It's fashionable to say that good customer relationship management (CRM) isn't that much to do with technology--that it's more about attitudes to customers and building people-friendly business processes.
"Many executives automatically assume that CRM has to be technology intensive. It doesn't," wrote Rigby, Reicheld and Schefter in February's Harvard Business Review. That message was echoed by several speakers at the CRM Summit in Warwickshire, U.K., in February. Professor Adrian Crane, director of the Centre for CRM at Cranfield, allows some credit for technology, yet says, "80 percent of the expenditure is on IT. Yet this represents only 25 percent of the success factors."
It's interesting that this view is frequently voiced at business technology gatherings, or in papers that ride on CRM's status as e-business flavor of the month. In this sense, CRM is an easy target for those that want to knock it down--imply that it is not real, a ruse by software companies to extract more cash from businesses, or that CRM existed long before Siebel and others married sales automation databases with call center systems.
The "technology is not the issue" view has been overstated. CRM is about the technology. To suggest that it is not is like arguing that spreadsheets didn't represent much that was new or innovative to accounting because ledger books already listed numbers in horizontal columns.
It is inconceivable that a modern multinational corporation could set out to introduce a measurable quality threshold for customer interactions across a range of platforms (phone, Web, e-mail, paper mail, face-to-face meeting) without a raft of software and hardware technologies being put in place first.
Good CRM installations are built to do much more than manage communications contact points with customers. They form part of a suite of e-business applications that are interconnected, helping to ensure that the quality of the service or product itself is good enough to keep the customer happy. To characterise modern CRM purely as customer communications systems is to deliberately misrepresent them.
There are problems. Arguments over the return on investment value of e-business and the difficulties and expense of deployment continue to rage--but the best CRM architects are building deep systems that form part of the firms' entire business process and its final output for customers.
Consider some examples: Audi is building a "myAudi" Web-based CRM plaform for its owners, enabling them to view a site that is personalized to the exact model of car they own, E.piphany offers its clients analytical tools to study customer interactions and make "predictive" suggestions to call center operators when they are online to customers, SAS is using its technology to help manufacturers control and predict warranty costs in real time--and obtain a holistic view of their after-sales service operations. Almost all CRM vendors are building tools to communicate with customers across several platforms--and in real time. All of this so manifestly is about the technology that it requires a semantic somersault to suggest otherwise.
This attempt to diminish CRM's importance in the modern e-business architecture can be seen in the wider context of an attempt by some academics to discredit the productivity gains won through the deployment of various business technologies in the "long boom" of the 1990s.
The Luddite camp is sustained by McKinsey, which produced a report last year claiming that the growth in U.S. productivity between 1995 and 1999 was generated in just six of the 59 market sectors and that overall, the IT investments by corporate America in this period failed to produce a return. It's really the subject of another column--and stay with me because I'm coming back to CRM soon--but just put the numbers to one side for a second and ask yourself this question: Do you think your company would be more, or less competitive, without a range of modern business technologies--the same technologies, in other words, that all of your competitors have?
It was, and still is, an arms race. For executives taught by their business schools to see the competition as the enemy and to keep a copy of Sun Tzu's The Art of War as bedside reading, laying down the high-tech arms was never going to be an attractive option. Even had they wanted to do it, what should they have given up? The cellphones? The notebooks? The VPNs? The firewalls? The HR software? Can you honestly say that this would have made their companies more competitive and boosted shareholder value?
In a modern economy, where the majority of the commercially active population is both online and connected to a mobile phone network, the smart company will develop systems to communicate with customers using all of these platforms.
Customers want value from each interaction with an organization, and they keep a scorecard. Sure, smiling and saying "have a nice day" is important--but not nearly as important as having systems in place that enable your staff to see all of a customer's account details in front of them, and be prompted by predictive engines that have previously analyzed similar customer behaviour, so that the quality of the advice offered is kept at a consistently acceptable standard. Not nearly as important as building a self-service CRM platform that enables customers to visit their account Web site and have the same "smart" predictive technologies "know" what it is they are after, and serve it up to them right here, right now, without a call center operator needing to be involved.
CRM--more about people than technology? It's unfortunate that this question has been asked. It's an irrelevance and is distorting the important discussion about appropriate use of this new technology. But since it's out there it needs to be answered, which is not difficult since the answer should be obvious--it takes both people and technology to deliver positive CRM results. But make no mistake--the catalyst for the commercial debate about how to boost customer satisfaction levels, and the business context in which it is taking place, has been created by the technology.
What's more important to your CRM initiatives--the people and business processes driving it, or the technology that supports them? Tell us your opinion in TalkBack.
