'The basis for business growth is successfully managing long-term relationships with customers on a one-to-one basis'

Why do CRM projects fail so often?



The main reason for failure is that organizations merely replace an existing
system with a new one without changing the existing business processes.

Implementing new CRM software with improved functionality doesn’t guarantee an

improved customer experience. So use the CRM implementation to re-evaluate

sales, marketing and service operations, identify all customer touch-points,

regardless of channel, and focus on improving the relationship and extracting

optimal value at every touch-point. In order to maximize return on your CRM

investment, always maintain a consistent focus on business goals. These goals

should be highly specific, and metrics for measuring their success should be

identified before the implementation.

What is the case for CRM implementation? Why are so many organizations

looking at it now?



Most process re-engineering and IT projects over the past two decades have

been targeted at streamlining operations and reducing costs. The focus has

shifted to CRM as most enterprises recognize that treating existing customers

well is the best source of profitable and sustainable revenue growth. The

emergence and integration of powerful and inexpensive technology solutions, has

empowered businesses to deliver highly personalized messages, products and

services to customers. Today’s basis for business growth is the successful

management of long-term relationships with customers on a one-to-one basis. As

India Inc embarks on its CRM journey, major industry verticals expected to focus

on CRM are financial services, hospitality, consumer durables and telecom. CRM,

if implemented in right earnest is a value creation tool both for the enterprise

as well as its customers.

What CRM Can Give You The average results of CRM across industry verticals are: Revenue growth of 15%-plus Customer satisfaction of 21%-plus Employee productivity up 20%-plus On an average, 15% of customers can be convinced Return on investment in 10 months

CRM is a business initiative toward building customer-centric organizations.

Technology is the enabler, so be sure to strike an optimal balance between best

practices built into software and organizational business processes. Also, use

the CRM implementation as an opportunity to weed out inefficient processes that

do little to improve the customer experience.

In a CRM implementation, what should an organization’s key concerns and

focus areas be?



The three primary areas to be looked at are people, processes, and measures.
That is, we have to decide on the people who will be involved and their roles,

the processes that need to be considered for redesigning and realignment, and

the measures that need to be chalked out. In the end, it is these measurements

that will be witness to the so called ROI from the CRM exercise. Such questions

will then be asked: Have I managed to reduce churn? By how much? Have I managed

to improve productivity? Have I been able to standardize processes? Have I been

able to enhance revenue — through cross-selling and up-selling? These are what

we call management goals against which RoI has to be measured. A pilot is then

done jointly by the IT and business teams after which the scope and detailed

deliverables of the entire project are worked out.

Any specific pointers at this stage?



Firstly, set precise goals. The CRM strategy for most businesses should be
multi-channel and supplemented with concrete goals which can be used as

reference points during the implementation process and which can also function

as success criteria for the finished CRM solution. Second, involve all the

affected departments. The success of the process depends on the active

involvement of the managers. The heads of the departments that are affected by

the implementation should be involved. Right from the beginning, they should

understand the necessity of reaching an agreement on implementation goals since

they are externally controlled. CRM involves customer facing functions and those

executing the order fulfillment process.

Third, use the best employees in the organization. It is necessary to involve

the employees who best understand the business. These experts must help define

and set the business processes in co-operation with the CRM implementers. The

advantage of involving employees as process owners is that the solution will

almost certainly, in terms of functionality, live up to the daily requirements

of company users.

What about change management within the organization itself?



One has to positively influence the organization. Change management is a central
element in project management. Today CRM software systems build on new ways of

thinking, which traditional organizations do not support. ‘Team-based selling’

is a good example. If, during the change process, these conditions are not taken

into consideration, implementation may meet with resistance from employees and

the business value of the implementation may be significantly reduced.

How do you proceed with implementing CRM without disturbing the other IT

initiatives in the enterprise?



Project managers are responsible for coordinating the CRM project with other

enterprise activities and projects. The diagram shows the organization of a

project that includes both CRM and IT project implementations. When putting

together a project organization, we must include all the people in the

enterprise who are involved in the project. External parties such as CRM-IT

suppliers and external consultants should also be included in the project

organization.

