CXM requirements
• CXM Strategy Stakeholder Presentation

Materials

• Whiteboard
• Markers

Participants

• Project Team

Instructions

For each PEST quadrant:

1. Document the point and relate it to a goal.
2. For each point, identify CXM requirements.
3. Sort goals and requirements to eliminate duplicates.
4. Document your outputs in the CXM Strategy Stakeholder Presentation Template.

Example: Parsing Requirements from PEST Analysis

Technological Trend: There has been a sharp increase in popularity of mobile self-service models for buying habits and customer service access.

Goal: Streamline mobile application to be compatible with all mobile devices. Create consistent branding across all service delivery applications (e.g. website, etc.).

Strategic Requirement: Develop a native mobile application while also ensuring that resources through our web presence are built with responsive design interface.

IT must fully understand the voice of the customer: work with Marketing to develop customer personas

Creating a customer-centric CXM technology strategy requires archetypal customer personas. Creating customer personas will enable you to talk concretely about them as consumers of your customer experience and allow you to build buyer scenarios around them.

A persona (or archetypal user) is an invented person that represents a type of user in a particular use-case scenario. In this case, personas can be based on real customers.

Activity: Build personas for your customers

2.1.8 2 hours

Input

• Customer demographics and psychographics

Output

• List of prioritized customer personas
• CXM Strategy Stakeholder Presentation

Materials

• Info-Tech examples
• Whiteboard
• Markers

Participants

Project Team

Instructions

1. In 2-4 groups, list all the customer personas that need to be built. In doing so, consider the people who interact with your organization most often.
2. Build a demographic profile for each customer persona. Include information such as age, geographic location, occupation, annual income, etc.
3. Augment the persona with a psychographic profile of each customer. Consider the goals and objectives of each customer persona and how these might inform buyer behaviors.
4. Introduce your group’s personas to the entire group, in a round-robin fashion, as if you are introducing your persona at a party.
5. Summarize the personas in a persona map. Rank your personas according to importance and remove any duplicates.

Info-Tech Insight

For CXM, persona building is typically used for understanding the external customer; however, if you need to gain a better understanding of the organization’s internal customers (those who will be interacting with CXM applications), personas can also be built for this purpose. Examples of useful internal personas are sales managers, brand managers, customer service directors, etc.

Sample Persona Templates

Fred, 40

The Family Man

Post-secondary educated, white-collar professional, three children

Goals & Objectives

• Maintain a stable secure lifestyle
• Progress his career
• Obtain a good future for his children

Behaviors

• Manages household and finances
• Stays actively involved in children’s activities and education
• Seeks potential career development
• Uses a cellphone and email frequently
• Sometimes follows friends Facebook pages

Services of Interest

• SFA, career counselling, job boards, day care, SHHS
• Access to information via in-person, phone, online

Traits

General Literacy - High

Digital Literacy - Mid-High

Detail-Oriented - High

Willing to Try New Things - Mid-High

Motivated and Persistent - Mid-High

Time Flexible - Mid-High

Familiar With [Red.] - Mid

Access to [Red.] Offices - High

Access to Internet - High

Ashley, 35

The Tourist

Single, college educated, planning vacation in [redacted], interested in [redacted] job opportunities

Goals & Objectives

• Relax after finishing a stressful job
• Have adventures and try new things
• Find a new job somewhere in Canada

Behaviors

• Collects information about things to do in [redacted]
• Collects information about life in [redacted]
• Investigates and follows up on potential job opportunities
• Uses multiple social media to keep in touch with friends
• Shops online frequently

Services of Interest

• SFA, job search, road conditions, ferry schedules, hospital, police station, DL requirements, vehicle rental
• Access to information via in-person, phone, website, SMS, email, social media

Traits

General Literacy - Mid

Digital Literacy - High

Detail-Oriented - Mid

Willing to Try New Things - High

Motivated and Persistent - Mid

Time Flexible - Mid-High

Familiar With [Red.] - Low

Access to [Red.] Offices - Low

Access to Internet - High

Bill, 25

The Single Parent

15-year resident of [redacted], high school education, waiter, recently divorced, two children

Goals & Objectives

• Improve his career options so he can support his family
• Find an affordable place to live
• Be a good parent
• Work through remaining divorce issues

Behaviors

• Tries to get training or experience to improve his career
• Stays actively involved in his children’s activities
• Looks for resources and supports to resolve divorce issues
• Has a cellphone and uses the internet occasionally

Services of Interest

• Child care, housing authority, legal aid, parenting resources
• Access to information via in person, word-of mouth, online, phone, email

Traits

General Literacy - Mid

Digital Literacy - Mid-Low

Detail-Oriented - Mid-Low

Willing to Try New Things - Mid

Motivated and Persistent - High

Time Flexible - Mid

Familiar With [Red.] - Mid-High

Access to [Red.] Offices - High

Access to Internet - High

Marie, 19

The Regional Youth

Single, [redacted] resident, high school graduate

Goals & Objectives

• Get a good job
• Maintain ties to family and community

Behaviors

• Looking for work
• Gathering information about long-term career choices
• Trying to get the training or experience that can help her develop a career
• Staying with her parents until she can get established
• Has a new cellphone and is learning how to use it
• Plays videogames and uses the internet at least weekly

Services of Interest

• Job search, career counselling
• Access to information via in-person, online, phone, email, web applications

Traits

General Literacy - Mid

Digital Literacy - Mid

Detail-Oriented - Mid-Low

Willing to Try New Things - Mid-High

Motivated and Persistent - Mid-Low

Time Flexible - High

Familiar With [Red.] - Mid-Low

Access to [Red.] Offices - Mid-Low

Access to Internet - Mid

Build key scenarios for each persona to extract strategic requirements for your CXM application portfolio

A scenario is a story or narrative that helps explore the set of interactions that a customer has with an organization. Scenario mapping will help parse requirements used to design the CXM application portfolio.

A Good Scenario…

• Describes specific task(s) that need to be accomplished
• Describes user goals and motivations
• Describes interactions with a compelling but not overwhelming amount of detail
• Can be rough, as long as it provokes ideas and discussion

Scenarios Are Used To…

• Provide a shared understanding about what a user might want to do, and how they might want to do it
• Help construct the sequence of events that are necessary to address in your user interface(s)

To Create Good Scenarios…

• Keep scenarios high level, not granular in nature
• Identify as many scenarios as possible. If you’re time constrained, try to develop 2-3 key scenarios per persona
• Sketch each scenario out so that stakeholders understand the goal of the scenario

Activity: Build scenarios for each persona and extract strategic requirements for the CXM strategy

2.1.9 1.5 hours

Input

• Customer personas (output of Activity 2.1.5)

Output

• CX scenario maps
• Strategic CXM requirements
• CXM Strategy Stakeholder Presentation

Materials

• Whiteboard
• Markers

Participants

• Project Team

Instructions

1. For each customer persona created in Activity 2.1.5, build a scenario. Choose and differentiate scenarios based on the customer goal of each scenario (e.g. make online purchase, seek customer support, etc.).
2. Think through the narrative of how a customer interacts with your organization, at all points throughout the scenario. List each step in the interaction in a sequential order to form a scenario journey.
3. Examine each step in the scenario and brainstorm strategic requirements that will be needed to support the customer’s use of technology throughout the scenario.
4. Repeat steps 1-3 for each persona. Document your outputs in the CXM Strategy Stakeholder Presentation Template.

