The CRM is always right

Knowing customers is one thing. Understanding them is another. Users tell us whether the technology is a true route to customer understanding.
By Kaunda Chama, ITWeb features editor
Johannesburg, 08 May 2006

The general conception of customer relationship management (CRM) is of a solution or application that allows companies to better service clients. However, the users of such applications reveal they are merely enablers.

Although technology is a major part of the CRM process, it is people and processes that determine whether a CRM strategy will succeed.

While technology underpinning CRM strategy has improved - and dropped in price, allowing more companies to embrace it - CRM success depends on careful planning and execution. Used correctly, it is a business process affecting every enterprise`s departments, with a deliberate drive to increase sales and improve customer service.

Businesses are increasingly investigating options like CRM to give them an edge. Companies from all industries operate in highly competitive environments, and CRM offerings cater for operations of all sizes - from SOHOs to multinational conglomerates.

Interviews with small, medium and large companies reveal they are reaping returns from marrying CRM solutions to customer-centric business processes.

Space Television, a local provider of satellite, television and CCTV solutions, has implemented Pastel Evolution to integrate its business and operational areas. It has enabled users to have immediate access to data across the company`s wide area network, it says.

The company`s offices span Johannesburg, Cape Town, Durban, Randburg and Port Elizabeth. "Our branches need to connect to our main systems in Johannesburg via high-speed and wireless links," says Sean Voigt, director at Space Television. "From a productivity perspective, and to offer a better service to our customers, we had to ensure transactions generated at our various depots around the country could be processed centrally and on the fly."

The success of a CRM solution is dependent on the degree to which it has been integrated with every aspect of the business that touches the customer, according to ISM`s president and founder Barton Goldenberg.

Following this principle, Space Television has integrated business processes from accounting to warehousing to administration.

Operators have instant access to information, and productivity has improved. "Permission-based rules assist us in controlling transaction terms and pricing. With customer profiles set up correctly, we are able to more efficiently collect any money outstanding," says Voigt.

The CRM component is being used as a repair tool to keep track of Space Television`s rental services through Teljoy. "CRM places information on country-wide distribution and installation at our fingertips. It`s a great tool for keeping track of outstanding items and generating reports instantly around dispatch timeframes. We can now easily follow up with clients to ensure installations are done correctly and report any necessary information back to Teljoy," says Voigt.

It will take a while before we determine the exact return on this investment.

Gudren Oliver, IT administrator, Nature`s Health

A multi-currency add-on module is assisting the business`s export operations. "We supply hardware and services to Nigeria, Namibia and Tanzania, among other African countries. Many of these transactions are dollar-based. We encountered a number of problems from an accounting perspective by invoicing in rand before, which meant backdating and converting data from Excel.

"We now keep track of our foreign dealings and customer balances, as well as our growing subscription base abroad," Voigt says. Accuracy has been ensured, he says, meaning less queries and administrative issues.

Integrating business and processes has improved Space Television`s warehousing capability. "Serialised tracking is a great tool for us, as it ensures stock items and warranties can be effectively tracked over the large geographical area we service.

"Our customer base extends to Africa, Pakistan, Saudi Arabia and Europe. We find the solution`s ease of use of great benefit when servicing order processing requirements, as well as contract and contact management functions across a vast subscriber business base," he explains.


Gudren Oliver, IT administrator at multi-level marketing company Nature`s Health, which operates an Accpac back-end, says her company implemented a CRM module for its call centre and it has improved the company`s marketing and sales process.

The solution proved relatively expensive, however, which she attributes to customisation which was performed prior to implementation.

CRM is not a system. It`s something a company does.

Werner Swanepoel, head of BI, FNB corporate division

Oliver says the implementation period for the system was about four months, starting with the back-end setup in December, to going live at the beginning of March 2006. Had it not been for the customisation, the timeframe would have been shorter, she says.

"It will take a while before we determine the exact return on this investment (ROI). We have already noticed improvements in the speeding up of processes in the sales cycle; and generally assisting our customers better," she says.

Roger Strain, director at Liquid Thought Business Solutions, a Microsoft CRM solution reseller, believes CRM implementation costs are still relatively low.

The average cost of an implementation for three users is about R50 000, he says, while one with 2 500 users can have a total cost of ownership over five years of R5 million.

Developing an effective client management system is not rocket science.

