Any organization banking on e-business to survive the current economic slump needs customer relationship management (CRM). E-business without CRM is doomed to fail.

But to make CRM work, according to Gartner analyst Scott Nelson, organizations must provide a “unified front” to customers: No matter how a customer decides to contact an organization, the level of service must remain the same. (TechRepublic is a subsidiary of Gartner.)

Nelson, who spoke yesterday during Gartner’s CRM Summit Spring 2001 in Chicago, contends that organizations can accomplish a unified approach by centering their initiatives around customer data, “the core of CRM.” Analyzing customer data is often the only way organizations can gauge the behaviors of their customers.

Create a central storage place for data
Nelson also suggests that organizations with long-term CRM goals need a central storage place for this data, making the information accessible to all parts of an enterprise and creating the architecture to which all other CRM applications will attach.

Architectural components of a CRM solution

But organizations often ignore building the repository. Nelson warns that organizations planning future CRM strategies must look to vendors that can create this backbone of a CRM plan, while keeping the architecture open to add-on products from other vendors.

While the idea of a central customer information repository is not new, Nelson says that 75 percent of organizations still keep data in separate areas, making future growth difficult for any organization.

One-on-one insight from the analyst
TechRepublic also spoke recently with Nelson concerning common questions that enterprises have about making the most of CRM:

TechRepublic: Many organizations are building their CRM infrastructures now. What strategies does Gartner suggest to ensure that the ones built today will meet CRM needs five years out?
Nelson: The biggest issue with that is that most firms undertake their CRM forays at a departmental level, meaning they’re trying to bring in systems to solve what a particular buying center needs. [For example], the call center buys a call-center package, or the sales group buys a sales-automation package. To really get the benefits of CRM… you need to build [your CRM system] at an enterprise level.
Where that’s especially an issue is with regard to the customer information repository that’s going to be used to drive all these systems. If you don’t architect to an enterprise level, you’re going to have little databases sitting at each different contact point that are not going to be able to share information. It becomes, then, very difficult when you want to elevate your thinking and your CRM initiatives.

TechRepublic: Can you explain the importance of an enterprise-wide approach to CRM?
Nelson: One thing we tell clients to bear in mind is that they shouldn’t be thinking of CRM as a technology. It’s a business strategy.
If you take the current processes and simply automate [them], you’re just going to make the same mistakes now more quickly and more efficiently than you did before.
I joke with clients all the time that CRM done incorrectly will give you the ability to very quickly, very efficiently, tick your customers off. That’s where it is for most clients right now.

TechRepublic: What lessons can we learn from CRM’s recent past?
Nelson: I think one of the important lessons to keep in mind is that CRM is really a strategy driven by customer needs, not necessarily what the business would like to see. We always have to go back to what the customer wants as we craft our CRM strategies.
There are also societal issues that are going to impact long-term CRM strategies. The classic example is privacy. A lot of firms just ignore privacy when planning for CRM. Firms need to be much more proactive in that and not just abdicate those areas to the government to determine what you can and can’t do. You have to be thinking about your privacy policies right now.
The third thing that’s going to be important in this is to remember that at its core, CRM is about people. Firms have to realize that all of your planning and all of your investment in technology is all going to go for naught if you also don’t take into account how you’re going to get the right kind of people [employees], how you’re going to keep those people, and how you’re going to grow additional people in your organization.
We’ve invited TechRepublic members and participants in Gartner’s CRM Summit to join this discussion, moderated by Enterprise Application Focus Editor Paul Baldwin, on emerging trends and best practices. Share your experience and insight with us.