Example: Scenario Map

Persona Name: Brand Loyal Linda

Scenario Goal: File a complaint about in-store customer service

Look up “[Store Name] customer service” on public web. →Reach customer support landing page. →Receive proactive notification prompt for online chat with CSR. →Initiate conversation: provide order #. →CSR receives order context and information. →Customer articulates problem, CSR consults knowledgebase. →Discount on next purchase offered. →Send email with discount code to Brand Loyal Linda.

If you want additional support, have our analysts guide you through this phase as part of an Info-Tech workshop

Book a workshop with our Info-Tech analysts:

• To accelerate this project, engage your IT team in an Info-Tech workshop with an Info-Tech analyst team.
• Info-Tech analysts will join you and your team onsite at your location or welcome you to Info-Tech’s historic Toronto office to participate in an innovative onsite workshop.
• Contact your account manager (www.infotech.com/account), or email Workshops@InfoTech.com for more information.

The following are sample activities that will be conducted by Info-Tech analysts with your team:

2.1.1; 2.1.2; 2.1.3; 2.1.4 - Create a CXM operating model

An analyst will facilitate a discussion to identify what impacts your CXM strategy and how to align it to your corporate strategy. The discussion will take different perspectives into consideration and look at organizational drivers, external environmental factors, as well as internal barriers and enablers.

2.1.5 Conduct a competitive analysis

Calling on their depth of expertise in working with a broad spectrum of organizations, our facilitator will help you work through a structured, systematic evaluation of competitors’ actions when it comes to CXM.

If you want additional support, have our analysts guide you through this phase as part of an Info-Tech workshop

Book a workshop with our Info-Tech analysts:

2.1.6; 2.1.7 - Conduct a PEST analysis

The facilitator will use guided conversation to target each quadrant of the PEST analysis and help your organization fully enumerate political, economic, social, and technological trends that will influence your CXM strategy. Our analysts are deeply familiar with macroenvironmental trends and can provide expert advice in identifying areas of concern in the PEST and drawing strategic requirements as implications.

2.1.8; 2.1.9 - Build customer personas and subsequent persona scenarios

Drawing on the preceding exercises as inputs, the facilitator will help the team create and refine personas, create respective customer interaction scenarios, and parse strategic requirements to support your technology portfolio for CXM.

Step 2.2: Assess the Current State of CXM

Phase 1

1.1 Create the Project Vision

1.2 Structure the Project

Phase 2

2.1 Scan the External Environment

2.2 Assess the Current State of CXM

2.3 Create an Application Portfolio

2.4 Develop Deployment Best Practices

Phase 3

3.1 Create an Initiative Rollout Plan

3.2 Confirm and Finalize the CXM Blueprint

Activities:

• Conduct a SWOT analysis and extract strategic requirements
• Inventory existing CXM applications and assess end-user usage and satisfaction
• Conduct a VRIO analysis and extract strategic requirements

Outcomes:

• SWOT analysis
• VRIO analysis
• Current state application portfolio
• Strategic requirements

Conduct a SWOT analysis to prepare for creating your CXM strategy

A SWOT analysis is a structured planning method that evaluates the strengths, weaknesses, opportunities, and threats involved in a project.

Strengths - Strengths describe the positive attributes that are within your control and internal to your organization (i.e. what do you do better than anyone else?)

Weaknesses - Weaknesses are internal aspects of your business that place you at a competitive disadvantage; think of what you need to enhance to compete with your top competitor.

Opportunities - Opportunities are external factors the project can capitalize on. Think of them as factors that represent reasons your business is likely to prosper.

Threats - Threats are external factors that could jeopardize the project. While you may not have control over these, you will benefit from having contingency plans to address them if they occur.

Info-Tech Insight

When evaluating weaknesses of your current CXM strategy, ensure that you’re taking into account not just existing applications and business processes, but also potential deficits in your organization’s channel strategy and go-to-market messaging.

Activity: Conduct a SWOT analysis

2.2.1 30 minutes

Input

• CXM strengths, weaknesses, opportunities, and threats

Output

• Completed SWOT analysis

Materials

• Whiteboard
• Markers

Participants

• Project Team

Instructions

1. Identify your current strengths and weaknesses in managing the customer experience. Consider marketing, sales, and customer service aspects of the CX.
2. Identify any opportunities to take advantage of and threats to mitigate.

Example: SWOT Analysis

Strengths

• Strong customer service model via telephony

Weaknesses

• Customer service inaccessible in real-time through website or mobile application

Opportunities

• Leverage customer intelligence to measure ongoing customer satisfaction

Threats

• Lack of understanding of customer interaction platforms by staff could hinder adoption

Activity: Translate your SWOT analysis into a list of requirements to be addressed

2.2.2 30 minutes

Input

• SWOT Analysis conducted in Activity 2.2.1.

Output

• Strategic CXM requirements
• CXM Stakeholder Presentation Template

Materials

• Whiteboard
• Markers

Participants

• Project Team

Instructions

For each SWOT quadrant:

1. Document the point and relate it to a goal.
2. For each point, identify CXM requirements.
3. Sort goals and requirements to eliminate duplicates.
4. Document your outputs in the CXM Stakeholder Presentation Template.

Example: Parsing Requirements from SWOT Analysis

Weakness: Customer service inaccessible in real-time through website or mobile application.

Goal: Increase the ubiquity of access to customer service knowledgebase and agents through a web portal or mobile application.

Strategic Requirement: Provide a live chat portal that matches the customer with the next available and qualified agent.

Inventory your current CXM application portfolio

Applications are the bedrock of technology enablement for CXM. Review your current application portfolio to identify what is working well and what isn’t.

Understand Your CXM Application Portfolio With a Four-Step Approach

Build the CXM Application Inventory →Assess Usage and Satisfaction →Map to Business Processes and Determine Dependencies →Determine Grow/Maintain/ Retire for Each Application

When assessing the CXM applications portfolio, do not cast your net too narrowly; while CRM and MMS applications are often top of mind, applications for digital asset management and social media management are also instrumental for ensuring a well-integrated CX.

