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Customer relationship management can prove very valuable to companies looking to streamline and improve relationships with customers, but the technology is often expensive, typically requires long implementation cycles and may require that companies rethink their internal processes. Following are some specific issues around CRM.
1. Lack of management commitment: Before a CRM project can be implemented successfully, management must adopt it as a strategic priority. The goals and benefits for the company and its employees must be made clear so that everyone in the organization is onside. CRM is most effective when the number one person in the organization makes the statement that the company is going to be customer focused. If it doesn't come down from the top, you are fighting the tide," says Steve Horne, president with New York-based Analytici.
2. Unrealistic expectations: Companies may believe a CRM system will lead to huge increases in sales and profits, and generate a significant return on investment. But if those expectations fall short, companies may look at their investment as wasted money.
3. Technology is seen as a fix-all solution: If a company's business practices and processes are flawed, no amount of technology will solve its problems. Before starting a CRM project, companies should review their operations and make any needed changes. "If anything, CRM implementations are forcing companies to take a better look at themselves, says Tracey Thorne, an analyst with Hurwitz Group Inc.
4. Selection of the wrong CRM partner: With more than 500 software vendors and service providers in the market, it is challenging to pick the right one. Companies need to carefully determine which parts of their business they want to improve and select a CRM company focused on that area, rather than choosing one with the lowest price tag.
5. Ignoring end-users: If a company doesn't consult the people who will use a CRM system, the technology that is implemented will not be utilized. Employees must be involved in the planning process and educated about the advantages and benefits.
6. Inadequate budgets: Companies that try to cut corners usually end up with CRM systems that don't do the job. Many projects cost more and take longer to implement than originally forecast.
7. Inter-system conflicts: If a company decides on a best-of-breed approach by selecting CRM products from a variety of suppliers, it could be challenging to ensure that they are compatible. Other problems could arise if different divisions within a company use different solutions. "The integration between the different areas has to be seamless," says Michael Davidson, national marketing manager with SAP Canada Inc.
8. Lack of long-term vision: CRM projects are long-term initiatives that require continuous improvements. Companies without a long-term goal regarding the impact of CRM on the organization will find it difficult to attain success. "CRM isn't the sort of business initiative that you start and say six months later if it is a success or failure," notes Kevin Rosen, director of CRM practice at Silverline Technologies Inc. in Toronto. "It is a continuous thing that you work at to improve relations with partners and business customers."
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