Lack of Guidance
Companies would never construct their offices without a blueprint. According to Gartner, however, more than 60 percent of companies that have implemented CRM did not have mutually agreed upon goals for their projects prior to the installation. Like a building without a bearing wall, a CRM initiative without goals will collapse.
The project leader must start by crafting a valid business case for CRM before selecting a vendor, upgrading software, or launching a new project. Assemble a cross-functional team to determine specific, measurable goals for the initiative. Areas to consider include automating processes that will improve user productivity and boost customer satisfaction, streamlining marketing and sales processes, giving customer-facing employees access to a 360-degree view of customer information, and supporting contact center agents with the tools to cross-sell and upsell.
After deciding on a project, create a phased implementation plan. Conduct smaller, more manageable implementations that can be completed within 30, 60, or 90 days. "It's about getting a quick return on investment," says Benjamin Holtz, president and CEO of Green Beacon, a mid-market CRM consultant, in Watertown, MA. Smaller projects also enable customers to change things as they go. Holtz compares it to home remodeling: "When you remodel a house, once you do the kitchen you might decide you want to do something different with the living room."
Jim Rubin, CFO of Tripos, which provides computational solutions for drug discovery research, had never been a believer in creating a static business case. His experiences in software systems implementations taught him that a static business plan can pigeonhole an organization into an undesirable situation, he says. Yet, when his CRM consultant convinced him of the benefits of writing a business case at the outset of a CRM project, he gave it a shot. The results changed his view on the matter: "Doing [the CRM implementation] in stages and demonstrating the benefits to each stage is critical to the success," Rubin says.
Today there is no killer application that solves all integration problems. Most large-scale implementations require some customization. This may lead to problems that put vendors and consultants at odds with customers.
Many vendors and consultants maintain that most customers expect integration to happen like plugging a light fixture into a socket and flipping a switch, when in fact it is an evolutionary process. However, customers like Rick Hassman, project manager at Pella Corp., argue that integration technologies aren't there yet. "With an integrated system there are always inconsistencies between the separate applications," he says. As Hassman discovered, employing a vendor's consultant to help with the integration can smooth the process.
The biggest problem for Pella, a $900 million manufacturer of windows and doors, in Pella, IA, was in the call center. Specifically, telephone calls and computer screen pops were not in sync. Using the call center solution within the Oracle CRM suite 11.5, Hassman expected each customer telephone call to instantly initiate a screen pop on agents' computers, so the agents would have all the customer information in front of them when they say hello. "The overall flow wasn't done as well as it should have been," Hassman says. "Sometimes the call would prompt the wrong data, or the screen didn't pop up fast enough, or it would wipe out your screen or data from line one when picking up line two. So getting all the parts and pieces in sync was more complicated than we thought."
Initially there were three Deloitte consultants and two Pella team leaders working on the call center integration, which took nine months to roll out. In retrospect, Hassman says, he would rather have had two Deloitte consultants and one Oracle consultant working with Pella from the beginning, because of the complexity of the phone and call routing system. "We now have an Oracle consultant whose expertise is a level higher than what we had. We feel comfortable with where he is taking us," Hassman says.
For this reason, Hassman says, it pays to work with a vendor consultant on large, complex installations. Not only are they extremely proficient in their own technology, they often include fixes to your problems in their company's next software upgrade.
No Long-Term Strategy
Believing that CRM is a technology solution is still a tremendous obstacle for far too many firms. The fact remains that CRM is a business process change, often supported by technology. But there continues to be a tendency to look to technology as a sort of business panacea, says Jonathan Copulsky, global lead partner for customer and channel-strategy practice at Deloitte Consulting. Business leaders who do so are often disillusioned by CRM, because they don't align their business processes to meet specific goals. Issues like job roles and responsibilities, accountability, and incentives are required for CRM to succeed.
