Steps to Initiating CRM

A CRM initiative starts with top management taking a conscious decision towards customer orientation. Visualization of benefits should happen at this stage and should be articulated in the form of a value proposition. A discussion on CRM project’s value proposition is available here. The next step involves outlining business processes that will be impacted by CRM. As mentioned in an earlier post, the impact of CRM initiatives is not limited to the front end and customer facing processes only. While CRM applications have evolved and are industry focused and process oriented, the custom processes of the organization still need to be mapped to standard processes provided by CRM vendors. A process re-engineering team comprising of members from strategy, operations, IT and external CRM consultants should be formed at this stage to analyze custom business processes of the organization and provide clarity on the following:

1.      Time/Cost Estimates of the initiative

2.      Phasing approach (and identification of quick-win projects)

3.      Change management requirements

4.      Metrics to monitor progress/returns at every step

Subsequent to this, the CRM product vendor needs to be selected. Unlike purchasing a cell phone, where one learns after purchasing a feature rich phone first, subsequently realizes his unique needs and next time buys just the right one, CRM product selection is a one time activity unless the organization gets it completely wrong. Product vendors are aware of organizations’ penchant for features and would package numerous additional features highlighting discounts if bought as a bundle. Enterprise vendors would also bundle a few non CRM components for future opportunities. Organizations that fall into the trap may end up paying for features which they will never use. Results of the analysis phase should provide the framework within which the organization should commit its resources. A similar logic should be adopted while purchasing licenses. Organizations should however, ensure that product support and consulting from the vendor are included as part of the package as these are critical to the success of the initiative and will be costly if bought later.

The next step is to decide whether to develop the CRM application in-house or partner with a system integrator (SI). There are advantages and disadvantages of each approach which will be considered in a later post. Some key things should be considered while selecting the SI partner. Reputation and reliability are important because organizations will be exposing their customer strategy to the vendor, trust and mutual respect will play an important role in opening up and sharing knowledge. Good CRM SIs are costly because they employ technologists who in addition to understanding the unique business processes, are expected to understand the organizations customers. Being penny wise here will prove costly in the long run.

Once the organization has mapped out its business processes and selected the product and SI vendors, they are ready to create specific business requirements with help from product and SI vendor’s teams. 

Culture Change to enhance CRM Acceptance

Success of a CRM venture requires acceptance of CRM at an Organizational Level. A CRM enabled organization is tuned completely towards its customers and listens to them through all available channels, then acts to fulfill customer needs. To enable this, processes across the organization need to be aligned towards achieving this goal. If the thought process is that CRM is only going to impact the customer facing processes and not others, then the Organization may not have thought through the initiative. The next important step is to identify the processes and people who will be impacted. A big risk to any change management program is that there is not sufficient buy-in from people who are responsible for implementing it. People who are actually going to execute the CRM initiative need to know how things will change. It is important that some key people are identified as champions of the initiative and initial successes are celebrated. The more the number of users who understand, accept and then actively promote the CRM initiative, better are the chances of its success.

In most Organizations which do not involve employees in decision making process, employees develop a confirmatory response model. This model is performance orientated while an exploratory response model gives more stress on learning. For a change initiative of the scale of CRM to be successful, unfreezing of the existing ways of doing things is essential. Employees with exploratory response are more tuned accepting such changes and championing them. Organizations may want to understand the response model of employees and help move towards the exploratory model. Change becomes easy when the combination of the following happen:

1. there is sufficient dissatisfaction with the existing environment (D)
2. there is a clear vision of the future which is superior to the current situation (V)
3. people commit to taking first steps towards the goal (F)

When the combination of these is greater than the resistance (R) to change, change happens.

D x V x F > R

To create such an environment in the organization should be the goal of the top management. One of the critical points to note is the first steps towards the goal need to be positive and encouraging. For CRM implementations, usability of the CRM system play a crucial role in forming opinions about the system and whether it will be able to deliver the vision. While most CRM providers are aware of this and some have invested heavily on usability related research, I have seen multiple issues with the usability of CRM systems. CRM vendors as well as System Integrators need to understand their direct and end customers better in terms of demographics, psychographics etc to make systems that are in tune with their individual needs and backgrounds.

Acknowlegements:

1. Gleicher’s Formula: D x V x F > R