CRM's 7 Deadly Warning Bells

A few heartbeats after the horses and their jockeys enter the gates each year at the Kentucky Derby, a telltale bell sounds out to the crowd and television audience. The bell heralds the start of a race in which a fortune or two will be made, hearts will be broken, and one thoroughbred will break away from the pack, crossing the finish line first. Less appealing bells have sounded over the past 18 months in another area of CDI. The unwelcome sounds were warning signals to the project team responsible for implementing a new CRM strategy's technical backbone. It is anchored by an Epiphany system, a field of customer analytics, Web-based analytics, predictive analytics, content management applications, new e-commerce capabilities, and integration with the interactive wagering platform terminals at the company's six horse racing tracks. "These bells start ringing when negative things are happening or about to happen in a general implementation," Shah says. "The bells are not restricted in any way by industry, timing, or channel. They are highly applicable to most if not all types of CRM projects." Shah knows about these bells. He's spearheaded successful CRM initiatives for the National Basketball Association (NBA) and at GSI Commerce, which received Gartner's CRM Excellence Award in 2003 as a result of that project. It remains to be seen if Churchill Downs' project will garner awards or deliver it to the winner's circle among investors, but the lengthy, involved initiative provides a wealth of lessons learned. The following seven warning bells signify problems that can slow a project, force it over budget, or in some cases, sabotage the initiative. The Commitment Bell When this bell sounds, the warning rings in the mind of the individual leading the CRM implementation, says Shah, who still hears its echoes from previous implementations. The bell rings when there is a lot of lip service paid to the idea of CRM, but not enough executive support for the project. Business conditions change and so do priorities. Shah estimates that it takes about 90 days to determine if the executive commitment has legs or is lip service. CRM veterans focus their due diligence on executive commitment before they accept an offer to lead a project at a new company. The commitment bell did not ring at Churchill Downs, where Shah was hired by a chief marketing officer, Andy Skehan, whose CRM vision helped him later ascend to the company's COO seat. The Hardware and IT Infrastructure Bell Shah's experience and project savvy did not prevent this warning from tolling last year. "I was overconfident," he says. "I kept saying that we could get the hardware later. Procrastinating caused some small problems, but it was nothing too serious." The warning bell typically--and frequently--sounds because the process of buying new hardware, IT infrastructure components, and other toys makes CRM vice presidents a bit punch drunk. That happens when an individual is handed $500,000 to spend on servers, database tools, desktops, laptops, and other hardware. The prospect of that shopping spree often clouds judgment. Oversights in hardware and acquisition investment decisions can cause problems throughout the duration of the project. "If you are a technical person, you are going to love the opportunity to buy tchotchkes," Shah says. "You love to spend that day with the Sun person, the Oracle people, or IBM guys. They'll schmooze you at the best seafood restaurant and you will be very happy. That happiness breeds weak decision making." Ignoring a company's existing relationships with hardware vendors represents a typical oversight. A CRM manager may be an HP person, but if the company already has a procurement deal with Dell--dude, you're getting Dells. Another common oversight occurs when hardware is purchased without considering whether the project team has the appropriate skills to work with and troubleshoot that brand of hardware. Overbuying is also a problem. "Never buy excess hardware," Shah says. "Your project money is too precious. Work very hard to buy exactly the amount you need, never mind the fact that you can get 27 gigs for the price of seven." The Data Bell If the tone of the hardware bell is a low rumble (not unlike the throaty sound of a sports car's engine), then the data bell is a high-pitched shriek. "It hurts, man," Shah says. "It will make your ears bleed." It also cuts to the heart of any CRM implementation. The warning sounds when a project team does not have the appropriate data or enough data. Successful CRM projects are fueled by healthy and wealthy databases. "You absolutely need to have different styles of data and different attributes in your database," Shah says. It is difficult to prevent the data bell from sounding on most CRM implementations, as Churchill Downs' CRM team discovered. The project was bitten by bad data in its tenth month, when Shah's team discovered that some customers were identified in the database by their transactions: Some customers who had conducted multiple transactions therefore appeared in the database multiple times. A data-integration application helped resolve the issue. The extra time Shah and his project manager had built into the budget also helped. "That's the primary technique for addressing data problems," he says. "Instead of saying that the CRM system will be up and working in five months, say it will take a