How To Avoid The CRM Graveyard
By Richard Earley, Covansys
If you've been paying attention to the business press lately, you
probably know that CRM implementation failures are reported to be reaching
into the 75 to 85 percent range. Yet, with all the hoopla surrounding CRM
technology, your company is still pressuring you to jump on the bandwagon.
The pressure builds on all fronts, and the executive team requires a swift
implementation, so you look into buying what the Jones' have and pray you're
not the next analyst's statistic.
Although CRM implementations do fail, it doesn't necessarily mean you
are doomed to become another victim. True, suitable technology product
selections cause even seasoned professionals to experience a bona-fide
techno-migraine. This can be attributed, in part, to the fact that most CRM
implementations are done in haste. Approaching these projects unmethodically
can inflict a network of widespread disaster ' organizationally,
functionally, technically and financially, to name a few. This is not a task
to be undertaken lightly.
The other major factor in the CRM failure epidemic is the substantial
innovation and consolidation in the market, which makes for a continually
shifting vendor ecosystem. The ability to sustain the current product
knowledge necessary to formulate 'smart' selections becomes extremely
difficult. In addition, while there are a host of reasons CRM technology
malfunctions, two are fairly simple: inadequate planning and/or unreasonable
expectations. I will act as advocate here and suggest that the buying
community is not wholly liable, as CRM vendors, following suit with other
software companies, have an appetite for inflating product abilities and
deflating the importance of due diligence.
All that said, the failure rate is one that is, to put it simply,
unacceptable. To ensure that this does not happen to you, it helps to take a
Functional Focus -- Enterprise Or Divisional
Defining a functional focus will assist in establishing firm groundwork
from which to draw. Decidedly, CRM extends to many functional business
areas, including contact or call centers, field services, marketing, and
sales and help desks, to name a few. While it is difficult to recommend
which of these should be on your front burner, the choice is typically
driven by the area that can realize the greatest return in the least amount
of time. It is feasible to attend to cross-functional units in tandem during
your CRM implementation, which, if well organized, is a preferred method.
Those areas that are deemed more complex, require greater attention or will
inherently take longer can be included in the earlier phases of an
implementation methodology (planning and requirements), but they should be
designated for deployment in a later phase.
If your scenario calls for cross-functional areas or enterprisewide
capabilities to be purchased now and deployed in a later phase (the modular
approach), you will want to consider all mitigating factors. Ensure that the
product you are selecting has the functional scalability you desire, or at
least ensure that the vendor has your desired modules in development. If
your focus is on one or two specific areas and you are fairly confident the
conditions are not likely to expand, consider going the best-of-breed route.
Bear in mind that managing several distinct area implementations
concurrently can lead to serious management challenges. It is recommended
that you establish one unifying team (management, integrations, data,
workflow, etc.) to oversee several sub-teams, each of which maintains a
focus on a particular area.
Know Your Business
It helps to solidify your business operating model (as it relates to the
functional area to be addressed), processes, procedures and customer focuses
prior to taking on any new CRM technology. This is the cornerstone of your
initiative and will contribute to the success of your CRM implementation.
This includes reviewing, understanding, modifying (where necessary),
documenting and employing desired business processes, procedures, rules and
policies prior to making your technology selection. This is how you manage
your customer relationships and it needs to be clear. Only then should you
draw on CRM applications to drive and enforce your business requirements.
Channel Distribution ' How Many Ways To Communicate?
Channel distribution is rapidly becoming the most talked about, most
demanded characteristic of CRM. While just a few years ago the ability to
communicate and deliver via anything other than the telephone or fax was
simply a product of idealism, it is no longer considered superfluous. Web,
e-mail, chat, even remote devices are now firmly entrenched at the
Avoid the pitfall of confusing the needs of the concept of CRM (an
industry creation) with needs of the consumer. Before you get caught up in
the hype, consider the population you are servicing. These customers may not
need, nor demand, multiple channel distribution today, and putting it out
there does not suggest you are 'automagically' saving big bucks.
Consider which channels will give you a true and calculable ROI in the
short-term. Consumers insist on a homogeneous information experience
regardless of which channel they use. As a result, providing reliable
information via one source is notably superior to providing erroneous
information via many sources.
