A Structured Approach to Retail CRM

Implementing a CRM solution in a retail environment is a complicated undertaking. Incorporating the requirements of stores (and other channels, such as Internet and catalog), distribution facilities and corporate headquarters is just one of the challenges in pursuing a comprehensive CRM solution. To be successful in meeting CRM goals, it is important to follow a structured approach to implementing the technology component of the CRM solution. This article details a strategy for conducting a CRM package selection and implementation.

Project Planning and Management

Successful selection and implementation projects begin with up-front planning. Developing parameters for the project is important in maintaining schedules, managing scope and utilizing resources. Companies that do not invest time in the planning stages expose the project to the risk of delays and missed due dates. The project planning and management phase should achieve four tasks:

1. Define the project. It is important to create a clearly defined plan that is realistic, understood by all parties, and will serve as the roadmap to enhance communication and gain consensus. The initial planning stages provide a forum for determining the project scope and interviewing key program participants, and can provide the following deliverables:

  • a comprehensive program budget
  • measurements to compare actual performance to plan
  • agreed upon methods of project communication
  • approved issue logs and
  • an organized review process.

    2. Review current systems environment. Effective CRM solutions require a company to review existing practices and systems environments before attempting a change. Companies that forego this step expose themselves to the risk of automating "bad" processes. Assessing legacy software capabilities relative to desired features and functionality will provide a baseline from which to develop solution requirements.

    Consider internal and external constraints such as organizational competencies, staffing levels and skill levels, and the specific retailer's unique elements. This will help decision-makers judge the level of CRM sophistication required. Once the assessment of current conditions is complete, it is critical to develop user requirements, plan the re-engineering of business processes, discuss platform options and determine high-level functionality.

    3. Formulate grounds for evaluation. Building decision parameters is essential in the decision making process. It is important for a company to evaluate and prioritize the criteria for the package selection to compliment your CRM strategy. Determining relative importance of distinguishing elements based upon business impact:

  • mandatory
  • beneficial (if cost effective) and
  • nice to have (if no incremental cost)
  • is one method of building structure into the evaluation process.

    Another tactic involves reviewing operating considerations such as:

  • vendor support
  • package cost and
  • ease of use.
  • Filling out a scorecard that ranks these criteria will produce a structured package assessment document that defines measurement elements, quantifies the fulfillment of desired functions and establishes a basis of comparison. This scorecard can then be used to identify the vendors capable of providing the technology to realize your CRM strategy. In performing these tasks, it is important to seek a comprehensive solution that will take into consideration stores (and other channels such as Internet and catalog), distribution centers and central processing. It is also recommended to limit the selection to two or three candidates to simplify the final selection process.

    4. Develop recommended systems architecture. The decision to invest in a CRM software package must consider the technical logistics involved. The final decision-makers need a perspective and understanding of available systems architecture configurations. Planning activities leading up to the selection process are expected to produce documentation that describes the ultimate operating environment:

  • feature/function criteria
  • interfaces
  • operating structure and
  • platforms.
  • Additionally, this documentation will describe required operating changes:

  • re-engineered management processes
  • controls and
  • performance measurements.
  • Using these findings, it is then possible to perform a cost/benefit analysis to fully examine the advantages and disadvantages of all of the alternatives.

    Selection and Implementation

    A successful selection and implementation phase employs the deliverables created in the project planning phase. Selection and implementation tasks progress in the following order:

    1. Invite players to the table. Based on the identified short list of vendor candidates, the objective of this stage is to provide a hands-on perspective of the packages being reviewed. Vendors are contacted to establish a schedule of system demonstrations. Each demonstration is held on a day dedicated to one solution. The demonstration must provide insight to all the functional areas, be attended by users and scored using structured evaluation criteria. It is also important to obtain vendor references and perform site visits to gauge the impact to your specific business.

    2. Narrow the field. After viewing a few packages, it is a common practice to develop custom requests for proposals (RFP) for the vendors being considered. RFPs are sent to each vendor to request all of the necessary information needed to consider for selection such as critical system attributes, projected modifications, standard contract stipulations, etc. The objective of this process is to ensure each vendor proposes a comprehensive effort to provide ultimately identical solutions by all vendors. This is the only means to achieve an apples-to-apples comparison.

    In reviewing the submissions returned, it is important to judge the completeness of information provided, the consistency with known history and the language used (there should be no ambiguities). A discussion should follow regarding the shortcomings and strengths of each package and the alternatives available in proceeding with different packages. A consensus will form and the vendor(s) of choice will be identified. After contract negotiations and agreements are signed, a system migration plan will need to be developed.

    3. start at a high level and add detail. The systems migration plan is the beginning to a successful implementation. The purpose of developing a systems migration plan is to identify the implementation constraints prior to rollout. A good systems migration plan lists the hardware upgrade requirements, software restrictions, project phases, high-level modification requirements, training needs and procedural changes. The migration plan is the basis for a detailed project plan.

    4. Engage in exercises that identify issues. The project plan maps out the overall timeline of the implementation, identifies resources and assigns due dates to tasks. Two of the first tasks listed on the project plan should be a conference room pilot and gap analysis. The goals of these tasks are to identify differences in business processes and systems functionality between current and future environments. Outputs of these exercises must yield:

  • current business process documentation
  • changes to existing business processes
  • list of missing functionality in new system design and
  • agreed-upon modifications.
  • The conference room pilot and gap analysis should identify the major issues to be addressed prior to rollout. The next steps are to develop a conversion strategy and begin unit testing. In this phase, the goal is to validate and prepare the system for the users. To support this effort, target systems application process flows and results from unit testing are reviewed to ensure compliance.

    5. Test and review to monitor progress. Documentation is a key element to a successful implementation. System architecture, network security, infrastructure, development and testing documents should all be reviewed prior to deployment. The last stage prior to full-scale rollout is user acceptance testing. The objective here is to review and assure that systems and user acceptance testing activities are sufficient to deliver a system that can meet the business requirements. User testing should identify the remaining issues not caught by earlier testing efforts.

    Finally, the rollout process can commence following the conclusion of testing. The implementation plan should be complete and realistic. Efforts must be made to ensure that due dates and goals of the project are being met. Once the implementation is complete, a post-implementation review must occur to ensure proper installation and system use.

    CRM software applications can add significant benefits to a retailer's operational performance. Following the above strategy in selecting and implementing the technology component will improve the speed and efficiency in developing a comprehensive CRM solution.

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