Moonlighting...

I've also been writing a blog for the Customer Management Community in case you wondered why my entries have become slightly more occasional. You'll need to sign up if you are not already registered. If you are not inclined to do so then Wednesday's post was as follows:

Systemising the CRM system…

I was having a conversation with a journalist earlier in the week who asked me what I considered to be the biggest issues facing organisations deploying CRM at the moment. The answer, to me at least, seemed a fairly simple one – getting people to use systems in a consistent and systematic way. It’s not a new issue of course; it’s dogged CRM implementations long before the acronym CRM ever existed. However our failure to effectively address it as an issue is one of the reasons so few CRM systems are significantly value enhancing.

To my mind most CRM implementations fall into a category I’ve rather unimaginatively dubbed ‘level 1’ systems (please don’t hesitate to contact me with any more insightful alternative descriptions you may have). ‘Level 1’ systems are characterised by fairly ad hoc and inconsistent usage. It’s not that don’t provide organisations with benefits. They do, but in a fairly limited way. For example the company may better coordinate its interactions with its customers because there’s now a central repository of data about them; or salespeople may manage their long term prospects better because they can set themselves call back reminders.

While ‘level 1’ systems provide benefits, they tend not to be significant because there are few supporting processes, and those that exist are not necessarily consistently followed. As a result, many of the benefits that organisations bought into when they purchased a system are not actually achieved. Management reporting doesn’t get any better because there’s no consistent usage on which to base accurate metrics. Direct marketing doesn’t improve because processes aren’t in place to ensure long term data quality. Sales forecasting doesn’t get more accurate because many staff are still hooked on Excel.

What characterises the high return generating ‘level 2’ systems by contrast, is that they have been set up to achieve a clearly identified set of desirable business results. Secondly there are a comprehensive series of supporting processes designed to achieve those results, and thirdly staff are trained and managed such that the processes are followed in a structured and consistent way.

The process driven ‘level 2’ system massively outperforms the ‘level 1’ system in terms of generating long term return on investment. However there is a price to pay for this. Creating and maintaining process driven systems isn’t easy. Developing and documenting processes, and training staff to follow them, is invariably time consuming, costly and resource intensive.

Too many organisations expect a ‘level 2’ result from a ‘level 1’ approach. They buy the pitch from the salesperson but underestimate what needs to be done to achieve it.

The art of avoiding disappointment is to be clear about what level you are trying to achieve and gear your approach accordingly. Sometimes it’s better to settle for ‘level 1’ through minimal investment, than end up with ‘level 1’ having wasted a shed full of time, energy and resources unsuccessfully shooting for ‘level 2’.

Dinosaur?

Working on a couple of engagements in London this week gave me the opportunity to catch up on some of the magazine subscriptions that have been piling up unread. The business section of the April 1st edition of The Economist was leading with an article on Microsoft called ‘Spot the dinosaur’, which caught my attention because of the Microsoft dinosaur ads that were liberally dotted around the Tube (I’d explain what they were about but despite having seen them for several months now I still have simply no idea). Anyway the article, which was illustrated with a cartoon of two dinosaurs, one captioned ‘Office’ the other ‘Windows’, posited the idea that Microsoft was heading for extinction on the basis of the rise of online software.

The two examples of potential challengers offered in the article, were Writely, an on-line word processor, recently acquired by Google, and Salesforce.com, the market-leading software as a service (SAAS) CRM package. I couldn’t help feeling this was another manifestation of the ‘armies of consultants’ argument I've talked about before whereby SAAS, offering instant access to the functionality of our wildest dreams for just pence per day, would sweep away all before it, including such behemoths as Microsoft.

It’s not that I don’t think SAAS has an important role to play in the CRM space – it already does, and will continue to do so. But I detect in the media the same hype over SAAS that we saw in the early days of the internet - retail as we know it is dead, the dotcoms will take over the world. It didn’t quite play out that way of course, with a few notable exceptions, the existing retailers offering both clicks and mortar have prospered.

With regard to Microsoft’s fortunes, while Salesforce.com may well be a more than capable competitor of Microsoft’s in the CRM space, it’s not exactly a battleground that will make or break Microsoft’s fortunes. I’m equally hard-pressed to see how on-line word-processors will seal the fate of Office, and quite what the threat is to the Windows operating system the article didn’t explain. To illustrate the dire predicament Microsoft was in, there were a couple of graphs plotting number of employees and revenues - both robustly trending upwards without a hint of a downward deflection. I may be being obtuse, but I can’t see either online software or even dodgy advertising for that matter killing Microsoft quite yet.