CUSTOMER RELATIONSHIP MANAGEMENT
Question of Successful Implementation
Harit Shroff

Customer in today’s dynamic environment has become the driver of life cycle of any organisation. With increase in size of operations and expansions beyond national geographical frontiers, managing customers has become a challenging task. It now requires greater sophistication and expertise to what is now term as Customer Relationship Management (CRM).

Customer Relationship Management is a customer-focused business strategy designed to optimize revenue, profitability, and customer loyalty. By implementing a CRM strategy, an organization can improve the business processes and technology solutions around selling, marketing and servicing functions across all customer touch-points (for example: Web, e-mail, phone, fax, in-person).

Primary objective of CRM is to provide the entire organization with a complete, 360-degree view of the customer, no matter where the information resides or where the customer touch-point occurred.

The concept of CRM is presently on its fancy with more and more companies are running into the fray of implementing CRM and want to reap the benefits of it. In virtually every industry, companies who are focusing on this aspect are optimizing their sales process and in turn realizing the significant advantages of doing so. They are outselling their competitors by 50% or more, cutting their sell cycle time by as much as half, becoming more customer-oriented, working more effectively across inter-enterprise and intra-enterprise boundaries, and doing all this at a significantly lower cost.

But flipping the coin to the other side will give the second perspective of the story. According to a rough estimate around 70% of the company’s do not able to implement the CRM effectively. Companies try to implement the concept and not the solution to a problem. Therefore most of the companies loose their vision of implementing the CRM and do not able to justify its strategic direction with specific goals.

In most of the cases, common threads of few shortcomings are found to be major cause of non-successful implementation of this concept. These major shortcomings are as follows:

1. Under-Commitment.

 If a company or its senior management team do not fundamentally believe that successfully redesigning its sales process is one of the top strategic challenges the company faces, then it must not even start a CRM project. The biggest single mistake companies make is failing to commit to their CRM initiative.

Symptoms of under-commitment include: 

Ø       Lack of Senior Executive Attention.

Ø       Tactical Project Orientation.

Ø       Part-Time Attitude.

Successful CRM projects are ones that are taken extremely seriously. The major components of a program are active executive involvement, an enterprise-wide shared vision, full-time commitment of personnel, accountability for results, and a process-driven budget.

2. Absolute importance to technology

A second mistake that is easy to make is expecting too much out of CRM technology. When a company hear about substantial gains from implementing CRM systems it may end up assigning too much importance to the technology components that were used.

The key to CRM success involves optimizing an effective sales process with the intelligent use of technology. If the process is fundamentally flawed, technology may give a little boost, but more likely it will end up helping a company do inefficient or ineffective things faster than ever before. So before it start looking at tools, give serious thought to what it wants to do with them.

3. Multiple orientation

Successful CRM programs require an enterprise-wide orientation. If a company let each of its departments attempt to deal with their portion of the sales process independently, it may create a configuration that no one can figure out.

While it may start its CRM initiative in a single area, it has to take the time up front to set some overall architectural parameters that everyone agrees to work with. Otherwise, somewhere down the road it will end up with a number of incompatible point solutions that will eventually force it to reconstruct at least part of its CRM system.

4. Big Dreams Small Budgets.

Trying to implement a CRM program as cheaply as possible is another mistake companies come to regret. Often, funding for CRM initiatives isn't included in the budget when companies kick off their effort. It is therefore tempting to take a low-cost approach to the problem, so as not to cause any waves in the current fiscal year plan.

While cost should never be the first thing a company should focus on, in its CRM initiative, rather focus should be on benefits. The revenue increases and cost savings it can generate through its CRM program can be tremendous. But nothing comes free of cost. If a company hasn't budgeted for CRM, it should do. Figure out what it want to achieve, determine what it will cost to get there, compare the benefits to the costs, and decide if it is a good investment.

5. Picking the Wrong Technology Partner for sourcing of CRM package

With numerous CRM-oriented vendors to choose from, a company should be able to find a solution that meets its specific sale’s process functionality needs. It should not base its vendor choice on product features alone. It should also dependent on other vital features, including:

Ø       Getting Boxed into a Technology Corner. It is important to understand not just what a product does, but how it does it. Some vendors have developed unique technologies around their products. While their products may have the features a company needs, the product architecture can negatively impact its ability to easily expand or enhance the system to meet future needs.

