Are you maximizing the value of your CRM investment?

Spending on customer relationship management software is high and growing, according to analysts. But with increasingly tough economic conditions in many developed economies, Celona Technologies' Tony Sceales looks at how companies can ensure they maximize on this investment.

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By  Tony Sceales Published  August 12, 2008

Research by Merchants Consulting indicates that 18% of UK customers have withdrawn their custom from a business based solely on a bad experience with a call centre, and 69% more would consider doing so. More than half the European consumers surveyed recently by Oracle said they felt let down by ineffective use of CRM technology.

British customers were the most likely to be critical, with 40% saying the service they received from call centres was ineffective. Oracle’s senior vice-president for CRM, Loic le Guisquet, commented that the contact centre managers Oracle had spoken to highlighted better quality information as key to ensuring improved CRM.

Says Guisquet: “Businesses need to go beyond the simple retention of customer information, and start to apply intelligence to the vast amounts of data they hold in order to meet the public’s expectations. Turning information on customer behaviour and their life events into actionable intelligence enables the business to sense and respond to their needs.”

Modern CRM systems undoubtedly offer extraordinarily complex and sophisticated functionality for doing just that, but while cutting-edge CRM technology is an important element in creating a great customer experience there are other essential components as well. These include well-trained staff, streamlined and effective processes, and good quality and accessible customer data. As Guisquet has highlighted, data is the essential foundation for an effective CRM application, but one that is easily overlooked.

A great CRM implementation should be seen as a journey for the business, and should embrace all the component elements required for success – not just software. Spending 90% of the time, money and effort on implementing and configuring solutions means that there is too little left to deliver the really good quality data needed to support the CRM initiative.

Optimally, CRM requires a wide range of data. But the problem many organisations face is that this data is more than likely distributed across a range of siloed datasets. The trend to outsource and offshore call centres, and the move to managed services of one type or another, has further increased the complexity at the data layer. And, quite frankly, it is common for companies to hopelessly overestimate the quality of their data – discovering too late that it is a lot grubbier and a lot more fragmented than they had assumed.

While it’s understandable that acquiring new CRM functionality that promises to deliver a vital competitive edge is the focus of most projects, it’s important not to sweep the dirty data problem under the carpet in the enthusiasm for renewal. In the long run, leaving data issues unresolved will simply undermine all the gains promised from upgrading your CRM solution.

I’m sure I don’t need to remind you that CRM project failure rates are scandalously high according to many industry commentators – Gartner quotes a 50% failure rate; other analysts estimate even higher levels than this.

Over the years the blame for CRM projects failing to deliver against expectations has shifted from technology, to process and organisational problems, before finally settling on data issues. Failure is rarely due to only one issue, but I think it’s fair to say that while good implementations might still have their data ‘challenges’, it’s rare to see a bad implementation where bad data isn’t a big problem.

So how do you boost your chances of success? I would argue that you are much better off delivering a narrower scoped project well, rather than attempting to deliver a much wider scoped project and failing. It’s always possible to build on what you have achieved going forward, but delivering a less ambitious project successfully enables you to prove your business case and start enjoying benefits faster. Modern third-generation migration tools provide a range of functionality that can help you improve your chances of success by delivering not just data migration but business process migration. They achieve this in a number of ways.

Firstly, they decouple the technical problem of moving data from the business processes that use this data. Historically, these processes were written as code, but separating the business processes from the data vastly increases flexibility. By defining business data sets (as distinct from database tables, rows or fields), third-generation tools support much more granular migrations, meaning that it’s no longer necessary to perform ‘big bang’ migrations unless you want to. You can move customers over according to the priorities set by you, and in the quantities set by you. And if your priorities change during the migration that’s okay too, because third-generation tools are flexible enough to accommodate this.

Third-generation tools also provide much more visibility, command and control, enabling staff to see what’s happening, drive what’s happening, respond to issues or errors, and set thresholds (such as error rates). Increased visibility puts business staff in the driving seat, ensuring that business and technical goals remain aligned throughout. While bi-directional synchronization capabilities keep your source and target systems in step, enabling you to move data incrementally according to your business need, and thereby achieve a low-risk, business-aligned, ‘lights-on’ migration.

So if you’re one of the companies that are in the process of upgrading or consolidating their CRM in the next 24 months and you want to avoid the twin traps of poor user adoption and poor CRM performance then my advice is to start by really getting to grips with your data. Here’re a few ideas to point you in the right direction.

1. Don’t assume that data will be clean, consistent and available – chances are the only place it will look like this is on your power point slide!

2. Recognise that data migration is both a business and a technical problem – putting the business in the driving seat means that before we ask ‘how do we migrate data’ we first answer a series of important related questions including: why are we migrating data? What data should be migrated? When should it be migrated? It is essential that business drivers, not technical ones, should take precedence and define the solution and approach selected. It is therefore really important that your migration solution should be easily able to encapsulate the business problems you face.

3. Understand the importance of flexibility – in today’s changing environment the goals of your project will change. Cutting-edge 3G data migration solutions are built to support changes in migration style and business goals. They allow you to select the most appropriate migration style or business goal at the time, and then change this if and when needed. Such solutions support a more flexible, business-driven migration than previous generations of migration technology – helping you reap benefits from your CRM investment much more quickly.

4. Plan for change – unless you can somehow freeze your data, in a dynamic environment it’s going to keep changing. This introduces the possibility of data reconciliation issues whereby your source and target data don’t match. The bi-directional data synchronisation technology offered by 3G migration solutions solves this issue, ensuring source and target remain consistent throughout the migration.

The critical importance of getting the migration right from a business perspective was articulated at a recent British Computer Society meeting by BT’s Phil Dance: “Increasingly our business case is going to depend on how good we are at getting our data across. A bad data migration ultimately means a bad customer migration, and in a competitive market that’s very bad news.”

This is why it’s so important to ensure your CRM upgrade delivers against all the benefits promised on your power point slide, and why it’s also so important to solve the data migration issues that could otherwise undermine it.

Tony Sceales is Chief Technology Officer at third-generation migration technology vendor Celona Technologies.

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