A call center manager, for example, may want his agents to switch from general, undifferentiated roles handling all sorts of calls to specialists. This transition from a homogeneous environment to a heterogeneous one requires a skills-based routing solution. But before implementing the technology, the manager must determine the various job qualifications for the different support tiers. He must also determine the training and career path options for customer service reps in these new roles.
For a long-term business process change to be effective, Copulsky recommends having members of the CRM implementation team spend time in the field to determine how the CRM system will help employees. "Executives at Land's End, for example, work on the production line during the busy season. As a result, they have a much more intuitive feel for what employees do," Copulsky says.
This level of evaluation helped Land's End realize an annual 22 percent ROI/savings on the total cost of its marketing initiative project areas, including costs of in-house labor, upgrades to the Affinium software it uses, and catalog and marketing expenses, according to Steph Mohlmann, director of marketing operations for Land's End.
An often-overlooked, yet insidious hurdle is dirty data, or inaccurate and old information. Data is the lifeblood of a CRM system, and incorrect numbers, spelling mistakes, and outdated contact information can infect that system if it is left unchecked.
According to Ken Chow, vice president of marketing and product management at Group 1 Software, it is not uncommon to have 25 to 40 percent data duplication rates. There are two main reasons for this: Customer touch points have multiplied, and the speed at which people can enter data has increased thanks to the Internet.
Dirty data can not only cost companies millions in wasted direct marketing dollars, but it can severely hinder CRM adoption rates. Group 1 client RSA Securities, for example, could not convince its sales staff to trust the shared data in the Siebel CRM solution, because the reps found so many inaccuracies and duplicate entries in the data. So instead they used their own Microsoft Excel or ACT! databases. To solve the problem RSA implemented Group 1's Siebel data quality connector, which inspected the data for duplications and inconsistencies, then reconciled the data. "Once [RSA] did that it went from a single-digit adoption rate to a 98 percent adoption rate," Chow says.
Lack of Employee Buy-In
It's natural to resist change. Top salespeople may ask, for example, Why should we be forced to change our working habits, when those very habits helped us become so successful? On the other hand, poorer performers may fear the outcome of their managers having a window into their bad habits. Failure to convince these and other employees of the benefits of CRM often results in passive resistance and low employee-adoption rates.
Effectively communicating the benefits of CRM to users should bolster their confidence in and comfort levels with the new system. It's crucial to "sell" those benefits internally both before and during a CRM initiative. Companies must not only create buy-in, but must also maintain users' enthusiasm.
"We've done a series of visioning exercises, what we call A Day In the Life Of, where we take groups of employees and identify what their lives look like today and what their lives will look like in the future [after the CRM implementation]," Deloitte's Copulsky says. These visioning exercises, he says, helped Lands' End improve its best-in-class customer support by identifying how call center agents can make alternative product suggestions when an item is out of stock.
Driven by fear of the unknown, resistance also spills into the managerial level in the form of avoidance, or lack of accountability. There is an unwillingness in top management to assign accountability to project leaders, Copulsky says. It's what he calls the nobody syndrome. But CRM success depends on that accountability. "We have tended to find a high correlation between lack of success and lack of accountability," Copulsky adds.
The fact is, if accountability is not taken at the upper most managerial level, negligence there will only breed negligence among those who should be using the system, but aren't, making failure inevitable.
Copulsky suggests baking accountability into managers' bonus options or other compensation packages. One of the reasons for Hewlett-Packard's recently successful company-wide transition to Siebel 7 is that there was some financial compensation for some executives associated with meeting their CRM milestone deliverables, according to Mike Overly, HP's vice president of marketing.
Copulsky also suggests giving project ownership to one individual. Often those responsible for the success of a CRM strategy are a team of business and IT project managers. The better approach, Copulsky says, is for organizations to have a single project manager, preferably a senior business executive who owns both pieces of the project, and can then drive change on the business and IT side of the company.
Contact Senior Editor David Myron at dmyron@destinationCRM.com