Business & Finance
Commentary
2/12/2002
02:37 PM
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Ask The Secret CIO: Be Careful With That Ax, Eugene

Responding to reader questions, this time Herb tackles CRM success, determining who'll be a good manager, coping with annoying cell phone users, and marketing outsourcing services. As usual, the Secret CIO accomplishes all this with good humor and an uncommon degree of wisdom.

How do we avoid CRM failures?
Hi, Herb:
We are systems integrators doing an ERP package implementation in Singapore. We intend to move into customer relationship management implementation as well. However, according to a study based on more than 200 CRM projects, the CRM implementation success rate is only 25%.

Based on your experience, can you explain why CRM implementations fail? How we can avoid the failures experienced by others?

Regards,
Teck

Dear Teck:
The percentage of CRM project failures quoted in that survey may or may not be accurate. Tom Seibel, for sure, would disagree with that appraisal--or else he'd say that the failures were all purchased from his competitors.

On the other hand, the number reported doesn't surprise me. As I wrote in I Want A CRM System!, when Ron Stagweg, executive vice president of domestic operations, told me we needed a customer relationship management system, I was delighted that he approached the situation in a way that would yield a good solution rather than create more difficulties. Had he not done so, I'm sure that we would have been well on our way to creating a mess.

There are four major reasons, I think, for the high level of dissatisfaction with CRM installations.

  1. A lack of agreement about what constitutes success. Frequently the IS team views success as installing the system according to agreed-upon specifications. Unfortunately, the business people on the CRM project are much more used to talking in terms of results rather than functionality. As a consequence, they get the tools promised by IT, but frequently have no clue about how to use them or they find that their problems are not solved by the new whiz-bang system.
  2. Over-promising by the IT people. Like the magic diet that will remove pounds from you without exercise or cutting calories, CRM systems have been touted as cure-alls for all sorts of business difficulties. If the IT people try to convince their business counterparts that the software is the solution without hard work on the part of non-IT staff, the partnership is doomed to failure. The end result? The IT people will declare a victory, while everyone else will complain about the new system.
  3. A lack of understanding of the actual business problems. The CRM system may not be what the business needs. If the business people don't understand the customer, they may succumb to the blandishments of the vendor: "Your customers hate your inability to tell them where their order is! Buy our CRM and they will love you!" The fact is, the customer may hate the answer when they learn where the order is, and the CRM system won't have helped solve the problem at all.
  4. Inability to integrate the technology with other systems. Occasionally, a CRM system fails because its information is unavailable to other systems that run the business, such as the enterprise resource planning system or the best-of-breed components that run manufacturing, sales, or finance. Technical integration, though, is a far easier task than developing the communication and teamwork necessary to handle those potential problem areas.
Avoiding a CRM system implementation failure requires a strong technical effort. It needs to be part of an even stronger management structure, which develops reasonable expectations, insists on clear and prompt communication throughout the project, and takes quick action whenever problems arise--as they invariably will.
What does it take to be a good manager? The right zodiac sign?
Mr. Lovelace:
In my experience, it's impossible to predict how people will behave when promoted into managerial roles. I've seen average, "Don't bother me, I'm here for eight hours a day and not one minute longer" workers turn into super managers and great, creative, team-oriented workers turn into tyrannical managers. Selecting a person who will become a great manager is probably influenced by a combination of genetics, early childhood development, weather-related phenomena, zodiac signs, the phases of the moon, chaos theory or, hey, fill in your favorite choice.

What do you think?

Thanks,
Brian

Dear Brian:
I've seen the same type of transformations that you have, both good and bad. If I could more often call them correctly, I would start going to the racetrack. Why not really cash in on that type of gift?

Alas, I cannot predict who will be an excellent manager and who won't be, beyond an educated guess. Certain personality traits and work habits, though, give me a clue.

I look for someone who doesn't hog the credit. If a manager wants to look good at the expense of his troops, I'm fairly certain that he also will pass along the blame quickly. Anyone with that attitude can't be very good at building a team.

A willingness to listen to others is important. No one likes to work for a know-it-all. If someone is willing to listen, I feel fairly certain that she can learn to be a good manager.

The ability to learn is probably the key attribute. The technology that we work with and the business problems we face are changing with frightening rapidity. A good manager has to adapt. Learning isn't just important on the technical side; it's equally necessary when dealing with personnel issues. I don't mind when someone makes a mistake. It's the second and third time that she repeats the error that drives me up the wall.

