How to Maximize Analytics' Effectiveness
Analytics is what brings CRM strategies and systems to life, according to Kevin Nix, group vice president for Siebel Systems. Nix delivered a keynote address to the audience at DCI's conference on Tuesday. Including analytics as part of a company's CRM strategy, Nix also said, is one important factor in making implementations successful--but not the only one.
There is a large difference in the approaches in successful and unsuccessful CRM implementations, according to Nix, who cited a McKinzie & Company study finding that 67 percent of successful CRM implementations included a training component, while only 30 percent of failed applications included one. Similarly, 69 percent of successful implementations had preimplementation input from various departments throughout the organization, compared to only 32 percent of unsuccessful implementations.
Seventy-nine percent of successful implementations were conducted in stages, rather than going for a big bang approach, compared to only 33 percent for unsuccessful implementations. Nix added that 59 percent of those companies with successful implementations made a cultural shift in the way they did business, while only one third of those with unsuccessful implementations made such a change. Those statistics point out that CRM is more than a technology, Nix said: "It's people, processes, and technology."
Therefore, CRM implementations should take a "four-plus-one" approach, Nixon said. Governance, processes, data quality, and change management need to be combined with BI. By governance Nix meant that upper management needs to buy in to the CRM technology and strategy very early in the process. A bottom-up approach doesn't work, he said. "It's much better if the CEO talks about CRM in a company newsletter than Joe from distribution."
IT shouldn't be the area driving CRM, Nix added, but instead should be the translator of business needs into technical functionality of CRM systems. "Companies won't have a successful CRM implementation if they take bad processes and throw automation at it," Nix said. "BMW took six to twelve months to document all of their processes. That was very painful, but they didn't want to automate bad processes." The analysis aided BMW in getting more benefits in installing a CRM system.
Even within Siebel, the company found more success in using its own CRM system when the company looked throughout the business process for ways in which the system could produce better results, Nix said. If various parts of a company aren't included in a CRM plan and implementation, there will be numerous inefficiencies, according to Nix. Most notably, companies will continue to have silos of data on each customer, and there will be little knowledge transfer from one system to another (e.g., telesales to sales managers).
"More than 50 percent of CRM and business intelligence implementations fail due to lack of data quality," Nix said, adding that data quality is more important now than ever before as companies rely on it for business strategies. Another factor in a successful implementation is explaining to the rank and file why
they are performing certain tasks, such as entering data, rather than just telling them to do it, Nix said. And the data itself needs to be used to do more than simply generate reports. Everyone in the organization needs to have access to the data to analyze the information. Analysis can show the company how best to segment customers, how to streamline process, and other ways to increase sales and profitability.
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