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So Many CRM Service Providers, So Little Time
Whether your strategy is operational excellence, product innovation, or customer intimacy, CRM is essential to achieve customer satisfaction. So how do you choose?
Posted Sep 7, 2010
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With so many alternatives in the marketplace, how should your firm choose its CRM solutions and providers? The answer depends on your expectations and scope. For example, a requirement for enterprisewide integrated capabilities would lead in one direction, while a need to optimize an individual function, channel, or interaction would lead in another.

In the broadest sense, enterprise CRM can be seen as sales, service, and marketing capabilities orchestrated through the integration of transactional, operational, and analytical systems. From the customer side, the desire is for needs-based interactions regardless of the channel (inbound/outbound, online/offline, proactive/reactive).

In the narrowest sense, CRM can be seen as enabling a specific customer-focused tactic in support of existing operations.

Whether your strategy is operational excellence, product innovation, or customer intimacy, CRM is essential to achieve customer satisfaction. It's well understood that customer satisfaction is a proxy for maintaining and expanding the economic contribution of your customer base. CRM is foundational to optimizing productivity, performance, and resource utilization, and any best-practice CRM solution will include your objectives for:

  • improving customer prospecting,
  • enhancing retention,
  • expanding share of customer wallet, and
  • differentiating service levels based on customer value. 

Regardless of your CRM sourcing strategy (one-stop-shop, best-of-breed, or prime-contractor approach), you must first define the expected business functionality and customer interaction outcomes necessary to drive improved financial performance.

You may be focused on several solution-provider competencies, such as

  • process management,
  • technology management,
  • systems integration,
  • consulting,
  • software maintenance/support, and
  • hardware maintenance/support.

Irrespective of individual competencies, numerous factors such as risk, business acumen, and technological expertise should be weighed, ranked, and prioritized. Typical evaluation and selection criteria should be rigorously applied.

While choosing the right CRM service provider is core to any successful endeavor, nothing ensures the realization of any expected business benefits. In fact, CRM initiatives often fail to deliver on the promise of measurable financial gain. This is typically attributed to two key factors:

  1. The false belief that a successful technology deployment will create a winning CRM capability. Tools, applications, databases, and systems are mere components focused on managing data, creating information, and generating customer-specific insights needed to profitably manage the customer relationship. Absent the relevant business rules, supportive processes, and organizational alignment, powerful CRM technology will deliver suboptimal CRM performance. Your scope may be focused on fixing broken capabilities, enhancing existing infrastructure, or introducing game-changing innovation, but you still have to link these efforts to specific improvements in top- and bottom-line performance.
  2. The contemporary corporate environment is highly complex and inclined to resist change. The very nature of customer management transcends organizational boundaries, functional silos, and myopic departmental agendas. This reality is often the motivation for finding a CRM provider that can assume the responsibility of working through such challenges.

This is why a deployment strategy that simulates and tests CRM functionality with in-market operational pilots is the single greatest risk-mitigation strategy available. An iterative process that focuses on

  • hypothesize,
  • test,
  • learn,
  • adjust,
  • stabilize, and
  • scale

forces the reconciliation between anything internally deemed necessary and any objective demonstration of success. This simple approach is the single-most-effective way to realize projected returns on investment.

Multiple reports by analysis firms such as Gartner and Forrester Research include survey results showing that a vast majority of CRM deployments fail to meet promised business benefits. Yet CRM providers somehow highlight seemingly unlimited success stories. This disconnect is primarily caused by CRM service providers who sell the belief in the mythical CRM silver bullet, leading to unrealistic expectations and failed initiatives.

But, in the end, with so many CRM service providers arrayed before you, how should you choose? Start by articulating the desired business benefit, and develop from that an implementation approach that rationalizes internal expectations with externally focused, customer-facing, objective proof. With that information in hand, the right solution provider will be quite a bit more obvious.

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About the Author

Ed Jenks (Edward.Jenks@cognizant.com) is vice president of business consulting for the Customer Solution Practice at Cognizant Technology Solutions. He has helped Fortune 50 companies deploy over a billion dollars' worth of business-driven technology.

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Please note that the Viewpoints listed in CRM magazine and appearing on destinationCRM.com represent the perspective of the authors, and not necessarily those of the magazine or its editors

You may leave a public comment regarding this article by clicking on "Comments" below.

If you would like to submit a Viewpoint for consideration on a topic related to customer relationship management, please email viewpoints@destinationCRM.com.

For the rest of the September 2010 issue of CRM magazine, please click here.

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