29th Nov 2010
In the second of our two-part series looking at the changing challenges of the CRM sector, experts discuss the main obstacles to successful CRM and how to overcome them.
Last week we looked at the challenges that the CRM industry had addressed to establish itself as a $10bn industry, demonstrating the people, processes and technology obstacles that had been overcome.
But to suggest that it’s all plain sailing these days would of course be grossly inaccurate. Today, a myriad of issues still blight CRM projects – some of which are much the same as when organisations began to implement CRM a decade or so ago, and some of which are newer problems.
"There is more experience now in project managers, there is more focus on metrics, exec buy-in, change management and better consulting advice available," says Ed Thompson, VP and distinguished analyst in Gartner Research. "The percentage of projects delivered on time (i.e. within a month of original plan), on budget and on scope is much higher now."
But challenges inevitably remain.
"Making a strategic CRM implementation a success takes some time, but if you can get it right it will transform your business," insists Sage CRM evangelist David Beard. "It requires consultancy and facilitation to help an organisation define its priorities, enable process change and ensure an uneventful transition. Indeed, one of the major challenges for companies implementing and running CRM remains in securing full organisational commitment from execs through to users in the field.
"For this reason, it’s critical that firms spend time actively educating the business on the ways in which making better use of data and insights can enable the organisation to win more deals, retain more customers and help reduce costs. Only then can firms ensure they are reaping the full benefit of the CRM system they have invested in - after all, the data that comes out of a CRM solution is ultimately only going to be as good as the data that goes in."
A second wave of hype
Mareeba Consulting’s Richard Boardman is less convinced about the majority of CRM implementations, and believes that the soaring popularity of on-demand CRM has only clouded the issue (if you’ll excuse the pun). "I think expectations have stabilised, and both vendors and purchasers are a little more savvy about implementing technology, but I’d say while a few organisations use CRM technology to quite devastating effect, the majority of CRM projects add little real value still."
"Interestingly, I think we would be far more advanced today if it hadn’t been for advent of the software as a service (SaaS) vendors, which triggered a second wave of hype, as hundreds of millions was pumped into convincing people that being ‘in the cloud’ somehow allowed people to defy the gravity of implementation reality. There was always someone tweeting from some SaaS vendor conference somewhere ‘Wow, XZZ mega-corp has just rolled out CRM to 10,000 salespeople in three weeks!!!!’, and just maybe they did, but they certainly didn’t do it in a way that added any value to XYZ mega-corps, bottom-line. Ultimately SaaS is just CRM but sat in a server farm somewhere, rather than in your own racks. The challenges of rolling out CRM are the same whatever the deployment model. I think the SaaS vendors are maturing a bit now in their approach, but I think on the road to getting to grips with CRM we took a pretty big diversion for a few years there."
And while Thompson pays lip service to the growing maturity surrounding CRM, he remains concerned that only a small percentage of businesses are able to measure the ROI of their CRM.
"Measuring costs is not too difficult – most organisations have an accurate assessment of the project costs and some measure TCO over three years. However, measuring benefits is difficult,” he explains. “Cost savings benefits are more accurate – i.e. reducing customer service costs through self service. But showing that the tech supports a process that directly leads to sales growth is difficult. Sales folk are not keen on giving credit to a technology-based project."
Bala Subramanian, vice president of Europe operations at ITC Infotech is in agreement. "The next challenge is implementing the right metrics to measure CRM success," he says. "Different metrics have to be employed for the calculation of different goals and organisations should analyse which metric is needed for which element and ultimately use the right one."
But some of the most common problems impacting CRM are extremely familiar. "I don’t think the main problem has changed. People tend to see CRM solely as a technology issue – ‘Get the right software and our organisation will be transformed!’" suggests Boardman.
"The reality is that you have to be clear what problems you are trying to fix, or desirable outcomes you are aiming for. You have to be able to work out how CRM can help you realise those objectives. You have to successfully manage a potentially complex project to achieve that. And, most of all, you have to work out how you are going to get people to use system in a consistent and structured way. These non-technology dimensions are woefully misunderstood, particularly user adoption, where I think I would be generous in rating the CRM industry one out of ten in terms of the sophistication of its approach to date."
Steve Fearon, VP in charge of Oracle CRM sales development and CRM On Demand for EMEA, agrees that some of the barriers are the same as 10 years ago – and that while the technology has matured, there hasn’t necessarily been the same level of development at the strategic level. "Companies who operate with internal silos and do not work across them will really struggle to both implement and operate a successful CRM system," he notes. "In addition, obtaining the right senior buy-in and management, sponsorship really is still an issue. While we’ve moved on greatly in the last decade, it is still the human aspect of business rather than the technology aspect that is holding CRM systems back."
So what should businesses take away from this? "Companies need to make a long-term investment in the CRM technology that they are using, the business processes supported by the CRM tool and the people using the tool as well as those that are maintaining it," says Kate Leggett, senior analyst, customer service and call centre processes, at Forrester Research. Leggett summarises how organisations can tackle the main CRM sticking points with the following seven tips:
- Learn about your CRM system. Many companies have CRM systems with capabilities that are not being leveraged.
- Upgrade your technology to take advantage of the newer capabilities.
- Leverage integrations with the rest of the IT ecosystem to make your tool more productive.
- Align your CRM system with best-practice processes.
- Measure your success. Gather feedback from CRM users. Use feedback to evolve your systems to realise a greater ROI.
- Dedicate the right headcount for the proper care and feeding of your application.
- Train your users to understand and use your CRM system.