Trent Rossini, IT director, Discovery Health

From a Liquid Thought point of view, a large implementation should take about eight months, three of which should be dedicated to planning, interviewing and training intended users.

"The planning stage can be quite extensive because different business units have unique needs and may use a CRM solution differently, which means there is a need for different strategies for each unit," says Strain.

Once a company considers benefits like improved functionality, better service delivery and the ability to have a single view of a customer, he says, the cost of these systems becomes justifiable.

Andrew Brown, MD of Dynamic Recovery Services (DRS), a FrontRange GoldMine (contact management, sales force automation and CRM) client, agrees. His company has run its CRM solution for the past four years and the benefits far outweigh the purchase price and maintenance costs, he says.

"We are a network security vendor and the solution helps us pre-empt contact renewal times, and better manage maintenance schedules and service contracts," he says.

Brown says DRS and FrontRange did not agree on any specific return on investment. All his company was interested in at the time was a system that could store data and provide specific reports.

Improved efficiencies

With customer and product information being updated and available in real-time, delay is a thing of the past, says Oliver.

<B>Puzzle pieces</B>

CRM should be an integration of the following:
* Sales
* Sales management
* Time management
* Telemarketing/telesales
* Customer service and support
* Marketing
* Executive information
* ERP integration
* Enterprise portals
* Data synchronisation
* E-commerce
* Field service support

"We previously used a system which could not handle the volumes of data we were pushing through it," she adds.

With the old system, Nature`s Health was sitting on a database of information it could not maximise. The new system is able to generate reports and use them to gain a better insight into customers, she says.

Companies should not view CRM as an implementation of a new system, Strain says, but rather as part of an organisation`s evolution. "CRM is not a once-off thing. It is a continuous process that involves continual updating of data," he says.

Werner Swanepoel, head of the business intelligence unit at First National Bank`s corporate division, agrees, saying it is wrong for corporations to perceive CRM as a software solution rather than a people-enabled process.

"CRM is not a system. It`s something a company does. Aspects such as business analytics and business intelligence also pay a major part in the quest for customer satisfaction. Even e-mail plays a role in all this, as a key communication tool," says Swanepoel.

CRM is a process by which a company interacts with its customers effectively, using many different technologies, says Swanepoel.

<B>History lesson</B>

Implementing CRM correctly has its benefits. Here`s a before and after look.

* Little knowledge of customer
* Fair customer satisfaction
* Lengthy turnaround times
* Reactive business environments
* Multiple views of clients
* Fragmented service experienced by customer
* Databases difficult to manage and maximise

* Better overall customer service
* Single view of customer
* More proactive service delivery
* Faster turnaround times
* Inbound e-mail and call routing
* A bridge between other internal systems
* Maximising of databases
* Easier to get customer reports for better insight
* Ability to offer wider product range
* Easier to handle growing customer base

"Although we are a Siebel customer, there are a lot of other technologies we have implemented that assist in managing our relationships with our customers," he says.

The rationale behind FNB investing in a CRM solution was to improve sales force automation, he says, and provide the call centre with the information needed to boost customer service.

Like many other end-users of CRM systems, he says the company is unable to determine the exact ROI of the solution. This is because the process is not based on a single piece of technology, but encompasses all the people and processes the company has in place.

"I can, however, confirm that it is effective, purely based on the improved performance of the business unit. That we have had the system for the past five years shows it is doing something good."

He advises companies to get their people and processes right before implementing a CRM solution, in order to get the best value out of it.

Trent Rossini, IT director at Discovery Health, a company that admits its survival is dependent on maintaining good customer relationships, says it opted for an in-house developed CRM solution after a previous out-of-the-box solution proved to have problems with scalability and integration with other systems.

<B>History lesson</B>

Total CRM software market in SA by vendor, 2004

An extract from IDC`s South African enterprise application software report and forecast, 2005 to 2009, and 2004 vendor shares.

"The system goes a long way in enabling our service centre through analytical tools to predict when a customer is experiencing bad service, and allows the agents to be more proactive about remedying the situation," says Rossini.

"It is not always easy for a company to have an in-house system. Our advantage is that we have a large development team and ultimately, developing an effective client management system is not rocket science," he confides.

He says the system, implemented about four years ago, has given the company the ability to automate functions like call routing. "A customer dials into our service centre, then enters their membership number. Based on that and the data we have on them, the system is able to identify them and route their call to the right agent," he explains.