CRM Systems – Panacea or Plague?

CRM Systems – Panacea or Plague?

There are many reasons for the slowdown in the technology sector, but one major reason is that the profitable 00’s allowed many firms to buy more and more new systems that took advantage of great technological leaps—but firms found they weren’t integrating and fully utilizing the systems. When the bear market hit, and profits sunk there seemed to be little appetite for buying even more.

In financial services, the 00’s saw an explosion in many technological tools and software, but the 00’s buying spree combined with massive layoffs over the past three years have left many firms with unused or unusable systems. Recent Collaborative research indicates that many financial services firms are now focused more than ever on gaining new clients (and retaining existing clients!) and once again are evaluating the role of CRM systems. Given the many well-documented failures of CRM systems, many firms are justifiably concerned about the ROI on this expenditure.

The Collaborative has worked with firms that believed that a new system—more accessible and organized client information per se—would lead to more clients or higher assets under management. While a new CRM system has the allure of being the “silver bullet” that will cure sales or client satisfaction ills, this is usually not the case. Our experience with these firms shows that a successful CRM implementation (or determination of the real problems, and different solutions) depends on first reviewing:

• Business processes. It’s a given that a new system will change the way Sales, Marketing and Client Service personnel will enter and report data. But can changes to old processes, reflecting new business realities, be the simpler and more effective answer? With a new system, how will quality and completeness of client information be assured? How will Product and Senior Management be able to use it? The Collaborative worked with one software firm that needed to make major changes to an already-implemented CRM system to reflect major process and organizational changes that all agreed were the real key to long-run success.
• People. Sales people are notoriously undisciplined at entering information into, or even using, CRM systems. What usage-related incentives are built into the compensation plans and performance reviews of personnel critical to system success? What new roles may be required to assure success? Do you have the right people now to fill new roles or must you go outside? You may find, as one of our clients did, that a new senior-level role—Knowledge Manager—is necessary to manage the increased client information and to “enforce” proper usage.

The Collaborative’s experience in helping firms avoid costly mistakes by asking the right questions and taking the right steps before making a huge investment in CRM could also help you. Call us today and ask about the “CRM Pre-Purchase Audit”!