A High-Level Overview of Crm Systems Challenges

At a certain point in the life of a strategic account management program, a need arises that may indicate a technological solution—internal or external communication, collaboration, contact management, or account planning, for example. Whatever the need is, it drives a potentially dangerous choice point. The question firms face at this point is, "Should we invest in technology?" The choice can be dangerous because the costs of some customer relationship management (CRM) and sales-force automation systems easily run into the millions of dollars, and may require millions more if problems arise (as they often do) in the system's implementation.

In our experience, there is a further challenge for strategic account management programs: most companies implement CRM systems primarily for their nonstrategic salesforces: field sales, telemarketers, perhaps customer service people. This means that adapting or reconfiguring the CRM software to meet the needs of the strategic account management program is often an after-thought. If the CRM system has been designed primarily to serve the firm's other and larger salesforces, the system's strategic account management capabilities may be cumbersome add-ons, making it difficult for the account managers to integrate the system into the way they work.

. . . [B]eing technology-driven can be a very expensive bandwagon for the supplier to hop on.

Let's start with a high-level distinction a colleague once made between "technology-driven" and "technology-supported" companies. The technology-driven company, too often before determining its strategic and user needs, invests in the "latest and greatest" technological breakthrough. Given the costs of these systems, though, being technology-driven can be a very expensive bandwagon for the supplier to hop on.

The technology-supported company, on the other hand, determines its needs, strategic and operational, and then finds the best tools—not necessarily computerized—to support those needs.

One technology-driven manufacturing firm invested in Enterprise Resource Planning (ERP) software in the late 1980s because the software sellers led them to believe the software offered a "total solution." After spending millions of dollars on the package, the company had a nightmarish and unfinished implementation. When many manufacturing employees complained about how time-consuming the system was to use, the firm asked the long-gone sellers for help. The sellers said they would be happy to help customize and re-implement the ERP software—for several more million dollars. Those who had bought the software did not want to admit they had made a bad decision, so the firm invested once again to get the assistance. The firm re-implemented the ERP system with training and support and waited for all its problems to disappear. After six months, though, the firm's IT department did a systems audit and found less than 30 percent of the organization using the ERP software, even though the firm had mandated its use. It took more than three years before the system started to truly help the firm. No one wanted to estimate how many man-years of productivity had been lost getting the ERP system up and running.

Ignoring the needs of strategic account managers can effectively negate whatever increased productivity the system offers.

We bring up ERP software because the push for CRM software offered a parallel situation—at least up to 2001, when the CRM boom slowed considerably. During the CRM sales cycle, most buyers heard "total solution" (which to us is the equivalent of promising the paperless office) over and over, as CRM sellers promised the software offered large numbers and kinds of features. And, in our experience, it was the rare vendor who, when asked if her software would handle a given problem, would admit that her program could not. The larger CRM systems tend to be very expensive—in the millions—and their implementation tends to be rough and sometimes more expensive. Too often CRM system purchasers haven't thoroughly determined what support their strategic account managers really required, particularly when, as usually happens, these CRM systems focus on field sales or telesales. Sometimes the best a VP of strategic accounts can hope for is to be on the committee that determines what functionality the CRM system will have. But the VP of strategic accounts still has only one vote. Ignoring the needs of strategic account managers can effectively negate whatever increased productivity the system offers.

As one strategic account manager told us, "It's not like I have a lot of free time to sit around, typing account plans and populating databases . . . and they never asked me what I needed."

In our experience, the system's implementation always takes far longer than vendors suggest, and even then it can be easier to get the system up and running than it is to get the account managers to use the program. They may have a compelling reason. The role of a strategic account manager—or that of any strategic account seller—requires huge time-management challenges. Given the numbers of customers and individual relationships most strategic account managers oversee, it is the rare account manager who will allow anything not immediately helpful to eat her time. As one strategic account manager told us, "It's not like I have a lot of free time to sit around, typing account plans and populating databases . . . and they never asked me what I needed."

Over time we have seen many successful and unsuccessful CRM/salesforce automation implementations. We'd like to share seven high-level steps that successful firms—and strategic account program directors—tend to take. Then comes the case of UPS, which succeeded in dramatically improving communications with an internally designed system targeted at its national account managers.