As the going gets tough, the tough gets going.In the today’s open and highly competitive
market which has been stifled even further by the constant global economical
tidal waves and local political instabilities, businesses are looking for ways
to survive, let alone edge out the next competitor.As costs continue to rise, cost-cutting can
only take these businesses so far, hence, managements are turning their
attention to the next re-buzz in the market, CRM or Customer
Relationship Management.This is not a
new buzz in the market place, in fact, the CRM buzz has been around overseas
for many years but today, there is a new CRM buzz.
CRM in many ways has transformed itself to be much more
feasible for the SME’s of the world.Service
providers and IT consultancy houses have had to adapt their implementation
approaches to become much more pragmatic and to realize benefits much quicker
for their clients.Traditionally, CRM
was targeted only for large enterprises with large volumes of customer transactions
that could justify the large investments in CRM platform which could take over
12 months to implement.In the end,
alarming statistics can be cited for rate of failures of these CRM
implementations.
‘The Butler Group, for example, cited a 70 percent failure rate
for CRM, while other reports from the Gartner Group and the Meta Group have
suggested failure rates of 55 to 70 percent.In yet another example, a Merrill Lynch survey of chief information
officers at large companies reported that 45 percent of those surveyed were not
satisfied with CRM installations.’
These failures are
simply due to the fact that the market is a dynamic ecosystem that will not
allow for such long implementation cycle and traditionally, relatively rigid
CRM platforms.
Today, technological advancement in software designs
together with a much thorough understanding of business requirements have allowed
CRM platforms to be much more practical, quicker to implement and flexible
enough to adapt to changing needs quicker with less efforts.It is found that an implementation of a CRM
platform longer than 4 to 6 months would diminish the potential of the expected
value significantly especially in an SME environment where the market and competitors
are much more dynamic.In this ecosystem,
relatively small changes have a much more significant and magnified effects on
the businesses.Therefore, it is more
important than ever for SME’s looking to get into the CRM game, to learn to adopt
and to adapt CRM quickly in order to most effectively maintain and grow its
highest valued customers while efficiently acquiring new strategic ones, just
to survive.
The problem most often seen with SMEs’ today is that
managers and staff at these organizations have only high level and often time
incomplete concepts of CRM and most cases limited to only certain areas of the
business e.g. marketing, or sales or just customer service.This is a crucial point in CRM as customers
need to be managed over the entire customer life cycle consistently and effectively.Therefore, CRM needs to be understood as an
integrated platform that can be leveraged across the entire organization from
front office all the way to the back office where all the stages of the
customer life cycle are managed.
Just as one would not take a trip without a plan, a map
and/or a guide, CRM is a journey not to be taken without good planning and
preparation.
How should an SME’s with limited resources and business
issues that are just as complex as large multinationals go about taking on CRM?Are there right steps in approaching CRM?
When considering CRM, the following check list should be use
as a guide for CRM managers and project sponsors:
1.Ensure that your organization has a good
understanding of the capabilities and scope of CRM, how it can help your
organization in all areas from PR/Marketing to Sales to Service to back office.
2.Ensure that your business processes are well
defined and understood within your organization in order to be able to
elaborate where customer interactions can have the most impact on your costs
and revenue opportunities.
3.Assess and define a well planned CRM strategy
which could include implementation road map and process improvement plans to
ensure that you achieve maximum benefits as quickly as possible in areas that
have most impacts to your business first.This will ensure optimization of your investments through value driven
approach.
4.Work your plan and implement your strategy as
quickly as possible but more importantly, in smaller steps.
5.Select the right CRM technology for your
organization, one that will easily change and adapt with your organization as
you grow.And do NOT take on a CRM
initiative that is more than 4-6 months at a time, optimally 3-4 months.Remember, CRM is a journey that thrives on
momentums of successes, not a one shot, “Big Bang” and your CRM universe is
created.
