NEW
YORK -- While many industry research firms have been strong boosters of
customer research management and have pointed to the area as one with
great potential for future growth, Gartner stands out by being a piquant
naysayer.
It
has just announced the results of some of its research into real-world CRM
implementations, and these they paint a grim picture for corporations
hoping to use CRM to improve performance.
Through
2006, Gartner says, more than half of all companies implementing CRM
systems will view those implementations as failures. Although this sense
of failure will be drawn from many customer-specific problems, Gartner
feels that the software's inability to link various channels, the lack of
true process redesign and the failure to provide any real customer
benefits will often be the main culprits.
In
addition, Gartner claims that while many businesses are implementing CRM
strategies, most of them will severely underestimate the costs of such
projects. The researcher claims these underestimates will be as high
40-75%.
Gartner
analysts said there are three key areas that enterprises must implement to
effectively use a CRM business strategy. To emerge as a market leader, a
company needs to excel in at least one of these areas, and it needs to be
as good as the competition in each of the others:
Most
companies will have a hard time reaching any of these goals if they do not
start the CRM process with the need to overhaul corporate culture in mind.
Becoming customer-centric is not as simple as installing a suite of
software from Siebel or E.piphany. To get there, and to avoid a flop of an
implementation, will take at least two initiatives.
First,
companies need to spend the time reasoning out their customers'
relationship with them. If this is done well, not only will companies have
stronger marketing and better use of technology, but also the customer
will be more fully integrated into the whole technological process.
Companies will have to closely examine all of the channels that they use
to deal with customers -- in sales, marketing and support -- and then
design systems that make those contact channels easier.
Once
that is accomplished, according to Gartner, companies will need to extend
"the customer's understanding beyond the marketing organization to
other groups within the enterprise, such as the supply chain for mass
customisation or customer service for cross-selling opportunities."
"The
rewards of greater customer-centricity are significant, and that is why
many enterprises are turning to the business strategy of CRM, which
clearly places the customer at the heart of an enterprise's
strategy," said Scott Nelson, vice president and research director
for Gartner.
To
help thwart the heavy cost overruns, companies will need to adopt
specialized project management tools and metrics to track, analyse and
influence the CRM implementation. Gartner estimates that a large
enterprise can blow through between $30-90m over a three-year period on
technology, labour, consulting services and training related to their CRM
projects. Companies can trim those costs by using tools such as a TCO
(total cost of ownership) tracker, which offers a view of true IT costs
over time, including all three major areas of any company: people,
technology and processes.