Identify dependencies (either technical or licensing) between applications. This dependency tracing will come into play when deciding which applications should be grown (invested in), which applications should be maintained (held static), and which applications should be retired (divested).

Info-Tech Insight

Shadow IT is prominent here! When building your application inventory, ensure you involve Marketing, Sales, and Service to identify any “unofficial” SaaS applications that are being used for CXM. Many organizations fail to take a systematic view of their CXM application portfolio beyond maintaining a rough inventory. To assess the current state of alignment, you must build the application inventory and assess satisfaction metrics.

Understand which of your organization’s existing enterprise applications enable CXM

Review the major enterprise applications in your organization that enable CXM and align your requirements to these applications (net-new or existing). Identify points of integration to capture the big picture.

Info-Tech Insight

When assessing the current application portfolio that supports CXM, the tendency will be to focus on the applications under the CXM umbrella, relating mostly to marketing, sales, and customer service. Be sure to include systems that act as input to, or benefit due to outputs from, CRM or similar applications. Examples of these systems are ERP systems, ECM (e.g. SharePoint) applications, and more.

Assess CXM application usage and satisfaction

Having a portfolio but no contextual data will not give you a full understanding of the current state. The next step is to thoroughly assess usage patterns as well as IT, management, and end-user satisfaction with each application.

Example: Application Usage & Satisfaction Assessment

Info-Tech Insight

When evaluating satisfaction with any application, be sure to consult all stakeholders who come into contact with the application or depend on its output. Consider criteria such as ease of use, completeness of information, operational efficiency, data accuracy, etc.

Use Info-Tech’s Application Portfolio Assessment to gather end-user feedback on existing CXM applications

2.2.3 Application Portfolio Assessment: End-User Feedback

Info-Tech’s Application Portfolio Assessment: End-User Feedback diagnostic is a low-effort, high-impact program that will give you detailed report cards on end-user satisfaction with an application. Use these insights to identify problems, develop action plans for improvement, and determine key participants.

Application Portfolio Assessment: End-User Feedback is an 18-question survey that provides valuable insights on user satisfaction with an application by:

• Performing a general assessment of the application portfolio that provides a full view of the effectiveness, criticality, and prevalence of all relevant applications.
• Measuring individual application performance with open-ended user feedback surveys about the application, organized by department to simplify problem resolution.
• Providing targeted department feedback to identify end-user satisfaction and focus improvements on the right group or line of business.

INFO-TECH DIAGNOSTIC

Activity: Inventory your CXM applications, and assess application usage and satisfaction

2.2.4 1 hour

Input

• List of CXM applications

Output

• Complete inventory of CXM applications
• CXM Stakeholder Presentation Template

Materials

• Whiteboard
• Markers

Participants

• Project Team

Instructions

1. List all existing applications that support the creation, management, and delivery of your customer experience.
2. Identify which processes each application supports (e.g. content deployment, analytics, service delivery, etc.).
3. Identify technical or licensing dependencies (e.g. data models).
4. Assess the level of application usage by IT, management, and internal users (high/medium/low).
5. Assess the satisfaction with and performance of each application according to IT, management, and internal users (high/medium/low). Use the Info-Tech Diagnostic to assist.

Example: CXM Application Inventory

Conduct a VRIO analysis to identify core competencies for CXM applications

A VRIO analysis evaluates the ability of internal resources and capabilities to sustain a competitive advantage by evaluating dimensions of value, rarity, imitability, and organization. For critical applications like your CRM platform, use a VRIO analysis to determine their value.

(Strategic Management Insight, 2013)

Activity: Conduct a VRIO analysis on your existing application portfolio

2.2.5 30 minutes

Input

• Inventory of existing CXM applications (output of Activity 2.2.4)

Output

• Completed VRIO analysis
• Strategic CXM requirements
• CXM Stakeholder Presentation Template

Materials

• VRIO Analysis model
• Whiteboard
• Markers

Participants

• Project Team

Instructions

1. Evaluate each CXM application inventoried in Activity 2.2.4 by answering the four VRIO questions in sequential order. Do not proceed to the following question if “no” is answered at any point.
2. Record the results. The state of your organization’s competitive advantage, based on each resource/capability, will be determined based on the number of questions with a “yes” answer. For example, if all four questions are answered positively, then your organization is considered to have a long-term competitive advantage.
3. Document your outputs in the CXM Stakeholder Presentation Template.

If you want additional support, have our analysts guide your through this phase as part of an Info-Tech workshop

2.2.1; 2.2.2 Conduct a SWOT Analysis

Our facilitator will use a small-team approach to delve deeply into each area, identifying enablers (strengths and opportunities) and challenges (weaknesses and threats) relating to the CXM strategy.

2.2.3; 2.2.4 Inventory your CXM applications, and assess usage and satisfaction

Working with your core team, the facilitator will assist with building a comprehensive inventory of CXM applications that are currently in use and with identifying adjacent systems that need to be identified for integration purposes. The facilitator will work to identify high and low performing applications and analyze this data with the team during the workshop exercise.

2.2.5 Conduct a VRIO analysis

The facilitator will take you through a VRIO analysis to identify which of your internal technological competencies ensure, or can be leveraged to ensure, your competitiveness in the CXM market.

Step 2.3: Create an Application Portfolio

Phase 1

1.1 Create the Project Vision

1.2 Structure the Project

Phase 2

2.1 Scan the External Environment

2.2 Assess the Current State of CXM

2.3 Create an Application Portfolio

2.4 Develop Deployment Best Practices

Phase 3

3.1 Create an Initiative Rollout Plan

3.2 Confirm and Finalize the CXM Blueprint

Activities

• Shortlist and prioritize business processes for improvement and reengineering
• Map current CXM processes
• Identify business process owners and assign job responsibilities
• Identify user interaction channels to extract strategic requirements
• Aggregate and develop strategic requirements
• Determine gaps in current and future state processes
• Build the CXM application portfolio

Outcomes

CXM application portfolio map

• Shortlist of relevant business processes
• Current state map
• Business process ownership assignment
• Channel map
• Complete list of strategic requirements

Understand business process mapping to draft strategy requirements for marketing, sales, and customer service

The interaction between sales, marketing, and customer service is very process-centric. Rethink sales and customer-centric workflows and map the desired workflow, imbedding the improved/reengineered process into the requirements.

Using BPM to Capture Strategic Requirements

Business process modeling facilitates the collaboration between the business and IT, recording the sequence of events, tasks performed, who performed them, and the levels of interaction with the various supporting applications.

By identifying the events and decision points in the process and overlaying the people that perform the functions, the data being interacted with, and the technologies that support them, organizations are better positioned to identify gaps that need to be bridged.

