Entry

What Are The Risks of a CRM Investment?

Apr 19th, 2008 02:07
Taksh Verdhan, David Cowgill, http://www.crm-guru.com/the-risk-of-crm-investment.php

The standard definition of the word risk is the possibility of loss or 
injury. However, an alternative meaning that is much more relevant to 
the world of enterprise software is "the variability of returns from 
an investment." There isn't a single organization that authorizes a 
technology purchase without some assurance of ROI and yet the majority 
of companies fail to properly identify and minimize risks in order to 
maximize return. These risks come in a variety of forms-internal 
risks, vendor risks, IT risks, market risks, et cetera, and each needs 
to be carefully evaluated as part of the overall ROI equation. 
This is particularly important when evaluating customer service 
solutions, as they extend across numerous applications and departments 
across the enterprise. By moving beyond a single, dogged focus on 
costs, companies can more accurately calculate the return on their 
investments. Key risk assessments include: 
Organizational risks. This involves assessing the company's own 
ability to undertake the project. First, consider implementation 
timing in terms of available resources and skill sets. Next, take an 
objective look at organizational readiness. A customer service 
strategy may involve an evolving business model through a chain of 
various processes and organizations with the company, from HR to 
accounting to marketing to distribution. Be sure the company is ready 
to undertake the magnitude of change required for this far reaching a 
project. Solicit input from senior managers and strategic planners to 
ensure the project is congruous with the objectives of the 
organization. Aligning customer service goals with overarching 
corporate goals lessens the chance of project dollars being pillaged 
for other initiatives.
Another important consideration often overlooked is user acceptance. 
Lack of user commitment occurs when employees aren't convinced of the 
need for a customer service technology strategy and implementation. 
Gaining user buy-in is a good way to ensure that all critical 
processes are incorporated into the software. In addition, users who 
are involved early on often become the greatest advocates, adopting 
the new technology immediately. 
The likelihood of acceptance can be difficult to gauge up front. 
Fortunately, there are many steps you can take to minimize 
organizational risk. One large financial company took numerous 
proactive steps to ensure a commitment across multiple departments. 
First, the implementation was accompanied by a high-profile internal 
communications campaign, which included a count down calendar designed 
to build anticipation ahead of the go-live date. More important, 
employees were invited to visit the physical space where the customer 
service system was being set up so they could see firsthand what was 
being implemented and why. Staff members were given a chance to 
navigate around the software, which was customized to reflect the well-
known look and feel of the existing business, and provide instant 
feedback and new ideas. Team feedback sessions were held four weeks 
prior to go-live to make sure all necessary solutions were deployed. 
To manage customer service projects effectively, set tangible 
benchmarks and keep stakeholders informed as each are met. Follow a 
phased approach to implementation. This has two benefits. First, it 
gives users an opportunity to learn and adapt to new processes in 
stages. Second, and more importantly, it provides an opportunity to 
demonstrate early successes as incremental metrics are achieved. 
Technological risk. Companies need to evaluate technological choices 
through a number of filters. Is the technology markedly different from 
what is currently in place? If it requires an entirely new operating 
system or application server, are the support resources in place to 
maintain this mission-critical system? Is it aligned with the 
direction the company is moving in? For example, deploying proprietary 
technology in an environment that is moving toward Linux or other open 
technologies could pose a problem. Many SAP implementations faced 
similar issues; the software had its own proprietary programming 
language. Finding and retaining SAP programmers became a painful and 
expensive proposition for many. 
Be sure not to lose sight of the end goal. It may seem 
counterintuitive, but CRM initiatives are at risk if too much focus is 
placed on the technology itself. Build processes around business 
drivers, not around the proposed technology. After all, without a 
clear business strategy, the technology is simply managing 
transactions instead of improving customer relationships. The goal is 
to move toward a more customer-centric environment. 
Another concern with technological purchases is the amount of 
integration needed. Determine how much customization and integration 
will be needed for the solution to work within the existing 
infrastructure. Also, consider how the proposed integration will 
impact the value of data retrieved through the integration point. 
Vendor risk. Talk with companies of similar size and business to glean 
lessons learned and best practices applied. Conduct due diligence on 
the company of choice to ensure the company is stable and mature 
enough to support you in the long term. Of course some vendors use a 
partner-driven model. 
Market risk. Uncertain times call for advanced planning. Consolidation 
of industry behemoths has many wary of new technology purchases, 
particularly when there is little synergy between the companies 
involved. Build these scenarios into your plan so your technology 
investment helps you stay ahead of the curve. 
Conclusion
A successful CRM project encompasses people and processes that are 
aligned together to build stronger customer relationships. A customer 
service system affects the culture of the organization. Although each 
business is unique, there are many risk factors that are universal to 
all organizations, including vendor risks, technology issues, and 
market conditions. Careful consideration and planning up front as well 
as a strong partnership with the selected vendor empowers businesses 
to maximize ROI. Companies looking to implement a customer service 
technology should look to vendors that are willing to partner with 
them and bring best practices and expertise to the table.
http://healthdir.mylinea.com
http://bishan.mylinea.com/
http://gamesgeeks.mylinea.com/
http://myspacedirectoy.mylinea.com/
http://insurancedir.mylinea.com/
http://1bollywoodmovie.blogspot.com/			
http://automotivedir.mylinea.com/
http://aaatravel.blogspot.com/
http://travelsdir.googlepages.com/