Give me someone with good skills in these three areas and I'll take a bet that he or she will be a successful manager.


Teaching technology offenders a lesson
Herb:
I read your column, "Technology's New Manners," and thought you may enjoy this.

Last year, I was sitting in a conference session when a cell phone went off. The speaker grabbed a fire ax he had stashed behind the podium, yelled, "I'll get it," and made a dash for the offender. The offender shrieked and took off at a run to the exit--not an easy feat in heels and with an overcrowded auditorium. It was close, but the felon made it to the door first.

The presenter looked around and said "Any others?"

Never have I seen so many surreptitious movements, as people tried to turn off their phones and pagers without attracting attention. Needless to say, the next 90 minutes were blissfully free of electronic interruptions.

Scott

Dear Scott:
When a cell phone goes off while I'm talking, I've wanted to react just that way--if I had an ax handy. But it does seem to be a mite of an over-reaction. However, even if the speaker staged the incident with the offender, as I suspect, it was a delightful lesson.

Maybe the same theory of terror-by-example could be used in restaurants and trains. Perhaps the waiter who is trying to serve dinner to someone babbling on the cell phone, who is annoying the rest of us, could say, "Excuse me, Sir," and drop the cell phone in the water glass. No, better, in the expensive wine.

And the conductor on the train could have a special heavy-duty punch that perforates the offending phone. Really important commuters could collect different conductor's punch holes on their now nonfunctioning cell phones to demonstrate that they really are road warriors.

The possibilities are endless.


Outsourcing Visions
Dear Herb:
I am the CEO of an ex-successful company in IT services, with our own development center in India. The dot-com crash and plethora of competitors forced our company to downsize from 500 employees to around 100. We aren't a body shop, but deliver fixed-price projects only in the migration/integration business. Since my capital outlay is greatly limited, I have become the only salesman. We are technologically advanced, but our weakness is marketing.

I need your vision. Can you give answers to four simple questions?

  1. Is outsourcing (out-tasking, rather) really attractive now?
  2. What's the best way to reach out to CIOs? (Professional societies, such as SIM, or magazines?)
  3. The "big five" sell relationships, not technology. In fact, they dip into the same resource well that we do, in delivering IT solutions. Are CIOs turned off by the high-priced consulting companies?
  4. Are there marketing agencies that help companies like us?
I realize I've asked a whole set of questions. I would appreciate your response.

With my personal regards to you,
Subbu

Dear Subbu:
Outsourcing, especially offshore outsourcing, is very popular today with CIOs. Because of increased cost pressures on U.S. firms as well as the added sophistication of vendors, CIOs are finding that they can entrust more and more work to such organizations. I expect that this trend will continue for a long time.

It used to be true that the big five accounting firms had an edge with CIOs. I wouldn't say that CIOs are all necessarily turned off by the way that these organizations market, but most CIOs today want more than just words about relationships. Even though these firms are separating their management consulting from their audit practices, they will still be on the very high end of the cost curve at a time when CIOs want to save money. In other words, I wouldn't spend a lot of time worrying about them. If you have a good track record and can deliver, you should be competitive.

Yes, you can get a professional marketing company to help you with your sales campaigns, but first you have to decide what your differentiator is. What makes you stand out from the crowd? Unless you can articulate the answer to that question, your task will be very difficult and a likely waste of your limited capital.

While both professional organizations and magazine advertisements are useful in reaching potential clients for your business, the best source of new business is a good referral. If you have satisfied clients, ask them if they would be willing to talk to their friends about the high-quality and low-cost work you've done for them. Follow up with these potential clients and soon you may be able to start expanding, again.


Your letters to my print column and this E-mail forum raise some serious issues about managing information technology in today's world. Since today's world is essentially absurd, my serious responses may sometimes sound a little whimsical, and my occasional whimsical one, serious. In any case, if you want to participate, or comment, write to me. I reserve the right to edit for size and content. Just sign your E-mail the way you want it to appear online. And feel free to join me in my discussion forum.

As I've mentioned, I am planning to put my InformationWeek columns together into a book with a little bit of additional commentary around the events and people about whom I write. If you would like to be notified of such an event, please drop me an E-mail, and I'll build a mailing list to let you know about it. Just use the word BOOK as the subject line.

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