| We all hear anecdotal evidence for the fact that | | | | success & identify failures |
| this or that CRM project is a roaring success or a | | | | - Not learning from the customer |
| raging failure. But what constitutes success is | | | | What's wrong? |
| very subjective. No one who invested is likely to | | | | According to the Insight report mentioned above |
| shout from the rooftops that they made a | | | | the major causes of failure are individual |
| mistake. | | | | resistance to change, not developing a practical |
| So what evidence is there for success or failure | | | | enough view of the real processes and the lack |
| of such CRM projects? More importantly what | | | | of clean data to use and resources to keep it |
| can we learn for our own work? Using mainly US | | | | that way. The actual figures are given below. |
| sources of data, here are some of the answers. | | | | - Managing Resistance 56% |
| When is a project not enough? | | | | - Identifying Process Holes 46% |
| Perhaps a bit of jargon first of all - "CRM project" | | | | - Data Cleansing / Management 39% |
| means so many things but I will use this to refer | | | | - Matching Tech to Process 35% |
| to the technology project - putting in new | | | | - Getting Users Productive 32% |
| applications to help people do their work. | | | | - Customizing Software 23% |
| "Customer programme" is a term I will use for a | | | | - Managing Roll out 17% |
| wider application of: | | | | - Determining ROI 12% |
| Strategy Organisational & behaviour change. | | | | - Executive Support 12% |
| Process, analysis and measurement changes. The | | | | - Remote User Support 11% |
| technology tools required to support new ways of | | | | - Evaluating Technology 5% |
| working. It also includes all the internal and | | | | - Adequate Funding 5% |
| customer communications effort | | | | - Managing Vendor Relations 5% |
| Just by defining a "customer programme" one | | | | I would argue that these are not causes but |
| starts to see a huge difference in approach, | | | | merely symptoms of a number of key issues |
| competency and cost required to be successful. | | | | which define this whole area and need to be |
| It's about rolling out a new strategy, a new way | | | | addressed in successful projects. |
| of working. And it doesn't stop at the end of the | | | | First, it requires all the executive team to |
| "project". There is no miracle to suddenly energise | | | | understand what they are getting into with CRM |
| the operation into a new way of working when | | | | projects - they will need a Customer Programme |
| handover into live operation occurs. | | | | not just a technology project. In particular they |
| And what is "success"? In this context it may | | | | will need to be prepared to make time, to |
| refer to the bottom line i.e. the profitability of the | | | | demonstrate leadership, to communicate change |
| business. But when this is measured matters. | | | | and to accept organisational changes. |
| Short term it may be historical profit and loss. But | | | | Sounds easy if you say it quickly. And that's often |
| the bottom line is also hit longer term by | | | | what happens. It's no wonder that initiatives stall |
| measures such as retention of staff and | | | | when a full understanding of the impact wasn't |
| knowledge, development of staff, referral from | | | | there at the start. It's ok to have a vision and a |
| customers and so on. But sticking to the easier to | | | | business plan, but that only counts when |
| measure return on investment (ROI) is the usual | | | | understanding of actions and changes is developed |
| way in business cases and the articles used to | | | | too. Then when the board says "yes" it means |
| research these findings. | | | | yes and leads the necessary changes required, |
| So many CRM projects, so little success | | | | rather than blocking them. |
| According to Insight Technology Group in their | | | | Second, the economic implications of strategy |
| report "The 2001 Sales Excellence Challenge" of | | | | decisions have to be examined so that the |
| the fully implemented projects recently reviewed, | | | | strategy is live and practical. Captured in a set of |
| just 24.0% reported achieving significant | | | | planning assumptions which can change and be |
| improvements in their operational performance. Of | | | | tracked but which keep the business objectives in |
| the remaining initiatives, 50.7% reported achieving | | | | mind and are not distracted by operational |
| only minor improvements, and 25.3% stated | | | | constraints which inevitably crop up later in a |
| there was no noticeable improvement at all. | | | | programme like this. The discipline of working out |
| In various reports Gartner's research is showing | | | | the numbers properly also has the benefit of |
| that 55 to 60 percent of CRM projects are not | | | | making the strategy practical when it arrives |
| expected to deliver a measurable return on | | | | around someone's neck to be implemented. |
| investment. Despite this, companies are investing | | | | Third, it's a programme not a project. That |
| in large, highly integrated CRM systems like never | | | | means the energy and leadership to gain |
| before. | | | | momentum has to go in from the start. It means |
| According to the Butler Group in its' report "CRM: | | | | that the key thing is to make people want to |
| Pitfalls & Potential" the technology has a long | | | | work differently. Techniques such as |
| way to go before it even begins to live up to the | | | | communication maps, consumption plans and |
| industry hype. Other reports from Meta Group | | | | message plans have to be carried out for staff |
| suggest failure rates of 55-70 percent for CRM | | | | and for customers. This is a big overhead but |
| implementations. | | | | essential. |
| These reports are not talking about technology | | | | The right people have to get involved early. |
| failures. They are talking about failing to focus on | | | | Crowds of people need to know what to expect |
| goals that drive business metrics and ROI. | | | | and in particular what it means for them. They |
| You don't want to do it like that.... | | | | need to believe that the new processes will cover |
| So what lessons are there on what not to do? | | | | what they do today and then some. |
| Below are some of the key findings. | | | | They need to know they are going to have |
| - Lack of executive focus | | | | enough time to get trained up, to do their day job |
| - Lack of alignment of CRM vision to strategic | | | | and ensure customers don't fall over whilst all this |
| objectives | | | | is going on. |
| - Commitment to change is often too little, too | | | | Fourth, funding needs to match the effort |
| late resulting in limited bottom line impact | | | | involved. It's no use spending all the budget on the |
| - No executive mandate to change | | | | system without taking people along. According to |
| - Focus on low hanging fruit in order to produce | | | | one US source, successful projects spend around |
| some return in a short period and then losing | | | | $18,000 per head compared to unsuccessful |
| motivation / sponsorship to achieve the bigger, | | | | projects at $10,000 per head. |
| longer term wins | | | | So what? |
| - Departmental 'project' focus with different, | | | | So what can you take from this whistle stop |
| independent drivers and measures of success | | | | tour? |
| - Lack of preparedness to accept the long haul | | | | My message is think of "customer programmes" |
| and that CRM is something you do, not implement | | | | which hit the bottom line as quickly as possible by |
| through a marketing initiative in 6-9 months | | | | being balanced between their strategic goals, |
| - Failure to address the end to end processes and | | | | economics, people, process and technology |
| the end to end customer lifecycle | | | | elements. Keep remembering that CRM projects |
| - Jumping on the solutions bandwagon - | | | | only provide the tools for people to use. It's those |
| mismatched technology | | | | people and the customers they talk to that you |
| - Lack of understanding around importance of | | | | must carry with you. That takes executive |
| data cleansing and process for ongoing capture | | | | leadership, stakeholder management, proper |
| - Poor measurement of results after deployment | | | | funding and a great deal of energy. |
| so no meaningful data exists to demonstrate | | | | |