Ø       Buying Technical vs. Sales Process Expertise. How well does vendor understand the business process in question? A vendor's limited knowledge and understanding of the underlying business problem a company is trying to solve can negatively impact its project.

Ø       Picking a Short-Term Player. As any new industry matures, weaker companies fall to the wayside as the industry leaders emerge. This will happen to the CRM industry, and it will result in a significant fall-out of the current 500+ players operating in the industry.

6. Considering CRM product inflexibility

Assuming that automating sales process through CRM will be similar to automating manufacturing or finance can be a huge mistake. The degree of complexity in implementing a CRM system is significantly higher than the other two examples. The reason is the issue of standardization. No sophisticated CRM product will work right out of the box. Regardless of which vendor a company choose, it has to build into the project plan the expectation of time required to adapt that product to its process.  It should avoid the temptation to try to retrofit its operations to fit the tool it has bought. Instead, view the product purchased as enabling technology, and modify it to meet unique sales process requirements.

7. Avoiding the Human Side of the Equation.

A critical pitfall to avoid is focusing too much on process and technology, and not enough on the people who will be using the system. One can design the best process in the world, and back it with the latest and greatest technology, but if people don't buy into the project, it won't work. There are three people-related issues that have surfaced in many of the CRM programs that are worth noting:

Ø       The Fear-of-Change Syndrome: Reengineering requires change, which most people instinctively resist. This fear of change needs to be dealt with early on, or the very people the system is designed to help will be the ones to see that it fails.

Ø       The Big Brother Syndrome. Sales force thinks that CRM systems are designed to track their every move, just waiting for them to make a mistake so that management can pounce on them. This initial distrust is a very serious issue that must be dealt with swiftly.

Ø       It's Easy Enough Syndromes. For CRM system to be successful, every single person must use it. For the sake of speed, a temptation may be to let a few computer-literate users design the system interface. What a company will end up with is a system that they think is easy enough for it to use, but isn't easy enough for everyone.

8. Being Too Diplomatic. 

Fundamentally, CRM initiative has to succeed or firm's long-term future may be in jeopardy. While one want to motivate people to change, there are several mistakes companies have reported making as a result of trying to be too diplomatic in their CRM program. Some of these errors include:

Ø       Not Having Executive-Level Buy-in. CRM needs to have the full support and endorsement of every member of the executive team. Inter-departmental turf-wars can erupt if employees don't see that their senior managers are behind the strategy.

Ø       Accepting Less Than 100% User Buy-in. Make it clear that using the CRM system is not an option, but a requirement of employment. As soon as company let a single person get away with not using the system the foundation for its project will start to crumble.

Ø       Backing Off at the First Sign of Problems. No matter how much thought put into the system, one can count on running into unanticipated problems when he implements it fully. Backing off at the first sign of problems will cause confusion, and ultimately chaos if it happens too often.

9. Assuming that Work is done 

A company may have clearly defined its project plan, involving all the right people in turning the vision into a reality, and done a superb job of rolling the program out across the enterprise, but even if one stop these, program can still fail for a variety of reasons including:

Ø       No Formal Training for New Employees. Count on any new employees requiring the same level of training as existing personnel requires.

Ø       Inadequate System Support. CRM programs require a significant amount of system support. If a company is asking its sales teams to commit to managing their sell cycles through a CRM system, then it has to give them a fast, easy way to get answers to system questions.

Ø       No Planned Enhancements/Upgrades. CRM is not an event; it is an ongoing process. A Company will continue to improve the way it sell over time, so its system will need to be enhanced accordingly.

Implementation of CRM thus requires concentrated and dedicated effort with endless endeavor to achieve efficiency and excellence in the organisation. It requires support from all corners of an organisation. Greater attention has to be paid to above discussed parameters to create sufficient flexibility and insight into the organisation. With other endless dimensions, success of CRM in present dynamics will ultimately be defined by the organizations trying to implement this concept. So let us wait and watch the real outcome, which will going to emerge in fore coming years.

Authors: 
Harit Shroff
MBA Student, MDI,Gurgaon.

Back