II. Understanding CRM
What is CRM?
The 10 Key Principles of CRM
I. CRM in Action
Sales Force Automation
II. The Many Faces of CRM
CRM in the Retail Industry
CRM in the Financial Services Industry
CRM in the Chemical Industry
III. When CRM Fails
What goes wrong and why
Case Study 1: Sales Force Automation Woes
Four Reasons Why CRM Fails
IV. A Framework for Successful CRM
Case Study 2: Boise Cascade
Following the 8 Principles of Success
Sources of information
We relied largely on internet resources for this project, through which we found
numerous articles and white papers on CRM. We also interviewed an SFA consultant
and relied on Lorna’s personal experience at Moai Technologies.
We divided the project in the following manner:
Jital and Kartik did the work system snapshot. Jital and Kartik researched the definition
of CRM, its functionality, and CRM across industries. Kartik came up with the Seibal
information and was the genius behind the power point presentation. Lorna researched
CRM failures and did the tremendous final editing. Pat researched CRM success stories.
We feel that the work was distributed fairly equally, and that we deserve equal credit.
The adage “the customer is king” is an age-old maxim of good business. Excellent
customer service leads to customer retention, which is the lifeline of any successful
business. When the local bookstore knows you by name and can recommend new titles
that you are certain to love – that’s good customer relations in action. When settling a
discrepancy in your credit card bill over the phone is a quick, painless affair handled by a
courteous customer service rep – that’s excellent customer relationship management.
Enterprises are increasingly treating customer relationships as a valued business resource
that needs to be managed, nurtured, and supported by information systems. Likewise,
today's customers expect consistent, professional service and support with every
interaction, through any channel, from anywhere in the world. Combine this expectation
for high quality service with an explosion of choices in providers of goods and services,
from retail, to banking, to insurance.
In today’s business environment, the renewed interest in customer relationships is due to
increasing competition for customers, as well as the widespread realization that customer
retention and loyalty is just as important as customer acquisition. Another reason behind
this renewed interest is shift in the balance of power from suppliers to customers.
Globalization has expanded customer choices by stretching a consumer’s reach across
countries. E-business tools help consumer and business customers evaluate diverse
purchase options. Given the vast choices, customers dissatisfied with their bank, credit
card company, or long distance carrier can easily switch to another.
While the quality of a company's customer service is even more critical to a firm’s
success and competitive advantage, the job of building lasting customer relationships has
grown far more complex for most companies. Hence the evolution of CRM, a
combination of new technologies that enable companies to better manage their valuable
Implementing CRM is a multi-million dollar corporate initiative. The market for CRM
goods and services is expected to crescendo at $76 billion by 2005. Yet 70% of CRM
projects fail in some way. In spite of the high failure rate, enterprises still choose to take
on that risk. This report explores the different forms and goals of CRM across various
industries. It evaluates the key factors involved in successful CRM implementations as
well as the reasons why CRM implementations fail.
II. Understanding CRM
What is CRM?
CRM, or Customer Relationship Management, is a company-wide business strategy
designed to reduce costs and increase profitability by solidifying customer loyalty. CRM
systems integrate information from all data sources within an organization to give a
holistic view of each customer in real time. This allows employees in sales, customer
support, and marketing to make quick yet informed decisions on everything from cross-
selling and up-selling opportunities, to target marketing strategies, to competitive
positioning tactics. However, there is no one way to approach CRM. CRM systems help
firms strengthen customer relationships in a myriad of ways and forms, across a variety
of different industries. Therefore, it may be more useful to think of CRM as a wide-
ranging and flexible process that integrates the three areas of marketing, sales and
customer support through 10 key principles.
The 10 Key Principles of CRM
1. Value Segmentation: Segmentation is based in customer needs, preferences,
behaviors and economic potential, which provides the basis for resource allocation
decisions in marketing, sales and service.
2. Institutional Memory: When the customer interacts with the company, everyone in
the enterprise is aware of prior inter actions, outstanding issues and pending
3. Collaboration: Customers are involved in the specification, design and/or delivery
4. Touch-point alignment: Customers are able to do business with a firm through
multiple channels, which are aligned with your customer r needs and, their value to
5. One & Done: Customer needs are solved during the first contact.
6. Real-time information manager: The employees have real-time access to the right
information in order to make customer-based decisions and resolve issue
7. Customer Scorecard: Employee performance requirements measures are designed to
drive specific customer behaviors that are measured explicitly.
8. Closed-Loop Processes: Integrated front and hack offices systems ensure that
information and workflow carry through the entire enterprise to their logical
conclusion, closing the customer loop and enabling continuous knowledge capture.
