CRM and Knowledge Management: Balancing Information and Insight

Breaking Down the Silos

The more troubling hurdles usually center on organizational issues. The biggest problem encountered is getting clearance and cooperation from the various business units responsible for generating and maintaining the knowledge. The problem is not breaking down technical silos of information, but instead breaking through managerial silos of jurisdiction. Executives often protect their fiefdoms. Different departments are responsible for various views of the customer and they do not want to give up that power.

Managers may also have legitimate business concerns. "Executives want to make sure that sensitive information is secure and not open to intrusion or examination by individuals without the proper authorization," Berry notes.

So firms need to build bridges among sales, marketing, and service content masters. To accomplish this requires top management's interest and approval. "We have seen cases where companies have formed knowledge management committees," explains Nav Chakravarti, vice president of product management at Oracle. To be effective, these groups have to come from the C-level rather than the business unit level so managers feel obliged to support the project.

Making the ROI Case

Cost is another management hurdle. KM projects are expensive. The price can quickly run into six figures, and large firms often spend more than $1 million just to get the project off the ground and into pilot mode. Justifying the investment is complex. "One of the challenges with corporate data integration projects is the ROI is soft rather than hard," states Dave Schubmehl, research director of search and content analytics at International Data Corp.

Consequently, management needs to make an investment with a long-term perspective, because the return on investment may not be very clear or tangible at first. In reality, a company may travel down a few paths to nowhere before it strikes gold in finding ways to leverage its knowledge. This proposition is difficult for executives to swallow with today's tight budgets and focus on immediate gratification.

Because of the various hurdles, history has not been kind to KM projects. "Knowledge management has become an outdated term for a technology with a lot of promise but not a lot of delivery," Schubmehl says.

An All-or-Nothing Proposition

In the past, many companies have tried to consolidate their knowledge but ended up with systems that were largely busts. "Either there was no data in the system or so much information in it that the system was useless," IntelliResponse's Lloyd notes. In some instances, employees never trusted the system so they did not take the time to load their data into it. In other cases, the system was overloaded with information, so employees could not find relevant information.

This time, proponents maintain the results will be different for a few reasons. First, the need for CRM/KM integration is more apparent. "A few years ago, a cell phone customer was only concerned with the device's warranty, so servicing the customer was straightforward," Chakravarti explains. "Now, consumers carry small pocket-sized computers and need help using some of the basic functions." Without some type of KM database, corporations will not be able to cost-effectively service their customers.

Second, KM technology has been getting better. Vendors have developed connectors to many CRM systems; connectors to leading CRM systems such as those from Salesforce.com and Oracle are easy to find.

Third, facing more intense competition and higher customer expectations, enterprises are seeking ways to enhance their CRM solutions. Integrating KM into them promises to streamline business processes and improve customer satisfaction. However, deploying these systems requires deft maneuvering. In sum, these systems present corporations with potentially great rewards but also great risks, so this integration project needs to be thought through quite thoroughly or companies are risking a serious threat to their yin and yang balance.

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Paul Korzeniowski is a freelance writer who specializes in technology and has been covering CRM for more than a decade. He can be reached at paulkorzen@aol.com.

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