If you’re not entirely sure that your company has developed the correct Customer Relationship Management (CRM) strategy or technologies, you would not be alone. According to recent research from Forrester, despite widespread adoption and deployment, many IT and business people says they are struggling.
They are struggling, they say, according to the recent research by Forrester by William Band and contained in the report Navigate the Future of CRM, not just with how to define the correct CRM strategies for their enterprise, but also struggling to re-engineer customer-facing processes where those processes are not working, and struggling to acquire the appropriate technologies to deal with the problems.
To be clear about this; Forrester, for the purpose of this report, has defined CRM as:
The business processes and supporting technologies that support the key activities of targeting, acquiring, retaining, understanding, and collaborating with customers."
Band adds that while Forrester is not proposing that CRM be defined primarily as a set of technologies, interest in these kinds of technologies is strong in businesses and as a result tends to be defined in technology terms.
This is supported by the fact that, of the 556 large enterprises in North America and Europe that were surveyed in the Forrsights Software Survey of Q4 2011, 50% have already implemented a CRM solution and many more are investing more to upgrade their solution. A further 23% have plans to upgrade in the next 12 months or so.
Band also goes some way to outlining why an effective CRM strategy is necessary. Success, he says, requires maintaining a focus on four critical elements simultaneously: strategy, process, technology and people:
As much as 18% of the problems at the companies surveyed were the result of inadequately defined CRM strategies including inadequate deployment methodologies (40%), poorly defined business requirements (25%); not achieving organizational alignment on objectives (18%) and failure to manage program costs (18%).
CRM processes focus on customer-facing business functions in an enterprise. Band notes that 27% of the problems are associated with difficulties around business process management including integration difficulties in supporting company processes (48%); poor business process design (31%) and the need to customize solutions to fit unique organizational requirements (21%).
One-third of problems are the result of problems related to technology deficiencies including perceived difficulties with solutions (30%); lack of the required skill sets to implement solutions (23%); data problems (19%); system performance shortfalls (19%) and poor usability (8%).
In all the CRM projects identified, 22% relate to people issues. Band found the most significant threats to be: slow user adoption (49%); inadequate attention paid to change management and training (36%) and difficulties in aligning the organizational culture with new ways of working (15%).
Customer Experience, Strategy Trends
Looking at these four areas in greater detail, Band has identified 13 key trends around them for the rest of this year, and probably beyond.
Customers themselves are driving the relationship between a company and its clients. Customer experience should be shaping CRM strategies in the coming year. There are three principal trends here that organizations say are top of their agenda:
1. From Aspiration to Strategy
Customer-centric transformation initiatives are floundering because they focus on vague objectives that are driven by internal stakeholders within silos such as marketing, sales, support and the web channel rather than customers. As a result, CRM efforts miss key elements for customers. Successful CRM strategies will:
- Define the intended experience
- Direct employee activities and decision-making
- Guide funding decisions and project prioritization.
2. The Experience Ecosystem
Band says that companies in every industry are disappointing their customers, especially when they jump channels. Companies, he says, need a new strategy that considers the input of every employee and every customer interaction.
In 2012, companies will start developing a concept of a customer experience ecosystem, which Forrester defines as the set of relationships among company’s employees, partners and customers that determine interactions between all these groups.
3. Experience Management
Enterprises will start implementing mature customer experience management strategies by the deployment of a set of sound repeatable practices with the focus in most companies around six categories of best practice: customer understanding, governance, strategy, measurement, design and culture.
Business Process Management Trends
Companies will start moving away from isolated BPM or front-office CRM projects to broader initiatives across the organization as enterprise look to deploy outside-in, customer-focused, cross-functional processes. There are three identifiable trends here for 2012.
4. Untamed Processes
Forrester defines untamed business processes as processes that form in the seams and shadows of the enterprise and require human and system support, and cross department, technology, information and packaged application silos to meet end-to-end business outcomes.
