2
CRM Technology and CRM: The Need for
a Communication-Centric Approach
2. I New ERP?
In the preceding chapter, I argued that vendors (i.e., organizations that sell
products or services to consumers) need to better understand consumer
motivations for purchasing. They also need to ascertain the nature of the rela-
tionship they want or don't want with the vendor. I also proposed a definition
that put communication at the center of relationship building. This chapter
discusses in more detail the role that customer communications management
should play in the CRM mix. It proposes moving customer response manage-
ment from stage left to center stage.
I would propose that in many vendor organizations, communications
management is not central to the CRM definition. Rather, in many organiza-
tions, particularly large ones, the implementation of CRM strategies starts and
stops with the implementation of technology~often, technology that is
focused excessively on internal processes rather than on customer communi-
cation and engagement. Increasingly, technology for managing customer
engagement is piecemeal and tactical.
How can I make such a wild assertion? Well, a look at what organizations
have been doing during the past decade or so will help make the point. As is
argued in the next chapter, market analysts have taken the view that there are
rich pickings to be made from CRM if it is essentially touted as being an
end-to-end enterprisewide technology infrastructure. It picks up where enter-
prise resource planning (ERP) left off. In many organizations it is the new
ERP. This means that its tendrils stretch from supply chain management to
17
18 2.1 NewERP?
customer-facing collaborative trading portals (or whatever the latest, hippest,
term is from Meta Group).
In fact, the following definition of CRM from Meta Group makes the
point well:
CRM (customer relationship management)~the automation of
horizontally integrated business processes involving "front-office"
customer touch-points~sales (contact management, product
configuration), marketing (campaign management, marketing), and
customer service (call-center, field service)~via multiple, inter-
connected delivery channels (telephony, e-mail, Web, direct inter-
action). The CRM application architecture must combine both
operational (transaction-oriented business process management)
technologies as well as analytical (data mart-centered business per-
formance management) technologies.
Such tall ambitions can be met only with a serious set of technologies. For
many CIOs, the simplest way forward when facing a requirement to imple-
ment an enterprise infrastructure is to install a suite of software to do
everything. This is one of the key reasons for the massive success of Siebel
Systems. In the same manner that large global organizations implemented
SAP's ERP solution, organizations started implementing Siebel for CRM.
Where SAP focused on internal processes and workings~getting manufac-
turing and inventory right~Siebel focused on the customer, and that had to
be good. Focusing on the customer is always good and will always get Board
sign-off. Hence, Siebel went meteoric.
The company took the pulse of this frenzy and made the panic ever
greater through very clever advertising that focused on the fact that companies
that implemented Siebel software did better in terms of customer satisfaction
ratings. It also hinted heavily that such companies did better in terms of stock
growth and producing overall shareholder value. (Chapter 7 discusses the effi-
cacy of focusing merely on customer satisfaction metrics as a measure of
CRM success.)
However, more recently, reports have been hitting the major business
titles that companies that have been spending millions on Siebel and other
CRM suites have not seen the returns that they were expecting. Some major
projects are being aborted, and many companies feel that they could perhaps
see greater customer satisfaction gains by implementing tactical CRM initia-
tives that result in tangible improvements.
2.1 NewERP? 19
It all sounds very familiar. Some five years ago I recall running CIO focus
groups where the most common gripe was the cost of implementing SAP ERP
and the difficulty of showing a tangible return on investment dollars.
There is a natural impetus within us all, particularly if we manage large
dollars, to be seen to produce a large rabbit from our hat marked "budget."
Should the necessary returns not materialize, it is very tempting to state that
the project is not yet finished and requires several connected modules to
make the entire system watertight and end-to-end. Meanwhile, an account
manager from a software firm or systems integrator is probably feeding us
with PowerPoint presentations that will make the whole thing easier to sell to
the Board.
Requests from business units to do something to help them manage the
vast volume increase in customer support requests pass unheard---that's not a
designated or funded module this year. Anyway, let's face it, a customer sup-
port management system is hardly as important as getting the call-center
application in and working and getting the salespeople out and selling with all
the tools they need.
Large system implementations can result in CIOs going slightly crazy.
They start to become corporate people in the weirdest way. They can talk sys-
tem talk in ways that no one has ever heard before. They become high on data
sheet speak. And they keep getting applauded by their pet market analyst for
making the right decisions and for sticking on in there, despite all the flak
they are getting from the front line.
Not all take this approach, and I am exaggerating to make a point. How-
ever, the point is worth making that many, many CRM systems have been
implemented without reference to the optimum requirements of the organi-
zation. Worse, they have been implemented without due regard to two
fundamental customer performance metrics: satisfaction and brand engage-
ment (these concepts are discussed in much more detail in Chapter 6 and the
chapters following).
CRM is not about technology; it's about developing appropriate rela-
tionships with customers through appropriate communications to create
long-term profit. Therefore, the end game is profit, not systems. And long-
term profit is unarguably about maximizing long-term customer value
through appropriate and measured customer relationship management
processes.
I Chapter 2
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