Organizational Process, Behavior, and Technology are Equally Critical for CRM Success

Adopting a customer-centered marketing strategy sounds simple. Focusing on the customers’ needs, values and expectations, and subsequently providing value for the customers is a goal to which many companies aspire. But too few deliver. The key to the successful implementation of a customer-centered strategy comes with the realization that technology alone cannot solve any problem without the people and processes in place to make it actionable. The reality is that most companies don’t have an integrated infrastructure – technology, people and processes – in place to support such an initiative.

Nearly every company focuses on the technology component of the infrastructure and assigns the people and process portions to a lesser level of importance. Technology rarely prevents a customer-centered initiative from being successful. More often than not, human behavior and organizational processes are the inhibitors to success.

So how can you ensure success with such an initiative?

Start by asking yourself the following questions:

  • Have your employees proven themselves willing to change the way they work, if necessary, to provide better service to your customers?
  • Is your entire company well trained in the art of customer service and is everyone customer-focused – regardless of how frequently they come in contact with customers?
  • Are your business processes designed with your customers in mind?
  • Do you have all the data about your customers that you need?
  • Are your systems capable of supporting your goals and objectives relative to your customers’ expectations?

If you have found that you can’t answer “yes” to each of these questions, you are not alone. Nevertheless, you’ve taken the first step in recognizing and accepting your company’s shortfall relative to customer relationship management (CRM) capabilities. To get back on track, keep in mind the three dimensions of CRM: technology, human behavior, and organizational processes.


If you are going to be effective in implementing a CRM strategy, you will need many different data sets – not just about your customers and their purchase patterns, but also about your products and services, your prospective customers, your competitors, the market, the economy and perhaps the regulatory environment. Next, quality technical capabilities are a must. To be most effective, you will need to be able to gather, move and mine the data for relevant information. You must integrate your systems to the degree that data sharing is dynamic according to your business needs.

Many companies have transactional systems, such as point-of-sale, telemarketing/telesales or customer service, but few have built in the degree of integration of the data necessary to truly assist the organization in meeting the customers’ needs.

Ask yourself, how does the information collected at these points of customer contact make its way throughout your company? Can product and marketing managers, market research, database marketing, and senior executives access this information at the appropriate summary or detail level to allow them to make sound business decisions?

Finally, most data has some value in and of itself, but it is the combination of the data, the system capability and the know-how that provides the actionable information needed to create a competitive advantage in the marketplace.

For example, let’s assume you know which customers buy which products or services you offer. Useful information to have, but ask yourself a few more questions:

  • Do you know why your customers buy from you? Can you find prospective customers just like your current customers?
  • Can you match your essential products and services against those of your competitors? What are the strengths and weaknesses? Are you selling against them?
  • Who are future purchasers of your products and services? What do they look like?
  • Do you know why your customers are not buying from your competitors?
  • Will changes in the economy influence your customers’ ability to purchase your products and services? How?
  • Will changing demographics have an impact on your business? How?
  • If your product or service is regulated, will pending changes in legislation affect your profitability? How?

If pressed, many companies can answer these questions on some level. However, the complete information is often spread throughout the organization on computer disks, in file drawers and in employees’ heads, which can take weeks or months to assemble. With such disparate and decentralized information in an organization, decisions are made without a complete understanding of the big picture.

Of course, reliable, consistent data and systems must be in place to maintain the integrity and credibility of the information. Without that, the ability to make sound decisions based on the information becomes suspect, and therefore should not be used.

Technology is the easy part of this equation. Systems and technology can provide virtually any capability that is needed to manage the data and information.

The tricky part comes with understanding the information and applying it to everyday situations. Most often, the creation of actionable information is not “rule-based” (generated solely by a computer) but rather, “expert-based” (requiring human intervention for interpretation).

Human Behavior

Human behavior is critical to the successful implementation of a CRM strategy. The biggest challenge companies usually face is putting an enterprise-wide focus on the customer. Outside of the sales or customer service areas, most employees are not directly exposed to customers. These individuals make vital decisions affecting customers. Everyone in the organization – from the CEO down to the line-worker – must be focused on the fact that the customers sign the paychecks.

This type of focus is difficult to achieve since individuals within an organization are usually focused on completing the task at hand and often have difficulty in seeing how their duties link to the big picture: satisfied customers. The good news is that overcoming human behavior challenges starts with a simple act – communication.

