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December 29, 2005

Forrester Looks at CRM Best Practices. Part 3: Pitfalls

By David Sims, TMCnet Contributing Editor
William Band, a CRM analyst for Forrester Research has written a highly useful paper titled "Best Practices For CRM Deployment."
 
"Forrester talked with 22 large organizations in North America, Europe, and Asia to understand their methods for achieving business performance improvement through investment in CRM initiatives," Band writes. "Organizations spend heavily to improve customer-facing processes, but they still struggle to achieve satisfactory returns on their effort."
 
CRM initiatives will be more successful if best practices are followed, and some highlights were given in Part 2 of this article series. However, the 22 companies Forrester talked with also warned of the types of pitfalls to avoid. The whole paper's available at resourcecenter@forrester.com:
 
One of Band's best practices is define objectives and processes first, and then apply technology. CRM technologies are a means, not an end. Tools, not ends in themselves. If you want to drive a nail, the niftiest screwdriver in the world is useless to you. Define CRM objectives and the business process changes necessary to meet the objectives before considering a technology purchase.
 
What's your goal, Band asks: "To increase revenue per sales rep? Increase average order size? Decrease customer acquisition costs? Improve customer retention? Decrease service response times?"
 
It's crucial to answer these questions before you pick up the phone to call the first vendor, since buying the wrong technology for the job, or other technology-related pitfalls, were, along with people-related issues, important areas of caution Band found.
 
Technology glitches can sink CRM programs. Technology-related pitfalls cover a broad range of risks -- customer data loading and integration continues to be a major
headache at many organizations. The executives Band and his colleagues interviewed caution that integration with legacy applications is never easy, which anybody who's tried it knows, forget what CRM vendors say.
 
And, as is so often the case with anything in business, People challenges are the toughest problems. The executives Band interviewed emphasized that "technical challenges constitute only 20% of the effort for successful CRM." Addressing “people”
issues will consume the remaining 80% of management attention.
 
The paper gives incisive examples of what Band means here, including uneven levels
of user technology literacy, choosing a vendor with poor user interface and not taking into account user needs. These and other pitfalls have wasted untold hours and dollars at failed CRM implementations. In this first of three parts we'll see examples of what best practices Band's talking about.
 
Much more in the paper, well worth its cost.
 
David Sims is contributing editor for TMCnet. For more articles please visit David Sims' columnist page
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