Encourage the analysis by compiling an inventory of business processes that support customer-facing operations that are relevant to achieving the overall organizational strategies.

Outcomes

• Operational effectiveness
• Identification, implementation, and maintenance of reusable enterprise applications
• Identification of gaps that can be addressed by acquisition of additional applications or process improvement/ reengineering

INFO-TECH OPPORTUNITY

Refer to Info-Tech’s Create a Comprehensive BPM Strategy for Successful Process Automation blueprint for further assistance in taking a BPM approach to your sales-IT alignment.

Leverage the APQC framework to help define your inventory of sales, marketing, and service processes

APQC’s Process Classification Framework is a taxonomy of cross-functional business processes intended to allow the objective comparison of organizational performance within and among organizations.

(APQC, 2011)

MORE ABOUT APQC

• APQC serves as a high-level, industry-neutral enterprise model that allows organizations to see activities from a cross-industry process perspective.
• Sales processes have been provided up to Level 3 of the APQC framework.
• The APQC Framework can be accessed through APQC’s Process Classification Framework.
• Note: The framework does not list all processes within a specific organization, nor are the processes that are listed in the framework present in every organization.

Understand APQC’s “Market and Sell Products and Services” framework

3.0 Market and Sell Products

3.1 Understand markets, customers, and capabilities

• 3.1.1 Perform customer and market intelligence analysis
• 3.1.2 Evaluate and prioritize market opportunities

3.2 Develop marketing strategy

• 3.2.1 Define offering and customer value proposition
• 3.2.2 Define pricing strategy to align to value proposition
• 3.2.3 Define and manage channel strategy

3.3 Develop sales strategy

• 3.3.1 Develop sales forecast
• 3.3.2 Develop sales partner/alliance relationships
• 3.3.3 Establish overall sales budgets
• 3.3.4 Establish sales goals and measures
• 3.3.5 Establish customer management measures

3.4 Develop and manage marketing plans

• 3.4.1 Establish goals, objectives, and metrics by products by channels/segments
• 3.4.2 Establish marketing budgets
• 3.4.3 Develop and manage media
• 3.4.4 Develop and manage pricing
• 3.4.5 Develop and manage promotional activities
• 3.4.6 Track customer management measures
• 3.4.7 Develop and manage packaging strategy

3.5 Develop and manage sales plans

• 3.5.1 Generate leads
• 3.5.2 Manage customers and accounts
• 3.5.3 Manage customer sales
• 3.5.4 Manage sales orders
• 3.5.5 Manage sales force
• 3.5.6 Manage sales partners and alliances

Understand APQC’s “Manage Customer Service” framework

5.0 Manage Customer Service

5.1 Develop customer care/customer service strategy

• 5.1.1 Develop customer service segmentation
  • 5.1.1.1 Analyze existing customers
  • 5.1.1.2 Analyze feedback of customer needs
• 5.1.2 Define customer service policies and procedures
• 5.1.3 Establish service levels for customers

5.2 Plan and manage customer service operations

• 5.2.1 Plan and manage customer service work force
  • 5.2.1.1 Forecast volume of customer service contacts
  • 5.2.1.2 Schedule customer service work force
  • 5.2.1.3 Track work force utilization
  • 5.2.1.4 Monitor and evaluate quality of customer interactions with customer service representatives

5.2 Plan and 5.2.3.1 Receive customer complaints 5.2.3.2 Route customer complaints 5.2.3.3 Resolve customer complaints 5.2.3.4 Respond to customer complaints manage customer service operations

• 5.2.2 Manage customer service requests/inquiries
  • 5.2.2.1 Receive customer requests/inquiries
  • 5.2.2.2 Route customer requests/inquiries
  • 5.2.2.3 Respond to customer requests/inquiries
• 5.2.3 Manage customer complaints
  • 5.2.3.1 Receive customer complaints
  • 5.2.3.2 Route customer complaints
  • 5.2.3.3 Resolve customer complaints
  • 5.2.3.4 Respond to customer complaints

Leverage the APQC framework to inventory processes

The APQC framework provides levels 1 through 3 for the “Market and Sell Products and Services” framework. Level 4 processes and beyond will need to be defined by your organization as they are more granular (represent the task level) and are often industry-specific.

Level 1 – Category - 1.0 Develop vision and strategy (10002)

Represents the highest level of process in the enterprise, such as manage customer service, supply chain, financial organization, and human resources.

Level 2 – Process Group - 1.1 Define the business concept and long-term vision (10014)

Indicates the next level of processes and represents a group of processes. Examples include perform after sales repairs, procurement, accounts payable, recruit/source, and develop sales strategy.

Level 3 – Process - 1.1.1 Assess the external environment (10017)

A series of interrelated activities that convert input into results (outputs); processes consume resources and require standards for repeatable performance; and processes respond to control systems that direct quality, rate, and cost of performance.

Level 4 – Activity - 1.1.1.1 Analyze and evaluate competition (10021)

Indicates key events performed when executing a process. Examples of activities include receive customer requests, resolve customer complaints, and negotiate purchasing contracts.

Level 5 – Task - 12.2.3.1.1 Identify project requirements and objectives (11117)

Tasks represent the next level of hierarchical decomposition after activities. Tasks are generally much more fine grained and may vary widely across industries. Examples include create business case and obtain funding, and design recognition and reward approaches.

Info-Tech Insight

Define the Level 3 processes in the context of your organization. When creating a CXM strategy, concern yourself with the interrelatedness of processes across existing departmental silos (e.g. marketing, sales, customer service). Reserve the analysis of activities (Level 4) and tasks (Level 3) for granular work initiatives involved in the implementation of applications.

Use Info-Tech’s CXM Business Process Shortlisting Tool to prioritize processes for improvement

2.3.1 CXM Business Process Shortlisting Tool

The CXM Business Process Shortlisting Tool can help you define which marketing, sales, and service processes you should focus on.

Working in concert with stakeholders from the appropriate departments, complete the short questionnaire.

Based on validated responses, the tool will highlight processes of strategic importance to your organization.

These processes can then be mapped, with requirements extracted and used to build the CXM application portfolio.

INFO-TECH DELIVERABLE

Activity: Define your organization’s top-level processes for reengineering and improvement

2.3.2 1 hour

Input

• Shortlist business processes relating to customer experience (output of Tool 2.3.1)

Output

• Prioritized list of top-level business processes by department

Materials

• APQC Framework
• Whiteboard
• Markers

Participants

• Project Team

Instructions

1. Inventory all business processes relating to customer experience.
2. Customize the impacted business units and factor weightings on the scorecard below to reflect the structure and priorities of your organization.
3. Using the scorecard, identify all processes essential to your customer experience. The scorecard is designed to determine which processes to focus on and to help you understand the impact of the scrutinized process on the different customer-centric groups across the organization.