9. Listening & Learning Posts: These Forums facilitate information sharing and learning
among the customers that help them do business with the company.
10. Customer Experience Management: Once all the above "touch points" have been
mapped the company is able to deliver a consistent, high quality experience that
provides added value to the customer.
These 10 principles provide the basis for increased efficiency and integration in
marketing, sales, and customer support.
III. CRM in Action
CRM has enormous value for a company’s marketing initiatives. CRM systems can help
simplify marketing processes, and at the same time add muscle to their initiatives through
data mining, targeted selling, and personalization.
CRM systems can be used to collect every conceivable piece of data from customers and
manage this information in a central location. For example, while websites may not ask
for personal information, a firm’s CRM system “might track the "clickstream" -- clicks,
time spent per page, items selected, but abandoned, and similar information -- all in order
to find out more about their customers and their behavior. The clickstream data becomes
a useful resource for data mining tools that predict gender, age, income, preferences, and
a customer's willingness to purchase,”
Marketing can use the information captured to create a highly personalized customer
experience that strengthens customer loyalty, grows brand awareness, and promotes
product cross-selling (based on what the customer purchased in the past), thereby
increasing the company’s sales revenues.
For example, much like the neighborhood bookstore that knows customers on a first-
name basis and their preferences in literature, the Amazon CRM system attempts to
mimic this experience by creating an interactive, online shopping environment. Each
time a customer views a particular item, Amazon’s system shows the customer what
others (who bought that item) also purchased. Each new visit to Amazon’s website pulls
up a new series of recommendations, all based on the customer’s previous orders and an
computer generated evaluation of the customer’s tastes. Amazon also gives special
discounts, allows customers to check on the status of a book order and provides free
shipping on orders placed on a customer’s birthday.
In addition to facilitating highly targeted marketing campaigns, CRM systems allow
marketing to evaluate the effectiveness of highly targeted campaigns more quickly and
efficiently than ever.
Sales Force Automation
CRM also includes sales force automation. SFA systems have done a good job of
enabling sales executives to better manage their pipeline. CRM systems allow sales reps
to organize and track important data about opportunities, prospects, and leads.
SFA systems also provide greater visibility into the sales process, and centralize all vital
data. Using an SFA system, managers can generate reports and forecasts quickly and
SFA systems, by streamlining the sales process and removing inefficiencies associated
with paper-based systems, can slash a firm’s sales cycle from weeks to days.
Furthermore, SFAs can usually be customized to a certain degree to reflect the sales
process of individual companies across various industries. Customized screens allow
sales reps to capture the data they need to accomplish the firm’s sales goals. SFAs also
usually include some kind of scheduling calendar so that sales reps no longer forget to
make calls or randomly call contacts from their account lists.
CRM systems can help a firm increase customer support channels by allowing customers
to reach support representatives through email, online chat and VOIP calls. CRM also
helps reduce the load on service personnel through its automation of customer support
procedures. Knowledge bases and posted FAQs also allow customers to help themselves.
CRM systems provide a certain element of intelligence to customer support functions.
For example, CRMs can track the who, what, when and why of customer calls or request,
whereas in the past, the history of customer calls was usually lost or never even
maintained. By allowing each service representative to access the history of customer
calls, the customer does not need to repeat the same old story, and the representative can
address the customer’s concerns more quickly. Customer feedback that is captured by
the system can also be applied towards future marketing campaigns.
The main idea behind CRM for customer support is the improvement of customer
satisfaction by managing, synchronizing, and coordinating all customer touch points.
CRM systems support sales, marketing, and customer support primarily through better
data management. The CRM system stores customer information centrally, rather than in
disparate systems across an enterprise. Centralized data management reduces inefficiency
due to duplicate records, reduces the risk of human error prone to paper-based systems,
and allows wide access to all key users of the information. Increased efficiency from
data automation can reduce operational costs, and promote increased productivity. CRM
data management functionality can support strategic decision making regarding delivery
channels and organizational structure. While CRM systems are expensive to implement,
it is assumed that the benefits from increased process efficiency, greater productivity and
improved knowledge management will ultimately drive down the total cost of ownership
of the CRM system.
IV. The Many Faces of CRM
While CRM can be seen as a wide-ranging and flexible process that integrates the three
areas of marketing, sales and customer support, the goals and functionality of CRM
systems varies widely depending on the industry it supports. This report provides an
overview of CRM in the retail, finance, and chemical industries.
