Most companies want to use CRM applications to “supercharge” their sales forces. They want higher customer retention and acquisition than their competitors, managing the sales pipeline and having better market insight. But few companies realize these goals.
After going through some of the academic studies and literature about CRM implementation, evidence suggests that some companies see limited benefit from their CRM implementations, but they are not happy overall. These anecdotal accounts show that the project itself causes the company to look more closely at their customers, which is how they benefit from their CRM implementations at all. Even then, the way the CRM software is often implemented does little to provide significant market-focused benefits.
You as a customer can change this. The SAP CRM application is not the problem. With CRM, ERP, and BI, the tools are all there, but an instrument in the hands of a journeyman musician sounds far different than the same instrument handled by the journeyman’s apprentice, or a novice.
Why CRM Projects Go Bad
Most older SAP CRM implementations relied on post-Y2K HTML and Java consultants who flocked to the CRM space. Because the SAP “New Dimension” products were new, companies could not provide sophisticated screening, so the experience requirements were low.
These web techies had little or no business experience– and certainly lacked understanding of competitive pressures, value propositions, business strategies to retain or acquire customers, or other key issues that a good CRM consultant must know. They were completely clueless about marketing, customer/sales conversions, product development cycles, solution databases, improving service cycle times, etc. Nowadays, they know how to set some switches, or make some coding changes, but they cannot transform your business or move you forward in the marketplace.
These consultants learn application jargon, and they can list some of the tools available, but when you drill down deep into their experience, you will find they are an empty shell. They are like beginner musicians who can read a few notes on a page of sheet music but lack the years of practice and background to understand and appreciate music. Going back to SAP, application technicians lack the critical transformational understanding your business needs. True CRM success stories require consultants who have some measure of business or marketing background, not just an IT background.
If you’re running a Formula 1 race team, you don’t go to your nearest garage with a great tune-up special and hire them to do your tune-up before a race. They might be able to keep the car running, but you have no chance of winning the race with their knowledge. Their garage serves an important purpose, and it fills a particular niche, but if you are looking for race-winning results, they are not the right people for the job.
Do CRM Consultants or CRM Vendors Know What You Need?
What are your goals, your reasons, or your business triggers for doing CRM, ERP, or BI applications? Did your implementation vendor assessment or consultant review include a detailed exploration of exactly how they would help you achieve those goals?
Does the vendor or their consultants have any real business change management experience to help focus the company on a commitment to the customer experience? Do they have the critical communication skills to support a communication program to the larger organization about the crucial role the new CRM application will fill? Can they help the business understand how each person’s job or responsibility affects the marketplace, how the ERP system extends into the supply chain, or how the BI system supports the key data for reporting on various goals and performance metrics? Do they even have strong enough communication or language skills to have actually done the projects they claim on their resumes?
At the start of the CRM project, did they explore where you might gain value in customer retention? Do they even understand general sales, marketing, business, or operations concepts around customer retention? Did they ask critical questions showing they know how to define what you need to improve the quality of your customer touch points? Does your CRM implementation vendor or their consultants have a clue?
I find it funny that to this day, I frequently receive calls from recruiters and companies who are interested in me helping them do a CRM project. However, I have clearly stated online that I have no SAP CRM experience, and my resume does not list any SAP CRM experience.
Even so, many customers are beginning to realize that the SAP Sales and Distribution background (SD), with its sales and marketing implementation focus, ensures proper integration between the CRM application and the ERP product. In addition, a good SAP SD consultant has strong business experience. On top of that, many highly experienced SD consultants have developed customer-focused reports and tools to address some of the customer issues. As a result, a solid SD consultant understands the types of data points and BI reports that are necessary to report on. Such an SAP SD consultant has also encountered many of the issues related to customer retention and customer acquisition.
First Things First – Basic Business Strategy
The difference between an application technician and a business consultant is whether the individual knows what questions to ask to determine the underlying business need. Even when technicians learn the business need, they often do not know how to convert it into a solution outside of their very narrow focus.
For example, if you have service or repair requests that seem high, do you focus on solving a quality problem, or on areas such as shipping processes or packaging? To resolve these issues, do you have or need a solution database? Do you need some form of Engineering Change Management process integrated within the Customer Service processes? Do you need Quality Management (QM)? Is full-blown, SAP-style QM overkill? Is there a way to promote customer self-service, both to empower them and to reduce your own internal costs? Does the ERP or CRM consultant have basic business and troubleshooting skills to ask such questions?
