Tech obstacles to CRM success can be considerable, but others include process and people concerns--read here about two companies' experiences.
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Kirstin Johnson was up against more than the average IT director. Johnson, less than a year out of college, had accepted a job in 2004 from Wallace Welch and Willingham (WWW), a Florida insurance company. That summer Johnson's boss asked her to purchase a CRM system that the company's two sales teams could work with together on leads and opportunities. Her response? "What's CRM?"
Aside from her lack of CRM knowledge, Johnson also faced one of the oldest barriers to CRM success: no user buy-in. She needed to convince a team of more than 20 salespeople--a team accustomed to using spreadsheets, card files, and financial/accounting systems--to switch to a shared data repository. To make matters worse, the company's power user and person responsible for training new salespeople asked, "Why are we changing from something that is working for me?"
This is a perfect scenario of the some of the trouble organizations can face when implementing a CRM system. Of course, the CRM tech-buying decision is an important one, but it's critical for companies to see past the technology and look at the employees who will be affected the most. "All too often companies get caught up with the vendor and the solution," says Jonathan Copulsky, a principal at Deloitte Consulting's strategy and operations practice. "Things like executive buy-in, end-user feedback, a thorough and continuous training program, and communication--they aren't just good pieces of advice. Not following them leads to a much bigger barrier other than technology, and that's unhappy employees."
Educate Yourself First
The first barrier Johnson had to overcome was her own ignorance about CRM. She began to learn the merits of CRM systems by attending an industry conference in the summer of 2004. There, the limitations of WWW's existing data-gathering methods became clearer to her: The 70-employee insurance company offers property, personal, and marine insurance for businesses in and residents of Florida. The sales team is divided into two groups, one for business insurance, and the other for residential insurance. The existing customer-data system of paper, spreadsheets, and accounting applications was limited in CRM functionality and lacked the ability to share customer information. Also, when employees left the company their customer contact information left with them. When WWW had to replace a salesperson, the new employee was advised to rummage through the predecessor's desk to find any "workable leads," Johnson says. "The goal with purchasing a CRM system was to enable salespeople to sort through leads. Also, there were many cases that involved a member from each sales team. The lack of a unified customer system inhibited this."
Safety in Numbers
Johnson also quickly identified at the conference another barrier to CRM success: a financially insecure vendor. With all the merger-and-acquisition activity in the CRM industry, one of her biggest concerns was that "while this would work now, the vendor would eventually fizzle out and there would be no support, no new updates, nothing. We would be up the river without a paddle."
What she learned at the conference helped Johnson to overcome two more common barriers to CRM success. One was limiting information resources to only CRM vendors. She needed unbiased opinions on each vendor's products and the vendor's staying power: "I went by [other customers'] comparison list on which vendor was going to be around for a long time and which was well respected." The next barrier was cost--the manageable monthly payments of the on-demand delivery model appealed to her. However, because she was not sure if WWW would eventually bring the CRM system in house, Johnson wanted a product that would give her the option to do either. She selected Sage Software's Sage CRM SalesLogix.
The implementation began in November of 2004 and the system was up and running within two months. To begin converting the sales force, she blocked salespeople from using the old financial/accounting system and forced them to run and file activity reports through SalesLogix. If the reports weren't filed through SalesLogix, they were considered not filed. "That pushed everybody to use it," Johnson says. "If there's no driving force behind it, people can ignore the new system for as long as they can."
Johnson then encountered staff resistance to the project. "We had at least eight or 10 guys [telling] me the sky is falling," she says. "They had complete doubt about whether the software would handle all the information, if information would be lost, or if the whole thing was just going to blow up.
Everybody wanted to do things their way. They were looking for SalesLogix to fail." To make matters worse, the company's biggest power user wasn't adapting the new system. He's one of the company's most successful salespeople, and was also responsible for training new recruits. He continued to use the legacy financial/accounting system, content on placing customer notes into the old system, printing out summary reports, and then having another employee shuffle through the reports so that each set of notes was in the proper sales zone for the corresponding customer. "He told me, 'You can have all the new guys change, but I'm not [going to],'" Johnson says. "That only added fuel to the fire. Other salespeople in the office started asking, 'Why do I have to use SalesLogix?'"
Johnson realized she might have a mutiny on her hands. Most sales, marketing, and customer service departments don't appreciate receiving instructions from the IT department. Johnson sidestepped this barrier by letting the sales manager address the matter. "He went into [the power user's] office and laid down the law," she says. "The power user had to buy into SalesLogix or face some potentially serious consequences." The power user began using SalesLogix, and finally saw its benefits. "It had a wonderful effect on the entire implementation," Johnson says. "He has become a champion of change. It was really important as both a power user and as a motivator/mentor to the rest of the sales team."
