CRM: The Success and Failure

CRM projects with wrong expectations have ended in contact center.

InformationWeek Staff, Contributor

May 10, 2005

6 Min Read


Survey after survey indicates that call centers are still failing customers. Much of this problem is attributed to the failure of the associated CRM projects, since these were expected to solve everyone’s problems. Unfortunately, like earlier ERP projects, the focus for many CRM projects was to automate the transactional flows. Systems included some rudimentary reporting on the transactions, but most didn’t provide any in-depth analysis, let alone the derivation of customer and business intelligence from the data.

But more fundamentally, perhaps, their title -- Customer Relationship Management -- gave rise to expectations that couldn’t possibly be met. Ventana Research asserts that relationships are difficult to manage even at the best of times, even on a one-to-one basis. Trying to manage relationships with thousands, if not millions of customers, is virtually impossible. Any one communication, sometimes with the best intent, can prove inappropriate for a given customer at a particular time. If the projects had been called Customer Contact Management, expectations might have been more realistic.

In the 1990’s, all the talk centered on how Customer Relationship Management (CRM) was going to be the savior of many organizations as they struggled to compete in highly competitive markets that were reeling from the .com bubble bursting. There is no doubt that the competitive marketplace is as fierce, if not fiercer, today than ever before; with competition coming from new entrants, new geographies and even more demanding customers. There is also no doubt that customers are still the most important asset any organization has. It would be nice to think that you can “manage” your relationship with them, but the truth is you cannot. You can only do things that will create a relationship, build on an existing relationship, or, indeed, bring a once successful relationship to an end.

Relationships are fundamentally about communication. Frequent, good communication leads to good relationships; bad or infrequent communication tends to lead to bad or broken relationships. The challenge for organizations is to more effectively “manage” its communication (contacts) with customers. There are several factors making this difficult:

  • Volumes:Today organizations can have hundreds of thousands of interactions from their customers. Analyzing this data to identify patterns, trends, causes, and so forth, has therefore become a horrendous task.

  • Channels:Interactions are increasingly happening across different channels of communications. While it is true that voice communication is still by far the most dominant channel, there are growing numbers of interactions via email, white mail, fax, web generated mail, and web chat.

  • Types:Customers now want to interact not only to obtain information, but to transact business, conduct inquiry on status, and receive information across the organization’s full range of products and services throughout the lifetime of their relationship.

  • Contact points:It is rare, if not impossible, for all of an individual’s interactions to be dealt with by one person within an organization. Collating interactions across contact points, sharing information and accessing systems, make it very difficult to handle customers consistently.

  • Measurements:It is sad to say that different measures of success within an organization can have serious impact on how customer interactions are handled. For example, if a call center agent is measured on number of calls handled in a day, then they will tend to work to maximize the number they handle rather than maximize quality.

These can all be considered as operational issues, which, through analysis, can be improved by a program of process improvement, which in turn can be supported by IT systems. The bigger challenge is how to make the interactions more intelligent and more appropriate to the customer at the time of the interaction. This requires more sophisticated techniques that rely on some of the more traditional performance improvement systems and methods such as BI, call center reporting, and scorecarding. Ventana Research believes that only in this way can agents be provided with the knowledge they need to manage the relationship by making each communication special for the customer.

The technology landscape is changing. Vendors are beginning to recognize the challenges in call centers and are developing systems to support the required changes. For example, we have seen in one provider the capability to analyze the interaction data records, identify the caller’s status, and prompt the agent with appropriate behavior. By linking back to the call routing systems, the call can even be delivered to an agent best suited to handle the caller, given their circumstances. In a similar way, through its recent acquisition of Blue Pumpkin, Witness Systems can now analyze recorded interactions and plan agent profiles in a way that’s best suited to call patterns and reasons for calling. Ventana Research welcomes the evolution of information technology and its developments. Unfortunately, call centers continue to consist of several islands of technology, and integrating these islands is still a major challenge.

However, technology is only part of the solution. Serious questions remain as to whether organizations are ready and able to run the change programs needed to make best use of their resources. Are employees ready for major changes in the processes? Are the training programs in place? Organizations should re-examine their CRM focus and metrics and align them more to the operational strategy for customer operations. Only when all of these are in place can customers hope to receive the better service they crave for.

Related Research Notes:
Manage Demand Chain Performance to Derive Greater Business Value
Customer Intelligence Energizes Demand Chain Management

Richard Snow, VP Advisory Services and CCPM Research
Richard has over 25 years experience working in the IT services industry, with companies such as Sema Group, Price Waterhouse, eLoyalty and Valoris. Much of this work has included developing world-wide partnerships with international product vendors e.g. a global partnership between PW and Oracle’s Telecom group and eLoyalty and Cisco. During this time he has been involved with all aspects of delivering highly complex IT solutions to a variety of clients in the Telecommunications, Financial Services and Public Authority Sectors. He specialized in delivering Customer Care and Billing solutions for Telecoms Operators and multi-channel Customer Service Center for both the Public and Private Sectors. He has written several papers and given several presentations on the theme of achieving improved levels of customer service through the deployment of Contact Center. He now leads Ventana Research’s Contact center Research practice, as well as working with both senior business operations managers and IT managers to ensure that businesses get the best performance from today’s highly complex application products.

Ventana Research is the preeminent research and advisory services firm helping our clients maximize stakeholder value with Performance Management throughout their organizations. Putting research in a business and IT context we provide insight and education on the best practices, methodologies and technologies that enable our clients to leverage assets to understand, optimize, and align strategies and processes to meet their goals and objectives.

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