Enterprise Software

Business goals should come before IT needs in a CRM project

CRM projects may be costly and hard to implement, but they can be a good investment if they're built on the right business framework. Find out why one expert believes companies must define specific business goals early on to enjoy CRM success.

Focusing on the technology needs of an initiative before considering the business drivers is a critical problem for CRM initiatives. Project leaders often get wrapped up in hardware and software needs or technical infrastructure before they’ve figured out what the project is designed to do.
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All things considered, CRM is far more about customer and company needs than it is about the technology that powers it. If senior executives keep that in mind, it should be easy to prioritize the wants and needs of various departments during a CRM project. This article outlines one CRM expert's framework for making a sensible business case for CRM initiatives and explains his thoughts on where IT fits into the project.

Basic value considerations
When Jeff Walters advises clients in the early stages of their CRM planning, technology spending is practically a non-issue. Founder of the Strategy Outfitters consultancy and co-author of the book Measuring Brand Communication ROI, Walters instead urges clients to develop a framework for CRM projects by evaluating the increased value they hope the CRM system will provide to customers.

In particular, Walters claims that developing a customer-centered framework involves two primary considerations:
  1. What kinds of communication will increase customer touchpoints and enhance relationships?
  2. What kind of information do employees need to reap the benefits of customer relationships and sustain the added value?

"The higher the level of complexity of communications, or the more one-to-one you want your customer relationships to be," said Walters, "the more knowledge you need to have and the greater the ability needs to be to deliver that knowledge to decision makers and front-line employees."

Customer expectations
To determine the value that a CRM project will contribute to your operations, you must understand what customers want their relationship with your company to be. For instance, when Jeff Walters consulted with IBM's PC Company on its CRM initiatives, customers had very high expectations of what IBM knew about them.

"If a customer had one million dollars' worth of equipment on its floor, the customer doesn't want to receive marketing materials for servers when they're sitting on 20 of them."

In a case like this, a company's CRM project needs to provide detailed customer information from inventory systems and customer support desks—all of which would need to be integrated to deliver intelligence to the salespeople or marketers who are in touch with the customer.

However, when this case is compared to consumers buying packaged goods in a grocery store, the customers aren't too surprised when a brand has little knowledge about them individually. Obviously, there's less money at stake on a per-customer basis with a product like soap than there is for technology hardware manufacturers. For the most part, low customer expectations accompany low-dollar transactions; this relationship should, in part, determine the magnitude of CRM technology investments.

Defining the role of IT in a CRM project
According to Walters, pinpointing the strategy and business case for CRM is far more challenging than locking down the infrastructure to power it. In fact, Walters believes that a lot of CRM horror stories are the result of an upside-down process—quick technology adoption with no clear business case to support it.

Although Walters does not mean to slight an IT department's role in a CRM initiative, he believes that the key players in the development of a CRM initiative should be senior management, sales, marketing, and customer service.

"IT obviously needs to work as a partner in the process, but too often, the technology implementation and decisions may be out in front of the business requirements," he said.

Collaboration, communication, and compromise among all departments involved in a CRM implementation are fundamental to a successful CRM implementation. But given the potential for conflicting priorities from different departments, Walters believes that this is perhaps the greatest challenge in any CRM undertaking. When these types of problems arise, deciding on a database server or an intelligence tool may be the easiest part of the entire process.

Getting CRM off the ground
Do you have any tips for a successful CRM implementation? Are there more ways to balance business needs and technology drivers? Share your thoughts by posting a comment below.


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