The Business Intelligence Channel

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 are given in Part 2 of this series. However, the 22 companies Forrester talked with also warned of the types of pitfalls to avoid, outlined in Part 3. The whole paper's available at [email protected]:

 

"Enterprises view customer-facing strategies and technologies as critical to gaining competitive advantage," as Band and his research colleagues have found, leading them to "continue to spend a great deal on CRM, though many organizations still struggle to

find the right practices to leverage CRM to its greatest benefits."

 

Enterprises will spend more than $3 billion worldwide on new CRM software licenses in 2005, Band writes: "Total spending on CRM, including maintenance, integration, and related hardware and software, will be more than $12 billion."

 

This level of investment reflects what the report calls "unrelenting pressure on organizations to create differentiated customer experiences to distinguish themselves from competitors." When products and services are so commoditized and available, it's hard to have a widget nobody else can match.

 

Customer service, then, is being seen as a distinct competitive advantage. The same pair of jeans or cell phone or car can be more attractive from the vendor who offers the better customer experience. Hence the billion-dollar industry we call Customer Relationship Management.

 

Nevertheless, Band's research has found that satisfaction with CRM implementations remains problematic. Despite high levels of spending -- this reporter would argue "because of high levels of spending," the mentality that throwing enough money at a problem solves it, all evidence to the contrary -- satisfaction with CRM implementations is not strong.

 

Forrester recently surveyed 94 business and IT executives about their satisfaction with CRM software applications. Want to guess what percentage "strongly agreed" that the business results they expected to achieve were met or exceeded? Your first few guesses will be high.

 

Ten percent. And only a further ten percent "strongly agreed" that they were able to quickly realize value from their CRM applications, while 14% "strongly agreed" that their CRM applications improved the productivity of end users.

 

It doesn't have to be this bleak. Band's paper shows how companies are increasing their satisfaction with CRM and avoiding common pitfalls along the way.

 

David Sims is contributing editor for TMCnet. For other articles in this series please visit David Sims' columnist page.