The global
research survey, conducted to understand the attributes and strategies
that characterize successful CRM initiatives, found the two approaches
most consistently cited as requirements for success were 'change management'
such as training employees to use CRM processes, tools and policies; and
'process change' such as involving employees in the process of designing
and changing CRM activities. When done correctly, these steps drive commitment
to CRM throughout the company, which translates into sustained value.
The survey
points out key faults which can cause CRM projects to fail or prevent
delivery of expected return-on-investment. In most such cases, companies
rely too heavily on technology systems as a panacea or organizations down-play
the importance of senior management buy-in, which leads to lukewarm adoption
by employees.
For those
companies struggling, study results provide clear guidelines indicating
that with the correct focus and commitment companies can significantly
improve CRM performance. While the requirements for success seem clear,
acting on these steps is no small task, which may explain why many companies
have difficulty implementing them. Today, fewer than 15% of global companies
believe they are fully succeeding with their CRM initiatives, and another
20-to-30% are having only some success.
The survey
reveals that a radical redeployment of CRM initiatives is underway. Many
companies are looking to CRM to improve their performance and grow their
business overall. Over 50% of companies believe that CRM is "relevant"
or "highly relevant" to improving performance from a shareholder
value perspective. Approximately 65-70% are looking to CRM to deliver
revenue growth by improving the customer experience and retention, and
influencing the development of new products and services.
"This
report illustrates the value of CRM and the lessons learned over the past
several years that have enabled companies to become much more successful,"
said Adam Klaber, Partner and Global CRM Leader, IBM Business Consulting
Services. "Increasingly, business models need to be built upon the
virtues of flexibility, real-time responsiveness, and a laser focus on
the customer. A successful CRM strategy is at the heart of this business
model."
"At
BCAA we understood early on the importance of engaging our employees in
understanding the business drivers of our CRM transformation program and
the linkages to our overall organizational goals," said Bill Bullis,
Chief Executive Officer British Columbia Automobile Association. "This
study reveals the great promise of CRM in driving customer value and increasing
organizational performance when it is done correctly. In the end making
CRM effective comes down to culture and creating broad acceptance and
adoption."
"Our
CRM efforts have helped us to offer unique services and products to our
customers based on a clearer understanding of their needs, values and
expectations. This approach is the basis for all successful CRM programs,"
said Kelly Bost, Vice President, Business Development Group, Manulife
Wood Logan. "IBM's survey findings are significant because they confirm
the very critical role CRM initiatives play in transforming a company
culturally, structurally and strategically."
The survey
was conducted by the IBM Institute for Business Value, a part of Business
Consulting Services. In late 2003 and early 2004, IBM surveyed 373 senior-level
or above management decision makers or influencers at a mix of small,
medium and large enterprises, to understand how companies attain CRM success
and achieve significant return on investment. The findings are available
in a detailed report titled The CRM Global Study -- Doing CRM Right and
an Executive Guide outlining the five success factors required for companies
to alleviate transformation risk and optimize CRM practices.
Additional
BCS Survey findings:
CRM should
be run at the corporate level or with a cross functional perspective.
Nearly 75% of companies manage it at the functional level, such as Marketing,
Sales, IT or Customer Service; only 25% of companies run them from corporate,
where a senior level team typically spans multiple functions and business
units. When corporate units or cross functional groups run CRM, there
is a 25-60% greater chance of success.
Senior management
in over 35% of companies impede CRM success by portraying it as useful,
but not critical. When senior management views CRM as critical or strategic,
it is a major contributor to overall CRM success. Viewing CRM as useful,
not critical actually detracts from success because it sends the message
to employees and middle management that CRM is not a priority.
Over 75%
of companies do not realize returns on CRM initiatives because they do
not fully use CRM once it is implemented. Only 14% of employees fully
use CRM. This is due in part to companies' underestimating the value of
stakeholder alignment. Companies that are most successful are those that
align CRM objectives with the priorities of employees. Surprisingly, aligning
CRM objectives with the priorities of customers is a close second. Yet
only 21% percent of responding companies view employee alignment as very
important to CRM success.
The CRM survey
findings reinforce today's CEO agenda and provide a more granular view
of specific tactics organizations are taking to meet future growth initiatives.
IBM's recent Global CEO Study 2004 included more than 450 in-person interviews
with CEOs, revealing their renewed focus on revenue growth. Many believe
this growth will come from new products and services, new markets, and
greater customer intimacy - and CRM is clearly instrumental to all of
this. Eighty-percent of CEOs surveyed cited the ability to respond rapidly
to changing market forces as a high priority in the coming years; and
the target most often cited was the customer. More than 50 percent of
CEOs responding feel they need to do a better job capturing and understanding
customer information rapidly in order to make swift business decisions.
A successful CRM strategy is central to all these opportunities.
About the
IBM Institute for Business Value
The IBM Institute for Business Value develops fact-based strategic insights
for senior business executives around critical industry-specific and cross-industry
issues. This executive brief is based on an in-depth study created by
the IBM Institute for Business Value. This research is a part of an ongoing
commitment by IBM Business Consulting Services to provide analysis and
viewpoints that help companies realize business value.
About IBM
Business Consulting Services
With consultants and professional staff in more than 160 countries globally,
IBM Business Consulting Services is the world's largest consulting services
organization. IBM Business Consulting Services provides clients with business
process and industry expertise, and the ability to translate that expertise
into integrated, adaptive, on demand business solutions that deliver bottom-line
business value. For more information visit www.ibm.com/bcs.
For more
information on IBM's on demand strategy, visit http://www.ibm.com/ondemand.
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