Recovering from Failed CRM Projects
Fair or not, Siebel is often considered the “poster child” for failed customer relationship management (CRM) system implementations. I’ve heard dozens of “war stories” about over-aggressive and excessively large CRM implementations that did not come close to realizing their promised benefits and wasted a lot of money. We can blame Siebel all we want, but if enterprises did not commit to the project and make the investment, Siebel would not have had the opportunity to fail. And to be fair, there were some Siebel implementations where customers were satisfied.
What is the “Siebel Effect”?
The “Siebel effect” is a fear of large, expensive and often very lengthy projects intended to revamp all aspects of an enterprise’s customer-facing solutions. For contact centers or customer service organizations, it’s about a “rip and replace” of the customer service and support application. This process could also involve sales, marketing and analytics.
The CRM era taught managers a few things they already should have known:
- If it looks too good to be true, it probably is
- Speak to references and find out what does and does not work before signing a contract
- Include rewards and penalties in system contracts; if vendors won’t commit, neither should you
- Systems cannot change culture
- Selecting system implementation resources is at least as important as selecting the system
But the most important, painful and often expensive lesson that companies learned was that large and complex projects should be broken down into manageable and measurable phases. “Big Bang” may have worked once, but it’s unlikely to work again in an enterprise environment.
During the last 6+ years, many organizations that did not realize the expected results and benefits from their CRM implementations have shied away from making additional investments to improve their servicing environments or finish what they started. Quite a number of companies stopped their implementation efforts and tried to make the best of what they had. This often included a combination of their old systems and the new CRM application. Since these companies made the initial decision to replace their servicing applications because they were outdated and unable to address customers’ customer needs, these failures were a major setback.
Having been burnt badly, many companies have since “limped” along, nursing servicing applications that could easily be more than 20 years old and not designed for today’s complex contact center environments. However, many organizations are now reaching a critical juncture where their servicing applications have simply run out of gas and can no longer meet the needs of their organization.
Managers in the US and around the world are looking for flexible servicing applications that can grow with their business, but are fearful of signing up for long-term and complex system conversions. Instead, they want quick fixes and are seeking ways to enhance what they have by adding a new layer of functionality on top of their existing servicing infrastructure. This approach has worked, and presents minimal risks for an organization.
While there have been many failed CRM initiatives, the CRM movement has not been all bad. It helped bring a great deal of senior management attention and investments to customer-facing departments, including contact centers. However, most organizations have yet to achieve the two primary goals of the CRM movement: (1) creating a system to give the company a holistic, 360-degree view of their customers, and (2) getting sales, marketing and servicing organizations to work together.
It’s well past time for most companies to invest in and replace their contact center servicing systems. But this time around, it’s understood that projects should be broken into short-term phases, and that process and training changes are as important as the system itself. We can blame Siebel all we want, but it’s time to stop using them as an excuse to avoid making the necessary infrastructure investments to enhance productivity and improve the customer experience. We need to apply the hard-earned lessons of the CRM movement to mitigate risk and greatly improve the chances of success.
Ask the Experts
What is the actual definition of shrinkage? How is shrinkage different than attrition? Is there any universal formula available to calculate shrinkage and attrition? If not, which is the easiest formula to use to calculate attrition and shrinkage?
Shrinkage is a term that is broadly defined as the percentage of time that scheduled agents are not available to handle customer interactions. Conceptually, it’s the time that “shrinks” from the schedule. Shrinkage can encompass planned events, such as breaks, paid time off, training, team meetings, coaching sessions, or other activities. It can also include unplanned events such as absenteeism, tardiness or agent attrition. It may also include time lost when agents do not adhere to their planned schedule. This is the percent of time that agents are not where they are scheduled to be or not doing the activity they were scheduled to do. For example, if an agent is supposed to be handling calls but instead is unavailable, they are out of schedule adherence.
Attrition is a component of contact center shrinkage. It is the rate at which the agent workforce is reduced through voluntary (resignation, transfer, promotion, job abandonment, etc.) or involuntary (termination, disability, sick leave, layoff, etc.) events. There is a clear distinction between the two.
DMG Consulting LLC is a leading independent research, advisory and consulting firm specializing in unified communications, contact centers, back-office and real-time analytics. Learn more at www.dmgconsult.com.