Modeling, Measuring and Managing the CRM Process

(Originally published in the January 2002 issue of AFSMI's Sbusiness.)

By William K. Pollock, Scott Cabral and Leo A.P. Moerkens

CRM is not just software to be implemented; it is more a philosophy and attitude that is manifested in an all-encompassing, customer-centric program. As such, the success of any CRM implementation will be largely dependent on two things (Figure 1):

1. Management vision and commitment, and
2. The ability of the organization to model, measure and manage the solution.

Figure 1


All CRM implementation success stories (as well as failures) are directly related to setting, managing and meeting expectations at the corporate, user and customer levels. However, many organizations begin the CRM process before they are totally clear on exactly what their company's management, user and client expectations are, and then find they can only attempt to manage and re-set expectations after-the-fact, or once it is too late.

Management Vision and Commitment
CRM implementations require a single focus across the whole organization as well as collaboration between internal and external departments and functions. The company's overall management vision is critical to success. Management vision is a key ingredient in any CRM-bound organization to create and stimulate focus on the full range of customer-centric concepts, initial acceptance for the changes that will be necessary, and the appropriate level of management "buy-in" to ensure the full team commitment that will be required to implement it. This vision must also be clearly communicated to everyone in the organization as well as to any external partners that will also be involved in the joint process of serving the customer. The classic expression that "the chain is only as strong as its weakest link" is very much applicable in this scenario.

However, vision alone is not nearly enough; the journey toward acceptance and implementation of CRM requires a pervasive and consistent commitment running throughout every layer of management in the organization. Companies that implement CRM successfully realize that the road to a successful CRM program will be long and bumpy, and will require a great deal of investment in the necessary change process and support systems. Many companies embark enthusiastically on such a mission, based on a good idea and solid vision, but then lose momentum after a brief period of time only to see the overall effort "die" before full implementation, resulting in a large waste of money and a dampened motivation of company personnel. As in every major change process undertaking, the commitment to move forward must match the communicated management vision, and come from the top down.

Once the management vision and commitment are firmly in place, the stage will be set to commence modeling the overall CRM initiative. Modeling will be critical in helping to lay out and structure the changes that will ultimately be necessary to implement the accepted concepts. In modeling the desired solution, there will be many CRM "checklist categories" that must be addressed before a full-scale solution can be implemented (Figure 2). These will cover a wide range of internal activities, all revolving in some fashion around modeling, measuring, and managing.

Figure 2


However, in carrying out these activities, it must be realized that implementing a CRM solution is not just selecting and installing a software system. In most cases, it will require a change in the way your company will conduct its business, interact with its customers, and manage customer care. To do this successfully requires careful planning, meticulous execution, and the ability to endure a journey that may actually be never ending.

It has been said that, "If you can't model it, you can't measure it; and if you can't measure it, you can't manage it." This quote is applicable not only to the obvious scenario of corporate managers chartered with the tasks of managing people and projects, but also in the way end-users (sales and customer service reps) are now being asked to manage their relationships with clients.

Managers must ensure that the entire CRM undertaking is directly referenced and articulated in their organization's corporate strategic plan. The desired benefits and results from the effort should also be directly related to established corporate goals and objectives. Only after this has been completed, can the organization truly begin to measure the expected return-on-investment (ROI) of its CRM initiative.

Depending on the overall scale of the CRM project, the CEO or President should not only be kept aware of the progress on the project, but should also play an active role in articulating its high-level goals and objectives. The effort needs to be an integral part of the business development plan and should represent the cornerstone for success. A Steering Committee, comprised of senior management, should be formed that will help define the lower-level objectives, guide the project, and ensure that its strategic goals are continually being met. At the same time, the committee must also prioritize and coordinate all activities to ensure that everything works perfectly together.

All members of the team must recognize the importance of the CRM project and give it the attention it deserves - including the commitment of all necessary full-time personnel resources and enough funding to get the job done. Ideally this will not merely be a "figurehead" team, but will also be empowered, along with the executive management team, to integrate the CRM effort into the company's overall business strategy and tactical plan. If CRM is seen merely as "just another IT project", the chances for successful implementation will be significantly reduced. Rather, positioned as a major enterprisewide undertaking, it is generally recommended that the CRM initiative have a full time project manager and/or an external consultant leading the team.

