I'd agree that short-term goals are becoming more popular. Our clients are waking up to striking that balance between long-term goals and short-term wins. If you approach CRM from the perspective of value realization, you start looking for ways to achieve quick wins to in part fund investments in CRM in successive time periods. Rather than put in something fairly large that has an unclear valuation plan, we work to balance the immediate goals and the long-term vision. What are some good examples of this kind of short-term project?
One good example is a call center application. Thinking in the framework of a long-term project, you can find a number of things in the call center to generate hard benefits, cost-savings specifically, that will in turn fund larger initiatives that deliver "soft" benefits and eventual revenue generation. This can be call center consolidation, self-service functions such as interactive voice systems and the like. The long-term call center goal may be real-time personalization or suggested selling using customer-buying patterns. Is the CRM market still obsessed with the high failure rates that we've been hearing about for some time?
I think what is happening is that executives are realizing the CRM isn't simply a matter of screwing in some software. They understand that it's not just a capability fix
One of the positions that we've taken is more of a gain-sharing approach. It's one thing to go in and work for a fee and say 'good luck' when we're done. And that was the traditional CRM approach. Now we try to identify some targets in terms of value creation and hinge our return, as a consultant, based on meeting those targets. An interesting thing happens. Instead of being on opposite sides of the table trying to solve a problem, you move to the same side of the table because the benefits of the project are highly aligned. This moves us from simply a consultant relationship to one of a partner. And the clients see a more substantial return. At the core of this all, clearly, is the success-failure rate. Are you seeing more successful implementations out there, or at least more realistic goals and short-term success?
I think it's fair to say that companies are getting a lot smarter about how they're doing CRM. People are recognizing that some of the promises of some of the software vendors aren't plausible without taking a more holistic approach to changing process and culture. I think that the perceived success rate will start to increase. By focusing on the short-term CRM goals, is there a danger that the big-picture CRM benefits may be somewhat compromised?
There's a risk there, sure. A smart client figures out how to leverage hard ROI in order to invest in some of the softer ROI issues. In other words, rather than bet everything on the fact that you're going to increase revenues or customer satisfaction, you want to make sure that cost savings are used to help fund the longer-term efforts around the softer ROI side. A smart client understands that CRM isn't just about cost take-out. At a certain point you run out of cost take-out. The real value creation is in driving the top-line vision. What advice would you give the applications vendors to improve their products, based on what you're hearing from clients?
I would hope to see vendors recognize that successful CRM transformation is a fairly major undertaking. We're trying to drive home the message that it involves more than simply putting a technology in place. I can't really speak to whether the vendors are getting this yet. If you think of the elements of failure or keys to success, it's all those often-repeated points, and to our point, what the newest research here indicates. I'm talking about executive management, business unit alignment, the communication between business and IT and empowering front-line employees. Those speak a lot more toward softer ROI issues than the relatively straightforward issues around systems implementation. The more they can facilitate this kind of activity, the more they will help their customers.
FOR MORE INFORMATION: