New CRM Philosophy

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CRM projects have created value in specific departments and customer touch points, but the promise of enterprise level integration continues to remain elusive. The grand CRM vision that has a single vendor managing all customer facing processes, as well as, acting as a system of record by loading all your customer data into a single database has run out of steam. While AMR Research believes CRM is still critical as a business strategy, enterprise CRM projects have faced three fatal flaws that are forcing users to change the way they evaluate, deploy, and manage customer-facing strategies. These three flaws are:

Misguided project and implementation strategies: There are two common mistakes in project definition. The first is CRM is often defined as a project that integrates processes across various customer-facing departments and divisions to achieve consistency, productivity, and intimacy. However, there is an inherent conflict in this definition. Too many enterprisewide projects place consistency over innovation. Improvements in productivity and customer intimacy can only be achieved by defining processes that are flexible enough to be responsive to the specific interaction or lifecycle stage the customer is in. This clashes directly with the drive for consistency. The second common mistake is approaching CRM as a big, centrally managed project, rather than as a series of short, focused projects. These small projects should be viewed as business releases that combine existing process change, skills enhancement, and various technical tools to build new applications. The lines of business managers need to own these business releases, its budgets and implementation teams, as well as success and failure. It's not about sponsorship for them; it is about ownership.

Lack of measurement and governance: Once you accept the reshaping of the projects as defined above, the next issue is maintaining control of these releases as decisions are delegated to the appropriate business executives. Two pieces are needed. The first is measurement and benchmarking. AMR Research has shown that 58 percent of CRM projects are launched without a business case or set metrics to be monitored. However, even in projects where measurement systems are in place, there is an overall of lack of industry benchmarks to track against. Benchmarks are a realistic qualification of performance and without them mediocrity or failure could be viewed as success. Benchmarks also are critical in creating strong IT governance, the second arm of control. Every project should start with an assessment of internal performance metrics and a realistic comparison of those metrics versus external benchmarks. IT governance bodies often have to decide how to best allocate money and resources among competing initiatives, many of which claim to provide similar benefits to the same metric. The assessment and benchmarking process will identify the root cause of performance challenges and help channel investment to the right projects.

Bound architecture layers: The idea of a single technology provider, a rigid process, and no customization in CRM deployments are fallacies and typically can't align with a unique business strategy. Most companies view the way they market, sell, or serve as differentiators over their competition. Rigidness may be effective in human resources, but is a death sentence to a CRM project. While the enterprise has a very real need for complete visibility into customer data and interactions, this does not necessarily translate into a single enterprise application platform that provides the complete data model, all the business logic and workflow to support all processes, and a common presentation layer. The future of application architecture breaks this model, and will separate the data model from the business logic and the business logic from the presentation layer. With this model, data fields and objects can be switched in and out to provide the necessary information in context to the interaction and customer lifecycle stage. These changes will also help IT to support the enterprise access to common data and visibility across department or divisions.

The value of CRM systems is apparent from departmental and functionally siloed deployments. Yet, much change needs to be invoked to distribute these benefits across an enterprise. AMR Research believes that new technologies such as Web services and composite applications will provide a basis to separate the architecture layers. However, changes in implementation strategies, benchmarking, and governance can only be brought about by users. Business executives should own CRM projects, its budget, and the definition of its processes. IT is responsible for the integration strategy, maintenance of master data, and adherence to technology standards in connecting these new applications.

No CRM project should be undertaken without a tangible and measurable link to business performance. This starts with first identifying the processes that will be changed and the current level of performance being achieved.

CRM projects need governance, not command and control. Due to the dynamic and interdepartmental nature of marketing campaigns, sales interactions, and service calls, CRM deployments should be managed by a team or governing body. IT-managed projects will look to conform the deployment to match existing initiatives and therefore eliminate the flexibility and new processes needed.

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