CRM Special Report- 8 Critical Factors That Make or Break CRM
The CEO of a large manufacturing company was frustrated at the slow progress his company was making transitioning from a product-focused company to a customer-centric one.
Each time the top management team met, the main topic reverted to problems executives were having regarding their customers. The meetings ended in conflicts that managers couldn't resolve.
Problems were identified: It took five days on average to enter, process and fill orders—an eternity in today's fast-paced business climate. CSRs didn't have instant access to product information, and they delayed customers on the phone while they located account information. The inability to address customers' needs was reflected in surveys and resulted in lost orders.
The order-entry process was complex, sequential and slow. To ensure that customers order the right products, salespeople had to be up-to-date on their customers' needs. While sales personnel were attentive, important customer information was carried in their heads and rarely reached CSRs. There were many times when the salespeople advised customers to buy appropriate products, but by the time the orders were placed, the information was lost or inaccurate. CSRs relied on knowledge of prior ordering patterns and product lists, but they still were unable to advise customers correctly based on customers' current needs.
The solution seemed to be changing the entire customer-facing business process. Company officials decided to move their sales, customer service and order-processing system to the Web. To do this, the team bought a CRM solution from one of the leading vendors who said its solution would remedy the company's problems and provide up-to-the-minute customer profiles. But managers underestimated the difficulties of implementing the system in their company. What seemed simple on the surface became a difficult problem in managing change.
The first challenge was how to realign the roles of salespeople and CSRs. Managers decided the sales force needed to spend more time with customers and learn their businesses. They wanted salespeople to be on hand when ordering decisions were made to advise and influence customers.
The next question became how to handle orders. Should the salespeople enter them online using laptops? If so, the order-entry job remained a clerical one. This wouldn't solve the problem of customers calling with inaccurate product information, which the CSRs couldn't correct.
Managers decided it would be better to put product and customer information online and upgrade the CSRs' jobs to empower them to manage customer orders. But a heated argument ensued about salespeople's roles. Some argued that if they put the customer online they could eliminate the sales force, a shift that was too radical for most managers.
It wasn't until company officials were into the implementation process that they realized they faced more challenges, only one of which was technical—notably, the extent of workflow changes and the cost of employee re-skilling. First, managers had to convince the salespeople to structure and report the information they'd received about their customers' changing requirements. This bothered salespeople who gained prestige by being the sole source of information about the directions their customers might take.
The second problem: educating the CSRs. Managers had chosen to reduce expenses by hiring unskilled people for this function. Many CSRs wouldn't be able to transition to greater responsibility.
The third concern: The CFO said the information for which he was responsible shouldn't be made available to people who didn't understand security requirements. He also was concerned that part of his responsibility—deciding on the conditions of credit to be extended—would not be in his control.
Additionally, the CFO faced a major change in his technical architecture for which he was unprepared. He'd been running on an enterprise-wide system that needed more extensive integration than anticipated because the company network included remote geographic locations. He'd just finished training his people to understand the client/server environment.
Managers structured their project teams to include all points of view. They added the manufacturing vice president because of the need for product information. The CEO said it would strengthen the relationship between manufacturing and sales, which had been strained in the past. They formed a steering committee and picked a project leader.
Lessons to Learn
This case points out critical success factors necessary to effectively manage a major business-process change grounded in the adoption of new technology such as CRM. In today's volatile corporate environments, failure to adhere to these factors may result in increased costs, delay in bringing a CRM solution online or even outright failure. Let's explore the eight success factors that could have improved this implementation:
1. Did the managers have a vision and passionately communicate it? They did not. Because of the conflicts managers had prior to this project, they couldn't agree on a clear vision. They needed to do the following:
•Put aside their differences to focus on the greater challenge they were about to face.
•Describe to employees how they expected to support the business for the next five years.
•Paint an indelible picture in employees' minds of what the company would look like in five years.(What would people feel like? What would the customers be saying and feeling?)
•Offer to employees a way to discover where they fit and how important they are in making the vision happen. Employees want to know how they can make a difference.
2. Did managers understand their company's culture in terms of its readiness and capability for change? Managers were ready, but employees in several departments were not. There's a difference between seeing a need for change and being willing to leap into it. Time and increased understanding, particularly the chance to change and the cost of not changing, may have helped increase their readiness.
The most crucial aspect is whether CSRs can change, regardless of how ready they are. Managers also should have assessed the potential loss of power salespeople may feel and change the job responsibilities the new customer service solution may have caused. Managers needed to assess how the change in business processes and technology would affect those who had to support the change and use the new technology.
The rule is: "The more change involved, the greater the implementation challenges will be." The project manager needed to prepare for this change effort by understanding the degree of difficulty he faced. The managers needed to address the departmental issues that stemmed from a lack of readiness and capability before the implementation started.
3. Did they begin by changing the business processes first? Company officials didn't completely understand the implications of the changes it was adopting, a common problem when installing a package solution.The management team needed to engage in a briefing on business-process redesign before implementation. The project team needed to learn all aspects of organizational redesign and identify capabilities needed that the company may not have prior to implementation.
4. How well did they communicate their intentions? Getting support from executives was a key criterion for their success. It's critical that executives address employee concerns and provide a forum for their input and feedback. It's extremely important that executives accurately set project expectations and communicate the project's importance. They needed to set-up dialogue sessions that engage employees in talk about the changes.
5. Did they provide superior executive support for the project? Many executives can be supportive of a project, yet fail to provide hands-on leadership and commitment. In this case, they did provide hands-on support. The difference between informal support and active leadership can be the difference between success and failure. Executives were prepared to personally engage in this process. They also needed to communicate to employees how this project would improve customer satisfaction, reduce work frustrations and make employees' jobs easier.
6. Did they choose a balanced team to manage the project? In this case, the project team consisted of employees in information systems, customer service, manufacturing, sales and finance. A consulting firm provided project leadership support and experts in the CRM solution. This team was responsible for customizing the software to fit the requirements of the particular business processes and customer interfaces. Team members helped train users and were seen as experts in the new technology's implementation.
7. Did they train everyone? Implementing a new system means learning new ways to operate. In this case, they knew there would be major changes in the business processes. Users were told why these changes were needed and the details of how it would change their jobs.
But managers didn't address the perceived change in status and self-esteem the salespeople and CSRs may experience. The project team analyzed the current skills and developed a template for the new skills needed. They analyzed the templates for significant gaps, and identified new skills and changes in business processes that would close the gaps. The organization structure was flattened, and they created a new team-based structure. The entire organization went through extensive training on team-building and how to function in the new structure.
8. Did they commit to change? Stay the course. The project leader now cautions new CRM implementers that they need consistency and determination to succeed.
In a CRM project of this magnitude, it's natural for problems to arise. The technical architecture may not be adequate. If the system hasn't been configured to accomplish the required set of tasks, users may revolt. It takes leadership and guts to maintain consistency and focus to overcome these obstacles.
Bill Brendler is president and founder of Brendler Associates (www.brendler.com). He is an expert in the human challenges associated with implementing new technologies and improving customer loyalty. He can be reached at (512) 847-0690.