Current legend for Weights and Scores

F – Finance

H – Human Resources

I – IT

L – Legal

M – Marketing

BU1 – Business Unit 1

BU2 – Business Unit 2

Activity: Map top-level business processes to extract strategic requirements for the CXM application portfolio

2.3.3 45 minutes

Input

• Prioritized list of top-level business processes (output of Activity 2.3.2)

Output

• Current state process maps
• CXM Strategy Stakeholder Presentation

Materials

• APQC Framework
• Whiteboard
• Markers
• Sticky notes

Participants

• Project Team

Instructions

1. List all prioritized business processes, as identified in Activity 2.3.2. Map your processes in enough detail to capture all relevant activities and system touchpoints, using the legend included in the example. Focus on Level 3 processes, as explained in the APQC framework.
2. Record all of the major process steps on sticky notes. Arrange the sticky notes in sequential order.
3. On a set of different colored sticky notes, record all of the systems that enable the process. Map these system touchpoints to the process steps.
4. Draw arrows in between the steps to represent manual entry or automation.
5. Identify effectiveness and gaps in existing processes to determine process technology requirements.
6. Document your outputs in the CXM Strategy Stakeholder Presentation Template.

INFO-TECH OPPORTUNITY

Refer to Info-Tech’s Create a Comprehensive BPM Strategy for Successful Process Automation blueprint for further assistance in taking a BPM approach to your sales-IT alignment.

Info-Tech Insight

Analysis of the current state is important in the context of gap analysis. It aids in understanding the discrepancies between your baseline and the future state vision, and ensures that these gaps are documented as part of the overall requirements.

Example: map your current CXM processes to parse strategic requirements (customer acquisition)

Activity: Extract requirements from your top-level business processes

2.3.4 30 minutes

Input

• Current state process maps (output of Activity 2.3.3)

Output

• Requirements for future state mapping

Materials

• Info-Tech examples
• Whiteboard
• Markers

Participants

• Project Team

Instructions

1. Discuss the current state of priority business processes, as mapped in Activity 2.3.3.
2. Extract process requirements for business process improvement by asking the following questions:

• What is the input?
• What is the output?
• What are the underlying risks and how can they be mitigated?
• What conditions should be met to mitigate or eliminate each risk?
• What are the improvement opportunities?
• What conditions should be met to enable these opportunities?

3. Break business requirements into functional and non-functional requirements, as outlined on this slide.

Info-Tech Insight

The business and IT should work together to evaluate the current state of business processes and the business requirements necessary to support these processes. Develop a full view of organizational needs while still obtaining the level of detail required to make informed decisions about technology.

Establish process owners for each top-level process

Identify the owners of the business processes being evaluated to extract requirements. Process owners will be able to inform business process improvement and assume accountability for reengineered or net-new processes going forward.

Process Owner Responsibilities

Process ownership ensures support, accountability, and governance for CXM and its supporting processes. Process owners must be able to negotiate with business users and other key stakeholders to drive efficiencies within their own process. The process owner must execute tactical process changes and continually optimize the process.

Responsibilities include the following:

• Inform business process improvement
• Introduce KPIs and metrics
• Monitor the success of the process
• Present process findings to key stakeholders within the organization
• Develop policies and procedures for the process
• Implement new methods to manage the process

Info-Tech Insight

Identify the owners of existing processes early so you understand who needs to be involved in process improvement and reengineering. Once implemented, CXM applications are likely to undergo a series of changes. Unstructured data will multiply, the number of users may increase, administrators may change, and functionality could become obsolete. Should business processes be merged or drastically changed, process ownership can be reallocated during CXM implementation. Make sure you have the right roles in place to avoid inefficient processes and poor data quality.

Use Info-Tech’s Process Owner Assignment Guide to aid you in choosing the right candidates

2.3.5 Process Owner Assignment Guide

The Process Owner Assignment Guide will ensure you are taking the appropriate steps to identify process owners for existing and net-new processes created within the scope of the CXM strategy.

The steps in the document will help with important considerations such as key requirements and responsibilities.

Sections of the document:

1. Define responsibilities and level of commitment
2. Define job requirements
3. Receive referrals
4. Hold formal interviews
5. Determine performance metrics

INFO-TECH DELIVERABLE

Activity: Assign business process owners and identify job responsibilities

2.3.6 30 minutes

Input

• Current state map (output of Activity 2.3.3)

Output

• Process owners assigned
• CXM Strategy Stakeholder Presentation

Materials

• Info-Tech’s Process Owner Assignment Guide
• Whiteboard
• Markers

Participants

• Project Team

Instructions

1. Using Info-Tech’s Process Owner Assignment Guide, assign process owners for each process mapped out in Activity 2.3.3. To assist in doing so, answer the following questions

• What is the level of commitment expected from each process owner?
• How will the process owner role be tied to a formal performance appraisal?
• What metrics can be assigned?
• How much work will be required to train process owners?
• Is there support staff available to assist process owners?

Choose the channels that will make your target customers happy – and ensure they’re supported by CXM applications

Traditional Channels

Face-to-Face is efficient and has a positive personalized aspect that many customers desire, be it for sales or customer service.

Telephony (or IVR) has been a mainstay of customer interaction for decades. While not fading, it must be used alongside newer channels.

Postal used to be employed extensively for all domains, but is now used predominantly for e-commerce order fulfillment.

Web 1.0 Channels

Email is an asynchronous interaction channel still preferred by many customers. Email gives organizations flexibility with queuing.

Live Chat is a way for clients to avoid long call center wait times and receive a solution from a quick chat with a service rep.

Web Portals permit transactions for sales and customer service from a central interface. They are a must-have for any large company.

Web 2.0 Channels

Social Media consists of many individual services (like Facebook or Twitter). Social channels are exploding in consumer popularity.

HTML5 Mobile Access allows customers to access resources from their personal device through its integrated web browser.

Dedicated Mobile Apps allow customers to access resources through a dedicated mobile application (e.g. iOS, Android).

Info-Tech Insight

Your channel selections should be driven by customer personas and scenarios. For example, social media may be extensively employed by some persona types (i.e. Millennials) but see limited adoption in other demographics or use cases (i.e. B2B).

Activity: Extract requirements from your channel map

2.3.7 30 minutes

Input

• Current state process maps (output of Activity 2.3.3)

Output

• Channel map
• CXM Strategy Stakeholder Presentation

Materials

• Info-Tech examples
• Whiteboard
• Markers

Participants

• Project Team

Instructions

1. Inventory which customer channels are currently used by each department.
2. Speak with the department heads for Marketing, Sales, and Customer Service and discuss future channel usage. Identify any channels that will be eliminated or added.
3. Document your outputs in the CXM Strategy Stakeholder Presentation Template.