WWW has seen dramatic improvements thanks to Johnson's persistence. Besides streamlining its sales department, the company has created a new marketing department. "SalesLogix has consolidated business operations across the board. The staff has come around. They accept that this is an improvement over the way things were previously done."
A Final Hurdle
Johnson overcame one last barrier by realizing early on that CRM training is a continuing process. She continues to educate the sales force by distributing daily emails to the staff with updates about additional functionality. "We keep an eye on the staff to see how advanced they are on the system and send corresponding updates each week to show them how to accomplish something new. It keeps them happy," Johnson says. "In hindsight, this initiative came down to communication--communicating and working with people."
Contact Editorial Assistant Colin Beasty at cbeasty@destinationCRM.com
Common CRM Success Barriers
little or no CRM knowledge and/or experience;
the risk of implementing a vendor that isn't financially secure;
a staff that is hooked on antiquated systems that use disparate databases;
a staff lacking confidence in a chosen vendor;
a staff's power user opposed to the product;
lack of ongoing training efforts;
Understanding Partnership Perils
Vendors often partner to fill in functionality gaps, such as adding wireless capabilities to CRM applications. Occasionally, however, a vendor partnership will fall through, a failure that can create another barrier to CRM success. "Customers need to understand the fallout a failed partnership might have on their system," says Jonathan Copulsky, a principal at Deloitte Consulting's strategy and operations practice. "If they're not in the position to support that technology on their own, they might need to retool."
A case in point is Briggs Corp., supplier of professional documentation systems, training materials, and medical supplies to the healthcare industry. Briggs implemented a CRM system for the same reason most companies do--centralizing and sharing customer information. The company has more than 60,000 customers and 12,000 healthcare products on offer, and operates within several markets. "We're very much an inbound, outbound, telesales service company. We really needed a CRM system that would provide us with a complete view of the customer across sales, marketing, and service," says Doug Dostal, vice president of IT and eProducts at Briggs.
Before Dostal joined Briggs the company had implemented the J.D. Edwards One World product line to streamline and automate accounting, distribution, and manufacturing. J.D. Edwards had a partnership with Siebel Systems at the time, and it made sense to implement Siebel's CRM product line to integrate the two. The implementation of Siebel started in the fall of 2000, about the time Dostal joined the company. Briggs's sales force went live in April of 2001 on Siebel's Enterprise Edition 6.1.
Dostal could see storm clouds on the horizon shortly after the initiative's launch. J.D. Edwards was promising a new software package at the time of implementation to integrate with Siebel. That's when the two software vendors began to part ways. "We realized we weren't going to get a solid integration product out of J.D. Edwards," Dostal says. "That was the first sign that the long-term picture might be clouded using Siebel."
Despite the setback, Briggs pressed on with integrating One World and Siebel CRM, and continued making roll outs to its sales force over the next six months. As those roll outs continued, so did the price of operating and maintaining the system. At this point Dostal ran into a primary barrier to CRM success--cost. Briggs was not aware that the cost of implementing and maintaining a CRM system could be two to three times the price of the software.
Briggs ran into two other potential barriers: time and location. "We thought it would take 15 to 30 days to roll out a functionality improvement. Instead, it was taking us 30 to 60 days just to make even the most basic of changes. Plus, we're based in the middle of Iowa so Siebel design people and consultants don't exactly grow on trees out here."
By the end of 2002 Dostal was under the gun and facing executive pressure. "Both the sales committee and executives said, 'Either make Siebel work or get something else that will,'" he says. "Siebel had cost a lot of money up to that point." By the middle of 2003, the decision had been made to look for alternative solutions. Briggs would stick it out with Siebel Enterprise Edition 6.1 into 2004 while the company shopped, but by the end of 2004 a new solution would be required. "When we launched the project to reestablish our new CRM strategy, everything was on the table," Dostal says. Despite the problems encountered with Siebel, he says, "Siebel was a good product. We just didn't have the hard ROI to show for it."
Due to the expense of owning a CRM solution, Briggs wanted an on-demand system. After he looked at multiple on-demand vendors, including NetSuite, Salesforce.com, and Siebel On-Demand, Briggs chose RightNow Technologies, at the end of 2004. The implementation and roll out lasted from February to April 2005, with sales and customer service going first, followed by marketing.
Since February 2005 Briggs's IT department has continued to make small improvements to RightNow, rolling out new functionality each month. The service department has found the most success. "They love it. They've had no issues since day one," Dostal says. A big payoff for Briggs is that the cost of operating RightNow is one-fourth what it was to operate Siebel. And thanks to the service contract, Dostal has a predetermined exit strategy in three years in the event things with RightNow don't work out. "Thanks to the cost cuts, I know at least a few executives who are happy with the RightNow implementation," he says. "The other nice thing about RightNow is I can stand up in front of sales, marketing, and customer service and say we're only committed for three years. That's brought goodwill and trust amongst everybody." --C.B.
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