CRM Application Users Are Key to Project Success

The True Story Behind CRM Failure

Many articles about customer resource management (CRM) project failure blame a gargantuan project scope or the software packages themselves. These are certainly among the many good reasons for those failures. However, I am more interested in the internal procedures that lead to some disastrous results. Companies are downplaying the true value of internal communication and training. In this article you will learn a number of industry best practice hints and the four phases before an application reaches its profit peak.

When implementing a CRM application, consulting firms, vendors, and end users rarely pay enough attention to the important issues of user training and change management. These issues are even more important when the current economy downturn and news of CRM projects failing are considered.

According to the Giga Information Group, companies spend $3.5 billion annually on CRM software alone, plus three to five times that sum on related implementation, integration, and training issues.

We see most large CRM projects taking three to four years to complete and then most companies don't achieve their goals. There is no doubt in my mind that companies should elaborate a broad and a complete CRM strategy that thoroughly covers all clients' contact points and integrates both their back-office and front-office. Nevertheless, to succeed one needs to finely split the giant task into more manageable chunks. Every single part has to hold its own reason to exist with its own return on investment (ROI).

It is therefore crucial to establish a series of achievable CRM projects rather than a global one-shot deal. However it is even more essential to get your employees to buy into the big picture and the steps through which they will get there.

Industry Benchmarks and Indications

Best practice indicates that for every one dollar spent on software and hardware acquisition, three to fifteen dollars should be spent on change management and training. Companies should consider spending an average of 10 to 15 percent of their total cost of ownership (TCO) in areas of training, change management, and internal communications. Consider the following:

  1. Lack of a well-defined plan for training can cripple a CRM deployment.

  2. The assumption that change will automatically happen as a result of the CRM system deployment is a commonly made mistake.

  3. Lack of communication can be categorized as one of the leading strategic mistakes in a CRM project. Communication is vital to the success of a project.

In reality the investment and attention paid towards this important part of the puzzle is often too low.

A Pattern That Repeats Itself

Quite often, companies rush to select a vendor and technical team to implement its software suite, but do not take the time to establish a real strategy that responds to the company's unique layout. Once a big chunk of the budget is spent on software and material acquisition and integration fees, decision makers find it hard to invest an extra 10 percent for user training and change management.

Be aware of last minute changes, unscheduled mini-trainings, and poor communication that could jeopardize your entire CRM project. We have seen many companies start over after months of technical settings and implementation.

CRM implementations are geared towards internal employees. These employees are not computer whizzes and are used to performing their jobs in a specific way. Resistance to change brings conflict and soon the perfectly toned software will be rejected or used incorrectly.

I have seen many cases where customer service representatives (CSR) or sales representatives process mismatched data, omit filling the proper data sheet in the proper section within the application, and disregard important issues due to the complexity of the CRM system's processing. As a result, companies get "garbage in/garbage out." Do not forget what CRM is all about

  • All contacts with a customer allow the system or the representative to collect data;

  • the data is analyzed to provide business intelligence;

  • through that intelligence, marketing teams can plan the sort of relationship customers expect;

  • the plan guides CSRs through the relationship with the customer;

  • and so on.

Figure1. CRM value chain

Data integrity starts from data collection and leads all other steps back to the relationship with the customer. Let's not always blame the system as the cause for errors and dissatisfaction.

What is basically the main goal when deciding to invest in a packaged software suite?

  • Productivity
  • Efficiency
  • Precision

Instead poor training and low internal acceptance can lead to less efficiency, duplication of tasks, and lower productivity.

It's All About Common Sense

Start by creating a task force at the early stages of the process. The task force should include representatives of operational users.

Communication is the key element to succeed employee's acceptance of forthcoming changes. However one should manage expectations.

A common mistake about communicating a CRM strategy to your internal or external users is to anticipate miracles and to set high expectations.

Analysts recommend that companies should look at their CRM global objective as a series of small well-defined projects, but they should also bear in mind the impact of changes and training.

The task team ought to communicate the big picture to users in order to provide them with a sense of direction and long-term benefits. It is essential to discuss different versions that users will have to go through before the full implementation is complete.

Each version (small project) represents a complete milestone with a well defined role and ROI.

Once roles and expectations have been set and communicated, the task force should act with tact and diplomacy. Quite often we see loss of enthusiasm from employees at the start of CRM integration. This is due to changing workflow, new work processes, and the organizational changes that come with the system. That is the moment when users get the CRM blues.

The downturn in motivation that CRM projects often face is part of a normal cycle of organizational change. The cycle includes four major phases:

Phase 1: High expectations from a new system

Phase 2: Disappointment builds up from the first difficulties with the system

Phase 3: The learning curve picks up from the moment that users start discovering new features and new limitations

Phase 4: Once the difficulties are over, users reach their peak productivity and only then people see real value.

Depending on the company's strategies and efforts, it may take a few months to a few years to reach phase 4.

Users working through those changes should see support from their management together with reviewed methods of evaluation.

Shorten The Cycle

Since CRM projects have to step through all four phases before reaching their main objective, companies should make sure to take necessary actions to shorten the cycle. Establishing a strategy for change management, communicating those changes and driven benefits upfront, providing sufficient and continuous training, and above all, monitoring results are winning components to help you achieve real ROI with your CRM implementation.

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