The Goldilocks Syndrome

Anyone who has gone through one CRM rollout knows what a complicated undertaking it can be. But imagine a company implementing CRM a second time, or even a third. In fact, organizations completing three rollouts are so common that we call the experience the Goldilocks Syndrome, taking our cue from the children's story, Goldilocks and the Three Bears: The first time the system was too big, the second time too small, and finally the third time is just right. Along the way these companies learn a variety of valuable lessons, not just about what to do, but also about what not to do. The common thread, however, is a deep commitment to the idea that CRM can help transform their businesses. Following are three stories of how perseverance led to CRM success--and that's no fairy tale. Buy-in Is Key Four years and four attempts at CRM led Avnet to a system that delivers measurable ROI. Avnet's path to the just-right solution was not based on a string of failures, but rather on a mixture of the wrong tools for the wrong people, successful departmental solutions that were not scalable enough, and an acquisition that required solutions to be merged. The first attempt for Avnet, a distributor of electromechanical components, semiconductors, and embedded systems, was a disaster. CRM project leader Dave Stuttard, vice president of application solutions for Avnet, was not around for this first attempt at CRM. But based on what others have told him it was a "complete failure due to a lack of understanding." "It was a combination of pushing the wrong tools on people and giving them no reason to use it," says Stuttard, who didn't disclose the name of the original vendor. Avnet was trying to get the sales team to adopt the solution, but it wasn't working. Less than 20 percent of the total sales force was using the product. Another completely separate group (which Stuttard also declined to name) tried an earlier release of SalesLogix, but the client/server version ended up being "overengineered and modified [by the group] so much that it was impossible to use," Stuttard says. Meanwhile, there was another implementation from an acquired company that was deployed on a Lotus Notes--based system. That system was working well, but was not scalable, according to Stuttard. Finally, after evaluating several potential solutions, the company selected an updated version of SalesLogix, because it most closely matched the needs of the company. This time Avnet Chairman and CEO Roy Vallee mandated that there be a single database with all customer records in one place. No one was allowed to have private Rolodexes, personal spreadsheets with customer information, or customer files as they had in the past. "We learned from [the first rollout] that you need senior sponsorship, and everyone following the same mantra," Stuttard says. "There was a clear vision and a clear commitment," he adds. "We also addressed the what's-in-it-for-me factor. We had to let everyone know exactly what was in it for them. It was the only way to make them want to use the system." The main incentive for sales and marketing users was the promise of access to other valuable information, as well as use of the sale analysis query tools if they were diligent about supplying particular information and updating data when necessary. "Over time more and more people get on board, which makes having the right information in the system a huge incentive," Stuttard says. Avnet started making specific tasks like newsletters dependent on inputting the correct data. The company then created more incentives to input data by gradually rolling out the system to other departments, including the credit group and the sales group. Eight hundred of the company's 1,200 workers in the Hallmark division, which deals with storage components, are currently using the system. The company's CRM initiative is one of Avnet's top-three priorities, and includes quoting engines and Web tools. Expanding CRM is a big initiative. Avnet currently is using the CRM solution for its sales, marketing, and support departments, along with partner relationship management. The company has 19 applications running through CRM, including back office, returns, and credit and mailing subscriptions. Finding the Right Partner Dana Jiron knows all about CRM failure and success. Jiron is COO, CFO, and co-owner of Inland Empire Components (IEC), which had two CRM systems before settling on Surado CRM. The 15-year-old company is an aftermarket buyer and seller of board level components on circuit boards and for years was using pencils, faxes, and phones to deal with customer information. IEC then implemented a system based on Lotus 1-2-3 and ACT! The limitations of that system were clear early on, according to Jiron, who noted that it was cumbersome to deal with inventory, part numbers, and customers (manufacturers, subcontractors, and the government). So, the company moved to a specialized solution built by Broker.net. "Our experience was not great," Jiron says. "The systems we had were sort of weak excuses for CRM. We've dealt with two solutions that never really provided what we needed." As IEC grew in size and sophistication, it was a shock not to have a full view of the customers, according to Jiron. That's when the company thought about a custom-built solution. So IEC turned to Surado after the vendor was recommended by a friend of Jiron's at another company. Surado was able to integrate with IEC's Great Plains back-end accounting system and its QuickBooks applications. IEC worked with Surado to put its inventory online so customers can buy parts. The company also offers parts on consignment, and giving partners and buyers access to the systems makes the process much easier, Jiron says. Up to that point she says she was not sure that an off-the-shelf solution would be able to handle the integration issues her company had. However, Jiron says she quickly learned that Surado had the integration expertise that IEC needed to assure that it would not have to look for a fourth CRM solution. "We would have been stomped out as a company if we [hadn't] moved forward to change our CRM system," she says. Using Lessons Learned Gomez, a performance management company that helps financial services firms optimize their online customer experience, wanted to get a handle on its own customers. Scott Fay, Gomez vice president of sales, says the company initially selected Siebel Systems, because it was a brand name in the marketplace and many of the executives at the then startup were familiar with Siebel from some of their previous companies. "We didn't have a full strategy at the time. Later we realized that it seemed like Siebel didn't know how marketing and sales work together," Fay says. "We were not oversold on Siebel. We didn't do the research on our own needs and how complex things are. "Over the course of the first six months we had to work on the customization," Fay adds. "But to get it suitable for the sales and marketing teams it would have been too expensive to do what we wanted to do." Thus, the sales and marketing folks were not using the system and instead were relying on Excel spreadsheets. However, the benefit of using Excel was that it allowed sales and marketing to communicate with the research department. "It would have been too expensive to get the research and consulting group the extra 15 seats in Siebel," Fay says. Gomez used Siebel for about 10 months before the company started to research competitive CRM solutions, including GoldMine and SalesLogix. Gomez chose SalesLogix, because the performance management company was interested in having a strong SFA component. However, there was some internal debate late in the process of implementing SalesLogix concerning the benefits of a hosted solution. So, after just a few short weeks of using SalesLogix, Gomez decided to go with Salesforce.com. It took Gomez only three months to roll out Salesforce.com. Fay claims Salesforce.com is easier to navigate and customize, but needed far less customization than Siebel. In addition, the lower cost of the hosted solution enabled Gomez to add the 15 people from its research and consulting group. Gomez now has 35 Salesforce.com seats. To ensure that everyone used the system, Gomez tied it to the compensation system. "It was about incentives; this time it was about getting paid. If you want to get paid you have to use the system," Fay says. The most important lesson, according to Fay, is to do due diligence on the package and to make sure that all of the groups involved in using it are involved in selecting it. "That makes a huge difference, and helps make it successful." Contact Senior Editor Lisa Picarille at lpicarille@destinationCRM.com