CRM in the enterprise
A hard-working CRM for you
To make your CRM initiatives work for you, first we need
to examine why CRM projects fail and then find the way to get optimum returns
from CRM. by Soutiman Das Gupta
Businesses dont buy from businesses, its people who buy from
businesses. Only those companies that understand this concept will mature into
successful customer-focused ones.
Unfortunately, far too many organisations seem to believe that CRM is a magic
bullet. According to G Radhakrishnan Pillai, Head - IT, SRL Ranbaxy, A
common misconception often promoted by CRM solution vendors is that CRM is a
technology to be purchased by implementing the latest and greatest CRM system
your business can afford. This message is a myth that has resulted in many CRM
implementations failing to provide any real customer benefits.
In spite of CRM concepts being explored and explained in the past, companies
land up with a process and solution that do not deliver the promised benefits.
To avoid such a situation, CIOs must look at the correct strategies for creating
and deploying CRM in an enterprise, and make it work its hardest.
Operational CRM is key
At the root of any CRM, success or failure is a well-designed operational CRM
If an organisations front-line customer service, sales and marketing employees
are not efficient, its CRM initiative is bound to fail. Operational CRM is the
source for customer-related information, which is invaluable for an organisation
as it can be processed by analytical CRM tools to extract business value.
This aspect of CRM, popularly called the ERP of CRM, provides the primary customer
touch points, and allows an organisation to create standard customer profiles,
understand buying needs and get first-hand feedback from an organisations
most valuable assetits customers.
A badly co-ordinated operational CRM initiative will capture incorrect data,
paint an untrue picture of the buyers needs, and provide insufficient
service and response levels. For instance, improper co-ordination between the
personal finance division and the operational CRM unit of your bank will result
in your receiving calls and mails asking you to take a personal loan even if
you already have one.
Operational CRM needs to be in sync with business units to receive complete
and updated information on which it can act. It must also integrate the systems
at various customer touch points. A mix of legacy and updated infrastructure
is all right provided the systems interoperate to provide a unified view of
the customer base.
Why CRM fails
In many companies, good quality customer and business-related
data is unavailable due to poor information management systems
Research Analyst, Frost & Sullivan
Apart from an uncoordinated operational CRM, here are some other reasons
why CRM initiatives sometimes fail.
Explains Prachi Kanekar, Research Analyst with Frost &
Sullivan, In many companies, good quality customer and other data is unavailable
due to poor information management systems.
CRM initiatives also fail due to the following:
Lack of targeted customer profitability management due to:
- Fragmented customer data
- Lack of data model to capture customer profile
- Lack of well-designed customer scoring systems
- Enterprises are sceptical about
the time and cost involved in a CRM implementation.
- Issues in integrating CRM applications with existing
legacy systems to facilitate a smooth flow of information.
From the market perspective, the low level of initial uptake of CRM may be attributed
to economic slowdown, which resulted in conservative IT budgets and postponement
of CRM purchases.
It is worth noting that one of the main challenges today is user adoption,
says Ravi Mirchandaney, Vice-president and General Manager, Siebel India Operations.
After a lot of effort is spent implementing a CRM technology, failure
to properly plan and drive successful user adoption can put the achievement
of intended business results at risk.
An elegant technology solution and best-in-class business processes will not
be successful if users and their management do not fully embrace and use the
new system. See box: A dozen ways to fail.
After a lot of effort is spent implementing a CRM solution,
failure to properly plan and drive successful user adoption can put the
achievement of intended business results at risk
Vice-president and GM, Siebel India Operations
Ensure optimal benefits
Here are a few things that can help get optimal benefits from a CRM initiative:
Create a co-ordinated, customer-focused business strategy: An organisation should
have business strategies that promote CRM across functional boundaries. The
lack of a single customer view across business functions makes it difficult
for the organisation to move far from the traditional product focus.
Have a CRM-friendly organisational structure: Organisational structure in customer-focused
organisations needs to promote cross-functional co-operation. Independent business
units, disparate marketing and sales organisations, and diverse customer care
centres can inhibit the ability to determine and perform next promotion or service
activity for the customer.
Build a customer information environment: Customer information is the keystone
to a successful CRM strategy. Its important for the operational CRM to
be alert and capture information at the beginning. This information must provide
a single customer view and must be the same across the organisation to facilitate
both operational and analytical uses.
These require a robust technology architecture that integrates multiple
channels and mixes with operational legacy applications with call centre systems
and data warehouses, opines Krishna Kumar, Head of Technology Management,
A successful and hard-working CRM initiative should be a simple but powerful
structural solution that can help organisations overcome accountability issues
that crush CRM efforts.
Companies should make both business and IT teams responsible for its CRM initiative.
The responsibilities should cover the design process, change management, and
technology implementation. However, there are many factors that can make or
mar a CRM initiative; these vary from one organisation to another.
Subhomoy Sengupta, General Manager, Applications Sales, Oracle India, explains,
A CRM initiative should help an organisation generate more leads, convert
a high proportion of them to customers, retain customers longer through enhanced
service and ensure more profitability from the customers through the effective
promotion of additional products and services.
