Prescription for healthier CRM

The payoff of customer relationship management (CRM) software is intoxicating. Letting employees in sales, marketing, manufacturing, accounting, or tech support view all pertinent information about a customer can boost both efficiency and customer service.

Accurate and insightful CRM data can also help avoid gaffes. No one wants sales to pitch a customer whose account is in arrears, or to send marketing material about a new upgrade to a customer who's been besieging technical support with issues about the last upgrade.

But it's this integrated view of all the relationships that a company and a customer have that makes CRM so complex. In fact, according to Gartner Group, more than 50 percent of all CRM implementations through 2006 will be viewed as failures from the company's point of view. Knowing the pitfalls associated with CRM software can help you avoid them. (For more, see "Six mistakes that will sink your CRM.")

Customers who've deployed CRM successfully concur that the software impacts companies on three fundamental fronts--cultural, procedural, and technical. As a result, it's crucial to cultivate support from both executives and employees, roll out changes incrementally, and anticipate the technological impact on your entire network.

Here's a three-step prescription to healthier CRM implementations.

A well-worn axiom of technology deployments is "get executive sponsorship"--that is, make sure someone at the top supports the project. Because of CRM's extensive reach into multiple departmental domains, taking this axiom to heart is crucial. "This shift doesn't come naturally. The business knows it ought to do it, but it takes someone with senior authority to make it happen," says Dave Marvin, CEO of Wind2 Software, a Fort Collins, Colo.-based developer of business applications, whose company uses Pivotal's CRM software. "Someone has to say that this is what makes sense for the organization, not the individual."

But CRM almost always requires departments to change the way they keep track of information, forcing them to convert from a familiar spreadsheet or database to the CRM software. Like any networked application, CRM software works only when everyone shares their pertinent information. The more information that's shared in the CRM system, the more valuable the information becomes for use in forecasting and analytics. If just one department considers its customer data sacrosanct, it can jeopardize the accuracy of the aggregated data. That means department heads have to adapt, as well as lead their direct reports.

The same kind of understanding about CRM's extensive reach is required when the software itself is actually deployed. Because CRM applications consist of multiple modules, each targeting a different department, those who have deployed CRM software recommend taking an incremental approach.

"Start with something you can conquer quickly. Build trust and confidence, and then move forward," suggests Roger Little, senior director of business applications at Salt Lake City-based Ingenix Health Intelligence. His company uses Onyx's software to track its customers in the health-care industry, to whom it sells consolidated market data and analytics tools.

"Rather than a big bang, we started with an organization that was crying for a tool like this," he says. Little started with customer support, and then moved on to the sales organization. "Once we had one implemented, it was easier to go on to the next one," he says. By working iteratively, you not only create champions within each group among the employees, but you also hone the knowledge of your technical staff as well.

The step-by-step approach also pertains to CRM software itself. In the same way that departmental modules can be deployed individually, the particular features and functionality of the software can also be made available incrementally.

"The software has so many bells and whistles, but you can turn a lot of those off. Why overcomplicate it?" says Steven McNally, a business systems architect for Lexington, Mass.-based Centra Software, a developer of collaboration tools that uses Pivotal's software.

For instance, the Pivotal software that Centra implemented contains rules about how quickly tech support should reply to a customer after a query is submitted. It also provided ways to ensure that queries were routed based on the terms of a customers' support contract. In order to ease the deployment, McNally initially turned off those rules. "As user acceptance went up," he says, "we turned the additional functions back on."

Ignore the importance of this slow-and-steady approach at your own risk: Several sources admitted to successful CRM deployments only after one or more attempts.Just as CRM software touches multiple parts of your company, its internal structure is also highly interconnected. There are three primary facets to the software: the application itself, the database that stores information, and its Web interface. "Underneath each of these are subcomponents, and changing one causes cascading changes in the others," says Marc Crawford, CTO for Raleigh, N.C.-based Tech Resource Group, a PeopleSoft customer that offers training and support for remote sales forces. "This requires significant understanding of the underpinnings so you can predict the downstream effect of changes."

Add to this a fourth component: the network. Sales is one of the key departments using CRM software; thus a global company might have a sales force on which the sun never sets. This requires thinking seriously about the reliability of your network. "This was a show-stopper for us," says Jay Gardner, CIO of BMC Software (a Siebel customer and partner), which, ironically, makes system management software. "The European sales team was concerned, saying that if they were going to depend on a system on an hourly basis, it had to be highly available."

The ultimate goal
It's complicated to undertake a project that touches so many different parts of a company. Each piece is dependent on the success of another--careful architectural design increases the chances of a successful departmental deployment, which in turn will motivate the cultural change necessary throughout the organization.

Given this, it's important to remember why you wanted the software in the first place: to become more customer-centric. In a time when customer service is becoming a key differentiating factor, it's crucial to remember--and remind everyone else--that the ultimate goal is serving the people who keep the organization running.

Silicon Valley-based freelancer Howard Baldwin is the former executive editor of Line56, a magazine covering business-to-business e-commerce.