year. You may take some heat up front, but in the long term you're going to look like a champ." The Measurement Bell The CFO and the corporate finance function have assumed a much more hands-on role in technology decisions in the past five years or so. Their involvement has raised the importance of developing ROI estimates. Those measurements are incredibly risky, and should be conducted with care and a clear understanding of the long-term implications. A well-kept secret in the finance department is that ROI calculations, not to mention accounting itself, contain a significant amount of gray area. "Every metric that you put forth becomes carved in stone," Shah says. "And you will be held accountable for every measure." High estimates might help make a business case, but they frequently set the bar too high. Even when a project team hits a high number--let's say a team responsible for a call-center initiative estimates that a new system will reduce call drops by 60 percent--the effect is rarely worth the effort. The finance department wants to see costs decrease and revenue increase. As long as those measures are headed in the right direction in the ROI estimate, it pays to sandbag, at least a little: The project team at CDI discovered that the e-commerce site had a hidden jewel; a small amount of redesign and new technology would probably give the revenue the site generated a sizeable boost. But Shah kept his estimate of e-commerce revenue increase modest. The redesigned site went live in April through the end of May, and e-sales were 148 percent higher than the same period last year. The Change Management Bell This warning tends to operate on a delay because many CRM project leaders and their executive sponsors tend to sweep change-management concerns under the rug. The conventional wisdom says that if the CEO, CFO, COO, vice presidents, and board of directors have bought into the project, the rest of the workforce will follow suit. The conventional wisdom is wrong. "Change processes need to occur at all levels of the organization, from the parking attendees and customer service reps all the way up to the CEO," Shah says. "One change formula does not fit for all levels of the organization. You have to introduce change differently to the rank and file, midlevel managers, and the executive level." During the seventh month of CDI's project, Shah's team held a CRM summit attended by director-level employees of all six race tracks. The purpose of the gathering was to recruit the midlevel managers as change agents so that they could evangelize the benefits of CRM to their colleagues. The Human Resources Bell This bell, Shah notes, may be the most important of all warnings to monitor. Effective project teams require a balanced mix of talent. Shah believes that technical, marketing, database marketing, and analytical mining expertise represent the four pillars of a successful implementation. As such, those skills must reside on the project team, whose expertise should not tilt too much toward marketing skills or IT skills. Troubleshooting skills and good-old-fashioned resiliency are also must-have qualities in CRM project team members. Pressure runs high in a project environment and unexpected obstacles always arise. The question, Shah notes, is how quickly can team members rebound from mistakes and setbacks? Shah places a premium on all of those skills. "If you have to pay $10,000, $20,000, or even up to a $100,000 more than the organization would pay normally for similar levels of people, do it," Shah says, "or else don't do the project at all." Hiring is not the only defense against the HR bell. "People are people, they are not machines. There will be times when they have tears and there will be times when they do everything wonderfully. Everybody falls down, no matter how cool a manager you are. The objective is to inspire everyone to get up as soon as they fall down." The Sales Bell Unlike all of the preceding warning bells, the sales bell's warning is silent. "This is a different kind of bell," Shah says. "It's one you have to ring and ring and ring." Call it the toot-your-own-horn bell. "You have to continuously sell your vision, the fact that you surpassed your original ROI projects, and the value of CRM, otherwise the project will lose the attention and momentum it needs." The CRM sales bell, like Shah himself, has rarely, if ever, been quiet since the project began last year. "Do not worry about stepping on anyone's toes, do not be apologetic for your enthusiasm," he says. "Promote yourself, your team, your vision, your idea, and your success stories. Hold a company-wide meeting, present to the board, get on the executive management team's regular schedule. If you cannot talk about your successes and be excited about them, you're in the wrong field." The entire workforce at Churchill Downs' headquarters has been stimulated by CRM. That's because Shah invested a fraction of a percent of his CRM budget in a gift, a Gevalia coffeemaker, that honored the organization's support on the project's initial go-live date earlier this year. The coffee that the machine brews serves as a continuous thank you to the staff and as a reminder of the importance of CRM to most of the organization. It also helps Shah's team remain alert for the sound of warning bells as the project nears its second year and the finish line. Eric Krell is a freelance writer based in Austin, TX