Here’s a riddle: what costs US$100 million and doesn’t work 70 per cent of the time? Answer: a customer relationship management system.
That’s what Gartner Inc. reported last year about large-scale CRM implementations. Executives responsible for overseeing such egregious wastes of corporate resources ought to thank their lucky stars for all the media attention deflected by the recent corporate accounting scandals.
It’s convenient to blame vendors and consultants for this sort of thing, and I wouldn’t entirely disagree. But too many companies jumped into CRM projects without clear strategies or sufficient buy-in from top management, paid too much attention to the technology piece of the solution, and radically underestimated the complexity involved in rethinking their approaches to customer relationships. Vendors only added more fuel to the fire.
CRM Still Growing
Despite this history and today’s tight budgets, analyst firm Aberdeen Group Inc. is predicting a compound annual growth rate for total CRM spending of nearly 10 per cent through 2005.
However, there’s a new wave of CRM projects that are scaled down, shorter in duration and much more closely monitored for return on investment. A CIO (U.S.) magazine survey published in May revealed that 49 per cent of CRM projects will be completed in less than 12 months and 70 per cent within 18 months. Moreover, 64 per cent of the respondents indicated that their CRM systems are being implemented incrementally through smaller pilot projects instead of as a single enterprise-wide project built with full-service software suites. Many companies are opting for smaller CRM packages and adding more later, patching together their various customer systems or outsourcing some pieces, such as call centres.
But you can still get in big trouble in a “CRM lite” world. My firm analyzed more than 150 CRM projects and learned that organizations ought to be focusing more than ever on people (vs. process or technology) if they want to succeed. Here are a few pointers from the study: Breed a strong line of project champions. Top performers like to stay on the move in their careers, which wreaks havoc on their projects. Be certain that the carefully selected champions you’ve attracted at all levels to guide your CRM project don’t bolt before qualified successors can take their place.
Do a formal stakeholder analysis and plan. Diplomacy plays a big part in CRM projects, especially over time in places where hot political issues and personal vendettas pose serious threats. Stakeholders must be identified, their roles recognized, their interests acknowledged and their relationships to other stakeholders understood. Map this out in a structured fashion in order to plan what’s necessary to influence each stakeholder and boost the chances for project success.
Organize a CRM project management office. Staffed by both business and IT workers, this office would be responsible for training users and actively finding ways to incorporate CRM into daily routines. It would also provide structure and processes for collecting information in a single spot and making it visible to all who need it.
Keep it simple, and exercise patience. CRM requires significant personal change for those involved, not just adjustments to systems and processes. Resistance can be subtle, elusive and exhausting. CRM veterans caution that time and effort are easily underestimated, especially the large amount of education, communication and patience required as psychological and emotional adjustments are made.
Technology should always come last with CRM, after you have determined what needs automation, designed solutions and developed a road map.
David Foote is president and chief research officer at Foote Partners LLC, a management consultancy and IT workforce research firm in New Canaan, Conn. Contact him at dfoote@footepartners.com.