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Business process improvements, customer relationship management and business analytics are high on CIOs' to-do lists this year.#2: Customer Relationship Management">
Project #2: Customer Relationship Management
Participants: Shared by technology and business units.
Price tag: Streamlining a process might cost as little as $50,000. A global CRM rollout at a big company could cost $50 million.
Time line: Payback usually comes in two to three years.
One measure of CRM's growing stature is that professional services firms like Deloitte, Infosys and IBM have been turning away prospective clients. "A lot of the vendors' professional practices are sold out," says Isher Kaila, who covers CRM for research firm Gartner. "This is a boom time."
Why now? There are a couple of reasons. Merger activity has put customers up for grabs in some industries. And then there's the impact of globalization and the Internet, two things that have put new power into customers' hands. Companies are doing whatever they can to keep customers in the fold, rather than risk losing them to a Web site that can provide the same service faster, cheaper or better.
Despite all the excitement, one in three CRM projects still fails, Gartner says. Aware of this, many companies are getting smarter about their tactics.
In particular, some are opting to do more prototyping and more pilots as proofs of concept. "Organizations are very shy about committing to multiyear, multilevel CRM road maps," Kaila says. CRM is now happening in "more bite-sized chunks."
Software-as-a-service offerings, including those from Salesforce.com, are another thing that is making CRM implementations simpler and improving ROI. For instance, Amicas, a Boston-based company that provides billing services for radiologists, is using its Salesforce.com system not just to track its business but to do customer satisfaction surveys. "The detail we can get back out of it is great," says Nancy Elliott, manager of client services for Amicas' financial group.
But companies shouldn't make the mistake of assuming that their initiatives are a success just because CRM has become easier. "Just because you can talk to more customers and engage more customers doesn't mean you can increase business value," Kaila points out. "At the end of the day, you have to drive profitability."
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