All about them


by Karen J. Bannan

Even before Toyota Motor Sales in Torrance, Calif., USA, launched its 2007 automotive line, the focus already was on customer relationship management (CRM) strategy. At every step, executives—along with project managers and the research and development team—considered the company's CRM data, according to Chip Pospisil, vice president of professional services at Innovative Management Solutions, Plano, Texas, USA.

“We detailed the requirements for the [related] projects based on requirements derived from an understanding of Toyota's customer base,” says Mr. Pospisil, who worked closely with Toyota. “They know who buys their cars, and that provides a bigger picture of understanding so the projects are aligned with the business strategy.”

It seems basic: Build a car based on customer needs. However, many organizations still are figuring out how to translate information on customer attitudes, behaviors and needs into successful and profitable projects.

“The ability to understand and respond to customer data leads to business success,” says Leslie Ament, director of customer intelligence research at Aberdeen Group, a research firm in Boston, Mass., USA. “In an organization that provides products or services to customers, about 80 percent of your internal projects are going to impact the customer. Best-in-class companies have success when they keep this in mind and link analytics and a 360-degree view of the customer when planning and implementing CRM projects.”


Every CRM project should have a clear objective—an outcome—that is owned by the sponsor and which aligns with the organization's value disciplines.

– Thomas Docker, Ph.D., AchievementPoint, St. Louis, Mo., USA

There are many benefits to a customer-centric project planning strategy—and not just for customer-facing projects, says Ginger Levin, Ph.D., PMP, a project management consultant. She also is a lecturer and program specialist in project management at the University of Wisconsin, Platteville, Wis., USA. “Projects are performed for customers. Since CRM focuses on continuous improvement of the relationships between a business and its customers, we also need to ensure our projects align with our [stakeholders’] CRM strategies,” she says. “Each project needs to maximize the value offered and delivered to the customer. CRM then needs to be integrated with project management processes end to end.”

What's My Strategy?

“Too often CRM projects are not initiated properly,” says Thomas Docker, Ph.D., chairman of AchievementPoint, a project management firm in St. Louis, Mo., USA. “Every CRM project should have a clear objective—an outcome—that is owned by the sponsor and which aligns with the organization's value disciplines.”

Companies must prioritize the most important factors:

  • Customer intimacy
  • Product leadership
  • Operational effectiveness.

CRM implementations often are “scoped as the need to put in a software system, whereas most are change initiatives and are better run as programs,” he says. “Treating them as primarily software implementations is why so many of them fail to deliver the expected business benefits, with most of them being delivered late or not at all.”

As CRM pervades a business, Dr. Docker says, the number of stakeholders can be extremely large and many will have different agendas, which makes the initiative complex. This means the project must be managed by “a project or program manager with significant soft skills rather than one with technical knowledge,” he says.

Companies also must have customer and project clarity. Organizations often spend millions on technology implementations without knowing what they're trying to uncover or what they want to do with the data once they have it, says David Myron, editor-in-chief at CRM magazine, New York, N.Y., USA.

One of the biggest mistakes companies make is “getting dazzled by the technology, then buying and installing it before making a business case,” he says. “CRM requires the IT and business development departments to get together and figure out what the company would like to do with their investments.”

One way to do this is to appoint a committee of department representatives that can speak regularly to the CRM project manager about issues and concerns pertaining to their respective groups. This group should meet before the CRM system is purchased. When the CRM project manager fully understands the business processes within each group, the project manager then can determine which processes can be enhanced, automated or removed by the CRM system, Mr. Myron says.

After the CRM system is purchased, he suggests reviewing the CRM strategy with the different stakeholders who are affected by and access the company's CRM program. Plans and benefits should be communicated regularly to minimize confusion, maintain high employee morale and keep the CRM project momentum going.

smart about software


AFTER A LULL, customer relationship management (CRM) software is back in vogue.

CRM license revenue increased 4.8 percent from 2004 to 2005, and that growth is expected to continue over the new few years, according to a report by Gartner Inc., Stamford, Conn., USA.

