MarketView : Beating the Software Scam
by Andy Bailey
CRM-Forum (www.crm-forum.com) 29th July 2003
Software vendors have been running a scam for years, and if you’ve ever been seduced by the promise of ‘enhanced competitive advantage’ by simply implementing a piece of software, then you’ve probably been sucked in. Simply put, how can it be possible to gain advantage by implementing a piece of packaged software that hundreds, if not thousands of companies have installed before you?
Surely there must be a way of increasing the advantage that applications such as CRM and ERP claim to give the organisation? That’s where process comes in.
‘Process’ can be thought of as the way companies do business and control their internal workings. Inevitably, every organisation strives to improve its processes as this is a way to squeeze every ounce of efficiency out of the business and to drive down costs as quickly as possible. If you can streamline the way you do business you can employ fewer people, take less time to complete activities, and monitor your customers and suppliers more closely.
Businesses have long been sold on the idea of buying packaged, off-the-shelf software applications to help them get the most of out of the business, with CRM and ERP solutions being the most high profile implementations in the past years. When companies buy these applications they tend to be looking for two things: increased competitive advantage and a better way of doing business. We have already talked about how the first is a myth perpetrated by software vendors, but statistics such as those from the Butler Group suggesting that as many as 70 percent of CRM implementations fail also make us think long and hard about the validity of the second.
Implementing a CRM or ERP solution costs a lot of money, and usually requires a team of consultants and many hours of negotiations about what you really need. However, if at the end of the project you end up with an expensive, state of the art system that does exactly what is says on the tin but not really what you want it to do, then that has to be deemed to be a failed project. Something no IT Director or IT Manager wants to think about in the current climate. So how do you make sure that you are getting the most out of the costly software packages that you have already implemented? Many companies are turning to Business Process Management (BPM) to help them extract value and advantage from their existing systems, and to help them really focus on the factors that make their organisation unique – one of the most effective ways to achieve advantage over the competition.
BPM can be best thought of as a framework that enables companies to streamline and better manage the complex and unique processes within an organisation that make it individual. When BPM is added to existing applications such as call centres, and supply and customer chain systems it enables the user to increase advantage and add value to the organisation.
All companies are different. For example, Firm A makes the same product as Firm B and sells to the same client base, but Firm A is perceived as being way ahead of Firm B in terms of reputation and business success. This is because Firm A has a process in place to chase invoices twice as fast as its competitor and its bank account fills up with cash more quickly. A very common scenario that is a constant source of worry for Firm B as it struggles to keep up with Firm A, but a business problem that is simple and quick to sort out. The solution? A process that informs the finance department when a job has been completed and an invoice should be issued. It also alerts them when the invoice hasn’t been paid and when a reminder should be sent out. Customers get their bills more quickly and in turn Firm B gets its cash faster.
Take another example. Local Council X has implemented a shiny new customer contact centre that means more calls from residents are answered on a daily basis. But all the citizens are unhappy because they are finding that their enquiries are taking longer to process because the requests are piling up. This is the equivalent of putting lipstick on a pig – sticking a flash veneer on your customer service function is not going to achieve anything unless there is a process behind it which reaches far back into the guts of the organisation. The solution? A system that routes the requests to the correct department and makes sure that someone is alerted to call the resident to keep them informed of what’s happening. This is BPM in action and this is why it matters.
CRM applications are a very specific type of scam. There are so many gurus and authors out there ready to explain how to get the most out of your customers that every company thinks it needs a CRM system or it will go to the dogs. In actual fact a good hard look at the customer processes currently in place, an analytical approach to thinking about automating those processes that you can, and some streamlining may well have the same effect, take a lot less time to implement and be flexible enough to move with the demands of your business.
Change is a good thing – however good you think you are at what you do, there is always a better way of doing things; just take a look at the competition. The business landscape keeps changing and companies need to be agile or they will be left behind. But each business needs to make individual changes that are unique to their organisation – not something an off-the-shelf CRM or ERP application can help with. Individual problems need to be diagnosed and prescriptive solutions recommended. This is where BPM can help a business make the most of its pre-existing solutions and make the smaller, more individual changes that bring true competitive advantage. Sometimes it is the smaller changes that bring the most dramatic results – all you need to do is analyse where you are going wrong and then do what you need to in order to make it better. Focus on the things that really matter and the rest will fall into place.
With a sound knowledge of your business, your competitors and the way they do business, and the current processes you have in place, it becomes relatively easy to identify where you can make changes. By using complimentary applications such as BPM to build on existing CRM and ERP solutions, and taking a hard look at the elements of your organisation that make you unique, companies can bring out the advantage that was quite probably there in the first place.
Andy Bailey is marketing director of Metastorm www.metastorm.com
CRM Forum 29-Jul-2003
Categories : CRM - Headline, CRM - Opinions
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Response from Michael Dickinson of Real World Software
I found your article provocative and interesting. You raise some reasonable issues regarding the claims of CRM and ERP that software alone can solve a company’s problems. This is clearly not true; success is dependant upon people, not the software.
However, although BPM is an interesting area, I do not believe that it represents a panacea for a company on it’s own. Just paying an external consultant to suggest ways to work more efficiently may only produce short-term gains. To make any real impact, a company has to really believe in, and develop their own processes, utilising software and people in the most efficient way.
Typically software products are described as Contact Manager, Customer Relationship Management and Sales Force Automation. Are customers really 'managed’? Is it possible to ‘automate’ a sales force? This is certainly not true in my experience. It is only through a professional sales approach that companies can be successful. This involves taking time to understand the business needs of the customer and proposing a solution that reduces pain and improves their effectiveness.
Only by understanding the real picture of what is happening with the front line salespeople can managers and executives hope to make the right strategic business decisions regarding product development and the investment of marketing budgets.
The effectiveness of not just the sales team, but also marketing and business development teams need to be seen, thus enabling better decision making processes based on up to date, validated information.
The key for success is to use software products and processes to act as a catalyst for knowledge transfer throughout a global organisation.
Michael Dickinson
Managing Director
Real World Software Ltd
+44 1865 390989