Nine things the CEO should know about implementing CRM software

May 9, 2011May 13, 2011 Richard Boardman

I was involved in a presentation last week to a group of CEO’s on the topic of CRM technology. The following summarises some of the points I wanted to get across:

Most projects do not add great value – my best guess is that over 80% of CRM projects fail to add any significant value. This is both a challenge and an opportunity. A challenge in the sense there are clearly issues with the way we generally approach these projects. An opportunity, in the sense that if most people don’t do them well this may be a significant source of competitive advantage.

Technology is easy, execution is hard – most organisations seem to get unduly wrapped up in matters pertaining to technology selection. While this is important, it’s still the relatively easy part of a project. Applying technology in a way that generates operational value is the much more exacting challenge. There’s also a danger of assuming that the CRM vendors or implementation partners can solve this issue. From my experience vendors are fine with technology itself, but don’t generally have the full suite of capabilities to apply software in a way that generates value.

There must be a business objective – CRM technology is a tool set. It enables you to achieve defined objectives – it doesn’t just add value on its own. It’s therefore imperative to define clearly what issues you are trying to address, or what objectives you are trying to reach. This will drive the whole approach to your project and the set up of your system. The defined objectives are likely to vary significantly from organisation to organisation. Even two very similar businesses working in the same vertical market might deploy CRM technology equally successfully, but in totally different ways. The starting point must be the operational goals, not the technology.

Don’t get caught in the middle – this concept is summarised in more detail in this post, but in summary I believe there are two approaches to CRM: an ad hoc approach where we provide users with a basic tool set but have limited expectations on how comprehensive or systematic usage will be, and a process driven approach where our key operational processes are managed through the system which demands very high adoption rates. The ad hoc approach is generally quick, inexpensive but returns on investment are modest. The process driven process is lengthy and resource hungry, but the returns can be huge. There’s no right or wrong on this. Some organisations may not have the resources, focus, or patience for a process driven approach. The key is not to get caught in the middle: spending heavily, but not enough to successful deploy a process oriented approach and ending up with as little benefit as if they had spent virtually nothing.

Pick your shots – because of the demands of a process oriented approach to CRM, it’s better to limit the goals for a project to a few key areas where technology can make a significant difference. Trying to do too much can overwhelm your resources and result in failure. The key is to generate success, even if it’s on a limited scale, and build up from there.

Software is not your biggest cost – it’s pretty common to see CRM projects described in terms of cost per software license, but in reality this is just a fraction of the total costs. Other, often less visible, costs will include infrastructure, and implementation services, but the largest, and most frequently overlooked, element is the internal time involved. Internal time can prove a big issue for would-be implementers of CRM technology, because the distraction from the day job can be a significant hidden expense.

The CEO should be involved – if the CRM project is going to have strategic value, the CEO has a key role to play in ensuring the project stays on track and that the right conditions for successful user adoption are established. Thereafter the CEO should be a key user of the system and a key consumer of reporting information. I can think of very few successful CRM projects that haven’t had active senior sponsors.

User adoption if the main battleground – you can deploy the best CRM system in the world, but if you can’t get people to use it in a consistent and systematic fashion it won’t add value. Defining an effective user adoption strategy and delivering on it is the key battleground. Poor user adoption kills off more, otherwise successful systems, than anything else. This needs to be the area where the weight of your resources are focused.

It’s a programme not a project – CRM deployments are fragile flowers, and many fail to adapt to changing circumstance over time. It doesn’t take much for a system to fall into obsolescence, so it’s essential to ensure there’s a supporting infrastructure that ensures the system develops and adapts over time. Organisations need to factor in the ongoing resources and disciplines if they are going to be successful over the long term.

Anyway, those were my thoughts. I will probably turn this into a more structured document at some point, so feedback on what I’ve missed would be appreciated…