Caring for customers on the Web

People naturally expect the best from their healthcare providers. Often, however, they are forced to accept less than stellar service from their insurance companies. But thanks to the Internet, many forward-thinking providers are better at understanding and anticipating their customers' needs.

Take Capital Blue Cross, for example. IT officials at the 2,000-employee health insurance company, based in Harrisburg, Pa., decided in January they wanted to take full advantage of the ability to reach out and touch customers more efficiently over the Web.

Ted DellaVecchia, Capital Blue Cross

"If you manage [a customer's] life cycle and provide products that meet customer needs for excellent value, they'll stay with you," says Ted DellaVecchia, senior vice president and chief information officer of Capital Blue Cross. "In our business, healthcare impacts people's lives. We're not selling toasters here. We're tying together services people can use for a reasonable cost to keep themselves healthy."

Before embracing the Internet, CBC strove to meet its customers' needs using "information based on legacy/heritage systems, which were COBOL-related applications using nonrelational systems," says DellaVecchia. "The executives responsible for customer relationships had to expend more labor to maintain those relationships than they do today." Today, CBC manages relationships with its 1.4 million central Pennsylvania customers by offering up-to-date insurance plans and services, attracting new clients, and keeping existing customers happy--all via the Web.

An Internet-enabled customer-support portal designed and implemented by DellaVecchia's team allows Web-savvy customer service agents to easily manipulate CBC's online applications using simple Internet browsers. These applications are answers to customer queries prepared by CBC's customer service organization. They are mostly information-based queries such as a claim status or the explanation of a particular benefit associated with the appropriate health plan.

AT A GLANCE: Capital Blue Cross The company: Capital Blue Cross provides health insurance for two of every five residents in central Pennsylvania and the Lehigh Valley. The 2,000-employee company, based in Harrisburg, offers a range of health care products as well as benefits administration, life, and other insurance services. The problem: How to attract new customers and retain its existing 1.4 million clients by providing cost-effective, up-to-date products and services, and enhanced customer care and support. The solution: A homegrown Internet-based front end for quick internal access to customer service-related information, plus a Web-based decision support/customer relationship management solution based on E.piphany's e.4 System. The IT infrastructure: E.piphany's e.4 System runs on a Windows NT LAN linking 50 to 100 Windows NT client workstations using Web browsers. Data resides in an Oracle 8.x database on a six-way, 440Mhz HP 9000 N-Class Enterprise Server. The homegrown customer service system runs VSAM flat files on IBM OS 390/CICS transaction processors on the back end, linked by NT middleware to NT clients. Capital Blue Cross plans eventually to implement Oracle's financial application suite on the back end of the decision-support environment, which will link to E.piphany's interfaces on the front end and take advantage of the integrated relationships of the data elements.

CBC's focus on nurturing existing and potential purchasers via Web-enabled customer relationship management (CRM) systems is hardly unique. All types and sizes of businesses are beginning to discover the importance of adding the Internet's direct connection to the traditional mix of telephone and fax methods by which companies interact with their customers.

"The Web is becoming critical as part of an overall CRM operation," says Howard Koenig, a corporate vice president with Automatic Data Processing (ADP) Inc., a $5 billion supplier of payroll and human resources services in Roseland, N.J. "Customers want to interact with you in different ways--telephone, voice, paper, and physically. The Web is one channel of many." ADP employs Clarify Inc.'s eFrontOffice Web-based CRM software to customize customer interactions.

Today's hottest enterprise application field

Businesses automate customer service operations to cut the costs of sales, boost revenue, and collect better customer data to improve support and increase selling opportunities. CRM market leader Siebel Systems Inc., as well as Clarify, Vantive Corp., and a slew of others sell software that helps companies govern marketing, service, and salesforce departments, as well as track customer sales histories and call center data.

With analysts calling CRM today's hottest enterprise application field, enterprise resource planning (ERP) vendors such as Oracle Corp., PeopleSoft Inc., and SAP AG are targeting the market, with good reason--CRM sales are booming. AMR Research Inc., a Boston-based market-research firm forecasts that customer support license, maintenance, and service revenues will jump 58% annually, from $1.2 billion in 1997 to $11.5 billion in 2002.

CRM Sales are booming License revenue is expected to grow to $7.5B by 2002, and suppliers are flooding the market with new products. Source: AMR Research, 1998

Increasingly, enterprise customer-care solutions involve the Internet. Some 57% of 100 customer-care executives at large companies already use the Web for customer support, according to a recent survey by market researcher Yankee Group Inc. in Boston. In addition, 55% of the other companies plan to use the Web for support during the next 18 months, says Robert Mirani, CRM strategies research director with the Yankee Group.

To that end, suppliers are flooding the market with new products. In addition to Web-enabled software from Clarify, Oracle, Siebel, and Vantive, several smaller companies--including Onyx Software Corp. and startup Octane Software Inc.--offer CRM functionality through fax, telephone, e-mail, and Web-based self-service applications. The aim is to provide an integrated solution that lets companies keep track of customers through all contact points, and allow customers to enter orders, tap into account status, and request service online.

But the benefits don't come cheap. High-end CRM software such as Siebel 99 "can cost several hundred thousand dollars for a customized, multi-user system with 100 installations," says Barton Goldenberg, president of Information Systems Marketing Inc., a research firm in Bethesda, Md. An "enhanced contact management package" like Multiactive Software Inc.'s Maximizer can run about $17,500 for 50 users, he says.