CRM in the Retail Industry
CRM in the retail industry is largely oriented around the creation of a personalized,
interactive shopping environment (on and offline) that fosters customer loyalty and repeat
sales. Some of the maxims of a CRM initiative for the retail industry include:
• Increase the lifetime value of a company’s relationship with target customers
• Optimize the effectiveness of marketing, selling and servicing of target customers
• Maximize the value of customer expenditures for company/customer gain
• Monitor customer behavior across all purchasing channels including the web,
catalogue sales, and call centers, as well as in-store.
• Create services that win lifetime value
• Drive business growth and profitability
• Increase customer loyalty
• Track customer activity across its multiple sales channels.
CRM in the Financial Services Industry:
Operations in the banking industry are changing due to innovations in technology as well
as demographic changes. People are living longer and the baby boom generation is
getting older. Bankers need to plan services around a new class of older client. Younger,
technologically savvy clients want to do all their banking online and never set foot in a
branch. Thus, financial service providers are leveraging CRM technology in order to
accommodate a more diversified customer base. Hence, the primary goals of CRM in the
finance industry are:
• Revitalize customer service channels and maximize their efficiency
• Provide a wide range of online financial services
• Identify opportunities for business process re-engineering.
• Identify the most valuable customers
• Consolidate customer data
• Protect customer security through the most advanced encryption technology
• Integrate customer needs and increase customer loyalty
CRM in the Chemical Industry
Knowledge management is very important in the chemical industry, where, in general,
fewer employees deal with customers directly than in other industries. Chemical
manufactures have different customer relationships than most other industries. For
example, some companies manufacture highly specific chemicals that they supply to a
handful of customers with whom they have long term relationships. Thus the mass
marketing campaigns widely used in retail are not effective in supporting the goals of
most chemical companies. Here the main of goal of CRM is:
• Improve customer loyalty and satisfaction
• Integrate the call-centers and telesales operations
• Present unified information to all customers
• Manage information about all customers
• Leverage the entire organization and give best services at lower cost
• Allow customer access to their personal data
• Allow employees access to specific customer data on their computer screens
• Provide online access to order entry, order status, account history, payment
information, product details and technical support
• Provide interactive customer interface and support
Given that the goals of CRM vary widely across industries, it is no surprise that CRM
application packages offer different functionality. There are several kinds of CRM
packages available on the market and companies would do well to assess the pros and
cons of each.
Given the high cost of implementation, companies ought to plan CRM projects carefully.
However, many management executives do not understand the complexity and scope of
CRM projects. Rather, they perceive CRM technology to be a silver bullet that will
eliminate all their customer relationship woes. Unfortunately, this perception fueled even
more by industry hype, leads to the enormous failure rates of CRM projects.
V. When CRM fails
Industry analysts predict that the market for CRM products and services will mushroom
to $76 billion by 2005. Given that enormous dollar opportunity, everyone wants a piece
of the pie. Software vendors, industry analysts, and technology reporters are all touting
the upside of CRM - and no one can stop pushing the hype button. Yet, in spite of all the
optimism, a closer look reveals that CRM implementations have an extremely high
failure rate. Industry data indicates that more than 50% of CRM projects fail in some
way, wasting hundreds of millions of dollars that corporations spend on their CRM
initiatives. The Butler Group suggests that number is closer to 70%. In fact, many
projects never work out at all.
That statistic is ominous, considering that corporations can typically invest upward of
$10 million for an initial CRM launch, with subsequent phases of maturity sapping
millions more from the enterprise. While it may be easy and convenient to blame vendor,
in fact “the worst implementations have little or nothing to do with the CRM software or
the integration effort,” (Berg). Enough evidence abounds to timidly suggest that it is the
business itself that is the root of failed CRM evils. However, in analyzing why CRM
projects fail, it is important to begin by first defining the concept “failure”; second,
pinpoint what is not working, and why; and third, identify methods to mitigate against
CRM project failure.
In his article, “The ‘Failure’ of CRM”, Jim Ericson asks, “But what is failure? Is failure
about software failing? Is it failing to meet ALL the goals set out? Is failure the result of
management picking the wrong solution for the wrong reason?” While analysts might
glibly say that it’s “failure to meet expectations,” this answer sheds little light on exactly
what’s not working and who is at fault.
What goes wrong and why?
While the technology vendor is an easy target, failures occur largely because the end-user
company does not put enough effort into preliminary preparation. In fact, most of CRM
failures go back ignoring Information Systems 101. A quick review of the principles for
IS planning includes concepts such as:
1. Support the Firm’s Business Strategy with Appropriate Technical Architecture,
Standards, and Policies
2. Evaluate Technology as a Component of a Larger System
Do not move the likely point of failure from one point to another
3. Recognize Life Cycle Costs, Not Just Acquisition Costs
Recognize that the total cost of ownership may far exceed the cost of acquiring
the hardware, building, buying software associated with a new info system.
