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Gartner, Inc.

People-related issues – leadership, employee buy-in, and change management – are at the top of the list for enterprises that excel at CRM.

Gartner has created the CRM Excellence Awards to recognize enterprises that have shown leadership in this mission-critical area of technology and business. The overwhelming response to this program demonstrates that enterprise decision-makers in every industry understand the importance of CRM to organizations. In this research, we have analyzed the lessons learned from the finalists and winners of the CRM Excellence Awards in 2001 and 2002, including some of the factors they have in common.

Methodology

We examined the case studies of the enterprises that have been recognized as finalists and winners of the CRM Excellence Awards in Europe and North America. These case studies present best practices that illustrate some of the most fundamental principles that have proved key to CRM success. The case studies involve the finalists of the last five CRM excellence awards and include large enterprises as well as small and midsize businesses. The applications that were submitted for consideration for CRM excellence closely followed what Gartner calls the "eight building blocks of CRM."

To understand the commonalities in what the winners and finalists considered as critical to their CRM success, we evaluated all of the comments made by the finalists and winners in the "Critical Success Factors/Lessons Learned" section of the case studies. This doesn't mean that the companies we looked at were not doing more, but these were the factors they cited and attributed as most important to their success in their CRM initiatives. Gartner has selected 16 enterprises to participate as finalists in the CRM Excellence Awards. Fourteen case studies have been published. However, we used sections of the application form in lieu of published case studies to complete our analysis and evaluation of critical success factors.

Results

It's apparent from reviewing these 16 CRM initiatives that all share a single, mission-critical thread: To achieve the long-term value promised by CRM, enterprises must approach CRM at an enterprise-wide level, with the IS and line-of-business managers looking beyond their typically departmental and stove-piped views to plan their initiatives within a strategic framework. Beyond this overall message, eight common messages stand out from analyzing the lessons learned from the 16 CRM Excellence Award finalists and winners. We discuss these common messages and link them to the appropriate building block.

Leadership (Vision)

Eleven of the 16 winners and finalists (69 percent) cite strong support from senior executives. These executives set sensible expectations for their CRM programs and ensure that enterprise-wide communication about the reasons for undertaking CRM are clearly articulated to boost employee buy-in and collaboration among employees, business units, and divisions worldwide. Many of our winners and finalists use consultants - both external service providers and software vendors' professional service personnel - to help articulate and deliver their vision.

Employee Buy-In/Involvement (Organizational Collaboration)

Eleven of the 16 finalists mention the involvement of a cross-functional team as key to gaining the coveted employee involvement that is common to our award winners and finalists. In contrast, we have seen examples of poor CRM where the ratio of IT to business employees (including managers and customer-facing staff) was 15:1, and employee buy-in was nonexistent.

Change Management (Customer Experience And Organizational Collaboration)

Eight of the 16 winners and finalists pay particular attention to the importance of changing the culture of the company. They heed the dangers of underestimating the need for training internally. Surprisingly, only 20 percent involve customers in their CRM programs, but those that involve customers claim to have improved customer satisfaction more quickly than if they had not involved customers from the start.

Phased Rollouts in Measurable 'Chunks' With Outcomes to Measure Against (Metrics)

Eight of the 16 finalists use an incremental and phased rollout of multiple small projects. They repeatedly said, "Beware of big-bang projects." In addition to the phasing, they mention budget controls, feedback loops, and other measures as evidences of their success. Thirty-eight percent have a formal total-cost-of-ownership calculation process coupled with benefits calculations to complete a return-on-investment calculation.

They define specific outcomes and measure during the development phase as well as after they've implemented, and they continue to refine their post-implementation metrics and measurement processes to ensure that the business value originally projected in their business cases stays on target. These organizations also align management objectives and incentives.

Pilot/Test/Integrate Applications And Channels (Technology)

Seven of the 16 finalists (44 percent) cite the integration of CRM technologies and integration to back-office technologies as critical success factors. Not only did they concentrate on these types of integration, but they also paid particular attention to the integration of customer touch points. Thirty-eight percent conducted pilots, in addition to testing and training, before their enterprise-wide rollout.

Clear Goals and Requirements Lead to Fully Understanding the Business Opportunity (Strategy)

Six of the 16 finalists (38 percent) cite their clear understanding of the business opportunity presented by pursuing CRM. They've painstakingly defined and articulated their goals to help them produce an unambiguous set of requirements for their multiple projects within their CRM programs.

Process Definition and Mapping Before Technology Is Implemented (Processes)

Five of the 16 finalists and winners (31 percent) highlighted the importance of evaluating current processes and defining or redefining them prior to applying technology to automate them. In most cases, flows were defined and prioritized so that the proper phasing and implementation of CRM technologies would enable the processes, rather than hinder them.

Data Cleansing and Transformation Weren't Afterthoughts (Information)

Three of the 16 finalists (19 percent) cite data transformation and cleansing prior to starting any type of technology roll out to end-users to be a critical success factor. The omission of this as a critical success factor may seem surprising. One reason many of the finalists and winners did not cite this as a critical success factor is that these enterprises realize the importance of good data first and customer insight second. Data cleansing and transformation are interwoven into their projects throughout, and therefore were not specifically cited.

Bottom Line

Each of the winners and finalists see different building blocks as critical to their success. Although competency in all eight is crucial to overall customer relationship management success, the people-related issues - leadership, employee buy-in, and change management - are at the top of the list for those enterprises that excel at CRM. What separates the winners from the finalists is that winners tend to address all of the building blocks to at least some degree, whereas finalists may address most, but not all.