November 2002

Relationship Intelligence: A Strategic Asset

By John Lipsey

Most businesses do not maximize the return they can derive from their client relationships. Consequently, competitors with more sophisticated relationship management capabilities are seizing opportunities. Most traditional corporations have instituted best practices to maximize the value of their customer relationships and are implementing customer relationship management (CRM) software, which is now one of the fastest–growing categories of enterprise software in the world. According to the Gartner Group, a worldwide technology research and analysis firm (www3.gartner.com), worldwide CRM software and services spending will reach $76.3 billion in 2005, up from $23 billion in 2000. Historically, however, accounting firms have yet to embrace CRM technology in large numbers. Culturally, most firms did not start examining their organizational model for managing relationships until the last five years. The systems available five years ago were aimed at midlevel sales forces and call centers, and were optimized to streamline the sales cycle for simple products. The technology focused on pipeline management, sales activity, call center support, and other functions largely irrelevant to an accounting practice.

Accountants find new clients and develop additional engagement opportunities by leveraging their network of personal and professional relationships. They often join professional, charitable, and social organizations that result in new contacts for business. By cultivating relationships and sharing vital information with other firm members, opportunities for new client acquisition and cross-servicing materialize. A CRM system’s ability to track and manage critical intelligence about firm relationships directly impacts its value to the firm.

Relationship Intelligence

As an organization grows and expands its service lines, the difficulty of managing information expands as well, because with that growth comes the increased likelihood of missed opportunities. Coordinating and communicating among large groups of people quickly becomes cumbersome and unwieldy. Ensuring the greatest possible return over the lifetime of a client relationship depends upon effectively expanding the scope of services delivered, and providing seamless communication and client delivery across practices.

Easy access to relationship intelligence is vital to ensure the overall health and development of any growing firm. Relationship intelligence reveals the unique and complex connections between people, companies, relationships, experience, and expertise, and it allows professionals to leverage who and what they know in uncovering new business opportunities. To provide real value, this knowledge asset is aggregated into a centralized system, managed, and then delivered to users wherever they are, whenever they need it.

Relationship intelligence content provides users a 360-degree view of the critical relationships that compose the core of the firm’s business. Consisting of information housed in many systems, relationship intelligence is the ultimate competitive advantage.

Data must be aggregated, managed, synthesized, and delivered in the proper context in order to be considered relationship intelligence. The process that a CRM solution must undergo to create relationship intelligence is complex and involves four essential components:

• Relationship discovery encompasses uncovering contact information, deriving relationships from data, and incorporating information into a database.
• Relationship management arrives at a single instance of a contact within the database. It provides adequate security to permit or restrict data
  sharing.
• Marketing automation provides the tools that enable users to analyze and synthesize information.
• Knowledge delivery is the ability to deliver relationship intelligence to the professional.

ROI: Tactical Versus Strategic Benefits

The return on investment (ROI) from a relationship intelligence solution will vary according to a business’ vision, leadership, culture and processes, and technology.

Knowledge of clients provides a more tailored service in the present and the future. Relationship intelligence solutions also provide the tools necessary to support bringing in new business. Relationship intelligence allows a firm to share its proprietary information more effectively with those who need it to compete for engagements. It also helps to prepare proposals and leverage past experience more efficiently. Relationship intelligence provides marketing auto-mation and data-mining capabilities. They enable firm marketers to conduct marketing, campaigns, seminars, and proposals more efficiently. This reduces overhead costs and increases ROI.