January 2001

BY JAY GAUTHIER

CRM visionaries and project managers: Does this scenario sound vaguely familiar?

Your global, multichannel company has decided that customer relationship management (CRM) is a corporate imperative. Management is looking to increase customer loyalty, customer satisfaction, top-line revenues, and drive more accountability into marketing and sales activity. The sales support call centers are an operational mess, and nobody has been able to get any of these customer-facing entities to interface seamlessly with your customer activity on the Web, or the back-end systems that control billing, shipments and marketing campaign history.

Here's the great news: You've been tapped as the business executive to lead the project. Deploy this one successfully in North America, and you will be giving CRM "best practices" speeches to your counterparts in the European headquarters by June. It's your baby'the project plan, the team, the big budget and the end-state deliverable. You have never had this much power, nor this much at stake.

The CRM Life Is Good
No sooner do you get started than you hit the first of many speed bumps. You didn't see it beforehand, though, and hitting a speed bump you don't see feels more like hitting a small wall, right? And the bumps keep coming.

The organizational boundaries and departmental fiefdoms -- people you thought were on your side at the project kick-off party -- are now hugging trees, and not exactly helping you move their teams, or this project, forward. You have a few project managers running key teams, but they have other responsibilities that take priority. They are uncomfortable with telling peers that the CRM effort will enhance critical skills and eliminate project and job redundancy. Job redundancy is job security.

Undisciplined and undocumented business processes seem to be the norm, yet the business groups you are working with are insistent that there is "No way we can change the way we do business'it's always been done this way."

You now find yourself in a world of pain in the technology environment -- you have more solutions supporting CRM than employees to use them. Unstructured customer contact data repositories are everywhere -- managed internally and housed externally, they are the sales reps' notebook, date book, PDA and ex-wife's PC, and are all categorized as ultra vital by their owners. To make matters worse, your internal IT counterparts assigned to implement the soon-to-be-selected CRM technology on your behalf have gone on record saying, "Your business team has no idea what its CRM requirements are," leaving you with a perceived vote of no confidence from your peers. In fairness to you, a member of your business process task force made a request for a "requirements template" from IT, and you were told weeks later there was no such thing.

You turn to the CRM packaged application vendors for insight and customer references; arming yourself to the teeth with information that will help you reach a vision of what you "could or perhaps should ask for" relative to CRM features and functionality.

Now you're getting somewhere. You begin thinking, "The opportunity management module looks strong on Package A, but Package B has a more robust territory assignment manager. On the other hand, Package C is a pure Web-based application, so the business partners will use it for opportunity management, as well. Then again, it looks hard to use and I'm not budgeted for training external resources on the product."

You press on with a plan to research ten, consider five and shortlist three software vendors. Trouble is, all of the sales pitches boast the same all-encompassing, multichannel, back office-integrated, just-press-the-button CRM fantasyland. A recurring six-word phase is permanently etched in your brain: "Yeah, our software can do that."

In search of unquestionable truth, you then spend $20,000 to fly your whole team to three reference site visits in search of greater clarity and a like-minded perspective. You see marvelous things. On the final flight home, an eager twenty-something program manager is inspired by the day's visit: "Did you see what their CRM system could do? Their sales reps get leads sent to their PDAs! We absolutely need that!" Do you? You really don't know. Let's face it, you're still trying to figure out the benefits and differences between a 200-seat universal license and a 200-seat concurrent license. The trip may have been merely a complete distraction to what you should be doing. You perceive the IT gang back at corporate has been secretly working on their diabolical plan to finish you off once and for all, and get your project delayed, perhaps killed. Take tomorrow off and make time to think.

The CRM Life Is Bad
The project isn't exactly what you thought it would be after all. It is, however, your project, and you will persevere in the end, and get the project off the ground, just like so many other fearless champions of CRM.

What happens next is pure fact. Project failure rates are high. Industry data confirms that nearly 80 percent of CRM front-office initiatives that set out to automate sales and marketing functions fail to adequately meet customer care expectations. Moreover, these enterprises lose an estimated 15 to 35 percent of their customers annually due to poor sales and service interactions. Considering that an enterprise may invest upwards of $10 million in its initial CRM launch, this statistic can be downright daunting. What's most troubling is that the worst implementations have little or nothing to do with the CRM software or the tactical software integration effort. The chief risk to business success is often the business approach itself.