4. Design Info Systems to Be Maintainable
5. Recognize the Human Side of Technology Use
People are a part of the system, and a spectacular system may fail if the human
participants are unwilling or unable to play their part effectively.
6. Support and Control the Technical System
Complex systems need regular care and maintenance, otherwise they degrade
and become more prone to failure from overloaded databases, incorrect data,
faulty documentation, or human error.
7. Recognize Risks and Have a Backup Plan
In order to be successful in CRM, companies need to “grapple with much tougher issues,
issues of business strategy and leadership, organizational change, business process
redesign, and user adoption”, (The Perils of CRM). Often management does not fully
understand the implications of CRM, and thus does not face up to the enormous
commitment of an implementation effort. When the technology goes live and problems
occur, management is ill-prepared and more money is spent doing damage control.
CRM involves adopting all kinds of painful internal changes that companies do not want
to make. “Specifically, most businesses' internal processes lack the consistency and rigor
necessary for today’s CRM systems to be completely effective. In effect, the company
ends up automating – rather than eliminating – bad processes, and as a result, helps the
business run more inefficiently more quickly,” (Berg). Furthermore, the quality of data
is an important aspect of any CRM system. If the company fails to clean up its database
prior to implementation, garbage in is still garbage out.
Companies also need to recognize that complex information systems need to go through
multiple generations of maturity. There is no such thing as an “out of the box” solution.
Furthermore, analysts tout whatever they think CRM should do, but in reality, vendors
are 2-3 years behind that.
Case Study 1: Sales Force Automation Woes
Founded in 1996, Moai Technologies was a small, privately held company
specializing in e-commerce software. Their product initially helped companies run
auctions and reverse auctions. Eventually, electronic marketplaces proved to be less
successful than hoped. Moai realized it needed to expand its customer base and move
into a more lucrative market altogether – strategic sourcing. Its product morphed into an
application that could facilitate multi-leveled dynamic pricing operations, structured
negotiations, and weighted decision-making. The target market was Fortune 1000
companies, as only companies with sales of at least $100 million would be financially
capable of investing in a software application that cost upwards of $1 million. However,
the more streamlined process efficiency and increased supplier competition created by
Moai’s product would, theoretically, save enterprises 5-30% off the cost of their direct
and indirect materials purchases.
Moai’s staff blossomed from 40 employees to 130. The sales department
consisting of a VP, several regional directors, regional sales reps, sales engineers, and
account development reps, grew to 35. The sales department used informal methods to
track sales leads, forecast sales, and document account information. Information relevant
to the sales process was decentralized. The account development team was responsible
for prospecting and lead qualification. Once the lead was qualified, they passed the lead
to the relevant regional sales rep via email or phone. The sales reps would continue to
work with the prospect - setting up meetings, demo-ing product, and nurturing the deal to
a close. Each sales rep was responsible for his or her own sales pipeline. Each quarter
they would enter data manually into spreadsheets, update their forecasts with estimated
revenue and closing dates, and submit this report to the regional directors. The VP would
review the sales progress of every region and report to the executive staff.
This decentralized, manual method of tracking sales cycles worked when Moai
was small. But, eventually management realized that there needed to be more control
over this vital information, particularly as the company was moving into a more
competitive market targeting Fortune 1000 clients. Sales management needed more
visibility into the sales process in order to forecast company revenues more accurately,
and to identify which prospects were hot and needed more fuel. Furthermore, the
marketing department was beefing up Moai’s visibility with expensive mailing
promotions, ad campaigns, and booths on various trade-show circuits. Marketing had a
vested interesting in proving to the executive staff that the ad dollars were being well
spent. Since details on existing accounts, passed leads, and prospects were documented
only in the regional sales rep’s personal files, passing this vital information on to other
interested parties required the owner’s consent and was subject to his or her selective
editing. More disturbing was the possibility that all regional data could be lost if one of
the reps left the company.
Moai tried to address the problem in-house. A marketing employee with some
experience with Filemaker Pro attempted to set up a centralized database that could track
both the marketing campaigns and the regional sales pipelines. The resulting interface
was a dizzying array of code fields, company information, qualifying questions that were
a result of clashing Marketing and Sales department interests. While Marketing relied on
the system to run reports, the account development reps were the ones that had to use the
system daily. Since the system was not set up to support their business process, the
ADRs had to work around many of the useless features in order to get to the vital point of
their task – determining if the prospect was qualified or not. The qualifying questions
that marketing had painstakingly thought up were useless to the ADRs, whose telephone
conversations lasted on average, 2-5 minutes. Furthermore, most ADRs could tell right
away if a prospect was bona fide or junk, without the need to answer that particular set of
questions. Once qualified, the ADRs needed to make sure that the account profile was
prepped for takeover by the regional rep. How to position vital data so that it stood out in
the cluttered interface was another challenge.
