Get CRM Right The First Time: Best Practices for CRM Success

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Get CRM Right The First Time Best Practices for
CRM Success
Steve Bonadio Senior Program Director Enterprise
Application Strategies META Group steven.bonadio_at_m
etagroup.com
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Business Technology Scenario
Critical Issues

• CRM continues to be a strategic priority
• Risk-tolerant early adopters have given way to
  pragmatic, risk-adverse, and more moderate
  organizations
• CRM investment is bifurcated between tactical LOB
  projects and CRM infrastructure
• Prevailing economic conditions are mandating hard
  ROI vs. leap of faith
• CRM technology is maturing, yet continues to
  evolve

• Developing a CRM Strategy
• Avoiding CRM Program Failure
• Rationalizing CRM Technology

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Develop a CRM Strategy Design Around the Customer
Customer Life Cycle Management (CLCM) as a
Three-Domain Business System

• Best-Practice CRM Principles
• Derive customer patterns by applying ETFS as a
  lens to drive sales, service, marketing and
  commerce chain process
• Anchor offer, channel, and business processes
  around customer patterns
• Technology-enable customer relationship with CRM
  ecosystem

Customer-RelatedBusiness Processes
Channels POIs
Sales
Mktg.
Service
Offer
CRM is not an IT project it is an iterative and
continual transformation of people, process and
technology
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Building the CRM Business Plan
Business Plan T.O.C.

• Addresses three basic ideas
• Business vision How do we want to treat
  customers?
• Business design How do we want to (re)engineer
  our business to enable customer treatment?
• Technology enablement How will technology
  support the new design?
• Organizational Constructs Program Management
  Office and Chief Customer Officer.

Value Measurement
Critical Success Factors
Risks
Financial Analysis
Schedule and Portfolio
Strategic Partners
Legal, Regulatory Impact
Staffing and Organization
Competitive Analysis
Market Research
Opportunity Outline
Strategic Fit Customer Philosophy Brand and
CRM Customer Value Proposition
Construct CRM business plan iteratively it does
not have to be a novel, but must codify (and
value) future customer strategies
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Assessing CRM Capabilities

• Maturity Assessment
• Measures the maturity of CRM program methods and
  how well it has been institutionalized relative
  to others in similar industries
• Helps predict failures and recommends remedies
• Readiness Assessment
• Gauges how well the CRM program concepts will be
  accepted and indoctrinated within the
  organization
• Collect and plot key indicator values along
  eight dimensions
• Look for dimensions in the danger zone and a
  high degree of inconsistency

CRM Readiness Sample
Assessing true CRM capabilities requires looking
at both CRM maturity and CRM readiness
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What About CRM Value?

• CRM investment is justified by top- and
  bottom-line impact
• CRM creates business value through hard,
  soft, and hybrid returns
• Hard Preferred, but difficult
• Soft Easier, but lack credibility
• Hybrid Viable, but require KPI consensus
• Most credible/ measurable ROI
• Cost displacement
• Customer penetration/wallet share
• Improved resource productivity

CRM value metrics must be incorporated into the
business plan, monitored, and updated periodically
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Avoiding CRM Program Failure
Headline CRM is Not Doomed to Failure!
There are several identifiable early warning
signs that predict eventual failure (and can
guide you towards success). Learn how to identify
these often surprising red flag indicators, and
the appropriate mid-course corrections to avoid a
potentially fatal CRM situation.
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People Still Make the Difference
Failure Warning Sign Recommendation
No executive support or visibility Establish leadership (and accountability) by proactively seeking out executive support
Too many individual projects going on (usually in different directions) Harness thematically related projects into a CRM program management office
IT-driven hero culture Apply reusable CRM program processes to avoid the hero culture
Not using a systems integrator Use a systems integrator, at least to bootstrap early activities and leverage skills
Appropriate leadership to promote business/IT
alignment and mitigate change impact on employees
and groups is critical to CRM program success
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Process Is Not a Dirty Word
Failure Warning Sign Recommendation
No business plan Create a CRM business plan, even if its initially just a few pages Take no more than 4-6 weeks to develop initial plan
Substituting a vendor implementation methodology for a CRM methodology Embrace a technology-neutral CRM methodology to encompass the big picture
No process re-engineering plan (or criteria by which to judge when to adopt vendor processes) Create a process re-engineering plan and the criteria to ascertain when to adopt processes instantiated in applications vs. extending the application to handle unique processes
No metrics (developed in advance) Develop success metrics/KPIs, and embed them in CRM processes Establish governance and accountability
Automating and optimizing customer processes is
at the heart of CRM value delivery Never
automate a bad process!
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Technology Its Not Simply Add Water and Stir
Failure Warning Sign Recommendation
Over-customization of applications Configure (declaratively) and extend applications Limit programmatic customization whenever possible
Lack of architectural standards Tap into enterprise architectural standards if there are none, use CRM as an opportunity to begin developing them
No strategy for development, extension, and integration Create a strategy for development, extension, and integration BEFORE implementing the application
No CDI approach Understanding who your customers are is a requirement of ALL CRM initiatives, although getting there is the ultimate challenge
CRM technology will ultimately support both
people and process Technology-only CRM
strategies will fail
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Rationalizing CRM TechnologyThe CRM Ecosystem
Analytical CRM
Operational CRM
Legend
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2
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1-4
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DataWarehouse
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2
ERP
LegacySystems
Supply Chain Mgmt.
Back Office
Order Prom.
CustomerActivityData Mart
CustomerData Mart
ProductData Mart
Order Mgmt.
Closed-Loop Processing(EAI Toolkits,
Embedded/Mobile Agents)
1
4
1
Front Office
SalesAutomation
ServiceAutomation
MarketingAutomation
1
Vertical Apps
4
4
MarketingAutomation
Mobile Office
Field Service
Mobile Sales (prod cfg)
CampaignMgmt.
Category Mgmt.
1
4
1
4
1
4
4
4
1
1
Voice (IVR, ACD)
WebStorefront
Direct Interaction
E-Mail
Customer Interaction
Conferencing
Web Conf
Resp. Mgmt.
Collaborative CRM
There is no ecosystem in a box CRM will remain
a multi-vendor/product/domain effort for the
foreseeable future.
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Exploring Operational CRM
Issue 1
Operational CRM Domains