It is recommended that you seek out a solution that has scalability as it
relates to channel distribution, but again that does not suggest that it all
needs to be in production today. Regardless of your population demands and
channel needs, a phased release approach will more likely ensure that each
channel is deployed properly and consistent with others.
As you are selecting a product, consider its delivery abilities. What
distribution channels are available within the product, and does it have
what you need to be scalable? How do these channels comply with your
existing structure (i.e., e-mail integration with Lotus, Outlook, Groupwise,
etc.)? Can you procure modules and add-ons as you release new channels and
what impact does it have on others? Are these presented in the contact
management modules as unified, and if not, what is the workaround to have
this occur? Note that many CRM vendors do not maintain their own
capabilities, but rather employ those of third parties in order to deliver
multiple channels. This creates a greater degree of dependency on numerous
organizations being consistently in development alignment and, equally as
important, in business alignment. Unified (one company) channel mechanisms
are preferred products.
Data Integration Is King
To provide your customer with accurate, consistent and updated
information, data and integration are vital attributes of a successful CRM
implementation regardless of business or functional focus. Most enterprises
maintain an assortment of disparate data sources, housed in an array of
platforms and databases, all of which are often maintained and supported
with unequal methods.
CRM systems (unless connected to a data warehouse) are rarely the 'system
of record.' In short, depending on the data element, they usually view or
make use of information from other systems in order to operate. That is not
to say that information is not created in these systems, but rather that
core customer data are typically not exclusive to the application. As such,
it is critical that the data that are to be used from other systems first be
identified, scrubbed and converted. In many cases, this includes the purging
of particular information, removal of duplicates, etc.
Seek products that attempt to make this process of conversion easier, or
at least less painful. This may include the ability to connect to systems
that inherently perform these functions prior to importing information into
the applications database.
Integration ' Be Connected
Define an integration approach prior to your product decision-making.
This may encompass integration at the GUI, application or data layers
depending on your needs such as workflow, computer-telephony, interactive
voice response, etc. Consider that you are not likely to discontinue the use
of the legacy, stand-alone or even telecommunications systems. This should
include business needs and existing system capabilities as they relate to
batch or real-time processes for updated information. The consequences of
not contemplating these tasks is disastrous.
Seek packaged products that provide out-of-the-box connectors or
application programming interfaces (API) as a component of the packaged
product that align with the technologies and programming languages you
currently employ. For example, in the event that you employ a particular ERP
or financial package, look around to see which products on the market have
appropriate connectors. Better yet, due to the previously described industry
consolidation, your existing enterprise package may have CRM capabilities or
add-on modules. Last, several products use internal integration management
facilities, much like a proprietary HUB that can eliminate the need to
create an interim repository.
The Perpetual Upgrade Path
Inevitably, before you have completed your first implementation, you are
going to feel as though you are behind the times. The chosen product vendor
will have upgrades to your release, or may even have released a new version.
Consider these points up front and talk to product vendors about future
releases and target dates. Inquire what new capabilities will be released
and understand that a 'new' release may be a vendor disguise for fixing
The vendor will undoubtedly describe an upgrade path that sounds
effortless; however, make sure you ask questions. You will want to know
whether it is a core or full upgrade and how it will affect your
Intelligence ' Abundant And Misleading
What a cumbersome, frustrating and sometimes manipulative process it can
be to acquire accurate information from a CRM vendor. While it is true there
are resources from which to gather information and guide you through the
vendor selection process, this, too, can lead you to wading through needless
and irrelevant information. Books, magazines, trade and vendor Web sites,
discussion forums, salespeople and white papers are abundant in the CRM
community. Depending on where you go or with whom you talk, you will likely
encounter innumerable views and answers to your questions. Discover these
sources well in advance and adequately educate yourself on all elements of
the CRM market.
The RFI and RFP processes are by far (if organized and conducted
appropriately) the most powerful means of acquiring information without
salespeople breathing down your neck. Performing the previously described
functional and technology analyses will permit you to come up with a
short-list of CRM vendors. Distribute an RFP targeted directly to your
desired vendors, receive comprehensive information, schedule demonstrations
and continue this process until you are satisfied you have what you need to
move on to the CRM 'decision matrix.'
The CRM Decision Matrix
Building a CRM decision matrix allows you to accurately quantify your
needs both in practice and visually. This method comprises a series of
qualifying factors that will help you make an appropriate selection.