Communicating the change to all employees is an important – but often overlooked – part of any corporate initiative. Here are a few ways to keep your employees interested, involved and more adaptable to the many changes required to implement a total CRM strategy successfully:

  • Get the individuals who will be affected by the change engaged from the very beginning of the project. Tell them about the initiative, what the organization is expecting to accomplish from the change, how the customers will be affected and – most importantly – how the change will affect their work. Ask for their input into the project, not only at the beginning but also throughout the project.
  • Communicate regularly with appropriate messages and provide an easy way for employees to offer comments. You will have multiple audiences – from senior executives to telemarketers – within your organization. Each target audience will likely need a different slant and frequency of information.
  • Prepare for and provide sufficient training, giving your employees the skill sets necessary for the new systems and processes you will be implementing. Use this as an opportunity to re-assess communications skills and provide additional training in this area, if needed.

While these three points will not solve all of your change challenges, they will help smooth the transition from merely having a CRM strategy to delivering on your customers’ needs and expectations.

Organizational Processes

Organizations are often their own worst enemies when it comes to implementing a CRM strategy.

In some organizations, the culture and processes are so ingrained that it is difficult to facilitate change – even if you have adequately addressed issues of technology and human behavior. Moreover, the mindset that permeates the organization’s processes is often based on technology limitations that were in effect at the time a specific process or procedure was developed.

What has been done in the past is often no longer the best guide for what to do in the future. Organizations must prove themselves adaptable with processes and procedures that are designed with the customers in mind.

Managing the total customer relationship is dependent upon how well these three dimensions – technology, human behavior, and organizational process – are developed, managed and integrated. To be successful, equal attention must be given to all three.


A version of this article originally written for Direct magazine and appeared March 1, 2000, in print. (Direct Magazine is now Chief Marketer)

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The Trouble with CRM Systems: Tomorrow’s forecast – Sunny with some early fog.

When CRM began to evolve in the mid-’90s, every software vendor who had an application that had anything to do with managing customer or prospect data began pitching itself as a “CRM System.” Many of these systems were built to address one particular aspect of CRM, such as Sales Force Automation (contact management, Campaign Management, or Customer Analytics, and could not possibly deliver the value promised as “CRM System.” It was a case of “over-promise and under-deliver.”

Unfortunately, there were no end-to-end technology solutions for CRM at the time, and today, there still aren’t (although we’re getting closer). As much as vendors collaborate to provide an “integrated solution,” the results have been less than stellar. One only needs to read the Wall Street Journal or any number of business and trade
publications to learn about the failures of CRM System implementation where multi-system integration is involved. It’s no wonder that Pragmatists don’t believe that CRM Systems are worth the investment. However, this may be about to change.

While there are undoubtedly a few CRM System vendors who are trying to monopolize the market with an end-to-end solution, there is a somewhat conscious move by most CRM System vendors to segment themselves into specific vertical segments. At this writing, these vertical segments seem to be:

  • Sales(Sales Force Automation, Contact Management, and Telemarketing)
  • Marketing(Campaign Management, Online/E-mail Interaction Management, and Marketing Management)
  • Data Management and Analysis( Business Intelligence, Customer Segmentation, and Data Transformation)
  • Customer Service(Order Management, Supply Chain Management, Call Center Management, and Interactive Customer Contact

By self-segmenting into these categories, CRM System vendors will ultimately force segment standards, against which all vendors within the segment will be measured. This segmenting is the first step to vertical segment consolidation, which will force the smaller, less well-funded players into merging, or failure. In the end, there will likely be 5-7 significant players in each of these segments.

So, what does this mean for marketers and how can we benefit from coming change? Here are my Top 3 predictions, with a few thoughts on how we, as marketers, will benefit:

  • CRM System vendors will concentrate on delivering value within a vertical segment using their core technology, rather than through integration of their offerings with other CRM Systems. This will lead to an increased success rate with CRM system projects and give the Pragmatists the comfort level they need to accept CRM technologies. This will be a blessing for both the CRM System vendors and organizations that are struggling to make an internal case for their Pragmatists.

Marketers will benefit from this segment concentration by having the flexibility to select a system that specifically addresses a specific business goal, rather than a system that tries to solve all of the organization’s CRM ills at once. For example, if the organization primarily derives revenue through direct mail or database marketing efforts select a campaign management, rather than a system that is focused more on sales-automation, but offers campaign management capability. A vertical segment system will provide the fastest ROI for the organization, and will likely allow for a more compelling business case for additional CRM technology in the future.

  • CRM System vendors will encourage more firms to address “people and process issues” before application installation. CRM System vendors have learned the hard way that implementing technology before dealing with resource skills and abilities, as well as supporting processes often negatively impacts installation success.

This helps create an opportunity for marketers to drive CRM as a business strategy, rather than the technology initiative for which it is often mistaken. Marketers should use this occasion to gain visibility for the strategies, tactics, and processes that the technology enables.

