Risk-Proof Your CRM System

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CRM integrations demand time and money. In return, the technology promises to give even more time and money back to the company, with a better customer experience to boot. But what happens when integration does not lead to utilization? How can such an expensive investment be protected from failure?

Assessments of CRM initiatives haven't improved much over the past decade. In 2013, just over half of executives felt their CRM changes were generally successful. In 2004, 41 percent rated their CRM changes a success, according to the 2013 Merkle study "Customer-Centric Transformation: Five Ways to Leading Successful Change." The news from Forrester isn't much better. Its 2013 report entitled "Mitigate CRM Risks by Using Sound Deployment Practices" surveyed people recently involved in a CRM project, and found that only 45 percent agreed that the applications improved productivity. Only a third surveyed found the programs easy to use and intuitive. Plus, they're expensive. Even with software-as-a-service on the rise, the long-term cost of ownership is high.

High-growth companies have figured out how to make CRM a "critical way of life" and reaped the rewards, serving their customers better and attracting better talent to their organizations. In its survey of 350 professionals, Merkle found dramatic differences in CRM success between companies defined as high-growth and ones defined as low-growth. Respondents from low-growth organizations were more likely to view CRM as an "important management tool" than a "critical way of life." Clearly, CRM adoption and an improved bottom line go together.

Better technology is not the answer

There's one thing integrators, strategists, and analysts agree on: The solution is not a better technology. The leading causes of problems in a CRM initiative are related to business processes, people, and strategy/deployment, according to the Forrester report. Technology is at the bottom of the list, with just a third citing issues in areas of data or skill competency.

In fact, anyone hoping for a quick fix from a new product needs a reality check. "Many technology companies rush to say if you only buy the tool, you will solve your problem," warns Lior Arussy, president of Strativity Group. "They give the executives the sense that they can bypass the tough operational and strategic decisions they need to make before they engage the tool." People in management should know better.

A CRM system is just a technology to enable a customer-centric approach. "An easy pitfall to fall into is that it's a technology project," notes Michael Malinchock, managing director of Accenture's Sales and Customer Services practice. "My view is [that] CRM is not a check-the-box activity. It's something you're going to need to care [for] and feed throughout the evolution of that program."

"One of the biggest missteps is treating CRM as a project and not a journey," confirms Tim Berry, copresident of Merkle. "There needs to be a road map associated with how you're going to get there."

While technology is not usually the problem, a CRM system needs to add real value for it to be adopted. Otherwise it's just what Arussy terms "Outlook on steroids." While simple CRM systems may be a good place for a company to start, Malinchock suggests that mature CRM systems are defined by systems integration that allows the company to embed the business process and customize it to its specific needs.

It's okay if a CRM system isn't completely customized from the start. In fact, it's encouraged. Deploying a CRM system over multiple stages allows for time to adopt a new program. In the Forrester report, authors William Band and Mark Grannan advise that quick wins can help boost morale and encourage adoption. They cite the example of a bank where only one in five employees wanted to use a new CRM system. The CRM project leader focused on how the system improved the reporting of sales leads, which helped rev up enthusiasm for the program as a whole.

In the past, implementations could take years, and customizations could "lead to overruns in time, cost, and complexity," Ernst & Young's Global Advisory Customer Leader Woody Driggs remembers. By the time the product was finished, businesses' needs had already changed. Today, with the rise of software-as-a-service, it's "extremely difficult to fail on that kind of level," Driggs says. "In software-as-a-service, changing the core code is highly discouraged. Instead, you configure it to your business processes, avoiding the pitfalls" that plagued companies in the past.

Today top executives often demand results in three-month increments, Driggs observes. It's something he also advises for longer projects "to keep everyone's attention. Frankly, people get antsy in today's environment. It can demonstrate you're making progress and give you quick wins." He's seen companies "putting some of the process changes in prior to the technology being ready," to help start familiarizing users or enable them to add data that can be used at a later date.

In contrast to the long, all-in approach of the on-premises CRM solution, "we see benefits happening in waves, especially with cloud," observes Malinchock. "What you need to do with CRM in a cloud sense is start an organization off with achieving benefits, wave after wave. Off-the-shelf solutions are able to get organizations to a certain level of capturing data and being able to view customer data across multiple users. That serves the foundation of establishing customer centricity."

CRM systems are supposed to help make organizations more customer-centric, but it's important to get inside the heads of those who will be using the CRM systems day in and day out. "We are seeing companies who are rushing the tools before preparing the people," Arussy warns. For employees, CRM systems can be burdensome and take time to master, slowing users down. Change puts people on guard.

Arussy offers the example of a top salesperson, a "rainmaker" in an organization.

"What is a rainmaker? [He makes] rain when God doesn't bring it. He works miracles. If you look at how salespeople develop their image, they emphasize how they perform miracles when no one else can, and they reinforce that through their demeanor on a daily basis," Arussy says. "CRM systems threaten them. They think, 'I just told you I do magic and bring miracles. You want me to document my formula for success? You want transparency of process?' That is threatening, because then you can fire [them] and get someone else. Not a single CRM company ever considered users' emotional reaction to the tool."

Many times, companies will exempt their top salespeople from using a tool "because they're too busy, when in reality they don't want to do it anyway," Arussy assesses. When select employees aren't required to use the CRM system, it' usually a symptom of a larger problem. If top performers don't have to comply with a CRM system, others are less likely to see the value in adopting it themselves. Another warning sign is if salespeople have their executive assistants update their CRM information for them. It's likely a reflection of a system "that's internally focused, when it's this thing that requires me to put in data, more time and effort, with little benefit in it for me," Driggs says.

Eric Pozil, president of CRM Northwest, has found generational differences in CRM adoption. He offers the example of taking a picture with a traditional camera. Used to digital cameras, kids are baffled that they can't see the picture immediately. "Younger professionals are used to that instant feedback. There's an expectation to see the reward. They're very adaptive to using the technology in front of them." 

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