6.Hire outside experts or “a guide” for your CRM
journey if you do not have or cannot afford to have anyone on your line
functions to dedicate sufficient time to this initiative.As in all strategic initiatives, CRM requires
your full attention and careful management in order to reap its full benefits.
In conclusion, CRM can be for everyone especially SMEs’ of
the world but CRM is a journey not to be taken lightly or without a solid
strategy and plan of execution that is right for your organization and market
situations.Where you are in your
organizational and ICT maturity plays a major role in how you should plan for
your CRM journey.The few steps above
will help guide a fruitful journey but as top management of your organization,
you must be able to take an accurate count of your internal capabilities and
level of readiness before undertaking any strategic initiative.
*) Statistics
recited from Article from Butler’s Group
Why strategic initiatives should be organized under the umbrella of a Corporate PMO
Organize business enhancements effectively
To survive in today’s ever changing market environment, companies need to adapt fast. To achieve the required “organizational agility” companies have to frequently launch strategic initiatives to either implement crucial enhancements in their business operations or expand their business scope. Those strategic initiatives can extend from the implementation of improved processes and technology, the setup of new organizations, introduction of new products and services or business restructuring initiatives.
Despite the importance to companies’ success, these strategic initiatives are often implemented very poorly and many inevitably fail. According to a study conducted by the Standish Group, 90% of initiatives do not meet their time, cost or quality targets. Only 9% of large, 16% of medium and 28% of small initiatives were completed on time, within budget and most importantly delivered measurable business and stakeholder benefits. Many companies discover that solutions either don’t bring the expected benefits or initiatives drag on forever and never get fully implemented.
What happens? Why do so many crucial business enhancement initiatives fail to deliver the promised business benefits?
To answer these questions we need first look at how companies traditionally approach these initiatives. A common approach to strategic initiatives is that an enhancement idea is given from Top Management to one of more middle managers for implementation. The middle managers then assign respective tasks to their subordinates on top of their day to day work. This approach sounds good in theory as it utilizes eventual idle time of the experts in the line organization. However, experience shows significant short comings. Often one year after the initiative has been assigned Top Management realizes that actually not much has been implemented.
There are four challenges that implementation teams typically face when trying to implement strategic initiatives out of the line organization:
Insufficient Focus of team members - Changes in an existing business setting are usually very complex and need to be well thought through. Since change always involves people, change management aspects are crucial for complete implementation and benefit realization. Running the initiatives out of the line organization means that necessary tasks are assigned on top of people’s day to day job. Chances are very high that the initiative gets lowest priority. Meetings tend to be postponed, issues are not being addressed properly and delays in delivery milestones are mostly being justified through some urgent work for customers. The initiative will take forever or die quietly.
Lack of cross-departmental empowerment and communication - most strategic initiative don’t stops at department boundaries. Initiatives that are run out of the line organization often suffer limited support from other departments. In addition to this, the department in charge also has insufficient understanding of what is required in other departments. People have insufficient end to end process overview and come up with silo-designs that are not effective to the overall company context. Furthermore, those initiatives often need to integrate with other initiatives of other departments. It’s often seen that initiatives end up in a catch 22 situation where every department is waiting on deliverables of another department.
Lack of Project Management Skills - The nature of working in a larger initiative can be very different from a line organization. While line organizations are driven by day to day schedules of external or internal customers and continuous analysis of business performance figures, projects are dominated by clear milestones and deliverables that have to be achieved within scope, quality, time and budget. In many organizations, middle management and team members have insufficiently understanding on basic project management principles that would help them to manage the dynamics of cross-functional initiatives.
Insufficient focus of Top Management - Often Top Management has very limited visibility about the status of the strategic initiative. On the other hand, the working team may have insufficient visibility on the current company strategy. It’s been seen often that implementation teams spend time and resources on ineffective solutions because they are not aware about potential changes in the overall business strategy and direction. If top management had more transparency about the project status and content, they would have given more direction and resolved issues quickly.
