We all know stories of late and out of budget implementations of end-to-end Enterprise Resource Planning (ERP) or custom suites of specific management software on resident hardware or the cloud. Having lived through implementations of these software platforms, I learned that every vendor presents a unique set of advantages and challenges. Although my direct experiences have been fairly positive, I also had the opportunity to learn a lot from what others had to share to avoid major pitfalls.
Back-office activities (sourcing, production, product development, accounting, HR, etc.) tend to be similar among industries and within territories of operation, in part due to regulations and generally accepted practices. Instead, front-office activities (sales, marketing, service) continue to evolve at fast pace, due to their competitive nature and advent of new ways to engage the Customer, as digital tools and social media.
Over time we have learned to get better at deploying back-office software, to the point that stories of major production delays during implementation are now rare. Differently, in the front-office space, tales of Customer Relationship Management software (CRM) blues are still with us: companies spend millions while commercial teams fill blogs with what does not work, to justify why they don’t want to use it. The worst part is that, while a back-office implementation gone badly causes a landslide of complaints from Customers, a bad CRM implementation could sometimes go fairly unnoticed.
It is not uncommon, after a “successful” multimillion CRM deployment, to hear from a Customer “I have not seen any change in the way we do business, I still have the same issues”. The company celebrated internal success … the Customer did not.
A decision to invest into a new CRM is a difficult task for senior leaders, as none of the products available today appears to be ideal. There is a big budget, a long timeline, heritage systems to be converted, ties to be made with back-office software, and, most of all, unaddressed Customer needs. So many things could go wrong.
To guide my decision process I focus on key features. A good CRM must be:
- Targeted – Must do all the things my business does well to serve the Customer AND improve where the engagement with the Customer needs help. My sales team, channel partners and, mostly, Customers must experience that new system is doing things better.
- Adaptive and engaged – Must evolve in tune with new ways to engage Customers, such as new technologies or new channels, and anticipate their needs.
- Integrated – Must be “native” to the software components that run the enterprise, such as supply chain management, financial reporting, human capital management, because selling and marketing are activities tied to manufacturing, accounting, HR, among others. The CRM must be a component of an end-to-end solution that helps the different parts of the enterprise operate in full coordination.
- Uncomplicated – Must have a core structure, quick and inexpensive to implement, able to handle basic sales, marketing, service and technical support activities, from campaigns, to transactions, to after sales support.
- Flexible – Must provide add-ons to address industry and company specific needs: I will pay more if I want it my way. Must provide analytics tools that can be customized by the company: I want to analyze my business in unique ways to serve my Customers better, while delivering more value for my shareholders.
- Intuitive – Must be easy to learn and use. Why do I have to take my organization away from serving Customers to learn a new tool that they ultimately find cumbersome and non-value adding?
- Measurable – KPIs are great; sales are better. All activities in the CRM should lead to a single metric: sales per dollar spent.
Although the ultimate measure of CRM success is sales increase, this metric cannot always be accurately connected back to the CRM right away. Fortunately, besides outright asking the Customers, there are some proxies, among which I like a couple:
- Transaction velocity – Did we make it easier and faster for Customers to do business with us? This is a good proxy for reduced cost of sales and increased potential market penetration.
- Adoption rate – How many people are using the new CRM? This is a good proxy for value added activity: if it does not help improve transactions, commercial teams, channel partners and Customers will not use it.
Interestingly, for many organizations that claim success in CRM deployment, transaction velocity did not change and adoption hovers around 50%.
Much effort is spent on driving adoption through training, incentives and leadership sponsorship. Those are excellent culture change tools, necessary because organizations frequently resist innovation.
However, I have always found that the best innovations are the ones that help to do things better, faster and at lower cost. For those, adoption is never an issue. A CRM is no different.
You can read more about Sergio’s thought leadership in his new book “Chasing Customers” available in Apple iBooks https://itunes.apple.com/us/book/book-title/id1053152060?mt=13
About Sergio Corbo:
Sergio Corbo is a commercial senior executive who helps fortune 500 corporations serve the Customer and deliver measurable results to investors. You can follow his thought leadership at www.linkedin.com/in/sergiocorbo
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