"Plan the work and work the plan". Often the enterprise discovers

too late that the project plan is not functioning properly. Unfortunately then,

the strategic concept will disappear and the solution will not be sufficiently

anchored in the enterprise.

Hence it is necessary to continually follow up and adjust the plan in

relation with the original project goals.

The risk of insufficient planning is especially great when it comes to the

development of interfaces and the conversion and transfer of existing data. If

the converted data is not in order and the necessary interfaces do not have

sufficient capacity, the system will not take off. Quality assurance of data

conversion as well as performance tests of the interfaces must therefore be

undertaken as early as possible in the process.

At what stage does the rest of the organization need to get involved?



It is necessary to involve a greater part of the organization apart from the

process owners because adjusting to the changes brought about by CRM takes time.

Employees can participate in the development work or in hands-on meetings. They

will then get educated about the new system and how it will affect their daily

work. Questions such as ownership of basic data, updating, etc may also cause

many problems if employees do not understand the changes right from the start.

The project also needs a sponsor in the top management whose personal goals

are directly linked to the success of the project. The sponsor can help identify

resources, reduce the resistance from employees, accelerate the decision-making

process and ensure the survival of the system.

It is the management’s responsibility to create a sense of urgency and

decisiveness to give the project the impetus necessary to ensure ongoing

progress based on the project vision and guidelines. In large projects, the

changes at times will require the full involvement of certain employees. To

create an effective work climate and to make it attractive to participate in the

project, employees who are involved should know what their new positions in the

organization would be after the changes are executed. Communicating continually

with the interested parties is another important aspect. Employees must

understand that the enterprise is initiating the project to achieve business

benefits in the form of loyalty, cross-sales, improved customer service, etc and

that all activities aim to maintain the competitiveness of the enterprise and

its ability to retain competent employees.

The change management process seems quite elaborate. Does this stretch

through the duration of the project and affect its momentum?



Usually no. At the beginning of the project, participants will be optimistic

and generally have high expectations. These high expectations typically

disappear when the parties involved discover how much a CRM project demands. As

the complexity of the project increases, there is a further loss of interest. If

the enterprise can reap so called Quick-Wins from the project, it is a good idea

to save them until this phase of the project to keep up the momentum.

What about training?



Do not try to save money on training and education. The first step of

training should be aimed at giving the target audience a business understanding

of CRM. After that, attention can be directed towards IT. When employees learn

new skills, their self-esteem increases; they feel more secure and

self-confident too.

What is your opinion on product choices and implementation methodology?



As a consultant I would like to refrain from promoting or advocating specific
products or vendors. PwC has handled CRM implementations across all the three

operational CRM platforms- Siebel, Oracle, and SAP. Regardless of the product

choice, we recommend a rapid application design (RAD) method for the

implementation plan. Unlike traditional implementation methods, the analysis,

design and construction phases are carried out simultaneously in the RAD method.

In practice, this means that no time is wasted in envisioning a final process

solution that cannot be supported by the chosen CRM system.

Try being optimal and pragmatic in carrying out the implementation. Choosing

to implement a solution in every corner of the organization is not necessarily

optimal. The acquisition of hardware, software and training programs and the

development of local interfaces requires significant investments. A good tactic

is to include those parts of the organization that will reap the greatest

benefit from implementation in the first phase. Avoid over-specialized

solutions. When the enterprise tries to meet all the demands of functionality

that the process owners want to introduce, it runs the risk of customizing the

CRM software beyond its ability. Experience shows that those highly customized

CRM systems in particular cause difficulties when they are upgraded to later

software versions. We recommend a four-step process involving analysis, design,

construction, and implementation with check-points for each, a method similar to

what we follow in an ERP implementation. Divide the CRM implementation into

different waves. The different parts of the organization have a right to know

when their turn is due. Before the beginning of a wave, there must be time set

aside for installing the hardware and the enterprise should be sure that the

employees have the necessary CRM and IT skills.

When will the results be visible?



Focus on quick wins. Quick wins form a convincing argument to sell a CRM

project to interested parties within the organization. Thus the management often

tries to achieve several large quick wins at the beginning of a project to

create the necessary momentum during the rest of the project period. In some

cases, the improved earnings achieved by quick wins at the beginning of a

project will almost pay for the rest of the project.

Easwaradas Satyan in Mumbai