MAKING IT GOOD AGAIN
How can your CRM effort be one of the stellar ones? How do you help stop your business from losing long-time, profitable customers? What are the lessons learned from these pitfalls, and how do you troubleshoot your own project before it short-circuits a great vision and plan?

First, leave the debates about CRM-enabling technology on the sidelines for now. Three primary considerations will help you keep a CRM initiative on track from the start: executive sponsorship, the customer and the process.

Executive Sponsorship
Many CRM consultants and successful CRM project managers would argue that genuine executive sponsorship is the only way big, complex CRM projects ever get started. The executive sponsor doesn't necessarily mean the person who pays or manages the group executing the program. The sponsor is the person that takes the heat when the project gets rough. Often, the best sponsor is the senior executive in charge of sales or marketing. The primary reason for this is that the greatest internal resistance to these efforts comes from salespeople. In companies where sales is king, salespeople make the rules. The executive sponsor ensures those rules are in the best interest of the customer and the success of the CRM project.

The project sponsor is also instrumental in helping to establish, communicate and stand firm on the documented goals and objectives of the project. Significant thought needs to be given to the metrics of a CRM project. What are the measurements? Is it customer satisfaction? Revenue? Demand generation? How will successes and failures be communicated? This will set the tone of the project from day one and ensure a consistent, company-wide assessment of the CRM end-state product and return on investment (ROI).

The Customer
How do you suppose a project of this magnitude came to be in the first place? What company's board of directors allocates multiple millions of precious capital -- margin-crunching dollars -- to an initiative just for the sheer sake of running a project? Your customer -- or more appropriately, the value of the customer to your company's revenue and profit picture -- is at the root of all this. Unfortunately, most companies react to CRM long after simple losses in customer satisfaction and loyalty.

It's important to acknowledge that above all, a customer-focused approach will almost always keep a project directionally accurate. Simulating customer experiences is perhaps the best way to clearly witness operational gaps in customer interaction management. Many companies accomplish this by teleconferencing with reps, going on sales calls and reading e-mail. This may be necessary, but it's definitely insufficient to understand the cradle-to-grave process of the customer buying cycle.

The Customer Process
Here's a great twist on a theme: Forget conferencing and forget surveys. Live the experience. Place a few mock orders into your customer call center or regional field office. They should be realistic, so include some errors (model numbers, quantities, purchase discounts, etc.) Carefully document what happens next. If the order is faxed in, how long does it take for your business processes to identify and rectify the problem? What does the customer experience throughout this process? If the order is called in, how are the order management issues handled? What happens if multiple resources are required to handle the order? What is that documented experience like for the customer? Would you buy from your company again?

Once you synthesize the data, bring the business teams together to discuss the experience and the customer perspective you've gained. Get consensus from business leads that current processes fail to support routine orders. With sufficient team buy-in, consider facilitated change management sessions to sort out how these, and other customer-facing processes, can be made more customer-focused. Communicate the results of early achievements to help other business groups understand how the work has impacted team building, morale and meeting core business objectives. This represents an operational base case for extending the proven business process element of the project across organizational boundaries.

FINALLY, SELECT YOUR PACKAGE
From this model, requirements can be successfully gathered and compiled to ensure the CRM solution you choose will support the user community. Translating business requirements into the technical specification for the packaged application integrator is not a job for rookies. Evaluate the processes and tools integrators use to collect, organize and prioritize user requirements, and consider hiring a consulting company with professional process modelers that possess a working understanding of the various CRM packages. This will ensure the requirements gathering and process modeling job is done right.

Once documented requirements are in place, selecting the right packaged application to enable these processes is much easier. Working closely with IT at this point can help the team identify the tradeoffs between one application's strengths and weaknesses and those of another. Implementers worth considering will use case scenarios to ensure the software vendors can simulate the required processes. Customization may be necessary, but you will know this prior to selecting the package to fit the need.

Select the integrator last. Work with the software vendor to identify integration partners they trust. However, never lose sight of the fact that you own the deliverable, and thus you are ultimately responsible for the performance of the integrator, not the software vendor.

CRM need not be a daunting process for companies. Simple steps, strong leadership and conviction to get the job done right consistently win big.

Jay Gauthier is executive vice president and co-founder of Berkeley Enterprise Partners, an eCRM consulting company that helps organizations design and build customer interaction solutions.