First, What is CRM?
Customer Relationship Management (CRM) is comprised of complementary layers:
• It's a philosophy of caring for and nurturing your customers.
• It's the organization and roles that deliver fulfillment of customer needs.
• It's a strategy for growth based on predicting and fulfilling customer needs.
• It's a set of best-practice business processes that support the strategy.
• It's the dialog and behavior of all of your customer-facing personnel.
• It's a support application within the information systems infrastructure.
• It's the channels and information technologies that enable customer communications.
• It's the enterprise-wide information and data that provide you with the knowledge of the habits, preferences, and concerns of your customers.
Figure 1. Five steps for Growth
When these components are successfully combined in a business operation, great synergy is introduced into the management of customer relationships. As depicted in Figure 1, the end result is the progression through a series of steps that leads to enhanced customer enthusiasm for your enterprise, products, and services. This, in turn, brings increased sales and profitability.
Enterprises that do not focus on developing customer relationships and have neither the processes, support infrastructure, nor behaviors in place to do so, ultimately suffer from disenchanted customers who will eventually purchase their products and services from competitors who do care about them. Customers across the spectrum (from "terrorists" to "enthusiasts" in Figure 1) will spread the word throughout your market sectors regarding your attitude and behavior towards them. This will have a direct effect (positive or negative) on your market reputation, attractiveness to prospective customers, and future growth.
Doing nothing is not an option! CRM has to be a fundamental building block of your business operations and support infrastructure. So how do you go about selecting and implementing the CRM infrastructure?
CRM: Integrated or Best of Breed?
If you had an unlimited budget for a CRM solution, how would you spend it? On the best software suite available from a single vendor, or on best-of-breed applications from multiple vendors that you would integrate to form one CRM support system? The scope of these choices across departments including the call center, sales, support, and service is indicated in Figure 2.
First, let's review the strengths and weaknesses of the single CRM application as summarized in Table 1, below (note that for each strength identified, the corresponding weakness is indicated).
Table 1. Single CRM Application
Simplicity of choice
standard solution across the business
Lack of modular flexibility/upgrades
Lack of specialist expertise
Out-of-the-box CRM functionality
Difficult to change/customize
Assumes standard processes
Not necessarily best-practice processes
Mobile communications technology
Locked into communications vendor/products
Incorporates rules-based scheduling
Inefficient service schedules
The issue here seems to be that one size does not fit all enterprises, in that out-of-the-box functionality does not fulfill their strategic needs or business operations. Now, let's look at the challenge of integrating disparate, but best-of-breed applications as summarized in Table 2.
Table 2. Integrating Best-of-Breed Solutions
"Best fit" for all customer service functions
Time to evaluate/select
Modules can change with the business
Time to upgrade
Multiple, specialist vendors
Time to evaluate/select
Business mapping enables best practices
Time to map processes
standard interfaces (APIs) available
Time to integrate
Choice of communications channels
Time to evaluate/select
Can integrate intelligent scheduling
Time to integrate
The key issues here are the time and cost related to selecting and integrating best-of-breed solutions versus the relatively poor fit and inflexibility of single CRM applications. More subtle weaknesses are the key risks involved in trying to force an out-of-the box CRM application into the business, together with the missed opportunities for introducing best-practice processes and lower-cost service delivery schedules.
CRM: Poll and Industry Trends
So what is happening in the global CRM market? Are enterprises going with a single CRM application or choosing to integrate best-of-breed? That's a question that destinationCRM.com has been asking the industry. This U.S. based publisher recently conducted a poll on their Web site, which produced results that may surprise you. They asked those polled to assume an unlimited budget for CRM--figuring that a vast majority of respondents would eschew the complexity of tying together various pieces of software for the relative ease of architecting a solution with software from one vendor whose separate parts all speak the same language. Matt Purdue, director of content, reported the following results:
• 42% were in favor of integrating best-of-breed applications.
• 38% opted for a single CRM package.
• 20% responded with "don't know" or chose "other solution."
These results suggested a very important conclusion to Matt. "No CRM vendor has yet developed a solution that fits the diverse requirements of a 21st century enterprise," he commented. "Despite the vendors' best attempts at throwing around buzzwords like end-to-end and fully integrated, many of our respondents cannot find or do not want such a solution.
"Despite the challenges and costs inherent in integrating best-of-breed software to create a closed-loop CRM solution, more than four out of 10 readers are willing to assume these risks to craft a system that, I would hope, can be more closely aligned with company strategy and customized to fit the unique needs of various end-users than a suite of products from one vendor," he added.
Matt's Internet poll, although not a fully scientific survey, did indicate results that are consistent with the findings and conclusions discussed on the European seminar and conference circuits (i.e., integrating best-of-breed CRM components can fit businesses better than implementing single CRM applications).
CRM: strategy and Implementation
CRM is a combination of organization, processes, and roles supported by systems and technologies. Many organizations make the mistake of choosing the systems and technologies and then trying to adapt their business operations around the result--usually with serious consequences and impact on the business. It doesn't matter how efficient or inefficient your enterprise is now, it's your vision of where your enterprise needs to be positioned in its markets, how you are differentiated from competitors, and how you achieve the vision that are the drivers for success.
