CRM: It’s no Field of Dreams

Here’s an interesting clip on some research being done at the Cranfield School of Management on how to make CRM deployments successful.

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While Professor Maklin’s research focus is CRM, I think that much of the advice offered can fit BPM or almost any technology investment.  Here’s the transcript of the middle section of the video clip:

Stan Maklan:  I think the success rate [of CRM investments] was low because I think firms had a technology based view of it, because there is a technology component to the database – the mining tools, the sales force automation – the rest of it was complex.   What you found was that the marketers had some vague idea, yes, let’s get closer to our customers but couldn’t operationalize that into systems and structures.   It is not the way marketing people are trained.   Those with that capability in the organisation were the technologists, the IT people, but of course they weren’t trained or capable in the management of relationships – how trust forms, how you build that sort of trust.

So you fell into a bit of black hole here; you thought that the IT department could specify a system, the marketing people couldn’t really tell you what they were going to do with it until they played with the system and so you fell into this little gap between those who 
understood the customer and those who understood the technology.

Steve Macaulay: You have got some quite clear views about the antidote to this,  haven’t you?

Stan Maklan: Well, yes.   What my research has shown is that the companies that succeed are not the ones who start off with big investments in technology first and hope the capabilities to manage customers will follow; quite the opposite.   They are almost acting like venture capitalists; they are saying let’s do a little, let’s ring fence some customers, let’s get the relationship right, let’s see what the benefits are, let’s develop a team of people who know what they are doing.  Let’s create the business case from real situations, see what it is like and then backfill with further technology investments to make it better and to scale it up across the business

There are a lot of relevant points in that section on the importance of business and technical alignment and the need for high functioning multi-disciplinary teams in business.  

But, the element that jumps out at me is what I have called before the Field of Dreams Fallacy.  Named after the Kevin Costner movie, its the idea in business that the answer to complex problems comes simply by investing money.  ‘If you build it, they will come’ is the phrase from the movie.

Except in business, more often than not, the exact opposite is true.  Spending money and buying technology is gratifying because its easy and often relatively quick to decide.  Making a headline investment in CRM or technology provides the illusion of progress and lets everyone feel reassured the problem is undercontrol.

In reality, the investment often becomes a second problem rather than the solution to anything.

There is no real replacement for actually understanding the problem and testing the solution.  Guessing at the technology you need is rarely a shortcut but sometimes getting the right people together in the right context is.