Take A Goal-Oriented Approach To CRM

Wars are waged one battle at a time, and if you're attacking a CRM (customer relationship management) initiative with a limited budget, CRM vendors and analysts advise you to pick your battles wisely. Few organizations have the cash (or the courage) to purchase an enterprise-wide solution, but many are finding success by making tactical CRM component purchases that combine short payback periods with a long-term vision for end-to-end sales, marketing, and customer service support.

"Companies should identify and prioritize specific tasks where CRM will increase revenue or cut costs," says John Grozier, VP of CRM marketing for SAP (Newtown Square, PA). "Users have always been able to implement incrementally, but the focus in the past was on integration complexity rather than solving problems." Experts advise organizations to look at the processes that are the most labor-intensive, error prone, or most likely to deliver a quick return. Even small projects such as integrating a postal database, automating bulk mailings, or implementing a data cleansing solution can cut labor costs and increase efficiency.

Cut Costs With Workflow, Web-Based Technologies
"Workflow is going to be a major CRM trend in the next year and a half," predicts Richard Smith, VP of delivery for CRM consultant and integrator Green Beacon Solutions (Watertown, MA). Major vendors are beginning to incorporate workflow engines into their products, and end users will find that automating communication or routing documents has tremendous advantages in cutting labor as well as speeding reaction times.

Brad Wilson, VP of CRM marketing at PeopleSoft Inc. (Pleasanton, CA), advises companies to choose Web-based applications that have lower implementation and maintenance costs. "Existing client/server applications have always been difficult to implement and maintain," says Wilson. "They also give the IT staff lots of individual desktops to maintain." Wilson estimates that a Web-based application can be rolled out up to five times faster than a client/server solution. It also increases efficiencies and cuts costs by supporting better access for mobile workers as well as trusted partners such as brokers or dealers.

Avoid Expensive Integration Traps
Budget-minded organizations can also benefit from preconfigured CRM modules that can be modified to fit their needs without extensive programming expertise. "Most organizations have the same basic processes or business flows," says Lisa Arthur, VP of CRM marketing for Oracle Corp. (Redwood City, CA). "They have to author and execute a campaign to generate prospects for sales. Salespeople turn those leads into opportunities and hopefully generate quotes and close deals. From there, the information has to go to accounting. The overall process involves five or six manual processes that can be tackled individually." Because of these commonalities, many vendors are offering preconfigured solutions based on a specific platform, allowing the user to spread a CRM investment over a period of time while decreasing integration costs of custom coding or interfaces. This approach also promotes acceptance by end users as it allows them to master the individual steps in the process before moving on to the next.

Because of the risks and costs associated with best-of-breed CRM solutions, these vendors recommend a single vendor solution. "When you have a best-of-breed solution, every time a vendor puts out a new release, that integration breaks down," contends Arthur. "But not all suite vendors have a truly integrated suite. Most of them have put together an end-to-end solution through heavy acquisition, meaning they really just integrated or created interfaces for the various components."

While integration costs are a concern, the services of an experienced CRM systems integrator could save time and money in the long run. AMR Research interviewed 80 companies that had recently implemented CRM. Nearly 40% of the respondents had used the services of an integrator, while the others were split between in-house IT staff and vendor-led implementation. According to the December 2002 report "CRM: Inflicting or Profit?," 87% of the integrator-assisted CRM implementations were on schedule or ahead of schedule, while 46% of those led by in-house IT staff were behind schedule. Projects led by integrators were also more than twice as likely to come in at or under budget than vendor-led implementations. Integrators often bring expertise beyond technology to promote the success of a project. For example, an integrator may provide consultation on change management, which AMR found jeopardized the CRM initiatives of nearly half of the respondents.

Review Your CRM Strategy Regularly
Even a well-planned CRM strategy is going to require ongoing investment if it is going to continue to deliver a return. "One thing that has been consistently clear is that when an organization isn't committed to the process, it will fail," says Smith. "CRM has to be viewed as a lifeblood application that is part of the business. If it isn't maintained, it becomes less and less relevant. Many companies have experienced layoffs and changeovers or revamped business processes entirely, but they haven't adjusted their CRM strategies to mirror these higher level changes."

The temptation during tough economic times may be to decrease IT spending, but the right CRM solution can help an organization weather the downturn. "Invest in CRM to control costs during this weakened economy, but with a vision to be prepared to take market share when the economy picks up," advises Wilson. "A project can pay off right now to protect and grow revenue by helping you cross-sell additional services and protect against customer churn. Your company will be in a stronger position than competitors when customers start spending again. The vendor you choose has to have enterprise vision and still be willing to partner with you on tactical projects of reasonable duration and scope."