How Prepared Is the Services Industry for CRM?
Topline Results from the AFSMI CRM Preparedness Survey
(Originally published in the January/February 2003 issue of AFSMI's Sbusiness.)
By William K. Pollock, Leo A.P. Moerkens, and Scott Cabral
The AFSMI CRM Preparedness Survey
Annual Sales/Turnover (in US $):
By completing the CRM Preparedness Survey, all respondents received "instant assessment" feedback via e-mail, providing them with executive-level comments and guidance with respect to each of their specific responses for more than 45 questions.
This article represents the first publication of the preliminary, top-line results of the survey, and will be followed-up later in the year with other AFSMI-sponsored publications and events including a continuing series of Sbusiness articles and columns, as well as an executive-level "white paper," a detailed CRM Survey Report, and a survey-based CRM Preparedness Webinar (in May 2003).
How Important is CRM?
As such, we believe that CRM is now both widely accepted, and firmly entrenched, in the psyche of worldwide business environment - and particularly for services organizations. There are still many opportunities for businesses to begin thinking about implementing CRM - but the window of opportunity is closing, and now is the time to either jump on the bandwagon, or getting left behind. In an environment where more than 80% of your peers believe something to be either "very important" or "essential" to their overall business strategy, then perhaps it is time to "join the crowd." In today's economic environment, being a follower is not necessarily a bad thing - if by not following, it means that you will not be able to compete!
Where Does Your Organization Presently Stand on CRM?
At the indicated pace, by mid-year 2003, an estimated 35% of the survey base will have rolled out their CRM implementations, with another 9% estimated to complete their implementations by the end of the year. As such, nearly half of the survey respondents will be expected to have their CRM implementations completed by the end of 2003, with almost another one-quarter following by the end of 2004. Therefore, while only 15.5% of respondents had completed their CRM implementations by mid-year 2002, almost five times as many can be expected to have done so within an approximate two-year period.
This "boom" in CRM implementation will mean - at the very least - the following two major trends: (1) the position of "wait and see" with respect to CRM is a fast-closing window, and one that will disappear within the next two years, and (2) there will be many opportunities for CRM consultants and software companies to increase their client bases during this same period.
Which Functions are Included in the CRM Strategy?
The responses to this particular question reinforce the belief that the most obvious customer-related functions are most likely to be included in the overall CRM strategy (e.g., sales, customer care, tech support, etc.). However, this exposes the possible risk for some organizations that if they do not include some of the other less "obvious" elements of the business in their CRM strategy, they may still not be able to provide the full measure of customer support required - and demanded - by their respective customer bases.
For example, among the 24.2% of the respondent base that has a partner/channel management function, but is not including it in their CRM strategy, we foresee the strong possibility of a potential problem in their ability to "reign in" their channel partners to deliver the required levels of supply chain support to meet the end users' overall service delivery requirements. As a result, we also foresee the need for many services organizations - even those that have already implemented CRM - to expand their scope to also include these not-so-obvious elements of the total supply chain delivery channel.
How Well-Defined are Your CRM Goals?
The fact that all three major segments reflect relatively low levels of CRM goal definition supports the finding that, apparently, many organizations get started on their CRM programs without conceptualizing and/or designing adequately from the outset. The potential downside of beginning an effort this big - and this important - without a clearly-defined set of goals is that if the goals are not well-defined, the benefits of the CRM program cannot be properly measured or managed. We have seen too many cases where CRM programs falter and die - midway - because management is unable to identify whether any realistic goals are being met, because they had not taken the time - at the outset - to set realistic goals, identify the proper units of measurement, and established a team to manage the attainment of pre-specified goals.
How much does CRM Cost?
It has been our experience that those organizations spending less than US$100,000 for CRM either do not have a realistic budget to embark on the CRM process, or do not realize the full extent of the significant efforts - and expenditures - that will be required. On the other hand, those organizations that spend more than US$1 million are truly serious, and realize that CRM requires a significant expenditure.
Does your Organization have a Plan for CRM and, if so, Does it Have a Dedicated Project Manager?
However, even more surprisingly, while more than three-quarters (77.6%) have/had a dedicated CRM project manager, roughly one-sixth (16.6%) do/did not. The question arises, how can an organization commit to the time, resources and expense of undertaking an effort as large - and, again, as important - as CRM without at the very least naming a dedicated CRM project manager? The only reasonable explanation might be that, in some cases, CRM is perceived by some companies as being merely an "automation" issue, and not a fully-developed CRM program initiative. We would further expect the CRM implementations at these companies would therefore only provide the benefits normally associated with automation-oriented projects and would not yield anywhere near the full complement of CRM program benefits.
How Long before You See Results?
Still, another 43.0% indicate they expect 1 to 3 years or more to go by before they anticipate seeing any measurable results. While these are typically the larger CRM implementations, among the larger organizations, many organizations have learned that they must still be able to show some measurable results all along the way - or else, they may find themselves in situations where neither internal support, nor funding, will continue to come their way. The old adage certainly applies in these cases - you have to show some results to justify your expenses.
Will you Buy or Build Your CRM Software?
However, more than one-fifth (21.0%) also use (or plan to use) either custom, in-house/bespoke software (15.9%) or custom third-party developed software (5.1%). We have also seen several instances where, due to mergers, acquisitions, and/or consolidations, organizations are "forced" to use both off-the-shelf and custom-developed CRM software solutions. It is noted that some problems usually occur when different departments within the same organization use different software, but this is not unique to the CRM environment.
The secret to success is, for whatever type of software is selected, that it is flexible enough to implement in all of the internal environments, and that it performs the way it is supposed to perform - that is, that it has al of the required functionality and flexibility to support a large, growing and evolving customer-focused environment.
Whether it is as simple an effort as assisting in designing, executing and analyzing a Customer Needs & Requirements Assessment/Satisfaction Survey; as narrowly defined as performing the required systems integration and implementation tasks and activities; or as conceptual as assisting in the design and scope of the overall CRM program effort, outside consulting assistance may have its place in the organization.
Ultimately, the CRM program must belong to you. It must be developed by you, incorporated by you, measured by you, and managed by you. However, in the meantime, you will undoubtedly require some assistance in order to make it all happen.
For more detailed survey results, watch for an announcement from AFSMI as to the release of the AFSMI CRM Preparedness Survey - Executive Summary, later in the first quarter of 2003. "How Prepared Is the Services Industry for CRM?" will also be the topic of a one-hour AFSMI Webinar that Bill Pollock will be presenting in May 2003. Visit AFSMI's website at www.afsmi.org for more information, or to register for the May 13, 2003 Webinar.
William K. Pollock is president of Strategies For GrowthSM, a services consulting firm specializing in strategic business planning and customer satisfaction research. He may be reached at 610-399-9717 or via e-mail at firstname.lastname@example.org.
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-onmc.com.
Scott Cabral is president of Peritum Consulting, Inc., a firm specializing in CRM solutions design and implementation. Scott can be reached at 858-259-1414, or via e-mail at scott.cabral@Peritum.com.
Site designed and hosted by TNT Online.
Copyright © 2018. All rights reserved.