Standing on All Fours
CRM is not a three-legged stool; it's a four-legged chair.
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For the last several years I have used the analogy of a three-legged stool when describing the formula for success for a CRM initiative. The legs represented a clear understanding of the processes, the use of an extensible technological architecture and full support of the people that will ultimately use the system.

All three legs--process, technology and people--need to be solid, or you will fall down the first time you try to use the stool.

As we started conducting this year's annual CRM marketplace survey, in talking to project teams about the biggest challenges they faced in implementing their solutions, it became clear that we were not paying enough attention to one additional critical success factor. The stool concept did not take into consideration a huge problem that many companies are encountering today: populating their systems with accurate information.

As CRM systems have grown in complexity over the last year, encompassing sales, marketing, support, manufacturing, finance and more, the complexity of the data repositories these systems are built on has also increased. In order to get the full benefit of CRM, you need to be able to pull data from a wide variety of sources, both inside and outside your company, and create a single view of the customer from all this information.

Failure to do this correctly can be a project-killer. You can have the best processes in the world, supported by the latest and greatest technology, which you give to users who really want to make the system work, but if the data the applications use is flawed, the whole project falls apart. Numerous companies have shared with us that when users lose confidence in the validity of the information they get from their CRM application, they just stop using it.

Adding Another Leg
The stool concept is not broad enough, so we need to add another leg to create the image of a chair when we think about CRM project success. As an executive sponsor for a CRM initiative, how do you go about ensuring that this fourth leg--data--is also solid? In interviews with a number of companies who did the task of data management right (and wrong), a three-phased approach emerged that I would like to share.

The first step is data identification. Your team really needs to understand what the users will be doing with the CRM system, and then identify exactly what data they will need to perform those tasks. With this shopping list of information requirements in hand, you then have to go across the enterprise and find out where in your company this data resides. When you have identified all the sources, you need to pull together all the data elements into a single format.

Once this is accomplished, move to step two, which is data scrubbing. As you start to analyze all the collected data, you will undoubtedly find files that are out of sync with each other. Your team will need to establish business rules for resolving data clashes and conflicts. This can end up being a task worthy of Sherlock Holmes, as you try to confirm the validity of the data, and build a single customer master file for your CRM system to utilize.

If you successfully complete step two, you are still far from done. Time will start to take a toll on your data the instant you complete the previous steps, so step three becomes continually reanalyzing and refreshing the data to keep it current. You will need to budget resources for this task for the life of your CRM application.

High Cost of Failure
If this sounds like an expensive undertaking, it can be. But the cost of not doing it is significantly higher. The companies we interviewed who reported even minor data management problems can have significant price tags. If marketing files are out of sync, you can incur higher direct mail costs as you send collateral and offers to non-existing prospects. If sales files become corrupted, you can have serious morale problems by delaying commission payments or paying the wrong amounts. If support records are incorrect, you can inadvertently provide service to a customer who has not paid for it, or enrage a good customer because you cannot verify that he has paid.

And if the data management problem really gets out of hand, you are ultimately looking at a huge cost. If your sales, marketing and support people stop using the systems because of a lack of confidence in the accuracy of the information, you will potentially be out the millions of dollars you paid to get the system into their hands to begin with.

This issue is critical enough that you need to make sure your team adequately addresses it in its project plans. If you decide to tackle the challenge yourself, then make sure you budget for the staff and resources you need to do the job right. If you don't feel confident that you can manage the task on your own, look for outside support.

Some of the CRM vendors are realizing that they need to help solve this problem if their products are going to be implemented successfully. For example, Dendrite International, which focuses on delivering CRM solutions to pharmaceutical firms, acquired Analytika, a data management firm, to help tackle the data management task for their customers. You should check with your software supplier and see what types of data management services it offers.

Another option is to contract with a firm specializing in data management. Dun & Bradstreet, for example, offers a data rationalization service that not only handles all the data analysis, cleansing and refreshing tasks, but also provides additional information services that allow you to leverage its marketplace databases to enhance the content of your own corporate databases. Dun & Bradstreet also has existing relationships with some of the CRM software vendors, making the task of integrating the data and the applications much easier.

Additionally, if you are using a systems integrator to help out with your project, you may want to ask them about the data management services they provide. Most of the major players have developed a group of resources to deal with this task.

Regardless of how you tackle the issue, the job must get done or your project can be in serious jeopardy. When I worked for IBM years ago, we had an old saying about computer files--GIGO--garbage in, garbage out. With CRM it is more like GINO--garbage in, nothing out.

The users will simply refuse to use the system. So our advice is make sure you build your CRM project on four solid legs to ensure you realize the full potential ROI from your efforts.

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