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With implementation failures pushing as high as 60 percent, CRM suppliers are turning to home-grown services as a way to help customers through the complex and lengthy customer relationship management process.
Siebel Systems Inc. next month will launch a business unit called eBusiness Consulting. Separately, Onyx Software Corp. is seeking to differentiate its CRM offerings through services garnered in its acquisition last month of consulting company RevenueLab.
From its beginning, the promise of CRM has been to provide companies with a means to sell to and service their customers across multiple channels, analyze their behavior, and plan marketing campaigns that will keep them coming back for more. But because of the complexity surrounding implementations, exaggerated expectations and an unwillingness by many companies to make the organizational changes necessary to carry out CRM projects, success seems to be elusive.
Gartner Group Inc., of Stamford, Conn., estimates that 60 percent of CRM software implementations fail. New York-based Ernst & Young LLP says more than half of all companies cant even measure the return on investment theyre getting from CRM projects.
Enter a new commitment by CRM software vendors to walk customers through the implementation process—personally. Siebels eBusiness Consulting unit will recommend technologies—its own as well as other companies—to help the companys customers map an e-business strategy that will deliver a consistent experience to customers.
The consulting services will focus on creating, integrating and optimizing sales and service channels, and they will promise results in as little as 60 days.
Officials at the San Mateo, Calif., company declined to say how far the consulting business will go to replace services already offered by the Big 5 consulting companies and local resellers it has traditionally depended on.
For its part, Onyx, of Bellevue, Wash., is folding RevenueLab into its operations to offer consulting services focused not so much on physical implementations as on improving its customers implementation strategies, methodologies and vision. Its also focused on changing the corporate culture at some companies to make them more customer-centric.
Onyx may be on to something, according to Nelle Schantz, who oversaw CRM implementation projects at First Union Bank Corp. and who is now chief CRM strategist at SAS Institute Inc., in Cary, N.C.
“Its not just about technology; there has to be a cultural change from being a product-focused organization to a customer-focused organization,” Schantz said. Companies focused solely on their products miss out on the cross-selling and upselling opportunities at the heart of increasing a customers lifetime value, she said.
But changing the culture is just one part of the CRM implementation equation. Many difficulties with CRM implementations revolve around business processes, according to Atle Fjeld, senior vice president for engineering and CIO of TheSupply.com, which uses Siebels Call Center and eService applications.
Fjeld said it is important for managers to take ownership of the CRM system because the owner of the system sets the business processes that the system will use and that the employees must follow.
Fjeld also noted that many companies try to move too fast on CRM, wanting immediate customization and expansion of the system. A better approach is to start out with a core group of basic applications and extend them to a large number of users, then deepen use of the system as they go along.
“Companies spend too much time trying to modify their systems to get them to do things theyre not designed to do,” said Fjeld, in San Jose, Calif. “People want to change the system instead of learning it.”
Buying implementation services from the company that sells the software will likely make it easier to do limited rollouts and reduce finger pointing between consultants and developers when software doesnt work.
“Consultants literally get paid to overcomplicate CRM implementations,” said Michael Ladato, vice president of marketing and business development at San Francisco-based DigitalThink Inc., which uses Siebel Sales, MidMarket Edition. “They dont want you to do an initial implementation with only three features. Theyll lead the implementation down a complicated path for the sake of fees.”
Not all CRM companies are looking to expand internal consulting services. E.piphany Inc., though it has its own professional services organization, plans to continue to rely heavily on its partners, which take the sales lead on half its deals.
The San Mateo company is increasing the complexity of its own suite with the purchase of CRM developer Moss Software Inc. and Radnet Inc.s sales portal technology, both of which were announced last week.
While welcoming the new vendor services, Giri Durbhakula, program director for knowledge management at PC maker Gateway Inc., thinks Siebels and Onyxs consulting arms will need to coexist with the companies business partners.
“The Big 5 [consulting] companies are focused on interoperability,” said Durbhakula, who is overseeing a multimillion-dollar CRM project involving software from a half-dozen vendors. “Siebel may be able to tell you best how to get the most out of Siebel, but the Big 5 companies can tell you best how other products will work best with your Siebel system.”
San Diego-based Gateway still has a way to go before its CRM system will run as seamlessly as needed, Durbhakula said. It wont likely see any return on investment for five years.
“If you asked me if our systems were truly talking together, the answer is no,” Durbhakula said. “Were getting there, but were taking baby steps before we take big steps.”