The CRM implementation iceberg...

Despite the fact that a lot of our engagements are focussed on our CRM planning, requirements gathering and vendor selection services, we also get involved in a lot of project implementation work. Some people find this surprising – they figure once the CRM software vendor gets underway there’s little left for us to do.

This view is predicated on a dangerous misconception that overshadows the CRM mid-market – that the CRM vendors provide the whole shooting match that takes the client from pre-CRM to a live high pay-back system. This isn’t the reality. Take a vendor quote and what you are seeing is the visible tip of the implementation iceberg. Lurking under the surface is a far bigger bulk of implementation work that is not provided for. Key areas such as business analysis, process analysis, process development, data cleansing and preparation, basic systems configuration, process documentation, business process specific training, and user adoption services, all vital to a successful project, are typically go un-catered for in the vendor proposal.

To use a building analogy - the CRM vendors in general are happy to build the walls and put on the roof, but the rest is down to you. So unless you want to take the time and trouble to learn how to do the plumbing, plastering, and electrics, you face the choice of living in a shell, or getting outside assistance. The reality of the SME market space is the CRM vendors act as technology providers, they may not admit it, but they aren’t in the business of delivering business solutions. And so the role we invariably play in the implementation phase is as a bridge between what the vendor can provide, and what’s necessary to deliver a high ROI CRM system.

Valuing CRM Projects...

When clients ask us to help them plan CRM projects, there’s a general anticipation that our biggest contribution will be helping them cut through the fog of competing vendor claims to identify technologies that will best suit their needs and budgets. While this is an important part of our planning services, if you approached clients who have gone through the planning programme, and asked them what helped them the most, I suspect the answer would, in the main, be the work we’ve done in establishing the business case and associated costs of, and returns on, investment.

Getting a clear understanding of what resources a CRM project will need, and what benefits it will provide, are a key foundation on which to build a successful project. In my experience, CRM projects are generally under-resourced and under-funded, and as a result vastly under perform their return on investment potential.

When an organisation has a clear up-front understanding of the value of a project, it can start to make informed judgements on appropriate investment levels. If you decide to invest in the stock market and wanted to appraise the value of a share you would be interested to know what dividend it paid. The value of that dividend (and projected growth) would guide how much you were prepared to pay for that share.

Part of the reason for projects being under-funded (aside from a general lack of understanding of the resource demands of CRM projects) is that, as a general rule, business cases, to the extent they actually exist, are often too broad-brush for executive boards to justify the expenditure levels that are realistic in order to achieve a high pay-back system. In other words, the less clear you are as to what the dividend will be, the lower your valuation of that share.

Being clear on project pay-back up front, helps organisations put the horse before the cart, by helping them realistically appraise what’s required to make a project a success. Armed with this information organisations can make informed judgements on whether, when, and how to proceed, and to avoid the twilight world of under-resourced CRM projects that soak up resources but give very little back in return.

CRM - what's in a name?

Customer Relationship Management is a term that means very different things to different people, and these perspectives were powerfully contrasted at a Netsuite briefing I attended this week.

On the one hand Jennifer Kirkby, independent analyst and editor of the Customer Management Community, was a powerful advocate of organisations shifting from a product-centric to customer-centric approach.

On the other, Keith Davies, Financial Director, of Endoscopy UK, presented a case study describing how CRM technology had benefited his organisation, the most striking aspect of which was that the very compelling business case for the project was largely driven by efficiencies delivered by the technology, rather than a closer strategic orientation towards the customer.

Which leads me to make a couple of simple points:

One - The shift from a product-centric to a customer-centric strategy, is both laudable, and if well executed, likely to be effective. However, though CRM technology may help facilitate the strategy, it isn’t a pre-condition for an organisation to become customer-centric.

Two - Organisations can achieve very significant returns on investment from CRM without any shift in their strategy towards the customer. A product-centric organisation that introduces CRM effectively is likely to be a much more profitable organisation, albeit still a product-centric one.

I make these points because from experience there are some organisations that see the benefits of CRM technology as only accruing when teamed with a change in customer orientation. The outcome of this misconception is that projects don’t get off the ground simply because the customer orientation shift is viewed as too challenging, too nebulous or too long term to justify the investment. As a result rapidly attainable, highly measurable, efficiency benefits go begging.