Three Strikes, You're In: Succeeding at Last
The failure rate in implementing information systems that manage companies' relationships with their customers can be shockingly high. A recent Gartner study said more than 50% of such CRM projects fall short of meeting business objectives.
BMC Software of Houston, a $1.5 billion software company, is an ideal example of how difficult it is to pull off a sales force automation project, one of CRM's toughest variants. Face it. Anything that gets between highly-motivated direct sales people and their quotas meets a miserable death.
The company succeeded with a Siebel Software deploymentbut only after two abortive attempts in 1994 and 1996. "When you mentioned 'Siebel' in the hallways, people would groan. They'd paint a target on your back," says BMC's Director of CRM Mark Meyer, of the first two efforts.
He estimates that this kind of softwareaimed at improving the ability to understand customers and their needsfails four out of five times, the first time around.
As one of Siebel's earliest customers, BMC forged ahead with a system to help 300 North American sales personnel in 1994without consulting the system's eventual recipients. Usage climbed to 50%, then fell back and steadied at an abysmal 30%. Users didn't want it because, among other problems, data was too unreliable.
"The contact database couldn't tell you if M.J. Fox was the same as Michael J. Fox and J. Fox," Meyer explains.
Heartened by the misimpression that all users needed a few more features and cleaner data, BMC took another stab in 1996. The result was the samelow usage, this time partly because of buggy software. And again, executive and grassroots support at the sales level was lacking.
"Using the system was like driving a car with a steering wheel on the wrong side," says Marvin Roush, a BMC account manager who quietly counted himself among the 30% who tried to stick with using the system.
BMC waited until November 1999 before going at it again. Incredibly, Siebel was chosen yet a third time. But this time around, BMC addressed the concerns that were overlooked in the doomed implementations, according to Meyer and a Gartner case study on BMC. This time:
BMC, Meyer says, spent more than $10 million on the third effort and expects a return in the neighborhood of $70 million over 2 to 3 years. Now 98% of sales reps are using the system, increasing their leads and converting more leads to sales.
Meyer tracks the resulting productivity increases. Sales reps, he claims, have recouped an average 17% of their time. The biggest portion, 7%, comes from electronic collaboration with customers. Vigilance over systems performance gets another 2%. Electronic price quoting and invoicing won back 1%.
Salesman Roush, who has 40 accounts in Oklahoma and Texas, figures he can now support about 25% more customers, which can yield a commensurate hike in personal income. "I don't have time enough to figure that kind of stuff out, but I did make Sales Club (BMC's distinction team). My job is to sell," he says.