Example: Business Unit Channel Use Survey

Bring it together: amalgamate your strategic requirements for CXM technology enablement

Discovering your organizational requirements is vital for choosing the right business-enabling initiative, technology, and success metrics. Sorting the requirements by marketing, sales, and service is a prudent mechanism for clarification.

Strategic Requirements: Marketing

Definition: High-level requirements that will support marketing functions within CXM.

Examples

• Develop a native mobile application while also ensuring that resources for your web presence are built with responsive design interface.
• Consolidate workflows related to content creation to publish all brand marketing from one source of truth.
• Augment traditional web content delivery by providing additional functionality such as omnichannel engagement, e-commerce, dynamic personalization, and social media functionality.

Strategic Requirements: Sales

Definition: High-level requirements that will support sales functions within CXM.

Examples

• Implement a system that reduces data errors and increases sales force efficiency by automating lead management workflows.
• Achieve end-to-end visibility of the sales process by integrating the CRM, inventory, and order processing and shipping system.
• Track sales force success by incorporating sales KPIs with real-time business intelligence feeds.

Strategic Requirements: Customer Service

Definition: High-level requirements that will support customer service functions within CXM.

Examples

• Provide a live chat portal that connects the customer, in real time, with the next available and qualified agent.
• Bridge the gap between the source of truth for sales with customer service suites to ensure a consistent, end-to-end customer experience from acquisition to customer engagement and retention.
• Use customer intelligence to track customer journeys in order to best understand and resolve customer complaints.

Activity: Consolidate your strategic requirements for the CXM application portfolio

2.3.8 30 minutes

Input

• Strategic CXM requirements (outputs of Activities 2.1.5, 2.1.6, and 2.2.2)

Output

• Aggregated strategic CXM requirements
• CXM Strategy Stakeholder Presentation

Materials

• Whiteboard
• Markers

Participants

• Project Team

Instructions

1. Aggregate strategic CXM requirements that have been gathered thus far in Activities 2.1.5, 2.1.6, and 2.2.2, 2.3.5, and 2.3.7.
2. Identify and rectify any obvious gaps in the existing set of strategic CXM requirements. To do so, consider the overall corporate and CXM strategy: are there any objectives that have not been addressed in the requirements gathering process?
3. De-duplicate the list. Prioritize the aggregated/augmented list of CXM requirements as “high/critical,” “medium/important,” or “low/desirable.” This will help manage the relative importance and urgency of different requirements to itemize respective initiatives, resources, and the time in which they need to be addressed. In completing the prioritization of requirements, consider the following:

• Requirements prioritization must be completed in collaboration with all key stakeholders (across the business and IT). Stakeholders must ask themselves:
  • What are the consequences to the business objectives if this requirement is omitted?
  • Is there an existing system or manual process/workaround that could compensate for it?
  • What business risk is being introduced if a particular requirement cannot be implemented right away?

Info-Tech Insight

Strategic CXM requirements will be used to prioritize specific initiatives for CXM technology enablement and application rollout. Ensure that IT, the business, and executive management are all aligned on a consistent and agreed upon set of initiatives.

Burberry digitizes the retail CX with real-time computing to bring consumers back to the physical storefront

CASE STUDY

Industry Consumer Goods, Clothing

Source Retail Congress, 2017

Burberry London

Situation

Internally, Burberry invested in organizational alignment and sales force brand engagement. The more the sales associate knew about the brand engagement and technology-enabled strategy, the better the store’s performance. Before the efforts went to building relationships with customers, Burberry built engagement with employees.

Burberry embraced “omnichannel,” the hottest buzzword in retailing to provide consumers the most immersive and intuitive brand experience within the store.

Technology Strategy

RFID tags were attached to products to trigger interactive videos on the store’s screens in the common areas or in a fitting room. Consumers are to have instant access to relevant product combinations, ranging from craftsmanship information to catwalk looks. This is equivalent to the rich, immediate information consumers have grown to expect from the online shopping experience.

Another layer of Burberry’s added capabilities includes in-memory-based analytics to gather and analyze data in real-time to better understand customers’ desires. Burberry builds customer profiles based on what items the shoppers try on from the RFID-tagged garments. Although this requires customer privacy consent, customers are willing to provide personal information to trusted brands.

This program, called “Customer 360,” assisted sales associates in providing data-driven shopping experiences that invite customers to digitally share their buying history and preferences via their tablet devices. As the data is stored in Burberry’s customer data warehouse and accessed through an application such as CRM, it is able to arm sales associates with personal fashion advice on the spot.

Lastly, the customer data warehouse/CRM application is linked to Burberry’s ERP system and other custom applications in a cloud environment to achieve real-time inventory visibility and fulfillment.

Burberry digitizes the retail CX with real-time computing to bring consumers back to the physical storefront (cont'd)

CASE STUDY

Industry Consumer Goods, Clothing

Source Retail Congress, 2017

Burberry London

Situation

Internally, Burberry invested in organizational alignment and sales force brand engagement. The more the sales associate knew about the brand engagement and technology-enabled strategy, the better the store’s performance. Before the efforts went to building relationships with customers, Burberry built engagement with employees.

Burberry embraced “omnichannel,” the hottest buzzword in retailing to provide consumers the most immersive and intuitive brand experience within the store.

The Results

Burberry achieved one of the most personalized retail shopping experiences. Immediate personal fashion advice using customer data is only one component of the experience. Not only are historic purchases and preference data analyzed, a customer’s social media posts and fashion industry trend data is proactively incorporated into the interactions between the sales associate and the customer.

Burberry achieved CEO Angela Ahrendts’ vision of “Burberry World,” in which the brand experience is seamlessly integrated across channels, devices, retail locations, products, and services.

The organizational alignment between Sales, Marketing, and IT empowered employees to bring the Burberry brand to life in unique ways that customers appreciated and were willing to advocate.

Burberry is now one of the most beloved and valuable luxury brands in the world. The brand tripled sales in five years, became one of the leading voices on trends, fashion, music, and beauty while redefining what top-tier customer experience should be both digitally and physically.

Leverage both core CRM suites and point solutions to create a comprehensive CXM application portfolio

The debate between best-of-breed point solutions versus comprehensive CRM suites is ongoing. There is no single best answer. In most cases, an effective portfolio will include both types of solutions.

• When the CRM market first evolved, vendors took a heavy “module-centric” approach – offering basic suites with the option to add a number of individual modules. Over time, vendors began to offer suites with a high degree of out-of-the-box functionality. The market has now witnessed the rise of powerful point solutions for the individual business domains.
• Point solutions augment, rather than supplant, the functionality of a CRM suite in the mid-market to large enterprise context. Point solutions do not offer the necessary spectrum of functionality to take the place of a unified CRM suite.
• Point solutions enhance aspects of CRM. For example, most CRM vendors have yet to provide truly impressive social media capabilities. An organization seeking to dominate the social space should consider purchasing a social media management platform to address this deficit in their CRM ecosystem.

