There are No Shortcuts

When some end-user clients think of a CRM implementation, their first reaction is to grab a bottle of Tylenol. And who can blame them? They have plunked down time, trust, and millions, only to get half-baked results. For many of these executives an effective, comprehensive CRM implementation turned into either an elusive endeavor or a giant headache. Today the belief that a CRM implementation has to be a mandatorily Herculean project is changing. Even so, implementing CRM is still fraught with challenges. While the technology running CRM software is making the systems smarter and easier to implement, it also opens a Pandora's box of new challenges, experts say. And while the actual implementation period is getting shorter, companies are spending more time in the early evaluation and pilot phases. "Yes, CRM is easier than it use to be, and the out-of-the-box functionality of any package is better than it was a year ago. But that doesn't mean this is at all easy," says Darius Vaskelis, vice president of research and solutions at Inforte, a Chicago-based CRM services firm. The reason? According to Tim Foley, senior director of CRM at Inforte, implementing CRM is a still far cry from plug-and-play status. "The scope of what we are doing is getting more complex. [But] the return on investment is better positioned than it used to be," he says. In the not-so-distant past many companies invested in CRM and expected it to work as easily as Excel spreadsheet-without reengineering their business processes. In many instances, pressed for time to fend off dot-com competitors, corporations tried to squeeze into 90 days or less what should have taken six months. Thus, many of these companies' expectations went unmet, and their trust in vendors was lost. Dick Lee, president of Minneapolis-based CRM consulting firm High-Yield Marketing, shakes his head in disbelief when he considers the scores of implementations that resemble the Titantic. "CRM implementations fail not because of the technology, but because of the change management and process engineering that occurs without developing customer-centric business strategies," Lee says. But they are improving in terms of technology and methodology. Unfortunately, that does not mean they are getting any easier, Lee says. "They are improving because more clients are aware that you must develop customer strategies first. Though in a sense the implementations are getting better and more successful, they are also getting harder," he says. "There are no short cuts." But there are optimists who see a shift in attitude among end-users. "I believe what is changing around the CRM implementation is not about them getting any easier or not, it's more about the customer thinking what they want to do. CRM is not a product. It's a business philosophy," says Simon Walls, vice president of consulting services at PeopleSoft Inc. "The technology is the enabling anchor behind that, and where people made the biggest mistake was buying an Oracle, PeopleSoft, or Siebel without thinking about what they wanted to do." Conquering Complexity In short, preimplementation goal-setting and process reengineering-or the lack thereof-is where most companies founder. And when organizations have not "prepared their house" for a CRM implementation, the software often is relegated to shelfware status or is not fully deployed, leaving feature-rich applications to sit idle. Although mastering the strategic aspects of CRM is crucial to a successful implementation, experts agree that the heavy lifting of the technical integration has been equally challenging-so much so that many end-user customers have been forced to seek help from consultants and vendors. "The biggest problem we see over and over is the difficulty of getting data in and out of CRM systems," says Frank Ingari, CEO and founder of Wheelhouse, a vendor of tools that map data from legacy systems to CRM systems. For this reason enterprises are more interested in fixing their current, tangled IT systems before implementing CRM. "A lot has changed. Most enterprises I visit have this as class-one priority. They are spending a lot of time and money to hook things tighter. They know they will never get the value out of their CRM system if they don't fully connect their other systems," Ingari says. Complicated IT tasks, like connecting to legacy data systems and ensuring the data is current and relevant, are some obstacles making CRM implementations a tougher road to travel, says Bill Chambers, principal analyst and director of CRM at Doculabs, a market research and consulting firm. "Our take is that it is getting much more difficult and much more complex. But that doesn't mean that end-users are not being successful doing implementations," Chambers says. "What I have found is that most organizations misjudge the complexity of the implementation and the scope of whatever CRM application they are going to implement," he says. Others are opting not to rush into a new CRM project. Today smart firms are taking longer periods of time on the upfront requirements like strategy, the analysis stage, and the customer profile and data management issues. They are willing to pilot CRM projects for a longer period of time to better understand the ROI, rather than jump headfirst without looking. "That period of time is getting longer and [these organizations] are doing pilots for select groups of customer service reps who are working with the highest-net-worth customers," Chambers says. In addition, he says, companies are conducting a lot of preplanning on platform and integration issues before beginning a pilot. Making the Connection Industry experts say that today the average length of a well thought out CRM implementation, including planning to pilot stages, has grown to 90 to 120 days. But for larger enterprises for which there is a more complicated roll out and integration, it could take up to a year. This also depends on the type of CRM platforms and the