However, soon, marketing campaigns for that period generated thousands of leads
and the Filemaker Pro system was unable to handle the deluge. Executive staff decided
to invest in an ASP (application service provider) model SFA. They selected
Unfortunately, many of the same problems that plagued the short-lived Filemaker
Pro experiment continued on to infect the Salesforce.com rollout. Marketing still owned
the implementation process and continued to dictate that application specifications suit
their needs, largely campaign tracking and reporting. Sales executives, still by far the
largest users of the system, were not consulted on what functionality would support their
business process. Unfortunately, that business process happened to involve the
company’s most important goal – software sales.
As before, the ADRs were on the front line, the first to process the raw data, sift
out qualified leads, and set up the company profile to express all the vital details before
the regional sales rep even laid eyes on the account. Marketing wanted to know the status
of every single lead generated by its costly campaigns. As each lead had a price tag,
Marketing wanted the ADRs to process the thousands of leads generated by each
campaign before those leads got cold. Each of the 10 ADRs were given 5000 names to
follow up on. Unfortunately, each inside sales rep can only realistically contact and have
meaningful conversations with 100 people a week. Typically, a lead gets cold after 2
While Marketing had a vested interest in proving to e-staff that the campaigns
were a viable expenditure of dwindling VC funding, the Sales staff were acutely aware
that 90% of those leads were junk. Moai’s e-sourcing software application cost at least
$1 million to implement. A $10 million dollar company specializing in aluminum siding
distribution would never, ever buy the product. The massive database included small
bakeries, local hospitals, auto parts retailers, a convent, a lab rat farm, and a mortuary.
Many of the ADRs felt that their time was better spent researching and calling into
known Fortune 1000 companies than wasting time and money calling small to midsize
businesses. The regional sales reps that they supported were in complete agreement.
The clash between Sales and Marketing goals began to approach blood-feud levels.
Word got around to the executive staff that the sales reps were not using the new,
expensive, SFA system, and moreover, were not following up on marketing leads. The
CEO gave the word, and the entire ADR team was ordered to qualify all marketing leads.
The IT department tracked all calls made by the ADRs to verify that calls were being
made and that leads were not simply being disqualified by hand. The ADRs devised
ways in which to disqualify a lead without actually speaking to the contact identified by
marketing. A 2-minute conversation with the receptionist usually sufficed. “Hi! How
many people are in your company? Five. OK, goodbye!” Disqualified. While the ADRs
were held up in this meaningless process, without any passed leads to follow up on, the
regional sales reps idled.
Additional problems haunted the implementation process. One of the primary problems
was the total absence of a project manager. VP Marketing and VP Sales took time to
direct the progress in addition to fulfilling their primary duties. However, there was a
communication gap between the VP of Sales and the Manager of the ADR team. Primary
user needs were not communicated to the Salesforce.com engineers. Thus, the SFA
system did not accurately support end-user needs.
Moreover, some of the functionality that Moai wanted was not available out of the box or
in customized form. While Salesforce.com was working to address the primary needs of
its customers, certain features would only be available in the next generation of product.
Control of Salesforce.com became a full-on power struggle as Marketing and Sales
continued to jockey for legitimacy in the eyes of e-staff. Unfortunately, nobody won.
Market conditions forced the company to downsize. Marketing was the first to go. Sales
was slowly chipped away. Salesforce.com went through several transitions of its own.
By the time Salesforce.com was working optimally, there was only a skeleton crew left to
enjoy the benefits. In the end, much like a shot-gun wedding, the company’s VC
investors forced Moai to merge with a more viable company in their portfolio.
Four reasons why CRM fails
The difficulties that Moai Technologies encountered in their SFA rollout are typical of
many companies that attempt to implement CRM with little corporate preparedness. The
case vividly illustrates the four primary reasons why CRM implementations fail:
1. Insufficient preliminary planning
• Business processes are not properly analyzed
• Management does not treat CRM implementation as a project with a beginning,
middle, and end
2. Organizational resistance and lack of executive buy-in
• System threatens employees, “dumbifies” jobs, and diminishes executive power
• End-users are not consulted on the project and refuse to participate
3. Bad system architecture
• System does not reflect end user goals
• System does not reflect company goals
4. Poorly defined goals and project metrics
• Over-customization overloads the system
By recognizing these common pitfalls and planning CRM around overarching corporate
goals, companies can mitigate the risks of failure.
