Sales Force Marketing - Salesforce.com CRM:
CRM - A Buzz-Term That May Cost You Millions

The importance of clarifying the meaning of CRM before we start

Recently I sat in a client meeting with top and selected middle management discussing CRM implementation approaches. During the course of the meeting, it became very obvious that most meeting participants have very different ideas about CRM. Some thought it's just a customer system with a comprehensive customer database, others related it to better customer segmentation, and while again others believed implementing CRM would mean a complete shift of the corporate culture to strengthen the brand with a strong customer service element across all touch points.

My immediate thought: No wonder that (according to Metagroup) more than 50% of CRM projects fail since it's already so difficult to create a common picture of what CRM stands for. Since clear, measurable objectives and well defined scope is one of the most important success factors of any kind of project, chances are already close to 100% that this company won't go anywhere with their CRM initiative if they don't spend significant time within management to clarify what the company means by CRM and what they want out of the system.

Indeed, I can name numerous companies in Thailand that struggled with their CRM initiative because of unclear and inconsistent direction. One of them is now scrutinizing their past investment in a CRM system and is considering starting over from scratch. Many of CRM projects, that we have seen either struggled because of being defined too broadly as "save all problems of the world projects" and became unmanageable while others were kept too limited
in a silo manner which caused problems later when integrating with other initiatives.

In general, I am not a fan of using too many buzz words in business. Business is all about people, and people become busy and generally have problems communicating effectively. The use of buzz words creates a big opportunity to oversimplify complex topics and concepts and cause lots of misunderstandings and confusion which often results in lots of efforts with very limited impact on business results. This is getting very obvious in the CRM context and may cost companies millions of Thai Baht.

Therefore, if you are considering a CRM idea in your organization, spend sufficient time with your management team to clearly work out how the company is going to utilize the concept. Ideally, this activity should lead into a well formulated and communicated CRM strategy (sorry to introduce another buzz word) that is specific to your business. What I mean with a CRM Strategy (and here the specific part) is clarifying as tangible and measurable as possible the overall goal and positioning of CRM in the company, evaluating which areas of your business should be impacted by the concept and how and what you are going to include under the umbrella of a CRM project and what you are going to exclude.

In some cases, we even recommend to drop the word CRM completely from the agenda because it's so easy to misunderstand. Instead we suggest using key ideas from the CRM concept as a guideline and name projects according to their specific business objective, e.g. "Call Center enhancement", "Service Capability improvement", "Campaign Management Improvement".

The need to be specific in your wording even holds true if you are going to implement a CRM software system. The functionality of these systems usually overlap (confusion again) with other software applications. For instance, for some companies a good Business Intelligence Solution may have more impact on Customer Relationships than labeled so called CRM software.
Clarifying the meaning of CRM and respective objectives, scope and approach as clear as possible to everybody in the organization before starting is a simple task that should not take more than a couple of weeks. However, the impact on project costs and risks and realization of CRM related benefits will be significant. Your bottom-line will be thankful.

Illustration Title: Like in the story of the blind men and the elephant, people in organization often fail to see the big picture for CRM. A well-formulated CRM strategy helps.

Source: Dr. Peter Theisen link

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