After years of spending, IT managers slowed their CRM investments in 2003. Companies weren't seeing the results they expected. Expensive CRM implementations sat unused and predicted return on investment went unrealized.

CRM software has returned to favor for one simple reason: Companies are getting smart about their installations, according to David Myron of CRM magazine.

“People are breaking down projects into three or six-month installations. They aren't going for the 18-month installations anymore because too many things can go wrong,” Mr. Myron explains. “Longer projects take a lot of people and you end up spending too much. You're over time and over budget and you can lose sight of your original goal. This is especially true if there are managerial or CRM project leader changes over that period of time.”

Create small, attainable goals as you would with any project, Mr. Myron says. “When you get small wins, they generate more buzz. That spirals, then people look forward to implementing another CRM component because they have seen why CRM works.”

Small businesses have historically favored on-demand CRM software. Hosted by the software vendor, it doesn't require much installation or in-house support and is instantly scalable. The vendor handles everything — but there was usually a price to pay for such convenience. Customization as well as multiple CRM components were reserved for installed software, which came with a much higher bill.

Recently, large CRM vendors such as Oracle Corp. and SAP have started jumping into the on-demand fray. “People are taking a renewed look at on-demand and deciding that it does make sense because most companies have a distributed workforce,” says Leslie Ament of Aberdeen Group. “Employees can use a Web browser to access the program from anywhere in the world, and implementation is minimal.”

This may be a good move for many companies, but she warns that there is a major downside to hosted software: Someone else is in charge of your data and its safety—not to mention the risk of service outages.

The bottom line is that there are pros and cons to both CRM business models, but either way represents a step in the right direction. “Anything to enhance the customer experience is going to benefit a company,” Ms. Ament says.

Even better, ask your customers what your project means to them. On the Unocal Thailand North Pailin gas development project, the company brought in the multiple stakeholders and customers to participate as team members. The move was instrumental in ensuring the needs of the project were met, says Mike Sypsomos, who served as project management coach. He is currently manager of project management at Chevron Thailand Exploration and Production Ltd., Bangkok, Thailand. (The two companies merged in 2005.)

The ultimate customers—operations personnel from the Thailand business unit—were present throughout the project's phases:

  • Design: Perth, Australia
  • Fabrication: Batam, Indonesia
  • Hookup: Gulf of Thailand.

“They were able to represent the customer perspective to solve potential problems early—rather than leaving an issue which might require rework or result in a long punch list,” Mr. Sypsomos says. “This was essential in terms of life cycle planning and management for the asset.

As a result, the transition period from hookup to commissioning was flawless.”

Setting a Plan

Some companies employ a chief customer officer to help create short- and long-term goals within the CRM strategy. Executives can make project communication and planning easier by creating a similar position on the project management side. This liaison gleans CRM data from the CRM program, and solicits feedback about that data—whether or not it's realistic and relevant—from business units and IT staff. “Someone needs to be responsible for customer collaboration, and some guidance or training may be needed in terms of maintaining a customer focus and in developing solutions collaboratively,” Dr. Levin says. “You should prepare, issue and follow a plan for CRM and assess customer satisfaction regularly.”

Once the project and CRM strategy integration is put into place, the work doesn't end. Project managers must constantly evaluate the strategy and make adjustments to the project based on any changes in that strategy. So if your stakeholder's CRM strategy changes—the company's focus shifts from one set of customer needs to another—your project should reflect that change.

“Project teams need to continually work with customers and ensure that they are aware of newly implemented innovations and their benefits to establish a strong partnership,” Dr. Levin says.

Those who do not may eventually run into problems. “CRM does not begin with a project but with a strategic vision and clear objectives,” says Judy Bayer, Ph.D., a consultant in advanced CRM analytics with Teradata, London, U.K. “You have to look at your projects in that context. Keep in mind the kinds of relationships you want to create.” PM

Karen J. Bannan is a freelance journalist based in Massapequa, N.Y., USA. She has written about business and technology issues for The New York Times, PC Magazine, The Wall Street Journal, Forbes and BusinessWeek.




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