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Strategic Vision: Giga Information Group on CRM
Customer relationship management (CRM) is one of the biggest buzzwords of the day. But is there any substance behind the hype? Giga's CRM expert, Erin Kinikin, looks at what it all means for the end user - and CRM's relationship with another three letter acronym, ERP

By silicon.com

Published: Wednesday 09 June 1999

The best way to view enterprise resource planning (ERP) applications is that they support the business process needs of an organisation. Primarily, they have focused on the foundation (planning/managing) part of the customer cycle (order entry, production, fulfillment and billing), whereas customer relationship management (CRM) applications have focused on the rest of the customer cycle (marketing, sales and customer service). The trend now sees CRM and ERP starting to overlap considerably with ERP vendors expanding their footprint to support the rest of the customer cycle.

ERP systems often operate on the premise, 'If we build it, they will come.' ERP is all about making companies more efficient - with the ability to make and ship products faster, cheaper and with higher quality. But who are the colloquial 'they' and what do 'they' actually want? CRM extends companies' reach from the manufacturing floor out to the customers and prospects, allowing companies to combine ERP efficiency with higher overall effectiveness.

CRM helps front-office sales, marketing, and customer service personnel work smarter, focusing more attention and resource on the customers and prospects that generate the most revenue and profit to the organisation. And yet, like many new disciplines, the value of customer relationship management is in danger of getting lost in an alphabet soup of acronyms - CRM, SFA, CSS, CIS, EMA, e-everything. How does an individual sort out what the company needs and how do they go about getting it?

Outlined below are a few practical steps to navigate companies through the CRM minefield to business success:

1. Clearly identify the business goals. The more you know about your business goals, the easier it will be to sort through competing CRM offerings.

For example, companies in newer industries focused on market share may be primarily interested in customer acquisition. Implementations will focus on customer profiling, campaign targeting, and a seamless integration between marketing-generated leads and the appropriate sales channel. On the other hand, companies in more mature industries may be primarily concerned with customer retention, customer service, and repeat sales to existing customers. Business-to-consumer companies will look at optimising marketing campaigns and call centre operations, while business-to-business companies typically focus on optimising direct sales efforts and customer service. A solution must be chosen to best match a company's business goals.

2. Think globally, act locally. The lines are blurring between sales, service and support. It is imperative to look for solutions that ensure consistent information across all front-office functions. This means consistent customer data, business rules, and workflow operations. However, companies must avoid 'big bang' implementations that drain organisational resources and limit near-term success.
CRM enterprise 'suite vendors' offer many front-office functions using a consistent architecture that reduces integration efforts. However, companies must expect to supplement these suites with best-of-breed marketing automation and analysis vendors, as well as custom enterprise integration to back-office SAP, Baan, Oracle, and PeopleSoft systems. Implementation is best achieved in a series of phases to reduce risk, and tie vendor payments to milestone achievement.

3. Address all customer touch points. Customers expect consistent, knowledgeable service no matter how they communicate with the company - across phone, fax, email, Web/ecommerce, voice and face to face.

An email question from a top customer should get the same priority as a phone enquiry. A customer who starts viewing company information on the Web shouldn't have to repeat name and address information if he or she has to call for in-depth assistance. And most importantly, don't forget vertical-specific channels such as kiosks and point-of-sale devices, ATMs, and online catalogue applications.

4. Take a business executive to lunch, or, if you're in the business groups, take an IT person to lunch! CRM implementations can be both technically complex and have profound implications on the business processes of the front office.

End user acceptance is critical to the success of a CRM system. Understand ease of use and desktop integration points that may affect adoption rates. Ensure consistency with key business processes. Demand sufficient user participation on implementation teams - CRM processes often vary widely between users.

5. Measure, measure, measure. If you can't define it, you can't measure it, and you probably won't achieve it.

Many CRM offerings have minimal reporting solutions. It is a good idea to take an inventory of reports used to currently run the business, and ensure that key metrics will be available with the new system. Work with business management to predict benefits, and measure actual results against predictions, and make sure the right data is being captured, and that the results are visible to the appropriate level of management.

If the 1990s were the decade of ERP and back office, the next decade must translate product success to customer value. Customer feedback helps companies apply scarce resources to the highest-value activities, protecting current business and accelerating growth opportunities - ahead of the competition! Overall, vendors will target specific industries more in 2000, while companies will demand more Web-based access to applications forcing this to become a standard for the millennium.

The author, Erin Kinikin, is an analyst covering customer relationship management, where she focuses on the applications and business processes necessary to get, keep and grow customer relationships. Major areas include customer support and service (CSS), sales force automation (SFA) and enterprise marketing automation (EMA), as well as customer analysis.