VI. A Framework for Successful CRM
In order to be successful with CRM, a company needs to incorporate careful project
management and system implementation into the bigger, holistic picture. This report has
identified eight essential factors in successful CRM strategy.
1. Vision: Successful CRM demands a clear vision, so that a strategy and
implementation can be developed to achieve it. The CRM vision defined as how the
company wants customer to look and feel about the firm.
2. Strategy: This considers the direction and financial goals of the business strategy and
sets out how the firm is going to build customer loyalty or customer satisfaction.
3. Valued customer experience: focuses on the need to seek and act on customer feed
back to create and maintain a successful customer experience.
4. Secure business and technology leaders to each other: Individuals, teams and the
whole enterprise must focus on the goal and constantly communicate what the
business want to the technology leaders.
5. Technology and implementation: Carefully consideration of the application,
architectural issues and integration of the technology. Most organizations that have
successfully implemented CRM have started small, experimenting with many
different pilots before rolling out larger-scale implementations of these new systems.
Train, deploy and support the CRM.
6. Organizational collaboration: Many enterprises believe that implementing CRM
technologies makes them a customer-centric organization. They forget, ignore or
avoid necessary changes to the firm itself. However, internal change is needed to
deliver the required and desired external customer experience i.e. changing
7. Information: Success CRM requires a flow of information around the organization,
providing customer insight and allowing effective interaction across channel.
8. Metrics: Set measurable CRM objectives and monitor CRM indicators to
successfully turn customers into assets. Without performance management, a CRM
program is destined to fail
Case Study 2: Boise Cascade
Boise sells office products, paper, furniture, and technology directly to businesses
through field sales reps, direct mail, inbound and outbound tele-sales, and its Web site.
Boise successfully consolidated its three business units (BCOP, Boise Express and
Reliable) into a single corporate entity. The project, known as One Boise, involved
consolidation of business units and IT systems.
In December 1999, Christopher Milliken, CEO of Boise decided to spend more than $20
million on CRM, believing that this strategy would help Boise stand apart from the
competitors. Boise wanted to offer the most personalized service in the industry and thus
sought to leverage CRM technology to help the company understand its customers better.
Following the 8 Principles of Success
Based on these 8 principles of successful CRM implementation, the One Boise Project
was a success.
Milliken, CEO of BCOP had the vision. He understood that in order to win customers he
needed to serve them better. He wanted customers to perceived the company to be
customer-centric. He was convinced that by collecting and acting on information about
each customer's needs and preferences, the company would be viewed as a value-added
supplier and therefore, helps the company to stand apart form the competitors. Milliken
felt that the potential of a customer-centric business model supported by a central
database was the key to the company’s success.
Milliken maintained a consistent strategy that supported the goal of company wide
consolidation. In 1999, he decided to consolidate the separate business units into one
corporate entity with universal customer support. Only when that was completed did
Boise move forward with the CRM technology investment
3. Valued customer experience
Based on the goal to serve customers better, the company tracks all customer preferences
and complaints. By using this data, Boise intends to create a better customer experience
and better support system.
4. Secure business and technology leaders to each other
Many technology projects fail because of lack of communication between business and
information technology managers. Boise tried to maintain clear channels of
communication from the start. One of the first things that the company did was to bring
together an executive steering committee to involve leaders from throughout the
company, seeking their input and suggestions for the project. They also used outside
consultants and experts.
In March 2000, Boise hired KPMG to help select CRM, computer telephony integration
(CTI) and campaign management software. KPMG also assisted Boise in integrating that
software with the systems they are currently using and with a new, central customer
database. The central customer database would let the company capture customer
interaction data from every customer touch point—a call center, a field sales rep, the Web
—and store it all in a central place. This would give the company a single, integrated
view of its customers, a much sought-after goal that less than 10 percent of large
companies have achieved. The company also used another group to help refine its
business plan and marketing strategy and assist with change management.
5. Technology and implementation
The company set aggressive deadlines for the One Boise project. In order to minimize
the risk of errors, the system was rolled out in phases, rather than all at once. Boise chose
4 software providers that would support their strategies: Clarify for CRM software,
Epiphany for marketing campaign management and analytics tools, Cisco Systems for
computer-telephony integration tools, and Harte-Hanks for its Trillium software that
facilitates the transfer of old data into new central databases. The company started
piloting the CRM and CTI software and one month later, rolled out the CRM and CTI
software to its six customer service centers.