  • There will be increased market consolidation between CRM front-office and back-office applications in an attempt to gain market domination in the CRM space. This consolidation will provide more seamless data integration between customer service, supply chains, and marketing, providing a wealth of data to use in improving the value offered to the customer. We are beginning to see this with acquisitions such as Vantive by PeopleSoft (, and Octane by E.piphany ( Of course, Siebel (, Oracle ( and SAP ( are also players in this space.

Increased data access will be the biggest benefit for marketers in using these enterprise-wide CRM Solutions. The wealth of data from nearly all customer interaction points can provide marketers with a more complete picture of the customer, and provide the potential to increase corporate value through improved message, product, and service delivery. As this occurs, the challenge for marketers will be how to become “information rich”, rather than “data poor”.

The evolution of CRM Systems space is taking place. Vendors are beginning to focus their offerings to differentiate themselves from competitors better, and there is a deliberate attempt for market domination (in both each segment, as well as those attempting an enterprise-wide solution). While these critical factors are necessary for CRM System vendors to gain full acceptance of their systems, how long this evolution ultimately takes is dependent on how firmly marketers push their needs, values, and expectation, and the proven, documented success of the vendors in meeting those defined goals and objectives.

Preparing for trouble with CRM

Customer Relationship Marketing (CRM) is one of the most prevalent and vital initiatives undertaken by corporations both large and small. Industry experts claim that nearly five out of every ten CRM initiatives fail. What’s the difference between those that succeed and those that fail? What does it take to implement CRM successfully?

My observations from successful CRM initiatives suggest that success can be, in part attributed to the ability to strategically manage the various aspects of CRM within the context of your organizations broader business direction. Based on our experiences, we suggest organizations consider the following points when developing and deploying a CRM initiative:

  • Create a strategic CRM vision. Buying the latest and greatest CRM software application or developing the slickest e-commerce site will not solve your CRM challenges. While technology certainly plays a significant role in supporting the success of CRM, CRM is a strategic initiative. It’s a way of doing business, not just a way of managing information. As such, a CRM initiative will be most successful if an organization has a clear vision for how it wants to deliver value to its customers.

A robust CRM vision is critical because it helps ensure that the decisions made in selecting technology will be made based on the goals of the company and not be driven-or limited-by the functionality or capability that a particular software application may provide. Remember that technology should support the vision of CRM, not drive it.

  • Avoid the cookie-cutter technology approach to CRM. Every business has a unique way in which it deals with its customers, and while many technological CRM solutions designed for your particular industry, virtually all will need customization to address your specific organizational needs to build loyalty with your customers. The goal with CRM is to differentiate your business from your competitors. If everyone uses the same technology or software application without customization, there’s no significant competitive differentiation, and you’ve gained little from your investment. Make sure the application purchased meets the needs of the organization.
  • Manage the number of cooks in the kitchen. The complexities of CRM may require working with multiple vendors on various aspects of the initiative. Often the efforts of the vendors are uncoordinated and result in “finger-pointing,” which inevitably occurs when something goes wrong. For example, depending on the organization’s needs, there may be a systems integrator; a contact management or sales force automation software vendor, a campaign management software vendor, and maybe an analytical software vendor. Each of these vendors will have specific needs, such as particular data structures, data, and system processes, data needs-for implementation, but how can an organization ensure that these needs are aligned to effectively and efficiently enable the CRM initiative?

Best practices suggest that the way to ensure success with multiple vendors is to:

  • Identify and hire a prime contractor as the lead project manager. One of the vendors should be charged with the primary responsibility for ensuring that all of the applications work together correctly. In some cases, the prime contractor could be a consultant; in others, it could be a systems integrator. However, it’s often best to hire an independent, neutral party to serve as the prime contractor or project manager to manage and coordinate the overall project.
  • Develop an integrated project plan. A project plan, which incorporates the critical tasks and milestones of all vendors, is a necessity. In many cases, there are significant dependencies between vendors that may go un-checked if not combined with the overall plan.
  • Engage all vendors in the system design and implementation process. Proper engagement should help prevent one or more vendors moving in a direction which may be optimal for their product or service, but which may render another vendor’s product or service inoperable as planned.
  • Engage all vendors in ongoing communication. All vendors involved in the project should receive weekly project status reports, as well as participate in weekly team meets. Overcommunicating will help avoid miss-communication as the project progresses.
  • Bind the vendors contractually. An excellent way to minimize these disputes is to bind the vendors contractually and enforce mutual warranties of performance for each vendor involved. In other words, each vendor would warrant that its work or applications will operate free of defects with the products and services of the other vendors on the project.

There are many challenges and issues to address when managing a CRM initiative. Addressing the factors here alone may not ensure success. However, if you keep these at the forefront of your initiative, you will have the ammunition you need to overcome many major contributors to CRM failure.


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