If you want ROI for IT expenditures, if you want SAP ERP, CRM, BI, or SOA to deliver business related results, start asking business questions about why you are looking at any technology spend to begin with. For example, consider the following:
- How do you determine customer needs and wants?
- How do you track changing dynamics in customer needs and wants?
- How do you convince your customer base to execute a purchase based on their needs or wants?
- How do you anticipate new products or services your customers may need or want?
- How do you track market spend to new customer or enhanced existing customer product spend?
- Do you measure, or need to measure, cost per lead and lead conversion rates?
- How do you compare to your competitors?
- Should opportunity tracking be embedded into the customer service process?
- Do you know what opportunities can be converted into new customers or into new (or enhanced) products or services?
- How do you track opportunity costs?
- Do you link complaints/repairs/service/opportunity reporting back to customer attrition?
Does your BI consultant know what to ask, or do they just ask you what reports you need? In other words, what are you paying them for: to make a few system settings, or for some business benefit? How often does a completely accurate order get to the customer on time? How quickly are orders processed through to delivery, and how long does delivery take? Are order to receipt to cash cycle-times in line with your competitors, and can you beat your competitors without additional costs?
In other words, if you want ROI, you need to take a genuine focus on the business drivers for an IT application to begin with. If you want the greatest return and the best competitive posture in the market, you need to find consultants who not only know the application but who understand business. Without them, all you get is another IT application when what you need is business transformation.
Even if your consultant or vendor did some homework and started asking you some of these questions, do they have the depth of experience or business insight to help you understand how to convert your answers into real solutions? Do they know how to help you bridge the entire supply chain process all the way to the customer and its direct or indirect connections to the CRM system?
Until you as a customer begin to demand that consultants and implementation vendors come to the table with real business experience, nothing will change. IT decision makers need to start demanding that their short list vendors solve real market-based problems that you are facing as a company. SAP’s ERP products are mature, and the consultants to implement and support them have been around for some time. Insist that vendors present A-list players to even be considered for a short list.
Start asking the tough questions from a business perspective, and be more proactive in managing the vendor resources you select. If you do avoid these questions, not only are you facing economic and global competition pressures– you will face new pressures with technology itself.
A Technology Change That Will Force You to Work More Closely with Customers
A while back, Google announced the availability of “SideWiki,” a web browser add-on to Internet Explorer or FireFox that allows users to comment on any page, of any site, anywhere. So if you think you can hide from the Internet or from your end customers any longer, perish the thought.
If you don’t already have some type of online customer community, you need to develop one. You can no longer control the message, and your PR or marketing departments can no longer cover for inadequate customer focus.
For the very least, work to understand and address your customers. Do you need an online customer community to more directly and more carefully address customer concerns before they get reported to some of the rating and complaint services? Or, outside of the CPG (Consumer Package Goods) space, do you need to move further into the value stream to get close to the end customer of your product or service? Should this online community also support gathering marketing intelligence, new product or service ideas, and generally engaging customers?
Are there areas of your customer experience where you must rely on third parties who are not as focused on customer experience as you are? How do you measure and track that interaction?
Even if these consultants ask the right questions, do they know how to convert the answers to those questions into real solutions that meet business needs? I do offer great source material right here in this article, and much more throughout my website. But asking the right questions, converting the answers into business solutions, generating solution scope, determining the right technologies, and then bringing the organization behind this type of strategic initiative is an entirely different matter.
In other words, we’re back to the same issue. What is the business reason for the IT investment? Why are you putting CRM in? Do you need CRM at all, or do you need a different solution? Are you better off investing in BI, or would you be better at working through process issues and using SOA to embed yourself further into the extended value chain?
This and many other articles point out the importance of focusing on business needs, market forces, and competitive pressures. Even skilled technicians who are talented at setting up a particular application cannot achieve this type of focus. A system alone only processes information– no system will change your position in the market. However, done properly, and with the right strategy-focused direction, a well-deployed ERP, CRM, and/or BI system empowers your company to effectively compete in the marketplace.
Additional Resources on ROI, TCO, Business Benefit, Revenue and Profitability with ERP Projects:
Tactics, Strategy, ROI, TCO and Realizing Business Benefit from SAP
Using SAP to improve Revenue and Profitability
Technology Evaluation Centers Listing:
For improving the business and for doing management work easily ERP is one of the best toll. but for maintaining the customers relationship the CRM helps a lot… so according to requirement of the organization you can use them effectively with the help of planning you can archive the goal…