POLITICAS CONTABLES

To make a success of CRM-based revolution, various steps must be taken. These include buying the right technology, making organiza-tional changes according to the market context, and leading a culture change. This culture change must orientate people towards the outside, so that what is done is driven from the outside in, rather than the other way round. Of these three things, the technology is all too often the one that receives the most attention.

The commonest fault is to buy the technology and then think the job done. Organizational and strategic barriers are more important than technical barriers, but this is still not generally understood. Too many companies have bought the technology but avoided the more difficult organizational and cultural changes needed to make the most of the technology. According to Foss and Stone (2002), people and organiza-tional issues are the greatest contributors, and in many cases the greatest obstacles, to the successful adoption of CRM practices. Too often big firms fragment into departments that exist as separate silos that communicate poorly with one another.

CRM requires an organizational change inside the company, away from products or silos and towards customer service delivery.

Organizational changes mean people having to change who they work for and where they work. This in turn means the inevitable political jockeying for position that always happens at senior levels of the firm. Cultural changes are often even more difficult. If you have worked in a large firm you will know how difficult it is to ask someone to change the way they work, the things they do on an everyday basis. Without a shared, culturally bound vision, the imple-mentation of CRM systems might fail because of political infighting over the ownership of systems and data.

Senior managers need to focus on the underpinning strategy behind the CRM decision or its implementation. In over 37 per cent of companies today, senior management is actually impeding the success of CRM projects. In many companies senior managers were

not thought to give clear, visible leadership in achieving excellence in customer management. Only 13 per cent of senior management have regular contact with customers. CRM is a leadership issue. Currently senior management takes a pragmatic view on CRM. Nearly 40 per cent of EMEA (Europe, Middle East and Africa) companies viewed it as ‘useful, not critical’. Indeed more were likely to see it as a tech-nology function, an IT tool, than as a critical function, ‘a way of life’.

Such attitudes actually detract from success (see Figure 7.6). This mindset sends a message to employees that the CRM effort is not a company priority.

Senior managers listed a number of obstacles to successful CRM implementation. These included:

• Approaching CRM on a piecemeal basis rather than as a holistic investment.

Correlation with CRM Initiative Success (Pearson’s Correlation Coefficient)

76%

47%

21%

-37%

Note: It should not be surprising that the ‘IT Tool’

approach contributes more to CRM success than the

‘Useful, Not Critical’

approach; expectations for CRM as an IT tool are typically smaller in scope and easier to define and track than broader, all-encompassing CRM efforts.

Senior Management View of CRM

Useful,

It turns out senior management viewing CRM as

‘Useful, Not Critical’ actually detracts from success; because this mindset sends a message to employees that the CRM effort is not a company priority.

Figure 7.6 Impact of senior management views on success

Source: IBM Institute for Business Value.

• Continued emphasis on customer acquisition at the expense of retention. Acquisition has often thoughtlessly achieved domi-nance because its budgets are controlled by one department – marketing. Acquisition spending is mainly media based which is relatively straightforward to organize. Retention spending on the other hand requires cross-departmental resources in people and processes. It is of a more long-term character. Long-term projects are more difficult for companies to deal with.

• Culture change. Changing the mindset of the organization from being, say, product, production or sales led to being customer (service) led, is a long, hard road that must be driven from the CEO downwards. It is often a battle of transaction versus rela-tionship cultures that most starkly divides companies. Has the firm introduced CRM systems to cut channel costs, increase cross-selling or create relationships? The CEO may say all three, but they are not easy to reconcile. If you are cutting retail service while at the same time preaching relationships, do not be surprised if the troops are cynical.

Perhaps not surprisingly, these symptoms are most visible in the question of ownership of CRM in an organization. Research shows that the ownership of CRM is largely in the wrong place today as the responses to the IBM 2004 survey shown in Figure 7.7 reveal.

When the senior leadership team owns CRM, from the CEO’s lead-ership team downwards, there is a much higher success rate.

Unfortunately this is only true in just over a quarter of companies. The research also uncovered a shift over time in attitudes and behaviour from the view of CRM as an IT tool or departmentally focused initiative, to a strategic enabler for the corporation and an enterprise-wide initiative.

Having the buy-in and support of the leadership team is not enough. Employees need to use CRM in their everyday activities too.

One reason projected CRM returns are not being fully realized is because three-quarters of US and European companies do not fully use CRM once it is implemented. Companies today are underesti-mating the importance of employee alignment with a true rela-tionship approach (only 17 per cent aligned), viewing it as a distant second to customer alignment (42 per cent aligned). Employee commitment to CRM has been historically tepid in many organiza-tions. In order for CRM to take root in the hearts and minds of employees, some critical stakeholder issues need to be addressed. A

CRM strategy forces an organization to rethink its functions, roles and performance metrics and, most importantly, it emphasizes the inter-dependencies between functions and people. CRM implementation will suffer unless employees are trained and empowered to manage customers within an organizational structure that is customer-focused and flexible. The importance of a strong governance structure cannot be overestimated.

Companies that are aligning CRM goals with the objectives of employees are actually realizing the most success with CRM. It is the alignment of all communities with the relationship philosophy so that each stakeholder community can realize the value that this will add, which critically determines the likelihood of a successful implementation.

Figure 7.8 illustrates what needs to be done in an area such as channel integration and optimization.

100%

90%

80%

70%

60%

50%

40%

30%

20%

20%

10%

0%

Correlation with CRM Initiative Success (R2)

88%

63%

54%

Ownership of CRM

Corporate Marketing Sales Customer Service

IT 46%

34%

Figure 7.7 Impact of CRM ownership on success

Source: IBM Institute for Business Value.