This year, enterprise will start addressing and automating this process, which includes: Customer onboarding, order administration, loan processing, incident management, customer service and investigations.
5. Linking Customer Experience With Process
Forrester is expecting more organizations to develop Target Operating Models (TOMs), which are abstract representations of how an enterprise operates processes, organization and technology domains interactively to offer better customer experiences. Working backward from the services delivered to customers allows a firm to derive the appropriate operational processes.
The need for this stems from the fact that, while many organizations’ weakest link is their business architecture capability, and while organizations strive to address this, they seldom target their efforts enterprise-wide
6. Agile Implementation
Agility raises its head here again. Companies have developed inflexible architectures that are built around business functions and aligned with particular silos. This creates problems for fast-moving companies in dynamic verticals, creating difficult customer experience, untamed processes and more expensive business.
Band says he expects more companies to adopt more agile project management and software development methodologies this year to overcome this.
New Customer Engagement Capabilities
Over the course of last year, the CRM landscape underwent considerable consolidation. To navigate through this, Band has identified five emerging trends:
7. Social Customer Engagement Tactics
As social computing develops, enterprise will be forced to go beyond optimizing the two-way relationship between enterprise and client. Enterprises will also have to optimize the interactions between customers enabled through the use of social media.
2012 will see the emergence of a lot more social CRM uses as organizations turn to social computing products to engage and collaborate with customers in new ways.
8. Mobile Applications
The impact of mobile technologies will change the way enterprises are using CRM, especially in light of the fact that e-commerce companies increasingly expect online sales to be transacted via mobile devices. eBay alone expects to see US$ 2 billion in business transacted via mobile -- up from US$ 400 million in 2009.
Enterprises will find it difficult to keep up with mobile CRM support, which will remain fragmented. While some platforms and solutions cater to specific industries, no mobile CRM vendor currently offers out-of-the-box cross-industry functionality. The functionality gap between desktop and mobile CRM applications will remain wide.
9. The Cloud and Governance Challenges
CRM is in the cloud five years now, Band says, with SaaS CRM solutions now offering greater due diligence, planning and integration with existing sourcing and IT processes.
Over 2012, SaaS will become more important to organizations and will be assessed around these elements as SaaS segments involve greater quantities of mission’s critical information. More-centralized purchasing and governance models will emerge to replace the under-the-radar business purchasing of the past.
10. Big Data and Agile BI
In 2012, BI professionals who support customer-facing business processes face the challenge that social-sourced customer intelligence never stops producing data. Big data provides analytics and transactional applications to harness petabytes of complex information flowing in from social media and other new and traditional sources.
Band anticipates even more interest in Agile BI as it enables customer-facing workers to get the answers they need quickly, with less reliance on IT as the middleman. They allow users to: Run and lightly customize predefined reports and dashboards; run ad hoc queries; add calculated measures to existing reports and collaborate with other users and team members.
11. Multichannel Customer Interactions
Band says that this year there will be a convergence of technologies from diverse sectors to form core customer experience management solutions.
Vendors from a wide set of solution categories -- such as content management, e-commerce, site search, and personalization -- are expanding their capabilities to support the management and optimization of cross-touchpoint customer experiences.
Employees, Customer Experiences
Because of changes and the rate of change in the customer experience space, employees will need to adapt to new ways of working and outpaces the employee’s ability to keep up. Understanding the following two trends will help:
12. Change Management Skills
Business leaders are starting to realize that they must make special efforts to improve customer interactions and to help employees understand why the organization is introducing changes, what the end results will be for the company, and what employees’ new roles will be.
In 2012, Band foresees a resurgence of interest in understanding best practices that help organizations adapt to the changes needed for their companies to deliver differentiated customer experiences.
13. Customers and Change
In 2012, Band expects organizations to adopt additional best practices that harness the voice of the customer. These will help organizations determine process improvement priorities as well as offering back-office employees better understanding of customer expectations.
This is only a summary of a deeply researched report that will provide invaluable guidance to organizations with customer experience issues now.