Consider building an analysis model with criteria such as features and
functions, supported platforms, integration, work plan, references, pricing,
organization, financials, cost of ownership, resources, etc. These
attributes are strictly quantifiable, and interchangeable, if necessary,
depending on what type of evaluation you are performing.
Once the criteria have been established, you can apply a scoring method.
While this too can be accomplished by a variety of techniques, it is key
that categorization of priorities is directly aligned with your priorities.
For example, if the functionality and workflow capabilities of the product
are more important to your organization than the ability to integrate with
disparate systems, then be sure your scoring methods reflect such a need.
Selection Done. Now I Have To Buy It.
Making your final purchase is a whole different ballgame. Contemplate
the procurement process only as you are clear as to what product you are
ready to go with. Discussion of the procurement prior to this point in the
process will only divert your attention from an accurate selection process.
There are several ways to negotiate more cost-effective deals with CRM
vendors. Many vendors maintain a variety of sales channels, typically in the
form of either distribution partners or resellers. You may find several
partners statewide that are eager to resell software to you, and the
competition could mean a bargain. In addition, seeking a quote, or
distributing a proper RFP, will enable you to drive the most economical
Implementation Services = Product Cost (x) WHAT!?
Let's get this out of the way from the get-go. You are likely to hear
many vendors discuss the words 'ratio' when it comes to implementing
your solution, or maybe you won't because they would rather not tell you.
The challenge of selecting an organization to implement your CRM solution
can prove to be as painful as choosing the product. In fact, you will want
to be careful with your selection process as 'ratio' refers to the
amount of dollars you will spend on the implementation of your CRM solution
compared to the amount of dollars you spent on the software. This ratio can
generally run anywhere from 0.5 to 4.0.
In the event that you have chosen a CRM application service provider
(ASP) solution, your ratios are likely to be lower for the simple reason
that you cannot make many changes to an ASP solution. However, in the event
that you have chosen a packaged solution that requires multiple channel
distribution or maintain numerous systems that require integration and are
deploying to a 700 agent call center, you might find yourself on the higher
Many Are Wading In The Resource Pool
In choosing a CRM services vendor, consider the following resource
options: internal, vendor resources, vendor partners, third-party or staff
augmentation. Performing the services internally would suggest that you
either have, or must hire, the appropriate staff. For this option, consider
that while you should have a maintenance and support plan and a
post-implementation plan, you are not likely to need the entire team
involved. Vendor resources can provide you with well-trained 'inside'
resources, although they can be costly. Using a vendor-certified partner can
prove valuable, as it is typically less costly and still allows you to
maintain the support of your vendor. Third-party vendors can also be very
useful, however they are not typically as well supported by vendors.
Finally, staff augmentation suggests you will seek certified independent
consultants, potentially from a variety of sources, however, in this
scenario, you remain accountable for your own implementation.
Whichever path you select, be sure to first certify the companies' and
individuals' backgrounds as they relate to similar implementations. Locate
organizations that have been involved in a vertically similar
implementation. This can help you avoid the pitfalls on the learning curve
by learning from the other companies' mistakes.
Negotiating implementation services can prove to be easier than that of
product purchases. In today's environment, many organizations are much
more willing to be flexible on cost given the abundance of available
resources in the market. Apply similar principles and methods to acquiring
services as you would for products. In short, never assume the first offer,
and be margin-savvy.
CRM Failures Are Usually Self-Inflicted Wounds
It is difficult, if nearly impossible, to outline all factors for CRM
implementation. However, it can be argued that the failure rate could
unequivocally be considered a 'self-inflicted wound.' Streamlining your
internal processes will increase the likelihood that your CRM implementation
will draw absolute success. Good luck!
Richard Earley has been developing and delivering integrated solutions
for over a decade and has a history of experience in enterprise development,
marketing, sales and operations/practice management. Originally operating as
a management consultant for large call centers, he was then involved in the
early adoption of CRM business applications, developing and operating
customized programs for government entities in the health care and call
center markets. Earley subsequently joined an international consulting firm
where he has filled many roles including director of the National CRM
Practice. He is the moderator of the Any Answers discussion forum (www.crm-forum.com/anyanswers),
a source of information written by CRM professionals for CRM professionals.
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