Facing Up to Global CRM

Getting a worldwide view of customers can pay off but is also challenging

It began with some innocent sales talk over drinks and munchies at a warehouse opening party in a Columbus, Ohio, business park for eyeglass parts manufacturers. After a few rounds, Mike Heilman, then vice president of sales at shipping and supply chain services provider Airborne Inc., and officials of a large U.S.-based Airborne client exuberantly agreed that Airborne would be a great choice for handling the manufacturers European as well as its American business.

Back at Airbornes Seattle headquarters, when Heilman told the companys international sales officials about the potential deal, one of them pointed out that Airborne was already doing lots of business with the eyeglass maker in Europe. As Homer Simpson would say, "Doh!"

That executives at two large enterprises might be unaware of whom their companies were doing business with in Europe is not a unique story, experts say. While many organizations have spent the last couple of years and lots of money deploying CRM (customer relationship management) systems to better identify and cater to their best customers, few have, so far, taken the next step: extending CRM to encompass global operations and customers. Until now. According to Sue Handman, national solutions practice director for RCG Information Technology Inc., in Edison, N.J., her consulting company is regularly hearing from multinational companies wanting to expand their CRM efforts to include all their offices worldwide.

But, experts caution, enterprises attempting to deploy CRM globally will face daunting challenges. In many cases, international subsidiaries use different business processes and customer data formats and definitions than domestic operations, so global CRM will often require re-engineering and data cleansing. Then theres the language issue. Not all commercial CRM products support a wide array of languages, so global deployment may not be possible. At the same time, enterprises collecting customer information globally will face a variety of privacy regulations, some of them quite restrictive.

Because of these challenges, said Esteban Kolosky, an analyst for Gartner Inc., in Stamford, Conn., "No global company has managed complete CRM, and it will be a long while before anyone does."

As a result, experts say, enterprises contemplating global CRM should keep their initial efforts focused on a specific and solvable problem such as SFA (sales force automation). And, in the case of large, fast-growing multinationals, the idea of a single, integrated repository of customer information may simply not be practical.

If enterprises attempt to globalize everything at once—SFA, marketing and customer service, for example—they could easily wind up in a CRM quagmire, RCGs Handman said.

"Ive seen numerous multinationals that are three years into a five-year CRM project," she said, "trying to get things perfect, while the department that desperately needs CRM still doesnt have it yet."

One Step at a Time

thats exactly the kind of situation Airbornes Heilman wants to avoid. For the first phase of the companys global CRM efforts, Airborne is concentrating only on SFA, said Heilman, who is now the vice president and general manager of Airborne Logistics Services in Seattle, a division of another Airborne subsidiary, ABX Air Inc., of Wellington, Ohio. The new software system for that global SFA deployment, provided by Onyx Software Corp., of Bellevue, Wash., goes live this week.

Each Airborne salesperson—covering all subsidiaries, including international sales representatives based in foreign countries—will have complete visibility into all sales activities by accessing the application through an Internet portal. The total cost to date, including training and licensing fees for 700 seats: $3.5 million, which is slightly below what the company budgeted for the project, according to Heilman.

The payoff for that investment, he said, is that Airbornes sales staff will be better able to coordinate its approach to customers and keep them happy. In the past, with no integrated view of global customer activity, Airborne has had a segmented approach to customers. And that has led to Airbornes being, if anything, too attentive.

"Customers have told us they might get calls in one day from sales reps in warehousing, in supply chain management, in freight," Heilman said. "Theyve told us that they want just one face."

Airborne is now making sure all salespeople worldwide have reliable Internet connections and that the Onyx system is easy for all of them to use.

For the next phase of the project, Heilman said the company would like to use the Onyx application to manage the customer service department database as well. That way, a salesperson could easily access information on any service issues customers may have anywhere in the world before going into a meeting with them. No date has been set on the project, he said, partly because the current legacy system for customer service has been working well. But Airborne is in the process of creating some portal links to give salespeople some visibility into customer service in the meantime.

The company has also managed to sidestep any possible language barriers by mandating that all sales activities be conducted and recorded in English.

Think Globally, Act Locally

for at least one large enterprise with rapidly growing international operations, while a global CRM strategy is critical, creating a single repository of customer information has turned out to be impractical. In just the past 10 years, General Electric Capital Corp., of Stamford, for example, has expanded its global operations mainly through numerous acquisitions. Today, the company is doing business in 32 countries, dealing with a total of 24 languages.

This rapid growth rate has made a global CRM strategy indispensable to the company, said Shaun Coyne, chief technology officer at GE Capital.

"At this point, weve reached critical mass," Coyne said, "so we must cross-sell and upsell to customers in order to keep growing."

But to find the right approach for global CRM, some tough lessons had to be learned along the way, he said. The main one being that having in one place a 360-degree view of all your customers all over the world is not only impossible, it may not be needed. Back in 1995, GE Capital actually started a plan to build a central data repository in the United States where customer data from all its subsidiaries would be stored and analyzed, Coyne said. But problems became apparent rather quickly.

