A telecommunications company recently embarked on a multimillion dollar project to revamp its billing system and
provide more customer knowledge to its employees.
The chairman and owner of this organization is a CRM visionary with plans to converge the company's multiple business lines in order to present a "single face to the customer." His plan is to leverage the loyal customer relationships held within each individual business line and become the sole communications provider for all of the organization's best customers. Free movie rentals for high levels of long-distance usage, single billing across all business lines, and VIP treatment for all multiple product owners are a few of the initiatives he wants to institute.
This might seem like an ideal situation -- an enthusiastic CRM champion with money to spend and a mandate to purchase new technology. But the reality is, until recently, the chairman had difficulty implementing his plans.
While most business line executives acknowledged his enthusiasm, they continued to run their individual organizations as they had always run them -- without cross-product discounts, VIP status or bills that included more than one product. In fact, the technology team charged with building the new billing system initially met with a high level of resistance. Several of the business units did not want to share customer information, wondered who would fund the free products and questioned the benefits of the technology expenditure.
Our telecommunications company learned the hard way that money and a mandate alone are not enough to breed a customer focused organization.
CRM Critical Success Factors
"CRM is the alignment of business strategy, organizational structure and culture, and customer information and technology so that all customer interactions can be conducted to the long-term satisfaction of the customer and to the benefit and profit of the organization." -- taken from "Building the Customer-Centric Enterprise" by Claudia Imhoff, Jonathan G. Geiger, Lisa Loftis, Published February 2001 John Wiley & Sons
Consider the critical success factors for adopting a customer focus -- failure to recognize or manage the "gotchas" in any one of these areas can have profound negative impact on your ability to reach CRM nirvana.
Implement a coordinated, customer-focused business strategy. An organization must have business strategies that promote CRM across functional boundaries. Goals that include phrases like "customer-focused" or "customer satisfaction" are indicators that CRM is important. However, if there are no underlying strategies in place that force a customer view across business functions, the organization is not likely to move far from the traditional product focus.
In our example of the telecommunications company, the chairman had the desire for customer-focused initiatives (e.g., VIP treatment), but had not implemented any enterprise strategies for moving the company in that direction.
Create a CRM-friendly organizational structure. The overall organizational structure must promote cross-functional cooperation. Independent product-oriented business units, multiple marketing and sales organizations and distributed customer care centers can all inhibit an organization's ability to determine and carry out the next promotion or service activity for the customer. With the autonomy and control possessed by each business unit executive, the telecommunications company lacked the organizational structure required to implement cross department initiatives.
Establish a CRM-savvy organizational culture. Culture is a critical but often overlooked factor that can have a strong influence in the success or failure of any CRM endeavor. There are three predominant aspects to consider. First is the organization's ability and willingness to effect change to business and thought processes. Second is the degree to which the business units work together, reach compromise and facilitate shared strategies. Finally, it is important that executives support CRM.
In the case of the telecommunications company, executive support was present, but the organization's culture promoted managing the enterprise as several independent business units. This made it difficult to achieve the cultural changes required to turn the focus toward customers.
Implement an integrated customer information environment. Customer information is the cornerstone to a successful CRM program. This information must provide a common customer view and must be distributed across the organization to facilitate both operational and analytical uses. This always requires a technology architecture that integrates multiple applications, ranging from operational legacy applications to call center systems to the data warehouse and its associated data marts.
While the technologists in the telecommunications company understood the need for consolidated customer information, the business units were content to maintain their disparate systems as they had always done.
The good news is that our story does have a happy ending. Taking these four critical success factors into consideration, the chairman formed a new department and seeded it with a senior manager in charge of CRM. Together, he and the CRM manager developed customer-oriented goals for the entire organization and provided the training necessary to accomplish them. The IT department was tasked with adopting an architecture to support CRM and with educating the organization to the components and benefits of the system.
Lisa Loftis, Jonathan G. Geiger and Claudia Imhoff represent Intelligent Solutions Inc., a leading consultancy on CRM and business intelligence technologies and strategies in Boulder, Colo.
This article originally appeared on SearchCRM.com, a sister site of SearchCIO.com