The team's primary responsibility will be to first formulate the overall project plan, and then to ensure that the required resources and investments are made to facilitate execution of the plan. Based on the overall plan, each of the individual team members can "sponsor" a specific component of the project, with one member - generally the one with the highest level of direct customer interface responsibility (e.g., Vice President of Sales, Marketing or Customer Service) - appointed as the internal team leader. In any case, the team leader should have well-rounded experience in the company's overall business, as well as a full measure of respect from other team members, corporate management and key, influential end-users.

The modeling task should start at the top, but will need to be broken down into key components that correspond to the company's major business functions. Different teams and sub-teams can work on each of these components as long as the interfaces are continually coordinated and monitored to guarantee a consistent and fully intregratable result. Continuous monitoring of the model "fit" throughout the duration of the overall project will ensure that all key components are working together, and that no major deviations from plan are occurring.

Measuring CRM
Successful CRM systems are not only measured in terms of meeting expectations, but also in the usage and enthusiastic adoption by the end users (Figure 3). The best way to achieve this aspect of success is to ensure that the system is designed by end users, for end users. The system should also be designed to help the Sales, Field and Customer Service reps improve their relationships with their clients, sell more or reduce call/cycle times with customers.

Figure 3


An organization's culture can also play a key role in achieving success with CRM. As the old saying goes, "everybody is in sales." However, in today's business environment, "everybody is in customer service", too. We have seen a change from a segmented customer approach to a more integrated customer approach over the last couple of years. The recognition that it is not solely the sales, service or product alone that ultimately creates customer loyalty and profitability, but the combination of all three elements, is rapidly growing.

An organization must also possess a customer-oriented, or "outward", culture before it embarks on implementing any new technology, including a CRM system solution. If existing business processes, particularly in sales or services, are not well articulated or understood, then the only thing that implementing a CRM solution will do is to "speed up the mess." Also, management should not view CRM as merely a tool to micro-manage users, as this will likely foster a "big brother" environment that will ultimately place management in an "us vs. them" scenario. If implemented properly, CRM will allow the organization to focus on the customer and assess what the potential impact will be of any internally-based decision. This will create a situation where future decisions can be made at a lower level in the organization, under the conditions that the vision is consistent and well communicated, and that people are well-trained and supported in their implementation.

This awareness is the first step toward rethinking the company's existing business processes and structure, and ultimately addressing the new, and expanded, requirements of CRM. Once this awareness is manifested, it then follows logically that the company's underlying business processes must be reviewed, and the way in which business is conducted - particularly in terms of supporting customers - must now be re-thought. Only then will the organization have a sound basis for taking the first step toward CRM - the selection and implementation of the appropriate supporting systems.

The degree to which an organization can assimilate change is directly related to the degree of the potential success it will have in adopting CRM. Very often, the implementation of CRM involves changing existing customer policies, implementing new (and sometimes unproven) technologies, and changing the behavior of key customer-interface personnel (e.g., salespeople, service engineers, customer service representatives, etc.). This is a critical success factor that is not always well understood by many organizations that are implementing CRM. But if done correctly, it will allow them to integrate the reengineered business processes and eliminate compartmentalization, which can be both very visible and highly annoying to customers. During the implementation, measuring the key success elements will also keep the project on track and motivate the team to continue on the chosen path. At the same time it will allow management to verify the selected strategy, continue to plan on an ongoing basis, and keep an eye on the resultant return on investment.

Managing CRM
Communicating the system goals and objectives, and the progress of the implementation, will help maintain momentum and garner ongoing enthusiasm and support for the solution. Giving prospective stakeholders the ability to openly voice their comments, concerns and ideas in a team environment will make them feel like they are actually taking part in shaping the system, and this goes a long way toward getting them to fully "buy-in" to it and, ultimately, support and use it. Management will come to rely on these advocate users to "spread the word" to their colleagues and peers, and get them to embrace and utilize the solution with the same levels of enthusiasm. The beauty of the concept is that the end goal will ultimately become a moving target. Once a certain, intermediate, goal is achieved, the team will easily be able to identify the next level, and start working toward that goal.