First of all, the company kept running into foreign consumer privacy regulations that restrict exporting certain customer information to the United States. Unlike the United States, many other countries—particularly in Europe—have strict laws on what details of an individuals personal information and credit history can be moved beyond his or her own countrys borders. These laws vary so significantly from country to country that its nearly impossible for a financial company offering broad services to develop a consistent policy about use of private customer data, Coyne said. Therefore, before transporting data out of a foreign country and into the United States, GE Capital faced a costly and lengthy process of stripping the data of any personal identifiers, he said. (For more on dealing with privacy laws, see story on Page 41.)

Of course, all the effort being expended might have been OK if it had turned out to be worth it. But, according to Coyne, it didnt yield the results the company was seeking. Thats because data analysts in the United States proved less proficient at interpreting the customer data than in-country analysts familiar with the local culture.

"[For example], no one knows the Hungarian market like the Hungarians," Coyne said.

There was also the issue of language, particularly when it came to his companys subsidiaries in Asia, Coyne said. For example, one centralized data warehouse would have had to manage double-byte languages, such as Japans kanji, as well as English.

Ultimately, Coyne said, the company decided it was less expensive and more efficient to allow its subsidiaries to manage their own CRM databases, especially with hardware prices steadily dropping. GE Capital eventually abandoned the idea of one central repository and now keeps data repositories in each country, although the company does attempt to get each international subsidiary to use a standard CRM methodology. When an offshore company is acquired, GE Capital sends in a team to introduce the new companys executives and IT people to its CRM methodology.

Though GE Capital prefers to use CRM software from SAS Institute Inc., of Cary, N.C., it doesnt require a new acquisition to switch to SAS if it already has a CRM system in place, Coyne said, unless the team concludes that a switch will be beneficial.

"We make sure that the right tools are up and running," Coyne said. "First, the cost is paid centrally [by GE Capital] and then eventually by [the subsidiary] once the CRM system is recouping its cost."

Of course, this approach doesnt give GE Capital a single worldwide view into all customer activity. But Coyne said the parent company doesnt need that detailed a view of all its subsidiaries customers. What matters, he said, is that the people running each subsidiary have that detailed view.

Of course, smaller operations are having a much easier time satisfying their global CRM needs, mainly because those needs are fewer and less complex. But even they are starting small and focused.

Take Polycom Inc., a telecommunications equipment provider in Milpitas, Calif., whose customers are 200 resellers from around the world. Polycom is kicking off its global CRM push by focusing on customer service. The company is answering inquiries from global customers by giving them special access to a private information Web site using software provided by Kana Software Inc., of Redwood City, Calif.

Partners log on to the site to submit questions or search a database of frequently asked questions. It sounds like a simple-enough system, but it took Polycom six months after purchasing the software to build a database of FAQs that it felt would work for customers in many different countries.

Right now, said Ardeshir Falaki, senior vice president and general manager for Business Solutions and Services at Polycom, the idea of building a complete, multifaceted global CRM system seems a long way off.

Also kicking off a multinational CRM push by focusing first on customer service is London-based EasyRentacar Ltd., a small but quickly growing rental car company of 240 worldwide employees with customers in England, Spain, France and the Netherlands.

The company has a business model that Henry Ford would have loved: Customers can rent only one type of car, a Mercedes (sorry, Henry), using only one method for booking—the Internet. And e-mail is typically how customer service reps receive and address customer inquiries. Not surprisingly, by the middle of last year, the companys customer service staff of 20 was being inundated by e-mail inquiries. Customers had to wait as long as a week to get responses, said EasyRentacars chief technology officer, Phillip Jones. Even more frustrating, the customer service department was typically getting asked the same types of questions over and over—such as whether the company rented out other types of cars.

The company decided to try a hosted, Web-based, automated customer service product from RightNow Technologies Inc., of Bozeman, Mont. The Web hosting company built EasyRentacar four language sites. As a result, instead of needing to hire more staff—not an easy thing to do, since EasyRentacar likes to hire only support staffers who know all four languages—the company has sites with FAQ pages that automatically list the most frequently asked questions and by order of highest frequency. The company monitors queries and comments for new product ideas.

If only all global CRM issues could be solved so simply. Before large multinationals can be expected to try rolling out more comprehensive global CRM systems, however, a few things still need to happen, Gartners Kolosky said.

First, CRM vendors need to add a wider variety of language capabilities to their programs. Youll find most CRM vendors offering at least the top European languages—French, German and Spanish. But few support a language as challenging as, say, Hebrew, which could be tough for a business with a customer base in Israel, Kolosky said.

Second, experts say, multinational companies will need a better understanding of what customer information theyre permitted to collect and export from which countries and where, for example, the use of Web browser cookies are permitted.

In the meantime, experts say, stay focused on fixing your global customer issues bit by bit. Said RCGs Handman, "Look for the low-hanging fruit first. Dont think you can solve all the companys customer problems in one shot."

But, at least by solving the easier global CRM problems first, you might be able to recognize a customer if you bump into one at your next cocktail party.