In effect, the success factors are:
- Increase in revenue
- Increase in customer satisfaction and decrease in
complaints against customer service levels
- Increase in the predictability of forecasts
- Increase in sales force productivity or decrease
in the time to close a deal
- Decrease in the cost of a sale
- Ability to get a single view of a customer
Most companies are not able to measure the success
of their CRM solutions because they are not sure of the business metrics required
to be measured in the first place, says Frederic Moraillon, Director,
Marketing, Business Objects, APAC.
Pillai comments, A good CRM strategy should be followed by measurable
criteria defined before the implementation. So while these companies realise
that CRM has changed their business, they cant measure the success because
the metrics was not defined at the start.
For instance, the success of CRM at a banks retail business unit depends
on the rate of revenue growth, yield per customer, rate of decrease in customer
complaints and rate of customer acquisitions. So the metrics must be defined
before the CRM solution is deployed in a business unit.
In this way, every business unit, from operational to the back office, must
create well-defined metrics for measuring performance a day before CRM. Any
improvement in performance over time (week, month or quarter) can be quantified
and considered the measurement of success of a CRM initiative.
CRM for THE SME
A common misconception often promoted by CRM solution
vendors is that CRM is a technology to be purchased by implementing the
latest and greatest CRM system your business can afford
G Radhakrishnan Pillai,
Head - IT, SRL Ranbaxy
In the current business environment, SMEs are also shifting their business
strategies from product-oriented to customer-oriented approaches.
Unlike large companies, SMEs do not possess sufficient
technology know-how, resources and IT personnel to implement a CRM programme.
As a result, most SMEs cannot afford such expensive products that are offered
by traditional CRM vendors, observes Girish Krishnamurthy, General Manager,
India, Talisma Corporation. See box: SME market inhibitors.
That said, these organisations also have the urge to improve their bottomline,
gain marketshare and enter a larger playing arena earlier dominated by the large
enterprises. According to Swati Sasmal, Senior Analyst at AMI Partners, The
need for CRM among SMEs is driven by factors such as competition, better customer
service levels, market globalisation and high global adoption.
In spite of the market inhibitions, there is a lot of scope and hope for the
use of CRM in SMEs.
SMEs need CRM strategies and technology that are easy to install with
little technical resources and permit integration with existing applications.
Scalability and reliability are necessary so that the solution offers a low
cost of ownership, adds Sengupta.
In the past, large software vendors have offered scaled-down versions of their
enterprise software. However these stripped down applications often
have a limited user ceiling and do not address the evolving needs that SMEs
embarking on an expansion path typically would have.
However, SMEs have to adopt specific business strategies. These have to be based
on the specific business needs of the organisation which may be typical of the
geography and industry vertical.
Comments Kanekar, Users in the Indian SME segment prefer to deploy modular
solutions with features that suit their organisations specifically instead of
a full-scale CRM solution. CRM solution on open-source technologies will be
likely to be sought to deliver a low-cost solution.
The ASP and the hosted applications model for CRM are expected to gain popularity
with the SME segment, as they are scalable and do not require any hardware or
An elegant technology solution
and best-in-class business processes will not be successful if users and
their management do not fully embrace and use the new system
A strategy example
Take, for instance, the case of an SMEa toothpaste manufacturer to be
specific. It wants to compete against the well-established MNCs and large private
The company can gather data from market survey and tele-calling teams on a simple
spreadsheet. It does not need sophisticated tools used in call centres, but
can use software that has strong analytical abilities with, say, five user licences.
This analytical tool helps identify segments in the target market that needs
The tool may identify males in the age group of 18 to 45 who smoke and have
stained teeth. There may be another segment of women aged 18 to 40 who need
fresh breath, as they have to socialise and go to office. There may be children
aged between five and eight who dont like the taste of the companys
So the company, instead of manufacturing another brand of toothpaste, introduces
specific products. It brings out tartar-control toothpaste for male
smokers, diva extra-fresh breath toothpaste for women and little
champion strawberry-flavoured toothpaste for children. This way, the organisation
can spend only on the CRM module which provides a strategic benefit.
The need for CRM among SMEs is driven by factors such
as competition, better customer service levels, market globalisation and
high global adoption
Senior Analyst, AMI Partners
With the evolution of CRM software and processes, many new technologies
help organisations get better benefits from their investments. This is not to
say that technology is everything, but when supported with processes and people
will create a winning combination.
VoIP The ability of a single network to transmit data
and voice will dramatically reduce costs and simplify management.
Web Services and Services Oriented Architecture Companies should develop
business programmes to help them extend their application functionality by incorporating
other third-party applications through Web services. These provide more adaptable
and flexible applications so that the applications can change more dynamically
in context to a business process.
Some of the open standards to watch are Speech Application Language Tags, Simple
Object Access Protocol and Extensible Markup Language.
Speech Applications Self-service applications, with the aid of VoiceXML,
can help organisations, especially call centres, cut costs and service customers
Outsourcing An outsourced application-delivery model will help an organisation
build a customised and scalable CRM infrastructure without large investments.
Wireless connectivity Allows mobile professionals to stay connected,
improve productivity and close deals.
Presence technologies Technologies such as RFID and POS can locate customers
and help tailor messages that may help extend a business relationship.
Open-source CRM Shared source code allows flexibility and faster product
CRM analytics and Business Intelligence (BI) Front-line CRM users would
not like to wait for an analysts report or a report generated by the IT
department. Give them analytics and BI in their regular applications.
Soutiman Das Gupta can be reached at