There was a time when the main challenge facing an organisation investing in CRM was the amount of discount they could negotiate on their Siebel licences. That was a time, when for many companies, CRM was all about technology. A time when the original definitions of CRM like “building mutually beneficial customer relationships” were ignored in favour of technology bells and whistles. Today the market has matured. CRM buyers are pretty savvy – many were burnt by investing in CRM the first time round and are still suffering from the hangover. I’m often asked by clients who got things wrong with CRM a decade or so ago, how they can ensure that they get things right today. I see three big challenges that need to be addressed to ensure CRM success.
The first challenge I see is that “failed CRM” was all about value to management. People invested in sales force automation solutions in order to get better visibility over their sales reps, which in turn enabled better forecasting, better alignment of resources to priority accounts (in the current quarter) and in theory a reduction in the loss of account knowledge when a sales rep left the company. Alternatively, within Customer Service management attempted to enforce call scripts, the measurement of everything (like average call handle time), scripted cross-selling in every call, or enforced channel shift to reduce costs (instead of “your call is important to us” read “you may want to speak to an agent but our CRM system will push you to an IVR (which in turn will advise you to go online) because it’s cheaper for us”). To be successful CRM investments need to unlock value to a balanced group of stakeholders. At a minimum this includes management, front line users who interact with the customer and of course, let’s not forget customers! Unless you have a clear picture of how your CRM investments will help unlock value to those stakeholders (particularly customers!) you are simply pumping money into the CRM technology slot machine and hoping to win. Most sales people I speak to hate “failed CRM” because all it did for them was create 2-3 hours admin on a Friday afternoon. Most customer service people I speak to hate “failed CRM” because they felt uncomfortable reading the script, or having to cross-sell to an angry customer. But critically, most end customers I speak to hate “failed CRM” because all they wanted to do was speak to someone about their problem. Transitioning to an outside-in, customer-centric mindset and balancing your understanding of value is the first challenge.
Once you have a balanced view of stakeholder value, the second challenge you need to think about is the full range of capabilities that need to be improved in order to unlock that value. I frequently come across CRM business cases that show a clear and direct linkage between a technology investment and a business outcome with no consideration to the inter-connected capabilities that might get in the way. For example, making an assumption that investing in XYZ technology will reduce sales force admin time is fine, but assuming that sales people will use that time to open up new accounts may be questionable. For that to happen it may well be that incentives need to be changed, that new business development or solution selling skills need to be improved, or that the sales organisation is simply structured in the wrong way. Without addressing those broader but dependant capabilities, you simply cannot guarantee that CRM investments will release value.
Finally, most people I speak to these days about CRM face a delivery problem. “Failed CRM” was monolithic and big-bang. Implementations took many months or even years before users saw anything. On the whole, clients I speak to today want to embrace a more iterative, agile way of implementing but that’s not as simple as flicking a switch and becoming “Agile” (and certainly not as simple as buying a cloud-base solution). I’ve seen several Agile programs that started with the best of intentions but ended up in tricky situations as maybe the business didn’t quite understand the level active participation and involvement that would be required, priorities across different business stakeholders and technology were not properly aligned, the technology simply wasn’t particularly suited to an agile implementation, or the technology solution evolved into SaaS best of breed Hell (see Ray Wang's latest from CRM Evolution 2012 http://blog.softwareinsider.org/2012/08/14/event-report-crm-evolution-2012/. Agile done well is a delight – expectations are aligned through constant communication and progress is visible for all to see. Agile done badly is a pretty dangerous delivery approach – at its worst used to justify taking unnecessary short-cuts or avoid any planning. Transitioning to an agile delivery approach is the third challenge.The three challenges are not exhaustive but I certainly see them repeated across a number of different clients and industries. What do you think is missing?