Quelle: CIO Canada
For all its promise, the record on customer relationship management isnot encouraging. CRM is supposed to help businesses retain customers,increase revenues and spend their money more wisely. The unfortunatetruth, however, is that more CRM projects fail than succeed.
Laura Pollard, president of the Customer Relationship ManagementAssociation of Canada, says reports indicate that CRM failure ratesare between 60 and 80 per cent, adding that she believes the 60 percent figure is low. Failure rates in that range, combined withE-Search Canada projections of CRM spending in 2003, suggest that from$628 million to $838 million will be lost next year on failed CRMinitiatives.
So why the failures? Or to look at it a little more positively, whythe successes? What are those organizations that have managed tosucceed at CRM doing differently?
To find out at least a few of the answers to these questions, wetalked to several IT executives at Canadian companies whose CRMprojects have stayed on the rails so far at least. Their experiencessuggest some factors that may help determine whether CRM delivers onits promise or becomes an expensive disappointment.
Starting With A Clear Vision
The CRMA recently surveyed about 20 large Canadian companies on theirCRM experiences, identifying some major problems those companies citedwith CRM. Third on the list was incomplete planning, including failureto prioritize activities and to define the rationale, budget,calculated return on investment and timeline of CRM initiatives.
The CRMAs findings were reflected in the comments of the executives wespoke to. What was evident from those conversations was that a keyingredient in CRM success is having a clear idea of what you want toaccomplish.
Baxter Corp., the Mississauga, Ont.-based subsidiary of health-carecompany Baxter International, implemented CRM in 2000 and 2001.Baxters emphasis on knowing where the project was going was animportant contributor to its success.
Director of CRM during that period was Doug Sommerville, now Baxtersvice-president of medication delivery. For us, CRM really began as abusiness strategy. We spent a lot of time early in this project reallydefining what our business strategy was, he says. We would never haveanything like this approved without being able to generate anacceptable return on investment, and the beginning of this exercisewas a fairly detailed business case.
The company realized it had a lot of contact with customers, but muchof the information gathered from that contact was staying in peoplesheads rather than being shared. Baxter wanted to make that customerdata available to more people to help them serve customers better.With that over-all mission in mind, the company then worked out itspriorities.
We prioritized around what would have the biggest impact and whatwould be easiest to execute, Sommerville explains. Those are thethings that we tried to aim for first.
Long-term & Short-term View
Toronto-based Hudsons Bay Company also began with a well thought outvision of its CRM strategy.
Rob Shields, vice-president of CRM and co-chief privacy officer, saysHBC has a clear long-term goal for its CRM work. Whenever a customerengages us, we want to be in a position to give them one view of ourorganization. Any way we speak to you on any given occasion shouldreflect your up-to-date relationship with us. Its our ability to havea strategy that can, at least in the short term, differentiate us inthe marketplace.
A long-term vision is not the whole story for Hudsons Bay, though. Thecompany also has short-term goals. We decided that the first thing weneeded to do was to consolidate our customer information, Shieldssays. But the goal was to drive an economic return at least break-evenwithin six months. What we did was to consolidate our two largestdatabases: our loyalty database and our credit-card database.
Having combined those databases, the company could earn immediatebenefits by, for instance, pitching credit cards to those customers inits loyalty-program database who didnt already have them.
Trying to do it all at once is often a recipe for disaster, but thesame can be said for taking it one step at a time with no long-termplan. The Hudsons Bay approach was to lay out a five-year plan butthen implement it in manageable stages. Perhaps most importantly, HBCstarted out by asking itself What is the end goal of our CRMinitiative? With that goal in mind, it knows all the steps it needs totake in order to get where it wants to be.
Taking A Phased Approach
Starting with something that both provides a foundation for the futureand delivers measurable results in a few months helps build supportfor a CRM initiative.
Mark Sauter, president of consulting firm GTP Associates in Midland,Mich., says he learned this in a previous job overseeing CRM projectsat Dow Corning Corp. We focused on key customers first and identifiedthings that were broken in our relationships with those customers, hesays. Once we could show visible signs of improving those things, andcustomer satisfaction improved, we could say: look, this is because ofCRM.
