INGRAINED BUSINESS BEHAVIORS WORK AGAINST CRM
by Jeff Moad

Who doesn't want to get closer to customers? In an e-world where your competitor is just a click away, cozying up to your best customers and offering personalized information and services online that make it hard for them to leave may be the quickest path to sustainable competitive advantage.

Indeed, in a recent survey of 800 IT and business executives by Meta Group, of Stamford Conn., 55 percent said "improving customer intimacy" is one of their company's top three business priorities. Another 36 percent placed that goal in their top 10.

If the statements by CIOs and other IT execs attending Meta's annual Metamorphosis West conference in San Diego last week paint a true picture, many enterprises expect to achieve their customer intimacy goals by investing in new CRM (customer relationship management) applications and business processes. CRM strategy sessions were packed with executives, many of whom said they have large, active CRM initiatives under way. Dow Chemical Co, in Midland, Mich., for example, has launched a large, enterprisewide CRM initiative, said Erwin Tien, senior systems architect.

But new research by Meta indicates those enterprises have a long way to go to reach the nirvana of customer intimacy, even if they've already begun deploying a CRM application package from one of the many vendors jockeying for position in the marketplace. Why? Many organizations have a lot of old organizational barriers to break down and new integration work to do in order to make their CRM efforts truly customer-driven, Meta researchers reported.

The goal of CRM at most enterprises is to produce a single, unified view of customer behavior, preferences and profitability by integrating customer data gleaned from every distribution channel and customer touch point across the enterprise. But, reported Meta, most CRM efforts today are driven by a single function within the enterprise, such as sales, marketing or service. That, analysts said, is partly due to organizational politics. Functional groups at many companies are often uncomfortable sharing customer information with other functional groups. The result, Meta research found, was that many CRM efforts are, in fact, failing to produce a single, unified view of the customer and are not, in fact, customer-driven.

One answer to this problem, said Meta Group Executive vice president Aaron Zornes, is to create a dedicated cross-functional organization to drive CRM efforts and to have it headed by a high-level executive--perhaps with the title of Chief Customer Officer--who reports to the CEO. In fact, said Zornes, 40 percent of Global 2000 companies are planning to create what he called a dedicated CRM project management office.

Another major CRM challenge that most enterprises will face revolves around integration, Meta officials said. Compiling, analyzing and acting on a unified view of customer information will require that existing customer systems and databases be integrated. At the same time, because no packaged application addresses all of the CRM features and functions that will be required by most enterprises, integration between packaged applications will be a major feature of CRM. In fact, Zornes said, Meta research shows that 60 percent of CRM project costs will be attributable to integration. And, for most companies, the cost of deploying CRM will exceed the cost of implementing notoriously expensive enterprise resource management applications.

But, according to Meta research, most enterprises have only begun to integrate customer information. In the survey, 67 percent of the 800 executives said their companies do not effectively integrate customer data from multiple touch points.