A crucial step to ensure effective implementation of strategic initiatives is to setup a Corporate PMO (Corporate Program Management Office). A Corporate PMO or Enterprise PMO usually reports directly to the CEO and ensures that investments in business improvement initiatives are effective, i.e. expected benefits are realized as fast as possible, costs are controlled, solutions are aligned with the overall strategy and risks to operations are managed.
Many Thai companies have already implemented a PMO for their IT department to multiple concurrent and dependent IT projects in a standard project governance framework. A Corporate PMO takes on very similar responsibilities on corporate level, e.g.:
Facilitate investment decisions and ensure alignment with Corporate Strategy
Create full transparency on project status, e.g. progress, issues, costs
Manage the Masterplan of strategic initiatives - ensure everything is in sync and issues are addressed
Facilitate sourcing of right skilled internal resources (team members) and external vendors
Ensure project members are well trained about core project management processes, e.g. planning, issues resolution, risk management or benefit realization
Facilitates the knowledge management process, e.g. organization of key learnings
Implementing a Corporate PMO can be quite challenging since the respective working culture requires high discipline and strong commitment to achieve planned milestones in time, scope, quality and budget. However, it’s worth the initial investment. As per a KPMG survey of 252 organizations, 69% of project failures are due to lack and/or improper implementation of project management methodologies and project governance. It’s seen that more and more Thai companies recently started setting up a Corporate PMO to optimize large investments and also make their business move faster.
IT Governance
Do you know ...
... what's going on in your IT department?
... what value you get out of your IT systems?
... if your people are utilizing the existing IT systems fully?
... if your IT projects are delivered in the most efficient way?
... if you are using the most efficient IT vendors?
... if your IT is ready for your company's future?
... if you spend enough or too much for your IT?
IT Governance, if implemented properly, gives you the answer to these questions, e.g.
It ensures that you maximize the value of your IT systems.
It helps you not to waste any baht in systems that don't enhance your business.
It provides tools to implement the "minimal IT" concept, a way to implement always just the right amount of IT.
It helps you to have full transparency about what your IT is doing with your investment at all times.
It supports the alignment of all IT initiatives to the overall company strategy.
So, what is IT Governance? It's a process framework that involves a mix of the following:
Control of the work performed by your IT department
Co-ordination between different IT projects and activities
Measurement of outcome of IT projects and activities
Compliance with internal company policy
Justification of IT spending (!)
Clear assignment of accountability and responsibilities
Transparency of status of cost and value drivers
Ensuring alignment of the needs of customers, the broader organization, and other IT stakeholders
How can you make this happen in your organization?
First of all you need to understand the role of IT in your
organization. In which areas is IT absolutely business critical, i.e.
does provide significant competitive advantage and which areas are more
or less nice to have?
Then you set up an organization (IT PMO - IT Program Management Office)
that will conduct all relevant IT Governance activities. The size of
this organization will strongly depend on the role and importance of IT
in your business. In some companies this would be a virtual
organization, and some other companies may have to have more than 20
people in this function.
Then you get a standard IT Governance framework such as COBIT
and adjust it to your organization. You don't necessarily need to
implement the full framework - be aware what processes are really
important for your business.
The implementation of the processes will require a change in thinking
and possible also a culture change for your people. Therefore don't
implement all processes at once. If you do it step by step, the chance
is much higher that the new processes will be accepted and effectively
used by your people. Start with processes that immediately provide
value such as reporting, issue resolution and project prioritization
and then move to more long-term oriented processes such as project
audit and continuous improvement.
Very important for all of this is that top management is frequently
reviewing the status using standardized KPI's and acts upon critical
issues.
At the beginning, IT governance may be perceived as unnecessary
overhead, but you will soon find out how much more smooth your IT
organization will run and how much more confidence you will win that
your IT department is really valuable for your business. IT governance
doesn't require much investment but the savings potential is usually
quite significant. Companies in Thailand who do get their IT Governance
well implemented will clearly increase their competitive advantage.
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