Firms must work out their CRM needs before implementation

Although most customer relationship management (CRM) software rollouts fail, a company that does its homework beforehand can...

Although most customer relationship management (CRM) software rollouts fail, a company that does its homework beforehand can overcome the change management and other issues CRM implementations often face.

That was the message at the Gartner CRM Summit 2003 in Chicago, which began yesterday with a sober look at CRM rollouts and why they often seem to run into difficulty. Although companies could apply CRM tools to better understand their customers and make them happier, few have attempted to use the tools - and the success rate has not been encouraging, said Gartner analyst Scott Nelson.

In a speech yesterday morning to conference attendees, Nelson said that 40% of companies surveyed had not invested in CRM, and that more than half that do so see the installations as failures. There was also a lot of confusion about just what CRM really is, he added, and went on to define it as "the voice of the customer in your organisation".

"On one hand, I believe it's the most important step your firm will take, because it is about your most important asset your company has: a customer," Nelson said. He suggested that CRM metrics should permeate a company just as financial metrics do, becoming a part of the way of thinking among employees. It's not only a technology, but also a set of processes and people and skills, he urged attendees.

Keynote speaker Harriet Pearson, chief privacy officer at IBM, emphasised the need for companies to protect sensitive customer data. At IBM, it was decided to "build trust" into the extensive CRM infrastructure the company installed. Because customers might have a number of privacy concerns when shopping on the web or engaging in some other form of e-business, Pearson suggested that companies use privacy as a marketplace advantage.

Building privacy polices into your CRM infrastructure is similar to the way "you engineer safety into cars. You can use it as competitive differentiator", she said.

A half-dozen users discussed their CRM efforts so far, including ATA Airlines and customer service company Affina.

Because of fears around the implementation of CRM, ATA Airlines started small, according to Robert Ellison, director of e-business and network services. Since July, the company has been rolling out a set of CRM analytics products from Teradata, a division of NCR, to support a frequent-flyer programme.

When it sends out its personalised e-mails to select customers, ATA has discovered there is a 2% increased chance they will sell a ticket. "We are starting small," said Ellison. " We have been taking baby steps. In fact, it was probably more like a crawl."

At Affina, employees decided to focus on well-defined processes and roll out CRM software under a timeline designed to get a fast return on investment, said Victor Burgess, general manager of alliances. The company is now running telesales and order-capture applications from the Oracle Corp. E-Business Suite 11i.

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