Enterprise Software

Ensure CRM success by avoiding old mistakes

Customer relationship management doesn't have to be a bust. Ed Joseph, co-founder of The Performance Institute, believes that the key to success lies in planning, communication, and tracking.


Sales of customer relationship management (CRM) solutions are slowing to the point where some vendors are offering CRM specials. For example, last April, Oracle announced a 90-day implementation guarantee to boost the company’s CRM sales.

The decline in CRM adoption rates is partly due to the current economic slowdown. But another reason for the decrease may be that some organizations have failed to achieve the results promised them by CRM vendors or consultants.

These failures are warning signs to organizations not yet using CRM. However, CRM can be successful when an organization’s IT team designs a solid implementation plan and regularly measures the plan’s progress.

According to Ed Joseph, co-founder of The Performance Institute, managers can help make CRM implementations successful by avoiding the past implementation mistakes made by others.

TechRepublic: What is the one piece of advice you can offer that will help IT managers keep a CRM project above water?
Joseph: You know the three rules of real estate are: location, location, location. Whenever you're rolling out a CRM process, or any kind of change process that's going to cause the project team or the organization to do something different, the three rules are: communication, communication, communication.

I'm not talking about memos and meetings. There is so much more to communication. For example, say you are a project manager on a contract with a federal agency—somewhere between $500 million and $1 billion. You’re going to take a largely people- and paper-based process that takes 150 days and knock it down to a week or five days through information technology. There is a lot of communication that has to take place to make that happen.

People need to know what's going to be different, what's expected of them, and how the organization is going to gauge its success.

 

TechRepublic: Following a system to measure an implementation’s progress is a stumbling block for many organizations. How can managers learn from the mistakes of organizations that have failed to keep their implementations in check?
Joseph: There are a couple of things they need to worry about, the first of which is don’t assume you’ve got the measurement system nailed. I mean, we hire a consultant that comes in and teaches us how to do this, and then we come up with what we think is the perfect system, and then we run with it. That’s not really a prescription for success.

The key is to understand that we want as much as information as we can get working through focus groups and through working with our own people, our own knowledge workers and opinion leaders. So we work with stakeholders, knowledge workers, opinion leaders, and customer focus groups.

Then we come up with a system…but we’re still going to pilot test it. We take the same approach to pilot testing that you take to systems development. The initial approach is going to be an alpha test. Test it in a place where it’s easiest to prove the feasibility and the value of the performance instrument. Once we’ve done that, then we go to beta sites and conduct an operational test.

2001 Technology Performance Summit
The Performance Institute, an authority on performance-based management practices, is holding the 2001 Technology Performance Summit May 15-17, 2001 in Orlando, FL. The conference is designed to help IT professionals increase CRM project investments and enhance their own management skills. Visit the institute’s Web site for more information.

TechRepublic: Often there is little communication between an IT department and the rest of an organization. What are some ways an IT shop can get the word out on their successes with an implementation?



Joseph: To communicate, don’t just say, “We’re going to do it.”

You need to tell people what you’ve done and make what you’ve done visible in the organization; advertise it. Put it on the company Web site, put it in a corporate newsletter, something like that. Make it visible so that when other parts of the organization face similar business operating conditions, they will look at other successes and say, “Hey, there’s a chance to learn here.”

 

TechRepublic: Once testing the new CRM system is over and real customer information is being processed by a CRM system, how can managers use this data?
Joseph: Whenever you get feedback from customers, the key thing for project teams and enterprises is to know that customer feedback, even if it’s negative, is never going to be used as a penalty. It’s always going to be used as a learning mechanism. Nothing will kill CRM faster than using it (the system) for penalties. It’s really the wrong way to go.

 

TechRepublic: Customer data can enter an organization from many places: call centers, e-mail correspondence, or the Web. What should the focus be for organizations?
Joseph: Those sources can come from many different places. Usually, you want to look at what people tell you, in response to the Web, because more and more business is being done over the Web. When it comes to external customers, [the Web] may be the best piece of information.

I’m a big believer in focus groups. I like to get people that are our customers and people that we wish were our customers in a room and ask them questions about [what] their specific needs are and what’s important to them. Then find out what are the elements of the service quality and delivery that are associated with each of those needs. Then, it’s not just us saying that we’re out there all the time and we know what people need.

It’s not enough to have the right answer. You’ve got to be able to prove it, especially if you’re trying to make a business case for additional information technology resources for the enterprise.

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