Since the implementation of a CRM solution is a major effort, both from a capacity and financial point of view, a structured approach will be necessary. In all cases, the following steps are recommended (Figure 4):
  • Vision and Strategy Development - It is critical to clearly define your overall strategic direction, and communicate it to the organization and its partners.
  • >Assessment and Implementation Planning - Once you define where you want to go, you need to know where you are, to be able to create a plan for how to get there.
  • Business Process Development - Business processes are central to the detailed definition of the "new" CRM-focused organization, and will provide the tools you will need to organize your resources.
  • System Selection/Configuration - Based on the requirements of the new business processes, the system requirements for performing certain functions and facilitating information flows will become clear, and can be executed.
  • Organizational Change - Also based on the new business process flows, the logical grouping of tasks and interfaces can be defined and translated into organizational requirements.
  • Full Implementation - This can be accomplished by bringing all the program elements together, and fine-tuning the model and design based on your early implementation experiences.
  • Verification - After an initial period of implementation (i.e., stabilization period), you will need to review whether the original goals and objectives have been met, and identify gaps/opportunities that still need to be addressed.


Figure 4


The CRM effort requires each of these elements to be managed carefully. The first, and most important, consideration will be the development of the appropriate business processes to fit the new CRM strategy. This needs to be coordinated very closely to make sure that the ultimate picture is complete, consistent and fully-integrated. The resulting processes are likely to require additional support from the Information, Communication and Technology (ICT) resources of the company, as well as from a re-engineered organizational structure.

The ICT requirements will focus to some degree on the selection the appropriate informational tools and, possibly, the reconfiguration and/or modification of existing systems within the organization. The new organizational requirements might lead to anything from merely the shifting or "reshuffling" of tasks, to the re-engineering of the entire organizational structure. This is likely to be the most critical phase of the CRM implementation. Again, if done correctly, the modeling and design steps will have already created a business environment that is ready to accept the prospective changes, and has already attained a full "buy-in" among all key management and support staff personnel.

Ironically, the hardware and software components of the selected CRM solution are perhaps lowest on the "totem pole" of requirements for success. Many of today's commercially-available CRM solutions seem to all "look the same". However, the differences between and among them ultimately come down to the organization's ability to quickly, and continuously, tailor the solution to its specific needs, while still being able to take full advantage of the standard implementation, support and future software upgrades that are readily available. Building CRM solutions from "scratch" is essentially a thing of the past, as it almost always consumes too much time, cost, risk and resources.

Another important factor to consider during the selection of the most appropriate CRM systems, however, is to focus more on the "how" factor, than on the "what" factor. As stated earlier, most CRM systems have functionality that is very generic and can be found in almost all systems. Thus, the principal area where systems may be differentiated from one another will be in "how" certain functions are performed. Therefore, the organization will first need to define exactly how it wants a function to work based on its specific business needs, before it can determine whether or not the selected system can actually deliver it. By first defining its business processes clearly, the organization can then assess more effectively whether a certain system's functionality fits its business environment better than another's.

Putting a training and support strategy in place is also an extremely important factor for sustaining the success of a CRM investment. Ascertaining the prerequisite needs of the systemwide users is key to ensuring a sound starting point for providing the required training on the CRM system. Despite the proliferation of PC, handheld and related technologies, there are still some people within the organization that will need to be educated on the "basics", such as how to maneuver through MS Windows, etc.

General business training is also critical for CRM success. It is a critical tool that is needed to help users "translate" the organization's overall business vision into specific customer-focused tasks, and ensure that all of these tasks work together in a "seamless" way to achieve the business goals. All training will need to be provided on an ongoing basis due to the ever changing circumstances in which the business operates. The training should be provided to all customer-contact personnel, on a consistent and ongoing basis.

Once these initial management processes and tools have been implemented, it is increasingly important to be able to show the results - and the return-on-investment - at different levels. Reports/information access and management/staff presentations need to be developed early-on to show that the overall effort is paying off. Practical, day-to-day examples should also be utilized and modeled, and used extensively during training.

