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Philips keeps reins on CRM

When venturing into direct-to-consumer online sales, an SAP CRM project threatened to spin out of control, but a focus on goals led to success.

BOSTON -- For anyone undertaking a CRM implementation, Kathleen Borden has some words of advice: Just say no.

Say no to pushing a project beyond its initial scope. Say no to adding extra features and stretching deadlines. Borden, the senior business information management director for Philips Consumer Electronics North America, shared her company's CRM experience at SAP AG's Sapphire show here last week.

A global corporation, Philips is based in Eindhoven, Netherlands, and all decision making is centralized there. When the North American division proposed the idea of selling products with a direct-to-consumer Web site, Eindhoven said yes. The company was looking for places to conduct SAP CRM pilots -- and North America soon found itself serving as beta testers.

Installing a CRM system, particularly one like SAP, requires firm limits on the scope of the project, Borden said. In fact, she kept a list of what was allowed -- and not -- posted on her office wall. It was also the wallpaper of her computer desktop. Borden brought a copy of that list to every company meeting.

"I kept hearing, 'If we do a little more, just think of what else we could have,'" Borden said.

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At the outset, Philips hadn't intended to implement SAP's interaction center, but it quickly realized that some customers were going to call no matter what. So the CRM implementation team elected to install the call center tool. From there it wasn't long before customer service started saying, "If we have them on the phone, why don't we just take their order," Borden said.

"You have to just say 'No,'" Borden said. "We knew what we wanted to achieve no matter what."

Today Borden sees three key limitations that should be considered when implementing CRM -- scope, time and money.

"You have to decide which is important," she said. "In my opinion, the majority of successful software projects are time driven. That controls the other two."

ROI study proves Philips success

One year into the project, SAP CRM has been a success for Philips. An ROI study conducted in conjunction with the Peppers & Rogers Group, a Norwalk, Conn.-based CRM consultancy, found that Philips will receive a 26% internal rate of ROI though 2007. That represents a benefit of $20 million on a $16.65 million investment in mySAP CRM, hardware, training and consulting.

Organizations should also be sure to take employee dynamics into account with a CRM project, Borden warned.

"With those affected or altered in terms of business support, you immediately hit that fear factor," Borden said. "They think, 'You're introducing this and getting rid of my job.'"

Bridging that gap requires a strong leader who can help maintain excitement in CRM. According to Borden , about four months into a software project, implementation teams start to get a case of "the doldrums." A CRM project is going to take at least six months, she warned.

"This is very hard," Borden said. "It wasn't because the software was hard; it was hard because CRM is so different."

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