6. Organizational collaboration
Boise company's leaders had to spend a lot of time managing the change. Executives had
to rethink job descriptions in light of new processes, which resulted in several hundred
changes in titles and reporting relationships. Employees were prepped early on for the
transition. All employees saw a video of introducing One Boise in early 2000, followed
by a series of newsletters. Executive officers, managers and all 1,200-field reps at the 46
distribution centers attended a six-hour One Boise immersion session; field reps also took
part in a follow-up web cast. All 1,500-customer service reps got 30 hours of training on
Clarify. Because communication and training was critical, Boise’s senior management
planned for extensive employee education, communication and overall change
Boise knew that in order serve their customers better, the company needed to consolidate
customer data and allow wider access to that information. To support this objective the
company invested in a single, unified customer database with company wide access.
8.Metrics and performance
Boise continues to assess the impact of its CRM project. Boise executives realize CRM is
an ongoing process. Performance has been successfully measured. Gross margins are
back up after a two-year decrease and sales are up for Boise's most valuable customers.
Moreover, the company implemented the first phase of One Boise within 1 percent of its
budget and six weeks of its target deadlines. Boise is on track to save more than $3.5
million annually, but more important than cost savings, customer retention has risen
dramatically since the CRM project launched.
Indeed it is possible to have a massive, enterprise-wide CRM implementation succeed.
Usually this requires a well-planned, corporate-wide initiative, with many hours of
employee preparation and training. However, any kind of large-scale corporate-wide
initiative involves such tremendous human effort, wide-spread departmental support, and
willingness to restructure, that it is no surprise that only 30% of the companies
implementing CRM do succeed to get the system running and derive measurable benefits.
CRM is not very different from ERP, SCM, and TQM. In fact, they all have one thing in
common. They are massive, overarching information systems that seek to integrate many
business functions under one umbrella. Due to the specialization of each enterprise’s
business processes in different industry, none of these systems are ever implemented in
their “out of the box” form. Teams of consultants and systems integrators are brought in
to customize the software. In doing so, the original technology is significantly altered
and often made unstable in the process. Since the base technology is significantly
changed, the original software vendors are no longer able to provide support for the
system. Problems that arise are then extremely difficult to mitigate. Downtime is usually
While the market for CRM is expected to reach at $76 billion by 2005, excitement over
the massive, enterprise-wide CRM “solution” has cooled. However, CRM is evolving.
The philosophy of CRM is still very important for corporate success. Moving forward,
we feel that CRM will be broken down into individual modules that address specific
functions. Those modules can be implemented on a departmental basis. Sales will roll
out the SFA system. Marketing will have its marketing management and campaign-
tracking tool. Customer support will have its call center application. These individual
modules will still connect to a central database. While the modules will be able to
communicate with each other, they can be installed on a piecemeal basis, as opposed to
all at once. Furthermore, if one system encounters difficulty, this will not necessarily
create downtime for the other systems. CRM have more flexibility under this
arrangement than as a behemoth application. However, only time will tell what CRM
will look like 10 years from now.
Berg, Howard. Avoiding the Stresses After CRM Installations. Computerworld: Jan. 15,
Ericson, Jim. The ''Failure'' of CRM. Line56: Thursday, August 02, 2001
Garcia, M et al. The Perils of Ignoring “Systems 101”. Communications of the
Association for Information Systems. Vol. 8, 2002.
Gomes, Lee. Siebel Hopes Government Will Choose Its Software for the War on
Terrorism. Wall Street Journal: Apr. 22 2002
Various. The Perils of CRM. Butler Group OpinionWire. November, 2001
Interview with Susan Grabicki, SFA consultant
Appendix A: CRM snapshot
Internal and external customers of any organization
Product and service
After sales service
Improve customer value
We have divided the business process as below:
Call Center Management
Online customer help
Customer tracking management
Call center management
Customer calls the toll free line
The call goes through an automated screening process with various options
The caller selects the options
If the desired service is not available then the caller selects the option to speak to the
customer service representative
The customer service representative attempts to solve/records the customer’s problem or
directs him/her to a representative in the required department.
Customer ends the call once he/she is served.
The system records the call information
Online customer management
Customer logs onto the website of the company
Customer clicks on the online service icon
He can then choose between 3 options: Online chat with customer service representatives
(CSR), make a internet call to CSR or post an email question to CSR which would later
get added to the systems FAQs list.
Incase of online chat, the CSR tries to solve the problem or redirects the client to the
concerned person. Incase of the email, the client emails the query and then the system
redirects the email to the concerned person. Incase of the Internet phone call, the CSR
tries to help or redirects the client to the concerned person.
Customer Tracking Management
Sales representative logs onto the system.
He / she then finds the desired the customer and opens the history of the customer.
He then tracks the data and sees where the customer stands – whether it’s a current
customer or a potential customer.