To ensure ongoing management support, a "System Administrator" and a "Data Steward" should also be dedicated to the ongoing CRM effort. The System Administrator, who is typically from IT, is responsible for the CRM system's availability, as well as for all administrative functions (e.g., remote connectivity, back-ups, software upgrades, bug fixes, etc.) The Data Steward represents a relatively new focus in CRM. This person, who is typically directly from the business, is responsible for the management and maintenance of all customer data. Key responsibilities include keeping the data "clean" (e.g., non-duplicates), ensuring that all reports are timely and accurate, importing/updating customer data, etc.

However, despite an extensive investment of time, resources and dollars in software, hardware and systems, plus the costs associated with changing the organization's existing business processes, one thing will always remain clear: if the users do not have full confidence in the data, they will not use the system. Many organizations only find this out after their system has been implemented - hence the need for the new position of Data Steward. Any major problems can be avoided if the information needs of the users are understood from the outset, and the development of easy-to-use tools for gathering and manipulating the information are provided.

Moving Toward CRM Software Implementation
Within the CRM software industry, the ability to model processes and functionality around the way organizations want to do business remains a contentious issue. Many services executives - and their vendors and customers - may have a pre-conceived notion that there is a "best practice" already built into some of the more popular, commercially-available CRM software packages. Some CRM vendors try to convince prospective customers that if the way they do business does not fit within their software, then their business processes must change - to the way the software operates.

Many companies looking to implement CRM also fall into the same "trap"; that if they do not have already have well-defined and articulated business processes - especially in sales - then they feel the vendor's built-in processes must be the way to go. Any organization that has been through a major ERP, or other large IT, implementation will probably recognize this paradigm. However, on the other side of the argument, some CRM vendors may still try to convince their clients that complete, mass customization is the way to go. These vendors usually purport their commercially-available CRM "solution" to be completely "customizable". One then has to ask, "Am I buying a total CRM application, or merely a toolkit?"

This issue is different from the classic "buy vs. build" scenario, as all CRM vendors today basically say they are selling applications, and not tools; and virtually all attempt to convince customers that their offerings will save time, cost and resources versus building a home-grown solution "from scratch". Still, many prospective customers remain confused with the basic question: "Should I change the way I do business to fit the customization limitations in the vendor's software, or should I find a package that can be completely customized and has no prescribed processes?"

There is no "right" answer to these questions. Many organizations spend a great deal of time trying to re-engineer and/or optimize their business processes before implementing CRM, and end-up "spinning their wheels" since they never really spelled out what they ultimately wanted to get out of their CRM solution until they start using it. On the other hand, some organizations readily adopt the processes embedded in commercially-available applications, oftentimes ending up creating more problems than they solve. Either case represents a scenario where the organization did not place enough emphasis on modeling, measuring or managing their respective CRM initiatives.

We believe that a consistent, focused strategy is essential to achieving a successful CRM implementation, and the three most important factors to focus on at any stage in a CRM project are, simply: modeling, measuring and managing. Anyone who has been through either a successful or a failed CRM project knows that showing sustained progress, even in small steps, is the key to success. So whether a company decides to adopt the processes resident within a commercially-available application or tailor the software to meet its own "unique" processes, it should be done in a clear, well-defined and articulated manner with the end-customer always in mind, and fully engaged.

William K. Pollock is President of Strategies For GrowthSM, a Westtown, Pennsylvania USA-based consulting firm specializing in business planning, customer service and customer satisfaction research. He may be reached at 610-399-9717 or via e-mail at wkp@s4growth.com.

Scott Cabral is president of Peritum Consulting, Inc., a firm specializing in CRM solutions design and implementation. Scott can be reached at 302-235-1253, or via e-mail at scott.cabral@Peritum.com.

Leo A.P.Moerkens is president of Hands-on Management Consultants, Inc., an international management consultancy firm that assists clients in developing and implementing business improvement programs. Leo can be reached at 203-888-1671, or via e-mail at LMoerkens@hands-onmanagementconsultants.com.


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