You could employ one of the big-five consulting firms to help you define and implement your CRM strategy, since their prior experience with other clients in implementing CRM is invaluable. However, this approach can be very expensive--as much as an extra 50% of the total CRM budget. Another alternative is to be selective and use outside services only where your own experience or skills are lacking. Regardless of which implementation approach you choose, the key steps towards implementing CRM can be divided into the following four phases.
Phase 1: Define CRM strategy and Plans
• Current Situation Analysis - Define where you are now by identifying the strengths, weaknesses, opportunities, and threats (SWOT) to the business.
• Future Situation Visioning - Conduct workshops for the management team to brainstorm and agree on where the business needs to be to achieve a competitive edge.
• Plan Transformation - Identify and plan the changes and activities needed to transform customer service operations (taking a holistic view across organization, roles, people, processes, support systems, and technologies).
• Define CRM strategy - Define the "way forward" for approval by the board of directors.
• Define CRM Business Case - Define costs, benefits, and return on investment (ROI) for board approval.
• Board Approval - Gain approval for the CRM strategy and budget.
Phase 2: Define Requirements and Evaluate Solutions
• Define CRM Requirements - Document the vision along with the agreed upon functional and technical requirements for all customer support functions in the enterprise.
• Determine Constraints - Determine limits including financial, time scale, resources, hardware (UNIX or NT), channels (voice/data/Internet/e-mail), and CRM application (single application versus integrated best-of-breed applications and technologies).
• Review CRM Market - Using your key requirements and constraints, research potential vendors of CRM applications and technologies.
• Invitation for Bids - Invite selected vendors to document their responses and level-of-fit to your CRM requirements with outline plans and costs.
• structured Evaluation Process (SEP) - Profile the relative level-of-fit and cost of vendor solutions, followed by reference site visits, due diligence, and final selection of the best-fit solution(s) and vendor(s).
• Management Approval - Gain management approval of the vendor-proposed solutions and costs together with agreed upon terms, conditions, resources, and development/integration plans.
• Formal Contracts/Orders - Complete the necessary paperwork for formal acquisition of the solution(s).
Phase 3: Development and Integration
• Business Mapping Workshops - involve customer service personnel to map "best practice" processes and customize the CRM application(s).
• Interface Workshops - involve IT staff in defining interfaces between the CRM applications and communications technologies (including mobile).
• Technical Workshops - involve technical staff in the integration of all the IT components for CRM within the technical infrastructure.
• Integrated Testing - ensures end-to-end effectiveness of CRM support applications and technical components.
Phase 4: Implementation
• Data Conversion - and file setup for the live CRM system.
• Education and Training - of all customer service personnel.
• Pilot Implementation - across a discrete area of the business.
• Full Implementation - across all customer service functions and data.
• Post-Implementation Review - to ensure that the objectives and business benefits of CRM have been delivered and meet expectations.
The typical elapsed times for phases 1 and 2 will vary according to your business environment, scope of transformation, scale of operation, and responsiveness of the management team in approving the CRM strategy, business case, and requirements. The typical elapsed times for phases 3 and 4 lie in the range of 6 to 12 months, varying according to the scope and scale of the implementation and the number of best-of-breed applications to be integrated.
CRM: Conclusions and Recommendations
- Win the commitment of your board of directors - totally dedicated, "hearts-and-minds" commitment is required in addition to funding for CRM to be successful. This needs to be extended downwards and across all customer service and project personnel.
- Choose best-of-breed applications and integrate them - it may take a little extra time to evaluate, select, and integrate the CRM components, but this will provide the best fit to the operational vision and business requirements. It will also allow the introduction of best-practice processes and will provide a more flexible, modular infrastructure that can change as the business grows.
- Don't change/re-engineer everything across the enterprise - identify where the real "pain" and root causes of problems are in current operations and eliminate them.
- Re-engineer for speed and ROI - processes and work-flows should be streamlined to eliminate extraneous activities and unnecessary checks. This ensures that communications and transactions keep moving. If they are not moving towards fulfilling the customers' needs, then they are not contributing to responsive service or earning money for the enterprise.
- Raise awareness of intelligent scheduling - if your management team is unaware of the principles of intelligent scheduling of customer requests to field resources, then significant potential benefits may be lost. Offering time-banded appointments, meeting SLAs, and driving down the costs of service schedules while increasing productivity can dramatically benefit the bottom line.
- Consider your service personnel - ensure that the call center technologies, scripting, and support applications are friendly and easy to use (user-intuitive). If you plan for your field resources to use mobile communications, involve them in the selection process--it will ease acceptance at implementation.
- Use joint project teams - structure your CRM projects and staff them using your own personnel in addition to vendor resources. Not only will this bring more synergy into the project, but your own personnel will learn new skills from these "outside" specialists.
- Pilot your CRM solution before full implementation - your CRM system "bares the soul" of your company to your customers. Don't risk any adverse exposure or failures during implementation without reviewing the pilot to detect any flaws or service problems.
- Review the final CRM implementation - don't just breathe a sigh of relief when the CRM infrastructure is implemented and working--this is when the difficult work starts! Monitoring service performance, tuning the CRM applications, measuring the business benefits, and following up with a continuous improvement program are all activities that will contribute to maintaining your competitive edge.
Good luck with your CRM program. It's hard, intensive work, but your enterprise will benefit and grow from the increased sales and profitability that developing the customer relationship brings.