Piecemeal CRM won't work

Opinion

Piecemeal CRM won't work

Don't let IT carry the can for failing to deliver CRM. A customer-centric culture must come from the top

During the past two years, corporate IT strategists have fielded a stream of departmental requests for new and upgraded customer relationship management (CRM) components - a help-yourself customer service Web site here, an upgraded call centre there.

Elsewhere, there are discussions about sales force management systems. Even the old data management exercise has been dusted off and renamed the business intelligence and customer datawarehousing project, although it still only addresses two or three of the multiple information domains needed for truly strategic CRM and none of these reference external data sources.

Of course, no one takes CRM planning for the mobile untethered Internet seriously yet and there is also the in-house organisational problem that telecoms are outside the IT organisation's remit.

In recent research we found that virtually every UK organisation claims to have some kind of CRM strategy. Well over half of respondents have installed multiple CRM components and point products such as those mentioned above. But only 47% (29% in the retail sector) say they have made good progress in CRM - and just two businesses out of our sample of 90 say they would describe themselves as truly customer-centric organisations.

Meanwhile CRM gets a bad press for apparently failing to deliver the high yield, high quality, persistent customer base which its proponents claimed and the CEO and the finance director were led to expect. What is going wrong?

The team adopting a genuinely strategic CRM approach has to build many and varied bridges across a customer information archipelago ranging from contact systems to tracking, order processing, campaign management, service, accounts collections, dispatch and logistics.

In addition to ultimately linking up with manufacturing and supply chain systems this team must also provide inputs to the intelligence, profiling and sales programme management warehouses that feed the corporate CRM dashboard. This is the most complex piece of systems and business integration to hit the IT industry so far.

So, implementing CRM solutions is a tough job for IT professionals. The people with the most experience of this task in banking and the travel sector say the toughest technical challenge is pulling together and normalising many fragmented and departmentalised legacy information sets from inside and outside the organisation.

But fragmentation of technology platforms and data is not the major issue. Ultimately, successful CRM depends on the board taking the lead and creating a new customer-centric mindset and culture. Some call it a missionary culture. Disney has it. BMW approaches it. We can all name a dozen companies which are nowhere near. And real strategic CRM is pervasive across the organisation.

The suppliers of tactical CRM point products are not helping. By concentrating on just part of the solution and pushing technology, not business systems, they are adding to the fragmentation and ignoring the real issues of change management.

Wherever change leadership is lacking, the IT team flounders and the organisation is littered with small tactical initiatives whose primary justification is in terms of warm and fuzzy "customer care" sentiments - not the clear bottom-line metrics which stress selection, prioritisation, retention and exploitation of those quality customers who represent the highest revenue and lowest sales costs.

Our information suggests that CRM is heading for disaster if it continues to be implemented in a piecemeal, bottom-up fashion, rather than a planned top-down initiative driven by the board. It is a disaster for which, quite unfairly, the IT team may carry the can.

Building a customer-centric organisation is not about installing technology. It is about radical corporate culture change. CRM is not something an organisation buys - it is something it does. Strategic CRM is beyond software.

The bottom-line benefits of CRM are clearly achievable if the implementation is planned and executed sensibly. Organisational change - breaking up departmentalism - is just as important in pulling disparate information sets together.

The time has come for chief information officers to step back from point solutions and tribal warfare to win the board's mandate for coherent and comprehensive CRM strategies driven by sound economic sense and a corporate vision of how to place the customer at the centre of its thinking.

Mike Fitzgerald is CRM practice director at EDS E Solutions

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This was first published in January 2002

 

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