Companies that learn to recognize and avoid them can realize the long-promised benefits of increased productivity, greater customer satisfaction, and better employee satisfaction.
Posted May 2, 2005
It's 1999--CRM is the must-have business application, because untapped customer relationships will open the floodgates to new revenues. You plan how you'll spend the bonus you know is coming your way.
Thousands or millions of dollars later, perhaps things didn't turn out quite as hoped. What went wrong?
First-generation CRM software was anchored in vendors' expertise in a particular customer touch point, often the call center or sales force. Companies purchased extra functionality for any given touch point. Meanwhile, failed deployments made national headlines.
Today's new products might give hope to companies that waited to adopt CRM technology or replace systems.
The pitfalls of deployment
Are companies in for the same problems that plagued first-generation deployments? The pitfalls do remain: AMR Research estimated in 2004 that 28 percent of CRM implementations failed to go live, and 33 percent had significant user adoption problems. Therefore, it is critical to consider the risks and take steps to avoid them.
Poor user adoption
First-generation CRM technology often required companies to redesign business processes to accommodate software function, and customer-facing personnel had to learn entirely new applications and processes. In some cases, neither vendors nor enterprises gave enough consideration to whether products would ensure user adoption.
Product scope instead of strategy
Immature technology led IT staff to focus on product scope, instead of capabilities that enhanced operations, legacy investments, and business processes. Companies even substituted CRM software for business strategy.
Rigid software design
First-generation software forced companies to conform to its function or customize it extensively, discouraging user adoption and automating business process without optimization.
First-generation CRM products took months or years to deploy, and the frequency of new product introductions continually pushed out completion of implementation.
Visions of 360-degree customer insight evaporated when first-generation CRM proved difficult to integrate with legacy software and data. The potential for poor integration remains: Gartner Research indicates companies risk sales and marketing teams sourcing technology without the IT department ("Predicts 2005: How CRM Will Help to Grow Revenue Again," January 2005).
Fortunately, companies have more options for CRM, and IT pros can take steps to get the most from CRM technology, bridging pitfalls without digging into new ones.
Consider integration broadly
A lack of information sharing leads to poor customer service, and Gartner Research indicates up to 75 percent of the information required for effective customer support doesn't reside in one single system ("Changing the Contact Center Is a Key to Customer Intimacy," July 2003). Most companies do integrate their many systems to link silos of information. But customer-facing staff also use the phone, email, and scheduling software. When these tools aren't connected, plenty of valuable customer interaction information gets lost.
By including core infrastructure IT systems such as email, portal, and scheduling technologies in integration plans, this valuable customer information can be connected from all points of contact including systems that staff use every day, which can extract greater value from existing technology investments.
Make user adoption a priority
If personnel struggle with software systems while serving customers, poor adoption will result and lead to poor customer service and low productivity. The benefits the CRM application can deliver are lost.
Familiar email, instant messaging, and scheduling tools offer a great starting point for high adoption: A single, familiar and intuitive interface to new CRM software and existing call center technologies can encourage adoption without disruption.
Consider software lifetime
First-generation CRM software took a long time to deploy. Determine when new CRM applications will realize their potential in your company, and whether they'll sustain performance to control costs and drive ROI.
Choose for the future
Hosted CRM applications promise rapid deployment at reduced costs. But companies also need to consider how easily hosted applications will integrate with systems inside the firewall and impact operational efficiency. In addition, as successful CRM takes hold within an organization, organizations will naturally ask for more from their CRM platform, making imperative the flexibility to support future strategic initiatives.
A hosted solution may save time from an infrastructure perspective, but the location of the servers doesn't change the business and process considerations necessary for a successful implementation--or the need to address the pitfalls mentioned above.
CRM Is a Business Initiative
In the wake of a generation of failure, CRM applications have improved, but deployment risks remain. Companies that learn to recognize and avoid the pitfalls can realize the long-promised benefits of increased productivity, greater customer satisfaction, and better employee satisfaction.
About the Author
Mike Pazak is the operations director for Avanade's Microsoft Business Solution (MBS) Practice in the Americas. Mike is also an Avanade Fellow with more than 16 years of experience implementing enterprise technology and business solutions as a developer, technical architect, and program manager. Before joining Avanade, Mike was an associate partner at Accenture. He can be reached at firstname.lastname@example.org or 206-239-5600