A phased approach to CRM is also favoured by Frank Erschen,vice-president of technology and solutions at BMO Financial Group andthe lead technology executive for what the bank calls customer valuemanagement.
I think its really critical to think big and act small when it comesto theseprograms, Erschen says. You really have to keep your eye on where youwant to be a number of years down the road, and figure out how you canprudently, effectively, efficiently get there one year at a time.
SaskTel, which is in the early stages of its CRM implementation, isalso taking a step-by-step approach. We did a discovery process, andthat was really our phase one, says Gail Lefebvre, general manager ofcustomer service development and support. We went through a process oflooking at what we want to be like and how we want to operate.
SaskTels first step is to build the foundation to provide a singleview of its customers and products. Then, it plans to roll out theability to track sales leads. After that will come pricing andconfiguration tools and the ability for front-line sales people to seeat a glance all the products and services the companys large customershave. The final stage in what Lefebvre expects to be an 18-monthimplementation will be to look at what has been done and seek ways torefine and improve it.
Need For Top Management Support
Breaking CRM down into smaller pieces isnt always easy, though. TheCreoScitex division of Creo Inc., a Vancouver-based maker ofpublishing technology, considered implementing CRM first in one partof its operation but concluded its North American operations were tootightly integrated for a partial rollout to be practical.
Dave Pritchard, ERP and CRM program manager, admits the rollout wasdifficult, but says taking it in smaller pieces would also have beenhard and would probably have delayed implementation by about sixmonths.
Nonetheless, the companys CRM project has stayed on track, and onereason is probably that it had what almost everyone says is the nextkey ingredient of CRM success: the backing of top management. Thevice-president of operations has been involved not quite full time butprobably 70 per cent of the time since the beginning, Pritchard says.
Shields at Hudsons Bay Co. tells much the same story. Support for theCRM initiative starts right at the top, with President and ChiefExecutive George Heller, and continues through CIO David Poirier andother senior executives.
Lefebvre at SaskTel notes that obtaining top management support cantake a good deal of work. Its not necessarily apparent to everyone inthe senior ranks of a company that this is an important and worthwhileinitiative, she says. It did take us some time to ensure that everyonewas brought up to the same understanding, but now we have that.
Getting The Business On Board
To succeed, CRM needs not just the backing of top management but alsosupport throughout the organization. On the CRMAs list of top 10 CRMissues, number one was the difficulty of instituting acustomer-centric culture, and number two was difficulty sustainingintegration and collaboration through the initiative.
Whenever you implement a technology of this magnitude you always seemto run into hurdles, says Baxters Doug Sommerville. I think one of thebiggest hurdles is having the business understand what the technicalside is capable of doing.
He adds that if he had it to do again, he would have emphasizedearlier training for the technical and business teams on the system.
It cant be run like an IT project, cautions Mark Sauter. EnterpriseResource Planning can be run like an IT project, because fundamentallypeople have no choice but to use ERP to get their business done. WithCRM, people have to believe in the benefits CRM will bring to thecompany.
That, he adds, means the leadership of CRM projects needs to come fromthe business side. IT needs to be involved, but if CRM is purely an ITinitiative it is probably doomed to failure.
The multi-functional team that drove CreoScitexs CRM project broughttogether both IT and operations people. SaskTel involvedrepresentatives from such areas as sales, sales support, marketing andhuman resources, as well as systems. Two executives one from thetechnical side, one from the business side lead BMO Financials CRMeffort.
When we got to the actual system design phase, says Sommerville, weprobably had about 70 employees who touched that design in some way,shape or form. Even then, you still dont get it right. After you gointo production you still have to keep improving it.
Innovapost is a joint venture set up by Canada Post Corporation andthe Montreal based consulting firm CGI Group Inc. to provide IS/ITservices to the Canada Post Group of Companies. The consulting firmAccenture recently became a shareholder as well. Part of Innovapostsjob is to aid in the development of new CRM initiatives at thosecompanies.