Customer Relationship Management (CRM)

Social Media Management Platform (SMMP)

Field Sales/Service Automation (FSA)

Marketing Management Suites

Sales Force Automation

Email Marketing Tools

Lead Management Automation (LMA)

Customer Service Management Suites

Customer Intelligence Systems

Don’t adopt multiple point solutions without a genuine need: choose domains most in need of more functionality

Some may find that the capabilities of a CRM suite are not enough to meet their specific requirements: supplementing a CRM suite with a targeted point solution can get the job done. A variety of CXM point solutions are designed to enhance your business processes and improve productivity.

Sales

Sales Force Automation: Automatically generates, qualifies, tracks, and contacts leads for sales representatives, minimizing time wasted on administrative duties.

Field Sales: Allows field reps to go through the entire sales cycle (from quote to invoice) while offsite.

Sales Compensation Management: Models, analyzes, and dispenses payouts to sales representatives.

Marketing

Social Media Management Platforms (SMMP): Manage and track multiple social media services, with extensive social data analysis and insight capabilities.

Email Marketing Bureaus: Conduct email marketing campaigns and mine results to effectively target customers.

Marketing Intelligence Systems: Perform in-depth searches on various data sources to create predictive models.

Service

Customer Service Management (CSM): Manages the customer support lifecycle with a comprehensive array of tools, usually above and beyond what’s in a CRM suite.

Customer Service Knowledge Management (CSKM): Advanced knowledgebase and resolution tools.

Field Service Automation (FSA): Manages customer support tickets, schedules work orders, tracks inventory and fleets, all on the go.

Info-Tech Insight

CRM and point solution integration is critical. A best-of-breed product that poorly integrates with your CRM suite compromises the value generated by the combined solution, such as a 360-degree customer view. Challenge point solution vendors to demonstrate integration capabilities with CRM packages.

Refer to your use cases to decide whether to add a dedicated point solution alongside your CRM suite

Know your end state and what kind of tool will get you there. Refer to your strategic requirements to evaluate CRM and point solution feature sets.

Standalone CRM Suite

Sales Conditions: Need selling and lead management capabilities for agents to perform the sales process, along with sales dashboards and statistics.

Marketing or Communication Conditions: Need basic campaign management and ability to refresh contact records with information from social networks.

Member Service Conditions: Need to keep basic customer records with multiple fields per record and basic channels such as email and telephony.

Add a Best-of-Breed or Point Solution

Environmental Conditions: An extensive customer base with many different interactions per customer along with industry specific or “niche” needs. Point solutions will benefit firms with deep needs in specific feature areas (e.g. social media or field service).

Sales Conditions: Lengthy sales process and account management requirements for assessing and managing opportunities – in a technically complex sales process.

Marketing Conditions: Need social media functionality for monitoring and social property management.

Customer Service Conditions: Need complex multi-channel service processes and/or need for best-of-breed knowledgebase and service content management.

Info-Tech Insight

The volume and complexity of both customers and interactions have a direct effect on when to employ just a CRM suite and when to supplement with a point solution. Check to see if your CRM suite can perform a specific business requirement before deciding to evaluate potential point solutions.

Use Info-Tech’s CXM Portfolio Designer to create an inventory of high-value customer interaction applications

2.3.9 CXM Portfolio Designer

The CXM Portfolio Designer features a set of questions geared toward understanding your needs for marketing, sales, and customer service enablement.

These results are scored and used to suggest a comprehensive solution-level set of enterprise applications for CXM that can drive your application portfolio and help you make investment decisions in different areas such as CRM, marketing management, and customer intelligence.

Sections of the tool:

1. Introduction
2. Customer Experience Management Questionnaire
3. Business Unit Recommendations
4. Enterprise-Level Recommendations

INFO-TECH DELIVERABLE

Understand the art of the possible and how emerging trends will affect your application portfolio (1)

Cloud

• The emergence and maturation of cloud technologies has broken down the barriers of software adoption.
• Cloud has enabled easy-to-implement distributed sales centers for enterprises with global or highly fragmented workforces.
• Cloud offers the agility, scalability, and flexibility needed to accommodate dynamic, evolving customer requirements while minimizing resourcing strain on IT and sales organizations.
• It is now easier for small to medium enterprises to acquire and implement advanced sales capabilities to compete against larger competitors in a business environment where the need for business agility is key.
• Although cost and resource reduction is a prominent view of the impact of cloud computing, it is also seen as an agile way to innovate and deliver a product/service experience that customers are looking for – the key to competitive differentiation.

Mobile

• Smartphones and other mobile devices were adopted faster than the worldwide web in the late 1990s, and the business and sales implications of widespread adoption cannot be ignored – mobile is changing how businesses operate.
  • Accenture’s Mobility Research Report states that 87% of companies in the study have been guided by a formal mobility strategy – either one that spans the enterprise or for specific business functions.
• Mobile is now the first point of interaction with businesses. With this trend, gaining visibility into customer insights with mobile analytics is a top priority for organizations.
• Enterprises need to develop and optimize mobile experiences for internal salespeople and customers alike as part of their sales strategy – use mobile to enable a competitive, differentiated sales force.
• The use of mobile platforms by sales managers is becoming a norm. Sales enablement suites should support real-time performance metrics on mobile dashboards.

Understand the art of the possible and how emerging trends will affect your application portfolio (2)

Social

• The rise of social networking brought customers together. Customers are now conversing with each other over a wide range of community channels that businesses neither own nor control.
  • The Power Shift: The use of social channels empowered customers to engage in real-time, unstructured conversations for the purpose of product/service evaluations. Those who are active in social environments come to wield considerable influence over the buying decisions of other prospects and customers.
• Organizations need to identify the influencers and strategically engage them as well as developing an active presence in social communities that lead to sales.
• Social media does have an impact on sales, both B2C and B2B. A study conducted in 2012 by Social Centered Selling states that 72.6% of sales people using social media as part of their sales process outperformed their peers and exceeded their quota 23% more often (see charts at right).

(Social Centered Learning, n.d.)