He / she then does the follow-up with the customer as required.
Internal and external customers
Customers relation supervisors and staff
Sales and marketing staff
Sales information: Number of units of each product sold to customers in a given area and
in a given period. Highly saleable product of the company.
Customer data: Customer details like address, name and the product interested in or
Customer satisfaction surveys: The level of satisfaction of customers towards different
Product information: Different products available and there specifications.
High speed network cable
Provide better customer service
Make call centers more efficient
Cross selling of products more effectively through use of system
Simplify marketing and sales process
Discover new customer
Technical infrastructures (network)
Human infrastructure (customer relations staff)
Legal aspects of data management
Appendix B: Siebel’s CRM Application Package
Siebel developed and sells CRM software called Call Center7 (CC7) which it uses run its
own CRM initiatives. While many CRM applications are viable only for large
enterprises, due to cost and need to manage enterprise wide complexity, the CC7 is a
package is designed to work for small and medium size Business units (SMBs), as well.
Most CRM packages implemented by SMBs fail in some way. Most CRM systems are
extremely expensive and only within reach of large companies. Since these applications
are, furthermore, highly complex and expensive to maintain, most SMBs do not have the
economies of scale to handle large enterprise CRM systems.
Three factors associated with CRM and why small to mid-size companies hesitate to
1. Complexity: SMBs think that CRM requires a complex development and deployment
stage, which take several months to a year. Maintaining such a system requires a
separate IT department to run and is resource intensive.
2. High Cost: Some companies think that CRM is only for those with unlimited
resources. That it is an expensive process and would consume enormous resources
without a measurable return.
3. High Risk: No guarantee of success. According a Gartner group report, over half of
all CRM projects fail to produce the results.
The main goal of any CRM software is to improve productivity in measurable terms, cost
efficiencies and customer satisfaction. The CC7 includes modules for inquiry processing,
campaign management, lead follow-up, customer quote and order forecasting and media
Functions of CRM according to Siebel Systems
• Customer Relationship
• Revenue Forecasting
• Deal closure probability based on data analysis
• Automatic Quoting: Accurate and complete
• Multiple Price List, Volume Discount and complex pricing rules.
The CC7 is employed by Siebel to run its CRM. The CC7 is spread wide and works
under a big spectrum. We would analyze the inquiry-processing module of CRM, where
the customer calls the call center for a query. Though the inquiry can be made through
the phone, email, Internet, web chat, we would analyze the phone inquiry.
1. Customer calls the toll free Call Center number
2. The system routes a call to the next available representative or if the extension is
dialed in, the call will get routed to that extension.
3. Customer details with all customer information pops on the screen in front of the
customer Relationship representative answering the call. Before the call is answered,
all the customer details are in front of the Customer Relationship Representative so
that the representative knows whom he/she is talking to and a brief history of the
4. Customer asks a question.
5. The representative tries to answer. If the representative cannot answer, she / he
transfers the call to the concerned person. The same customer detail screen pops up
whereever the call is transferred so that, who ever talks to the customer, knows the
history about the customers.
6. Call is disconnected and ready for the next caller.
We presume that all customer data like, name, address, contact details, product bought in
the past or shown an interest in, etc. is already fed into the system when the first contact
is made with the client. The data is fed into the system by the customer relationship
representative or by the sales staff depending on the input location. The input locations
are sales and customer relationship. If a new client calls in, then the customer relationship
representative takes down all the details of the customer before proceeding with the
This is one of the basic functions of the CRM. It addresses customer complaints and
queries. It can also be a point of initial contact with the customer and the data can be
passed onto the sales staff to follow up on leads.
The pitfalls of the system are that callers may not like to talk to automated voices and
would rather prefer real time conversation with humans which may not be possible at all
times. But to date the system has been successful with Siebel due to the following
The project is developed in house for sale and is being used by them. Since Siebel
develops software themselves. They have their own employees taking care and
maintaining the system. It’s cheap for them to run it and beneficial since they get to test
the system in real working conditions and suggests upgrades to their development teams.
The feasibility study was done in house before implementing it. The project was planned
with users, customer service representatives, management and the development team
The software was developed for their clients and is used for their own CRM. All
hardware and installation was in place to implement the project. The system is tested all
the time and a part of the development team closely monitors the implemented CRM
software to make sure it runs properly and to remove any bugs. The system is
programmed and tested in-house and there is no outsourcing. Since a lot of investment is
saved in outsourcing the development and implementation of the project, that saved
money is invested in training the staff on the software which makes the Siebel customer
service representatives one of the best trained staff in their field. The in-house developers
carry out ongoing support and maintenance continuously.