integration with legacy ERP systems. "[Implementations are] a whole lot easier than couple of years ago. The packages are getting easier to install and configure, and more things are built in and there is less customization," says Roy Schuster, vice president of CRM strategy, at Akibia Consulting. "But there is a lot of breadth and they have to talk to back-end systems." Many industry experts advocate a CRM application built on a Java-based platform that allows for easier integration to multiple back-end systems. Vendors like Kana Communications and Chordiant are making strides toward this type of open platform, Chambers says. While proprietary platform architectures may slow down an implementation because of the technical requirements, many problems stem from not fixing the existing ERP system. "A common mistake is people trying to put in a front-end process without integrating the ERP," says Somes Mulukutla, principal at Technology Solutions Co., a technology consulting services firm based in Chicago. But while the corporate behemoths work through these issues, CRM is making inroads into the mid-market. And it appears to be going a bit smoother. In the mid-market, CRM is still a hot new entry that is easier to deploy and has a simpler implementation cycle compared with the large enterprise market, says Natalie Burdick, vice president of Goldmine, a product of Front Range Solutions. "Midsize companies are looking for CRM to integrate with what they have. They are not about to throw out systems, and they want it flexible," Burdick says. Even so, much like their global counterparts, midsize customers are also stretching CRM pilot periods and are taking them for more serious, Burdick says. "What's happening is that [all companies] are starting to look harder at wider software options because they want value," High-Yield Marketing's Lee says. Overall, while CRM technology is becoming easier to implement, new challenges are cropping up ranging from total IT integration to longer evaluation phases. Regardless, the result will be more successful implementations and fewer failure rates. There is a light at the end of the complex CRM tunnel, industry experts say, but they caution that it is still a long tunnel. A Tale of Two Implementations Like most IT managers of midsize manufacturing companies, Cheryl Jones knows pressure. The worst of it came last year when she had fewer than 90 days to find CRM and ERP solutions for Koch Equipment LLC, because it was splitting off from its parent company. Steve Hills, vice president of sales and marketing at The Washington Post, is also working in a hot kitchen. He is overseeing a CRM project to extract data from a proprietary legacy database to improve targeted marketing for the newspaper's subscriber base of 1.1 million readers on weekends and 800,000 on weekdays. Both executives, familiar with the horror stories of CRM implementations, took the appropriate measures to side-step implementation problems, but in doing so have taken different approaches to their CRM solution. Jones's top challenge was time. She had to identify, find, demo, and install both ERP and CRM systems in fewer than three months for Koch Equipment, a 100-year-old maker of industrial-grade food equipment, based in Kansas City, Missouri. Jones speed-dialed 50 software companies and narrowed the selection to eight after many companies were not able to provide demos in the needed time period. After the demos she engaged Front step Software. "The biggest thing was, the direction the company was going was to have a seamlessautomation between ERP and CRM," Jones says. Also integral to Jones's decision was Front step's mid-market focus. Jones sought to move away from the weighty administration of the Goldmine software that the company had used prior to the split. But the real challenge was porting information scattered among three databases that included ACT! and Goldmine and merging and integrating that data into the new ERP and CRM systems. The implementation took one month-three weeks for the ERP and one week for the CRM-primarily because Front step's product is aimed at manufacturing companies. Bill Lilegon, director of front-office products for Front step, says that in the mid-market many of the companies are doing CRM with an ACT! or Goldmine product, but are not getting the views to the ERP side. "What we have done is, they want to move to a seamless approach from managing the opportunity to ordering and quoting," he says. Time-to-implementation was less of an issue for the Post's Hills, whose primary concern was getting exactly what he needed from a CRM system. "The mistakes some companies make is, they buy a CRM system without thinking what they want out of it. For us, we had marketing needs and the goal is to build a system that allows us to get data," Hills says. The newspaper's main CRM system is a legacy circulation sales and customer service system used by telemarketers. Hills says the company is midway through a 15-month project to build a customer data mart on an Oracle database that is fed into an analytics package called DI-Diver, by Dimensional Insight. The new system will allow the company to create targeted marketing initiatives. "One of the primary issues we have is that with the data, we don't know if someone has been a subscriber for one year or ten years," Hills says, adding the company has had to settle for mass marketing pieces instead of true campaign management. Hills turned to Wheelhouse, a vendor of CRM mapping tools, for help with the structural, technical, and strategic issues that the company had to solve because of the amount of integration needed. "Right now we want pretty basic information-demographic and subscriber profiles-and over time we will come up with ways to entice people to give us more information, either from our Web site, credit cards, and areas of interest," Hills says. For both Hills and Jones, the implementation worked because it was only one part of the formula focused