Gartner: take the iterative approach to CRM

The loudest mantra for the enterprise today is that it's a customer-driven economy and if you don't value the customer as your most important asset, you do not have a vision for CRM.

So says Gartner research director, business applications, Kristian Steenstrup, adding that most senior executives in the region saw CRM as merely the integration of front-and back-office operations.

However, he said those on the ball (23 per cent) viewed it as part of a total corporate strategy, a way of transforming business processes to create more intimate customer relationships.

Steenstrup said there are classic examples of those that did not invest in their relationships with stakeholders for long-term value. "Communication [gaps] were the beginning of problems for companies like Enron and One.Tel in terms of relationships with stakeholders."

NRMA information services CIO Gary Dransfield said it would be a mistake to think CRM was anything but part of the corporate strategy.

"CRM is not merely about automating interaction between your front- and back-end, it's a total business strategy to determine how to get the most from customer interaction."

He said NRMA has implemented a CRM program in increments over the past two years, starting with a back-office data warehousing project to analyse and segment its customer base.

The next step in its total strategy, Dransfield said, was to develop a work-bench tool providing sales force automation and giving sales staff more customised information.

According to Steenstrup, speaking at JD Edwards' third annual user conference for the Quest Australia and New Zealand group in Melbourne last week, one of the key errors managers make when planning CRM projects is to believe they are "doing CRM" for themselves.

Such insular thinking leads to a lack of focus in communicating with the customer in a holistic way from the inside out of an organisation, Steenstrup said.

"Common mistakes businesses make is managing CRM in a departmental fashion," Dransfield, said calling the notion of departmental CRM a "contradiction". He said it was problematical for organisations to organise a CRM campaign in silos like product groups instead of customer segments. He said this was approach was "too narrow".

Steenstrup said the rule for a more seamless, organisation-wide approach to CRM is to make it "iterative".

"There is no reason why you can't roll CRM out in parts" and treat each of the parts as separate projects, he said. "And do it in all honesty with the rest of the company, because you'll need its support to push the strategy through."

Steenstrup said the iterative approach starts with planning six-month milestones or mini-projects within the wider CRM program to ensure employees do not lose sight of the main program's objective.

Steenstrup said this approach is also a smart tack in a slow economic environment.

"If you've incurred costs through CRM initiatives, this slows down your wallet share. So CRM can be a very good leveraging tool in times like these."

The piece-by-piece approach was particularly important to volatile industries like banking and financial services, because they deal with high-value relationships, he said.

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