While CRM vendors have done a pretty effective job of marketing and selling their software, as an independent consultant, I'd question how successful they've been in helping their customers implement and manage systems that create sustained value. A lot of companies quickly discover their newly implemented CRM technology doesn't quite live up to expectations.
Consider my experience getting one company on track. We became involved with the client, a midsize U.K.-based capital goods manufacturer, initially because the executives felt they wanted guidance on selecting a new system. Looking at the firm's existing system, we found that it wasn't being extensively used. In fact, many employees didn't access the system at all. Those who did used it in a fairly ad hoc way, which was limited to basic contact management. There was no reporting from the system, and the data was riddled with duplicate and incomplete records, making it unusable from a marketing standpoint.
While executives believed the CRM system needed to be replaced, we didn't see the underlying technology as the issue. The CRM application was one of the market-leading packages and had more than enough functionality to meet the needs of the client.
What appeared to have happened was that the company's business model had changed—from selling through channel partners to a direct-sales model—after the software was first implemented, but the system hadn't changed with it. The system, no longer supportive of the new business realities, had quickly fallen into obsolescence.
Rather than have the company re-invest in a whole new system, we recommended a far more cost-effective re-implementation of the existing software. I'd note at this point this is not always possible to pull this off. Sometimes a technology (often through no fault of its own) is so negatively perceived that you are forced to start again. However, because we hadn't quite reached the point of no return, we embarked on a fundamental first step, which was to define what people actually wanted the system to do for the business. After some discussion this came down to five key objectives:
- Improve the return on investment from the marketing budget by facilitating relevant, targeted direct marketing campaigns, and relying less on advertising
- Improve the responsiveness to, and follow-up of, customer leads and enquiries
- Increase lead-conversion rates through a well-structured sales process
- Reduce the number of customer data silos that had emerged with the breakdown of the original system to facilitate better customer insight and service
- Improve the depth and immediacy of management information to allow more effective decision-making
Once we were clear on what we were trying to achieve, we moved on to Step 2, which was to define the business processes that would help us get there. We ran a series of workshops with the users and their management team. These can be bruising encounters, where gaining consensus on what the current processes actually are and what they should become can be challenging. While this was no exception, over the course of a number of iterations, we were able to define a solid set of operating procedures.
We then took the processes and worked with the software vendor to map them into the technology. One of the failings of the original system was that the processes set up in the system were so convoluted and tortuous that users were loath to follow them. We knew that that they had to be intuitive and they had to minimize data input. This requirement wasn't quite met by the "out of the box" software, so we customized the system to suitably streamline them.
‘The system, no longer supportive of the new business realities, had quickly fallen into obsolescence.’
We also undertook a major data enhancement campaign to improve the quality of existing records—and to incorporate customer data that was being tracked in other systems. One of the more demanding tasks was to try and build a reasonable picture as to where the equipment that the company sold was being used. This was potentially highly valuable information because older models could be targeted for replacement. However, because historically a high volume of business had been conducted through a reseller channel, information about the end user, when it was known at all, was spread across a number of different warranty, help-desk and finance systems. So this required a somewhat complex data import to build a reasonable composite picture of the installed product base.
A lot of effort was put into the user adoption aspects of the re-implementation. We knew if we wouldn't get the users to follow the processes, then none of the five key goals would be achieved. Training was specific to each user's role, and was delivered in the context of the newly customized software. Staff members were issued with manuals setting out how the system was to be used, and considerable resources were provided to hand-hold users through the first months of operation. We also audited usage on a regular basis to ensure defined processes were being followed.
The system re-implementation achieved the five objectives. Two years on, the business has grown significantly without a commensurate increase in headcount. The system is used by all staff members, and it has become a core part of how the business is run. The system has continued to be developed and enhanced, including incorporating the customer support function, which, in turn, helped this area evolve from being a considerable cost center to a profit center in its own right.
While the issue of "shelf-ware" (software that remains on the shelf unused) is a recognized problem, the issue of what we might call "server-ware"—software that ticks away on the server but adds no value to the business—is a pervasive but less acknowledged phenomenon. In my experience, these systems can generally be turned around and can become a powerful source of improved profitability.
That said, it's a lot more efficient to get it right first time.