CRM: it's what you do with it that counts

Customer relationship management has spread like a rash across the industry, but many analysts see recent deployments of the new "must have" technology as ill-advised, poorly thought-out and a drain on finances and resources. Tony Hallett investigates

The phrase customer relationship management (CRM) has been hard to avoid in 1999, with any number of technology vendors claiming they have the expertise to improve dealings between users and their current and potential clients. However, a consensus is rapidly emerging that despite the hype, CRM is no silver bullet for a company's woes. Last month, the Meta Group published research showing a high proportion of the world's largest companies have CRM initiatives that are at "serious risk of failure". It's not hard to see why. Although 80 per cent of the companies polled by the research house said they have at least one CRM application up and running, too many are still making front-end call centres and interactive Web sites a priority. Many of the 50 sample companies - which included giants such as Eastman Kodak and Sprint - are not using datawarehouses properly for meaningful analysis, and few are exploiting applications that allow proper collaboration with customers, the Meta Group found. Richard Sykes, chairman of sourcing consultancy Morgan Chambers and former CIO at chemicals company ICI, said: "I'm not surprised this has emerged. It's like a rerun of the whole ERP (enterprise resource planning) fiasco and it stems from the fact that companies haven't worked to get their customer strategies in order in the first place before bringing in the software to support it." Rene Carayol, IT director at IPC Magazines, believes that users - of any size - must concentrate on getting the basics right. He asked: "Why do we need to wait until it gets to the horror stories that are murdering the credibility of our industry? Too many times it takes tens of millions of wasted pounds before people say 'Hang on a minute, is this really working?'" With users savvy to vendor hype, it now looks as if some providers offering a technology that supposedly 'improves' CRM are scaling back their claims. GoldMine - reinvented as a CRM vendor since it merged with Bendata - doesn't go out of its way to gun for the enterprise market, and has criticised vendors targeting that space: Oracle, Siebel, Vantive and others. Martin Riddell, GoldMine's European marketing director, said a lot of those companies' CRM packages are too complicated. He also added: "A lot of CRM solutions aren't implemented properly - within enterprises they can take twelve to eighteen months, and businesses nowadays are likely to change in that time." So if the technology isn't as good as it's claimed to be and companies are implementing it incorrectly anyway, what's the solution? Frank Gibson, a marketing consultant with another CRM player, Exchange Applications, said that end-users must remain customer-focused rather than product-focused, but admitted that this requires corporate backing at the highest level. Toby Detter, customer service programme director at Shell, and leader of a large-scale CRM project, agreed. "The challenging part of CRM is changing the mindsets of people in established companies and the way they approach CRM. That takes time," he said. Also, rather than expecting CRM projects to overhaul a whole business overnight - the silver bullet approach - users should get each stage right, usually one application at a time. Informix provides some of the back-end technology or 'plumbing' that is a component of many CRM initiatives. Charles Chang, a senior VP and group executive at Informix, said: "Whether you're a big company or a SME, you should focus on a single type of application rather than start off too broad. You need fairly distinct parameters as you go along." What's certain is that users should look for the value of any technology spend on CRM projects, but not expect results overnight. The Meta Group even said in its report that some of the harder aspects of CRM are neglected because it's impossible to quantify short-term benefits. David Taylor, president of IT directors' association, Certus, offered a final piece of advice: "CRM is as much about a piece of paper and a pad, an account director and an Access database as it is about hundreds and thousands of pounds worth of software. Really focus on what your organisation needs to communicate better with the customer." * For a video discussion on CRM, see Behind the Headlines, 29/10/99 - http://www.silicon.com/a33684