• Implement discrete CRM functions (e.g., sales,
  marketing, service) to enable management of
  customer
• Transactions
• Interactions
• Expectations
• Surface and re-use underlying application
  services (e.g., business rules, workflow, various
  engines) to enable
• Integrated processes
• Flexibility and re-use

• CIC/Call Center (agent-facing)
• Campaign Mgmt./EMM
• Channel/Partner Mgmt.
• Incentive Mgmt.
• Product Configuration
• Sales Automation
• Service Automation (live and field)

CRM strategies mandate strong support for
operational services to automate customer-related
business processes
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Exploring Collaborative CRM
Issue 1

• Implement portals to enable UI aggregation and
  contextual navigation
• Develop multi-channel interfaces to enrich
  interactions and increase exit barriers
• Infuse personalization into all customer
  interactions
• Organize content and knowledge for use by
  customers and employees

Exploit collaboration to enable rich interactions
with customers and to improve communication and
information sharing
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Exploring Analytical CRM
Issue 1
Analytical CRM Domains

• Balanced Scorecard
• Behavior modeling profiling
• Data Mining Recommendations
• Marketing
• Segmentation
• Scoring
• Planning/Analysis
• Performance Measurement
• Reporting/OLAP

• Leverage analytical applications to recognize
  customer behavior patterns
• Support multiple analytical methods (e.g.,
  reporting, OLAP, data mining)
• Build a strong foundation (e.g., DW) to enable
  analytical CRM
• Implement effective data management (e.g., ETL)
  strategies

CRM will fail without support for analytics
leverage existing infrastructure to jump-start
analytical CRM
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Rationalizing CRM Integration Approaches
CRM Integration Domains

• Plan integration strategy early
• CRM integration can account for 60 of total
  implementation cost
• Recognize that integration methods, costs, and
  effort varies dramatically
• Use customer patterns and ETFS processes to
  ascertain integration scenarios

Integration technology is the glue that binds
people, process, and technology
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To Get CRM Right, Enterprises Should. . .
TRANSFORMATION STEPS

• Refocus on business and CRM planning to align
  existing technology investments to enterprise
  goals
• Avoid potential failure by perceiving early
  warning signs
• Automate and optimize business processes, while
  developing a framework to manage customer data

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To Get CRM Right, Enterprises Should. .
.(continued)
TRANSFORMATION STEPS

• Rapidly sense and respond to environmental change
  through tightly coupled analytics
• Expose collaborative interfaces (e.g., portals,
  touch-point synchronization) to enrich
  interactions
• Pull everything together by fixating on
  integration

Business Impact CRM is a business strategy that
will transform your business Understand this
fact and youre on your way to program success
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Next Steps

• Attend META Groups Events
• METAmorphosis 2004 The Adaptive Organization
  Building Value by Remodeling for IT Flexibility
• See metagroup.com for dates and locations
• Listen to Upcoming Webcasts and Teleconferences
• Connect With metagroup.com/events for Details
• Contact Your Client Services Representative

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Next Steps (continued)

• Engage META Groups Analysts and Consultants
• Teleconference
• Half-Day, On-Site Briefing
• Browse Related Research
• Connect With META Groups Enterprise Applications
  Resource Center on metagroup.com

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