When NextiraOne was founded in April 2001, arguably the most unenviable job fell to CIO Loren Tobey.

The network services operator was formed by bolting together three companies on two continents, each running a different enterprise resource planning (ERP) system. Tobey’s task was to

put together a coherent customer relationship management (CRM) strategy quickly, one that would enable the Platinum Equity-owned company to slash costs but still improve customer service and loyalty.

To start, the three ERP systems needed to be consolidated. “Because the company was created through the merger of three other companies, we had three of everything: Three financial packages, three cultures and so on,” says Tobey. “The sets of legacy systems also meant three ways of doing business,” he adds.

The company lost business to rivals because sales staff lacked a rounded view of customers and their needs – customer-related data might be in any one of three unconnected systems. As a result, sales leads were lost in the labyrinth and often not followed up until well after potential clients had signed on the dotted line with competitors.

Tobey therefore decided to consolidate on SAP, one of the NextiraOne’s three ERP software suppliers, and then develop a CRM strategy. “You need a CRM strategy before you even consider purchasing an application,” he says. That strategy document needs to dictate the objectives of the CRM strategy and map the business processes by which it will be achieved. Given the fundamental operational changes that this will entail, it requires support from the very top of the organisation downwards, he adds.

Anthony Bosco, CIO at US construction and engineering group Day & Zimmerman agrees. He says his current CRM software roll out involves developing a more proactive business strategy, rather than purely technical matters: “Our effort is not to roll out a CRM technology, but to develop a strategy.” The biggest mistake organisations make, he says, is to try to implement the CRM software before addressing the CRM strategy.

Cultural change

The second biggest mistake, he suggests, is to try to roll out the software before changing the organisation and culture of the company to make it more responsive and proactive towards customers.

Quite simply, say analysts, implementing CRM software demands a complete overhaul of the way an organisation handles its customers. And that requires new business processes and an acceptance of the need to change from the CEO downwards. “Real business change is required to succeed and no amount of software integration will compensate for groups who don’t trust each other or want to work together,” says Erin Kinikin, an analyst at Forrester Research.

Michael Maoz, vice president and research director for Gartner, supports that view: “Central to presenting a satisfying customer experience will be a suite of CRM applications that define a consistent set of business rules for customer interactions, both direct and self-service, across channels and throughout the customer life cycle.” But organisations should not underestimate the difficulties of persuading sceptical staff to make full use of the new technology. “All the customers we spoke to highlighted the challenge of user adoption,” he says.

Sales staff, in particular, are notoriously resistant to new technology, he adds, and even more averse to sharing sales pipeline information. Contact centre staff will often resist additional data entry demands because of the pressure to meet performance targets.

At the same time, says Chris Eldridge, a senior project director at Business Link for London, in many cases, staff will need to get used to having less leeway over how they structure their working days. They will therefore need to be prepared for that change. At Business Link, a publicly funded body that provides help

and advice to small business owners, the organisation as a whole had no concrete understanding about the scope of the services it offered – all that information was locked up in the heads of consultants.

The implementation of PeopleSoft 8.8 CRM enabled Business Link to codify and document the services it offered, to identify areas of overlap in the organisation and to improve efficiency markedly, says Eldridge.

As a result, the organisation has increased its targets exponentially, from an initial objective of helping 1,500 businesses a year before the project was completed, to 100,000 a year after the implementation.

Real-time CRM

But although a well-defined strategy, strongly endorsed by the board, can help to cut through potential resistance among staff, too many of these are simply based on vague, well-meaning statements such as achieving “exceptional customer service” or a “360-degree customer view”, say analysts.

“CRM [strategy] must begin with company objectives and continue with specifics such as the desired customer result, required employee and partner involvement, necessary information and biggest opportunities,” says Kinikin. A lack of clarity, he adds, will only fuel resistance and possibly stoke-up feuding between departments in the organisation.

Vendors have subtly changed their approach in the past two or three years in a bid to improve implementation times and bring the way systems operate even closer to real-time.

In the late 1990s, a CRM system was largely a standalone package with limited integration with other elements

of an organisation’s systems. Typically, customer data would be exported from other operational systems, so staff dealing with customers would effectively be working on an old copy of data. Also, this created another ‘island’ of data that would need to be looked after. Today, suppliers such as PeopleSoft, Oracle and SAP are offering CRM packages customised for particular vertical industry sectors in a bid to speed up implementation and to make projects more likely to succeed.

Such packages include typical business processes used in those sectors – which can be customised, if necessary – combined with pre-built integration with other popular ERP systems.

According to Kinikin, this approach is re-igniting the interest of many organisations that were burnt earlier, flawed CRM implementations. “Increasing depth of vertical CRM offerings will encourage many of these companies to re-look at packaged CRM once they can see clear returns for a reasonable cost,” he says.

Improved integration means that a call centre agent today, for example, can easily examine product inventories, check the payment history of a customer and confirm the status of a complaint, details of which may well be held outside the CRM system.

“At any point, you have got visibility [of the customer] in any direction along the business process,” says Brad Wilson, vice president of marketing for CRM products at PeopleSoft. “Being able to link these processes and access the data live and connect applications live, is what real-time CRM is all about,” he adds.

A key enabler of that kind of real-time CRM has been the increasing ability of systems and databases to handle more and more transactions. Now, says Wilson, it is even possible for business managers to conduct basic analytics on operational data stores without affecting the performance of the applications they are supporting. Only five years ago, that would not have been possible. “You can do a certain amount of lightweight management reporting against base tables without degrading transaction performance,” he says.

Indeed, the whole idea of real-time CRM – or even near real-time CRM – would have been preposterous five years ago because applications were still based on two-tier client server architectures, rather than on the Internet, and there was a lack of reliable bandwidth. It would simply not have been possible to run call centres out of the Philippines, Vancouver and Bracknell from the same single instance of data, for example.

But increasingly, that multi-site CRM is just what organisations such as BT and banking group HSBC are doing today. Not just to improve customer service with a ‘real-time’ response, but to improve efficiency.