Understand the art of the possible and how emerging trends will affect your application portfolio (3)

Internet of Things

• Definition: The Internet of Things (IoT) is the network of physical objects accessed through the internet. These objects contain embedded technology to interact with internal states or the external environment.
• Why is this interesting?
  • IoT will make it possible for everybody and everything to be connected at all times, processing information in real time. The result will be new ways of making business and sales decisions supported by the availability of information.
  • With ubiquitous connectivity, the current product design-centric view of consumers is changing to one of experience design that aims to characterize the customer relationship with a series of integrated interaction touchpoints.
  • The above change contributes to the shift in focus from experience and will mean further acceleration of the convergence of customer-centric business functions. IoT will blur the lines between marketing, sales, and customer service.
  • Products or systems linked to products are capable of self-operating, learning, updating, and correcting by analyzing real-time data.
  • Take for example, an inventory scale in a large warehouse connected to the company’s supply chain management (SCM) system. When a certain inventory weight threshold is reached due to outgoing shipments, the scale automatically sends out a purchase requisition to restock inventory levels to meet upcoming demand.
• The IoT will eventually begin to transform existing business processes and force organizations to fundamentally rethink how they produce, operate, and service their customers.

For categories covered by existing applications, determine the disposition for each app: grow it or cut it loose

Use the two-by-two matrix below to structure your optimal CXM application portfolio. For more help, refer to Info-Tech’s blueprint, Use Agile Application Rationalization Instead of Going Big Bang.

Integrate: The application is functionally rich, so spend time and effort integrating it with other modules by building or enhancing interfaces.

Retain: The application satisfies both functionality and integration requirements, so it should be considered for retention.

Replace/Enhance: The module offers poor functionality but is well integrated with other modules. If enhancing for functionality is easy (e.g. through configuration or custom development), consider enhancement or replace it.

Replace: The application neither offers the functionality sought nor is it integrated with other modules, and thus should be considered for replacement.

Activity: Brainstorm the art of the possible, and build and finalize the CXM application portfolio

2.3.10 1-2 hours

Input

• Process gaps identified (output of Activity 2.3.9)

Output

• CXM application portfolio
• CXM Strategy Stakeholder Presentation

Materials

• Info-Tech’s CXM Portfolio Designer
• Whiteboard
• Markers

Participants

• Project Team

Instructions

1. Review the complete list of strategic requirements identified in the preceding exercises, as well as business process maps.
2. Identify which application would link to which process (e.g. customer acquisition, customer service resolution, etc.).
3. Use Info-Tech’s CXM Portfolio Designer to create an inventory of high-value customer interaction applications.
4. Define rationalization and investment areas.
5. Document your outputs in the CXM Strategy Stakeholder Presentation Template.

Example: Brainstorming the Art of the Possible

Use Info-Tech’s comprehensive reports to make granular vendor selection decisions

Now that you have developed the CXM application portfolio and identified areas of new investment, you’re well positioned to execute specific vendor selection projects. After you have built out your initiatives roadmap in phase 3, the following reports provide in-depth vendor reviews, feature guides, and tools and templates to assist with selection and implementation.

• Select and Implement a CRM Platform
• Select and Implement a Marketing Management Suite
• Select and Implement a Customer Service Management Solution
• Select and Implement a Web Experience Management Solution
• Vendor Landscape: Social Media Management Platforms

Info-Tech Insight

Not all applications are created equally well for each use case. The vendor reports help you make informed procurement decisions by segmenting vendor capabilities among major use cases. The strategic requirements identified as part of this project should be used to select the use case that best fits your needs.

If you want additional support, have our analyst guide you through this phase as part of an Info-Tech workshop

Book a workshop with our Info-Tech analysts:

2.3.2; 2.3.3 Shortlist and map the key top-level business processes

Based on experience working with organizations in similar verticals, the facilitator will help your team map out key sample workflows for marketing, sales, and customer service.

2.3.6 Create your strategic requirements for CXM

Drawing on the preceding exercises, the facilitator will work with the team to create a comprehensive list of strategic requirements that will be used to drive technology decisions and roadmap initiatives.

2.3.10 Create and finalize the CXM application portfolio

Using the strategic requirements gathered through internal, external, and technology analysis up to this point, a facilitator will assist you in assembling a categorical technology application portfolio to support CXM.

Step 2.4: Develop Deployment Best Practices

Phase 1

1.1 Create the Project Vision

1.2 Structure the Project

Phase 2

2.1 Scan the External Environment

2.2 Assess the Current State of CXM

2.3 Create an Application Portfolio

2.4 Develop Deployment Best Practices

Phase 3

3.1 Create an Initiative Rollout Plan

3.2 Confirm and Finalize the CXM Blueprint

Activities:

• Develop a CXM integration map
• Develop a mitigation plan for poor quality customer data
• Create a framework for end-user adoption of CXM applications

Outcomes:

• CXM application portfolio integration map
• Data quality preservation plan
• End-user adoption plan

Develop an integration map to specify which applications will interface with each other

Integration is paramount: your CXM application portfolio must work as a unified face to the customer. Create an integration map to reflect a system of record and the exchange of data.

• CRM
  • ERP
  • Telephony Systems (IVR, CTI)
  • Directory Services
  • Email
  • Content Management
  • Point Solutions (SMMP, MMS)

The points of integration that you’ll need to establish must be based on the objectives and requirements that have informed the creation of the CXM application portfolio. For instance, achieving improved customer insights would necessitate a well-integrated portfolio with customer interaction point solutions, business intelligence tools, and customer data warehouses in order to draw the information necessary to build insight. To increase customer engagement, channel integration is a must (i.e. with robust links to unified communications solutions, email, and VoIP telephony systems).

Info-Tech Insight

If the CXM application portfolio is fragmented, it will be nearly impossible to build a cohesive view of the customer and deliver a consistent customer experience. Points of integration (POIs) are the junctions between the applications that make up the CXM portfolio. They are essential to creating value, particularly in customer insight-focused and omnichannel-focused deployments. Be sure to include enterprise applications that are not included in the CXM application portfolio. Popular systems to consider for POIs include billing, directory services, content management, and collaboration tools.

After identifying points of integration, profile them by business significance, complexity, and investment required

• After enumerating points of integration between the CRM platform and other CXM applications and data sources, profile them by business significance and complexity required to determine a rank-ordering of priorities.
• Points of integration that are of high business significance with low complexity are your must do’s – these are your quick wins that deliver maximum value without too much cost. This is typically the case when integrating a vendor-to-vendor solution with available native connectors.
• On the opposite end of the spectrum are your POIs that will require extensive work to deliver but offer negligible value. These are your should not do’s – typically, these are niche requests for integration that will only benefit the workflows of a small (and low priority) group of end users. Only accommodate them if you have slack time and budget built into your implementation timeline.

"Find the absolute minimum number of ‘quick wins’ – the POIs you need from day one that are necessary to keep end users happy and deliver value." – Maria Cindric, Australian Catholic University Source: Interview

Activity: Develop a CXM application integration map

2.4.1 1 hour

Input

• CXM application portfolio (output of Activity 2.3.10)

Output

• CXM application portfolio integration map
• CXM Strategy Stakeholder Presentation