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Forrester reveals CRM's best practices

While some of the steps may not come as a surprise, a recent study shows that companies are finding CRM success.

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For anyone familiar with the CRM market, the latest list of best practices for CRM deployment shouldn't come as any great surprise -- companies need high-level sponsorship, end-user adoption, usability -- but a recent report from Forrester Research Inc. proves that there are companies following these practices and succeeding.

"What this confirmed is that while the principles for success are well known, now that the market's matured, we can look at companies that have been at it for a time and see they are getting results," said Bill Band, consulting analyst at the Cambridge, Mass.-research firm. "The idea that CRM fails and doesn't pay back isn't true."

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Forrester interviewed executives at 22 large organizations in North America to learn how they're succeeding with CRM. Forrester identified the firms by requesting success stories from the leading enterprise CRM vendors: Siebel Systems Inc., Amdocs Inc., Oracle Corp. and SAP AG. All 22 saw increased revenues, lower costs, higher ROI and improved competitive strength, thanks to following CRM best practices.

The study results come as spending continues on enterprise CRM, despite the consolidation in the industry. Forrester predicts that enterprises spent more than $3 billion worldwide on new CRM software licenses in 2005 and total spending, including maintenance, integration and related hardware and software, will be more than $12 billion.

The businesses that have seen success with their enterprise CRM implementations all followed these best practices:

  • Build strong executive sponsorship of the program.
  • Have business units lead CRM with support from IT.
  • Put in a governance structure that fosters accountability and decision making.
  • Define your objectives and processes first then apply the right technology.
  • Follow a realistic pace for the rollout.
  • Define data requirements and data quality approaches early.
  • Foster user adoption.
  • Place a high priority on software usability.
  • Simplify the CRM platform.
  • Actively manage the vendor relationship.

    Consultants, analysts and vendors have been touting many of these practices for years, but the Forrester study confirms that wide-scale CRM deployments can pay off, particularly when companies commit time and effort to the project.

    "Staying the course is one of the most important lessons," Band said. "The companies all said they developed a long-term vision and did one country at a time, one function at a time. 'CRM in 90 days, implemented and done,' that's really is a fallacy. It speaks to the overhype in early '90s when people had visions of quick and easy return and it's not just there."

    The CRM leaders questioned in the study have been working at getting benefits from their CRM implementations for two to four years. Many of the early stories of the large-scale failure of CRM in the '90s could have been avoided or at least mitigated if companies had stuck with it, Band said.

    Forrester has been telling companies to make their CRM technology buying decisions based on processes and business need for years, but the study found that once the decision has been made, firms are looking to platform vendors. Increasingly, enterprise CRM buyers are purchasing multifunctional suite platforms.

    "The subtlety here is, early on a lot of people bought the technology first and didn't figure out what they were going to do with it," Band said. "Now they've spent a lot of time on the business case and vision, but once they've done that, they tended to want to go to a platform."

 

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