The failure rate of software implementations involving CRM has always been a cause of concern for both vendors as well as buyers.
In most implementation engagements, the key aspects of strategic thinking, solution design and delivery are typically sliced apart in silos involving resources with different skills, causing lack of synergy ultimately resulting in the loss of a huge opportunity to unlock value from an implementation. While almost any software implementation has this shortcoming, in a CRM implementation, these silos exacerbate the causes of failure even more, and further render these implementations more operational in nature.
CRM projects demand a not-so-apparent duality of perspective. While maintaining a well planned external view, CRM implementations should also ensure that organizations are able to also look inward to address internal processes and drive them towards more efficiency.
The entire relationship management process has to be an efficient orchestra of inward and outward looking processes, both driven by the twin objectives of revenue profitability to the organization and value benefits to the customer.
If cognizance of this duality is lacking, the core purpose of the CRM exercise is undermined. On the other hand, if the duality is effectively addressed, you have organizational processes aligning brilliantly to create significant value benefits.
Providing such value benefits to customers in implementation situations could result in customers who go beyond being happy – because you end up delivering value that may even be beyond defined deliverables.
Your Revenue Function needs more attention!
In most organizations, the revenue generation function, despite being one of the most important, is still one of the least organized. And what is interesting is that just a little bit of screw-tightening can have a ripple of positive effects.
Let’s take a look at how re-aligning a single aspect of the sales management process can lead to a series of positive effects on subsequent events in the revenue cycle – thereby facilitating improved efficiency of sales efforts leading to improved revenue performance.
A holistic plan – the fundamental need
Organizations have to understand what makes them effective in generating demand and revenue, and of course, what limits their effectiveness. Many organizations, unfortunately, focus on various effectiveness parameters such as closure skills while neglecting efficiency. When revenue realization becomes a concern, organizations are tempted to make investments in marketing, training etc. these may include buying prospect databases, training on effective negotiating, closure skills, etc; printing fresh collaterals and so on. These are all at best, ‘point solutions’, while the need of the hour could be to look at ways to improve underlying sources of dysfunction.
The challenge to sales managers is in viewing sales processes from a holistic perspective. Organizations need strong processes that allow the various players in sales and marketing to work together to meet common objectives and sales managers have to first understand how the right processes and technology make them efficient.
Surprisingly, in many organizations, sales and marketing typically have the least mature processes compared to product development, finance and accounting, service and support and other functions.
Revenue and Profitability must be King, Not the customer!
One of the most widely quoted ‘truths’ in any industry is that the Customer is King. It is a statement with such profound implications, that debating it would amount to blasphemy. But lets take that point as an argument. Organizations need to understand and acknowledge first that if there is only one purpose to relationship with any customer, that one purpose cannot be ‘Make customer feel like King’. Instead it would quite simply be “make a profit”. The relationship occurred in the first place because the organization saw a revenue opportunity and the customer saw a value. Therefore an organization will benefit the most when it acquires only those customers that can help it achieve its revenue growth plan – which means the cost of acquiring, cost of keeping, cost of growing should all contribute positively to that growth plan.Such a carefully selected basket of customers are the ones you should treat like a king. And here starts the process definition basics of the inward looking aspects of CRM.
People, Process and Technology : In-synch
Improving adoption through such tools therefore has to be achieved by empowering the sales people; helping them become more effective and by removing barriers to effective selling. Typical barriers occur because of dysfunctional processes. A process-oriented approach ensures that all related business processes are aligned to both strategic as well as sales objectives. The effort to improve sales effectiveness can lead to more revenue opportunities; better marketing effectiveness, shorter sales cycles and several similar goals.
And the starting point to designing such a process is an enterprise view of how an organization attracts and draws effectively on customer interactions to effectively drive revenue activities. Access to the right information at the right time drives effective internal processes that maximize sales opportunities. And this can happen when people, process, technology and information are all aligned to strategic objectives.
The role of technology in most situations CRM is more about realizing an opportunity cost. An organization could anyway reasonably manage without such a tool. But when implemented properly, the right CRM product has the potential to give benefits that can surpass expectations immensely because it impacts the very core of an organizations growth engine – revenue.
Opportunities for product and services companies
The need for technology implementations to positively impact business processes has been acknowledged widely. Technology vendors are talking to customers more about business strategy and policies, business models, process methodologies, etc., and less on technology and platforms. Customers are also looking for value differentiators, opportunities to increase margins, reduce costs and so on.
The opportunity cost of re-aligning and improving underlying processes, though undefined, could be more significant than many organisations might imagine. That chunk of additional revenue that comes simply by better alignment of processes, people and information stares as an opportunity right in the face of every organization and waits to get noticed and grabbed. Indeed, this can be a very tempting initiative to any organization. By helping customers realize that, tremendous value far beyond expectations can be added. With enough successes and demonstrable capability to indeed add quantifiable revenue improvements to customers, there is a definite option to link the delivery-pricing model to a percentage of revenue improvement realized by the customers.
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