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CRM (Customer Relations Management) : "Best Practices Basics"
These are some of the highlights of the 2006 conference, attended by the biggest names in the business. The "Basics" shared here can certainly be applied to business of ANY size!
Best Practice Basics
Industry consultants outline the key drivers that place the processes and people ahead of the technology at the destinationCRM 2006 conference.
by Colin Beasty
Organization and planning were the name of the game during the first round of breakout sessions at the destinationCRM 2006 conference in San Jose yesterday. Industry experts, including consultants at McKinsey & Company and ISM, stressed the importance of making sure companies have strategies, end-user needs, and corporate goals aligned before embarking on any CRM initiative.
Despite the number of failed CRM implementations since the mid-90s, companies have failed to heed the alignment lesson, said AnupamAgarwal, an associate principal with McKinsey & Company, in his afternoon session, "Organizing for CRM." Companies should first identify the strategic and tactical business benefits for the organization, the value proposition for the end users, and should identify and repair the business processes that drive the CRM strategy. They should also understand how this will improve the customer experience before considering which technology vendor to partner with. "You can't rely on technology alone; define the business solution first and use the technology to support it," Agarwal said.
According to Agarwal, the core problem is that businesses don't pay enough attention to the organizational challenges inherent in any CRM initiative. The continued focus on technology as the primary decision driver continues to be the biggest mistake companies make. Experts agreed that technology should represent only 30 percent of any implementation, with the remaining 70 percent focusing on the processes and people. "The technology should be driven by the goals and needs of the company and end users," said BartonGoldenberg, president of ISM, during his "Executive CRM Boot Camp" session. "The purpose of CRM software is to automate the processes, not drive them. Companies that try it visa versa might as well quit while they're ahead."
There are a variety of obstacles that usually spell doom for CRM programs, but resistance to process change for end users, integration woes, and a lack of consensus on objectives are the top three. Companies should identify the operational and financial impact of improving business capabilities through CRM by understanding how a company interacts with its customers and develop a CRM value strategy and road map based on the businesses process that drive the current CRM practice, according to Agarwal.
The objectives of executives and of end users often fail to correlate when it comes to selecting and implementing a CRM solution. Goldenberg cited an example of one manufacturing client whose executives identified the top-three business incentives for purchasing a new CRM solution. "Those three reasons were numbers 44, 45, and 46 on a list of 50 reasons that came from end users when we asked them the same question," Goldenberg said. It's critical companies identify the reasons and expectations of both the executives and end users simultaneously. Besides finding a happy medium, it also exposes how different departments within the organization use CRM data, which helps to break down the silos. It's also important that organizations map out the business processes and correct any flaws. Goldenberg recommends "supergroups" of approximately 20 end users who represent every customer touch point within the organization to garner feedback from frontline employees.
End-user adoption and executive buy-in, always a potential pitfall for CRM initiatives, should be tackled by a top-down/bottom-up approach, according to Goldenberg. If executives can't identify at least three clear-cut business cases for taking on the CRM project, the plug should be pulled right there. "When it becomes strategically relevant is when you'll have executive buy-in."
For the end user, whose expectations of CRM are more tactical in nature, companies should spend anywhere from four to six weeks convincing them of the importance of the new CRM project by walking them up a five-step ladder. Starting with awareness of the new initiative, end users must then understand--and accept--then get involved, and finally, be committed to the new processes and/or solutions. "You're ensuring success from within the belly of the beast by taking the time to march then end user up the ladder," Goldenberg said.
For the many companies that have implemented a CRM strategy the right way, ROI numbers can be compelling. Goldenberg sais companies should expect end users to experience a 10 to 20 percent increase in productivity, thanks to the automation of processes, while financial ROI numbers can range from 50 to 100 percent, all over a period of 3 years.
Best Practice Basics
Industry consultants outline the key drivers that place the processes and people ahead of the technology at the destinationCRM 2006 conference.
by Colin Beasty
Organization and planning were the name of the game during the first round of breakout sessions at the destinationCRM 2006 conference in San Jose yesterday. Industry experts, including consultants at McKinsey & Company and ISM, stressed the importance of making sure companies have strategies, end-user needs, and corporate goals aligned before embarking on any CRM initiative.
Despite the number of failed CRM implementations since the mid-90s, companies have failed to heed the alignment lesson, said AnupamAgarwal, an associate principal with McKinsey & Company, in his afternoon session, "Organizing for CRM." Companies should first identify the strategic and tactical business benefits for the organization, the value proposition for the end users, and should identify and repair the business processes that drive the CRM strategy. They should also understand how this will improve the customer experience before considering which technology vendor to partner with. "You can't rely on technology alone; define the business solution first and use the technology to support it," Agarwal said.
According to Agarwal, the core problem is that businesses don't pay enough attention to the organizational challenges inherent in any CRM initiative. The continued focus on technology as the primary decision driver continues to be the biggest mistake companies make. Experts agreed that technology should represent only 30 percent of any implementation, with the remaining 70 percent focusing on the processes and people. "The technology should be driven by the goals and needs of the company and end users," said BartonGoldenberg, president of ISM, during his "Executive CRM Boot Camp" session. "The purpose of CRM software is to automate the processes, not drive them. Companies that try it visa versa might as well quit while they're ahead."
There are a variety of obstacles that usually spell doom for CRM programs, but resistance to process change for end users, integration woes, and a lack of consensus on objectives are the top three. Companies should identify the operational and financial impact of improving business capabilities through CRM by understanding how a company interacts with its customers and develop a CRM value strategy and road map based on the businesses process that drive the current CRM practice, according to Agarwal.
The objectives of executives and of end users often fail to correlate when it comes to selecting and implementing a CRM solution. Goldenberg cited an example of one manufacturing client whose executives identified the top-three business incentives for purchasing a new CRM solution. "Those three reasons were numbers 44, 45, and 46 on a list of 50 reasons that came from end users when we asked them the same question," Goldenberg said. It's critical companies identify the reasons and expectations of both the executives and end users simultaneously. Besides finding a happy medium, it also exposes how different departments within the organization use CRM data, which helps to break down the silos. It's also important that organizations map out the business processes and correct any flaws. Goldenberg recommends "supergroups" of approximately 20 end users who represent every customer touch point within the organization to garner feedback from frontline employees.
End-user adoption and executive buy-in, always a potential pitfall for CRM initiatives, should be tackled by a top-down/bottom-up approach, according to Goldenberg. If executives can't identify at least three clear-cut business cases for taking on the CRM project, the plug should be pulled right there. "When it becomes strategically relevant is when you'll have executive buy-in."
For the end user, whose expectations of CRM are more tactical in nature, companies should spend anywhere from four to six weeks convincing them of the importance of the new CRM project by walking them up a five-step ladder. Starting with awareness of the new initiative, end users must then understand--and accept--then get involved, and finally, be committed to the new processes and/or solutions. "You're ensuring success from within the belly of the beast by taking the time to march then end user up the ladder," Goldenberg said.
For the many companies that have implemented a CRM strategy the right way, ROI numbers can be compelling. Goldenberg sais companies should expect end users to experience a 10 to 20 percent increase in productivity, thanks to the automation of processes, while financial ROI numbers can range from 50 to 100 percent, all over a period of 3 years.