Posted by William Band on November 8, 2010
The phenomenon of the social Web — which Forrester calls Social Computing — is forcing business process professionals to expand their thinking beyond the goal of optimizing a two-way relationship between an enterprise and customer to also include the simultaneous interactions that customers have among themselves. CRM is evolving from its traditional focus on optimizing customer-facing transactional processes to include the strategies and technologies to develop collaborative and social connections with customers, suppliers, and even competitors.
Notwithstanding this emerging trend, one challenge that I see remains constant. Organizations still struggle to define the right CRM strategies and effectively acquire and deploy the right CRM technology solutions that will meet their needs. Disappointment with CRM is usually the result of poorly conceived strategies that lack a laser focus on improving a specific set of business capabilities to increase revenues or reduce costs. To avoid wasting your time and money on ill-conceived CRM programs, beware of the two most common pitfalls of CRM plans:
- No strategic focus on business value. Many companies have a grand vision to become "more customer-focused," but the implementation of this vision often lacks practical focus and recognition of the typical constraints (e.g., time, money, and politics) that must be taken into account to make the vision a reality. A CRM program should be tightly linked to business goals, focused on customer benefits, clearly identify the processes and constituencies that will be affected, and specify the associated information and functionality needs.
- Lack of attention to business process and people issues. In some organizations, CRM initiatives have degenerated into technology-centric projects aimed at basic process automation. While automation projects may well lead to cost savings, the sheer complexity and size of these initiatives has led to a blurring of the target value. Complexity and a lack of clear objectives divert resources from the important tasks of redesigning underlying processes and architecting how employees will work effectively within these processes. The potential of CRM lies not in technology itself, but in the process of using technology alongside an in-depth understanding of the customer to drive unique, valuable customer interactions.
The most successful CRM initiatives are framed in terms of their overall impact across the organization and the customer but are implemented in focused, incremental steps.
To help Forrester clients define the most effective approach to CRM, I have just published our “Updated 2010: Forrester's Best Practices Framework For CRM” report. The framework provides a structure that you can use to see how you stack up against 11 sets of business capabilities, across four categories comprising nearly 200 best practices, including social CRM:
- Strategy. Your customer strategy identifies the customers the organization intends to serve and articulates the desired customer experience to be delivered.
- Process. Business processes are comprised of the practices associated with major customer-facing business functions in the organization. For example, marketing, eCommerce, direct sales, partner sales, customer service, and field service.
- Technology. Your technology environment plays an important role in enabling the CRM business processes and is comprised of customer analytics, customer data management, and technology infrastructure.
- People. How people are organized and led has a large role in determining success with CRM. You must pay attention to the organization's corporate culture, leadership practices, collaboration methods, training programs, and performance measurement approaches.
We have been using the Forrester's Best Practices Framework For CRM in our client work for the past four years. It has proven to be powerful tool for organizations embarking on the path to assessing and improving their current CRM programs or for jump-starting programs that are just getting started.
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