When do CRM implementations become failures?
When Do CRM Implementations Become Failures?
Posted Jun 24, 2002
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While there is a lot of talk these days around failed CRM implementations.... what does that really mean? What makes a CRM deployment a failure or a success? For instance, a few months ago I was sitting in an airport and waiting for my flight, which was delayed by several hours due to weather conditions. At the table next to me was a group of about six to eight business executives discussing the implications of their company's "failed" CRM deployment. I could not help but overhear much of their conversation because their voices grew louder as they appeared to become more and more frustrated. It seemed that the group had just returned from a CRM seminar, and they were strategizing "next steps" for their own CRM initiatives. Some seemed hopeful; but others appeared to have given up. Before they left, I managed to introduce myself and asked them more about their company and its line of business, etc. I learned that they worked at a U.S.-based leading pharmaceutical company, and all members were a part of a cross-functional management team for their CRM initiative. Finally - I couldn't resist - I asked them: "What if I was able to take you back two to three years to the days before you ever purchased and implemented a CRM solution. Would you do it?" Meaning: The company could go back to doing business just as it did before it ever heard of CRM, and all their investments in time, money, and etc. would be returned. Immediately, the group of executives all jumped in and said: "Absolutely not, while we recognize that we are not using our CRM system to achieve optimal returns, we are definitely much better off than we were before." The group went on to explain that the company used a highly distributed, unstructured, and costly business process system before the initial CRM implementation. It was manually intensive and was largely paper-based. The in-house system had little - or no - automation capabilities to help sell, manage or track its products and services. The company relied on multi-part pricing and order forms that created time-consuming customer service processes. Because these processes, and the legacy systems supporting them, were complex and slow, responding to urgent customer inquiries was difficult. Fundamentally, the group of executives all agreed that while the CRM system was not perfect, it undoubtedly provided benefits, such as automating and streamlining many mundane everyday business processes. Bottom line results: Lower operational costs through the elimination of multi-part, paper-based forms and increased profits through more efficient business processes and the ability to speed the sales cycle and improve customer care processes. Yet, research shows that enterprises continue to struggle with how to offer reliable and fast sales, marketing, and support to customers without breaking the bank. If the effort is minimal, organizations risk losing valuable customers and irritating employees. While CRM still affords abundant room for improvement, the mother lode of opportunity for driving CRM performance and process efficiency lies not only with the software and service provider but also the user organization itself. Enterprises will need to overcome a number of business management and technology challenges, such as applying technology not only to data exchange, but simultaneously to address business processes that drive the flow of data. The secret is a willingness to test and redefine new business models. Companies must also be willing to invest in the necessary IT infrastructure.
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