Reid Kilburn, vice-president of CRM, says Innovapost has peopleworking with groups such as sales and marketing to help them identifyCRM needs. These initiatives generally come from the client, based ontheir strategic plans, their operating plans and their marketingplans, he says. Innovapost helps the client refine these requirementsand then develop the initiative through a phased approval process.
Communicate, communicate, communicate!
Involving representatives from throughout the business is only part ofthe solution; its also important to communicate with the rank and fileabout what is happening.
Once BMO Financial had established the over-all objectives of itscustomer value management program, Erschen says, the second thing thatwe talked about was change management and making sure we dideverything possible to communicate and deploy the change effectively.I would say for everything weve done, thats the area where wevelearned the most.
According to Dave Pritchard, informing CreoScitex employees about thechanges CRM would bring proved to be quite challenging. I dont thinkwe did a very good job of that because we had some quite tight timeand budget goals.I think we underestimated the amount of change that was happening andwhat it would take to communicate with people, he says.
A key message to SaskTel employees will be that CRM will help them dotheir jobs and meet corporate goals. The company has establishedvarious measures of customer satisfaction and has set objectives interms of such things as frequent contact with customers. Wecommunicate the message that this program will help us to do thosethings and I think we have achieved buy-in because weve been saying itover and over again. Lefebvre says.
SaskTel brought its sales managers together in the fall to talk abouthow CRM will change sales, and to encourage them to help employeesadjust to the changes. The company is now finalizing achange-management plan that includes assessing what employees need tocope with the new systems and then providing them with that help.
Communicate, com-municate, communicate, Sommerville agrees. I cantstress that enough. You really want to start with why we are doingthis. To maintain employee support for a CRM program, he adds, whatthe customer is telling you has to be put into use, and therepresentatives have to see that youre putting it to use.
Rob Shields says Hudsons Bay Co. is trying to promote an attitude thatcustomers are important. The customer is king, he says, and the topline is directly attributable to the customer. If you can get peopleto talk about the customer as an asset, youre really making greatstrides.
Grappling With Technology
While the people issues in CRM implementation are critical, thetechnology issues are certainly not trivial. Innovaposts Kilburn saysthat the methodologies and standards implemented by Innovapost providean overall framework that reduces risk and ensures that thepeople/process side aligns with the technology solution.
I think its fair to say that it was difficult, says Pritchard ofCreoScitexs SAP CRM implementation. We opted to implement 3.0, andwhen we started doing it, it was in the early release phase. I thinkwere one of the very few customers that have implemented it in a veryintegrated fashion. A lot of the problems were data problems that showup more in a highly integrated system like this.
Erschen says one key to BMO Financials CRM success was replacing sevendifferent technology platforms used to deal with business and personalbanking customers with a single platform. Customers were being sold toand serviced differently depending on which branch they walked into ordepending on which channel they were being sold to andserviced through, he says. That made it very difficult to offer newservices consistently.
Describing the technology implementation as taxing, Erschen sayssuccess depends on taking a phased approach and picking the rightpartners including software vendors and consultants with depth ofexperience.
Customizing CRM software to meet the businesss needs and integratingit with legacy systems can present headaches. Baxter avoidedcustomizing code as much as possible. We did a lot of what I wouldcall configuration on the user-interface side, but very littlecode-level custom-ization, says Sommerville. Baxter also limited thenumber of links from its CRM software to legacy systems.
Cleaning up data is also an issue in most CRM implementations. One ofthe things that everybody tells you but that you dont believe untilyou get there is that your data integrity is always worse than youever imagined, says Sommerville. You are making some data visible thathas not been visible before, so you get a chance to see how bad itreally is.
In the end, succeeding at CRM comes down to having a cohesivelong-term vision but taking your time about getting there, allowingtime to build support, doing the work properly and managing change asyou go.
And keep in mind the need for flexibility as your CRM initiativematures. As Frank Erschen says, This is a journey. You might have tomake adjustments to your journey along the way.