The Promising but Perilous Paths to CRM Success

CRM is risky, with failure rates running 55 percent — even 80 percent — according to various Gartner and Meta Group reports. Clients themselves are conflicted about CRM. In a BearingPoint study of CRM, 82 percent of corporate executives surveyed described CRM as very important. Yet, 40 percent noted that their CRM initiative failed to achieve the expected value. "Effectiveness and performance clearly is an issue when it comes to CRM," concludes Mindy Propper, vice president, BearingPoint CRM financial services practice leader.

Technology often takes the blame, but "CRM is not about technology — often, technology is the least important part," observes John Freeland, CRM global managing partner, Accenture. In fact, "a CRM project can fail although the technology works," contends Bill Henry, vice president, PeopleSoft Global Services. In such cases, the client usually has failed to prepare the organization for change — for example, by failing to change the appropriate business processes or by giving users appropriate incentives to change their behavior.
So how should a CRM implementation proceed to ensure the greatest chance of success? There are two basic approaches: (1) pick a CRM package and implement it as-is to some degree, or (2) pull out a blank sheet of paper and start at the beginning with your business objectives and customer strategy. Either way, success requires a partnership among the technology provider, the consultant as expert implementer, and the client.
San Francisco–based Union Bank of California rejected the package approach and, working with BearingPoint, essentially started with a blank piece of paper. Polycom Inc., a global video conferencing company based in Pleasanton, CA, wanted results fast and jumped right into implementing the PeopleSoft package. Each considers its effort a success.

Union Bank wanted CRM to support its new branch sales initiative. It already had a lot of technology: a banking platform, a central customer information file, and a sophisticated CRM system for its relationship bankers. Rather, it needed something in its branches to help branch staff sell bank services. CRM vendors wanted to sell the bank their functionality-rich CRM systems for the branches, "but we didn't have a lot of time to spend on packages, and the vendors wanted to include a lot of things we didn't need," recalls Jo Ellen Hart, vice president.
The bank's objective was to improve its branch sales culture. It linked up with a sales training consultant who "taught us not just how to be order takers but also how to do a consultant sell," Hart explains. The company spent a year working on its sales training and sales culture without automation. When it was finally ready to give its branch staff some sales automation, it turned to BearingPoint, which previously had helped the company with the automation for its relationship bankers. "BearingPoint quickly realized that we needed a very scaled back version of CRM software," she says.

The consultants spent six months pinning down exactly the CRM functionality the branch staff needed and then spent 10 more months building what the bank calls the SMART (Sales Management And Relationship Tracking) system. The system is designed to reinforce one-to-one marketing to drive both market share and customer wallet share. In addition, the solution allows bank managers to analyze real-time sales results and customer trends.
In the end, the project involved two BearingPoint professionals on-site for the six-month design phase, during which they absorbed the bank's new sales culture. They went back to BearingPoint to build the actual system. The rollout and training took another three months, Hart reports, making the project a 19-month effort. A Union Bank team of six people worked side-by-side with BearingPoint during the design phase. A few bank people also joined BearingPoint in the build effort. At the same time, bank staff was busy setting up data collection from the bank's mainframe systems and getting the data into the data warehouse for use by the new system. The bank staff also handled all the infrastructure components.
Specifically, the $5 million solution (including the cost of an Oracle data warehouse and other technology infrastructure) provides branches and departments with direct browser-based access to customer and prospect data, which enables the sales team to better market services and products to the customer. The system also feeds the bank's existing platform banking system for outbound marketing. SMART delivers real-time reporting to all management levels and enables sales coaches to monitor the branch staff. SMART users also can access comparisons of goals to actual sales and service metrics. This system allows the 1,200+ branch employees to service any customer regardless of which of the company's 245 branches the customer visits.

For the first six months, adoption of SMART went slowly, but now, two years later, "the system is working well," Hart reports. The bank has seen an increase in branch sales, although Hart can't determine whether it results from SMART or the new sales culture or — more likely — a combination of both.
Looking back, Hart would like to have spent more time on the system. She continues to meet with BearingPoint weekly about the project. Still, the project is considered a success, the key to which was the effort BearingPoint spent in learning the bank's sales culture. As a result, the CRM software hit the target exactly. "We use everything we built, every function," she points out.
At Polycom, the CRM project started with the CRM package, and speed drove every decision. "We needed to get the project running in six months. In this organization, people have a short attention span. If a project drags on too long, people tune out," says Ronald Coble, IT director. The project was owned and managed by the service organization, which put extra money on the table to ensure that it got what it wanted, adds Chris Walsh, director of service technology. At the same time, the company decided not to involve other departments. "Maybe we should have involved billing or shipping, but then we couldn't have stayed on our timetable," Walsh adds.

The service group put six people onto the project plus Walsh. Each person on the team represented a service function, such as contracts or call center or logistics, and was empowered to make decisions quickly on behalf their function globally. They would later take the lead in promoting adoption. On rare occasions when decisions had to be escalated to top management, the appropriate vice president was given just 24 hours to make the decision.
Coble's IT group contributed three people to the effort. PeopleSoft Global Services provided the software expertise and handled the bulk of the implementation. Company executives had chosen PeopleSoft six months earlier. The company selected PeopleSoft Global Services for the implementation because "version 8.4 had just come out and we knew that PeopleSoft would have the most expertise in that release," Coble explains.
To speed the implementation, the team agreed to minimize customization. "We decided to model our practices on the tool. As a result, a lot of internal practices did change," says Walsh. Team leaders subsequently worked with each function to accommodate to the change. In the end, only about 20 must-have customizations out of an initial list of over 300 requests were undertaken.
Even without customization, the implementation was complex. Polycom had acquired two other companies and faced a massive data conversion chore. This required additional resources and slowed the implementation by four to six weeks. To speed the process, the company skipped data cleaning. "We should have done it then. We're doing it now," concedes Coble, but the team felt pressed to deliver something before people lost interest.
Polycom already ran PeopleSoft financials and other modules, and integrated the CRM piece with its other systems. "This presented a lot of difficulties," notes Walsh. Once the setups were integrated, a service agent could enter a change on behalf of a customer and have it ripple through the other systems. Suddenly, the company realized that it needed new policies and controls for how data would be changed. "We're doing that now," adds Coble.

Similarly, the company is now, only after the system has been deployed, adding management reporting capabilities. When the system was ready to be launched, the team embarked on extensive training through use of a PeopleSoft training partner.
The company considers the system a success. "Everybody is using the system and nobody has been fired," quips Walsh. For the sake of speed, they cut corners they later regretted, but "it is not possible to do a project like this without a lot of headaches," he continues. Today, they have functional CRM without having had to wait for months or years for the ideal system.
However you implement CRM, the risks are high and success can be difficult to determine. Trade-offs among speed, functionality, and cost are always involved. The trick is to understand the trade-offs in advance and to make sure that you and your partners are in agreement about how to handle them.