EVOLUTION OF BPR

Unlocking the Value of CRM Enterprise Software - Part 1

Posted on the March 4th, 2008 under CRM, Organizational Transformation, Sales Force Automation by Gregory Yankelovich

CRM Enterprise software initiatives are rightly considered to be the most challenging Enterprise Software undertaking by many people in business, yet many companies dip their proverbial ‘toes” into this dangerous “water”. The attraction is, that when these initiatives do succeed, the return on investment is very fast and spectacular. It is interesting to understand what the critical reasons for such volatility are. I will explore them in this post, based on my own experience as well as what I have learned from various discussions with other practitioners.

1. Clear definition of objectives. The objectives are often articulated in terms which are not specific or measurable - “Improve Customer satisfaction”, “Obtain 360 degree Customer visibility”, “Increase time available for Sales calls”, “Improve Sales efficiency by 13%” - are quite common and absolutely useless if not harmful.

First and foremost, we have to manage better communication….Project failure and success seem to depend on saying, “Are you able to accurately articulate and collect what the requirements are?” and “Are you able to express the right estimates?”…. Too many times, the collection process is weak, because the customer is not easily able to articulate [his needs] in language the people [on the project] understand. [S]oftware estimation is not a trivial exercise; it is still an art rather than a science.

JP Rangaswami is the Managing Director of Service Design at BT Design

There is either no measurable target or agreement on base line and measuring methodology. The agreement is the crucial word in this sentence because we deal with an open economic system which can be influenced by multiple market factors outside of the sphere and control of this initiative. So it is difficult to come up with clear metrics which would allow for measurement, i.e. accountability, and people are not often motivated to do difficult things without effective leadership. The result is a list of features and functions which are collected without asking a fundamental question - How this feature, function or process would affect the GOAL?

2. Effective leadership. The leadership is very often outsourced or delegated to IT after initial, very loud announcements:

In American culture, we tend to equate leadership with yapping. There is no correlation. Lead Well and Prosper, by Nick McCormick.

I would like to thank Michael Krigsman for posting these and some other excellent references and analysis in his ZDNet blog.

That is why effective leadership is critical - Management is doing things right; leadership is doing the right things.

Peter Drucker

It is much easier to be a critic, so I will try to be constructive for a change, ranting can get very tiresome. From my Best Practices notebook I can suggest the following targets as examples:

“Reduce selling cycle by 5% first year, and 7.5% during subsequent 2 years without decrease of average deal size, normalized to our industry market condition”;

“decrease deal discount rates by 10% from the current (pre-initiative go live) levels, normalized to industry market condition”.

These do not reflect the whole CRM footprint, but I found the SFA part is more challenging, that is why I have included these examples, but I hope it is illustrative enough to extrapolate to Marketing, Support, etc.

Oh, I would love to use this new SFA system!

It is business leadership which needs to step up to the plate and articulate WHAT do they want to achieve, and WHY these are the most critical targets to aim for. It is also very important that achieving agreed targets does not become an IT challenge, but remains a business challenge thru training, adoption, and compliance management. The IT is an enabler, not a deliverer of economic results.

I will continue later with the rest of the W’s

I have six honest serving men,
They taught me all I know.
Their names are Who and What and When,
Why and Where and How.
- Rudyard Kipling

Re: Carbolic Smokeballs and software salesmen.

Posted on the March 3rd, 2008 under Business Risk by Gregory Yankelovich

The subject of software sales regulation is discussed in this very well written post. I must admit that any idea of regulation usually initiates a violent, negative reaction, since I affiliated (loosely) with a Church of Free Markets. However since I am not a fundamentalist in my beliefs, I can agree that sometimes it does produce positive results and also not always intended ones.

As software does more and more important stuff on our behalf, it is likely that it will face greater regulation. This may be no bad thing, but let’s tread cautiously. Regulations, like technology, often bump into the law of unintended consequences. This can be a good thing in software, as may lead to Accidental Awesomeness. In law though, it tends to hurt folks it was supposed to protect, or protect things that ought to be protected.

I will take on one of Vinnie’s points though:

Require systems integrators to be truthful

This was amplified by Nitin’s comment about outlandish sales claims.

Another one comes to my mind as a honorable mention as well:
- Regulate the advertising or hold vendors accountable for what they claim regarding profitability and efficiency. Vendors claim the moon - I cannot see any other industry where there is so much FUD and bogus claim

Re: IT and productivity growth: it was nice while it lasted?

Posted on the March 2nd, 2008 under Business Risk, Change Management, Organizational Transformation by Gregory Yankelovich

This is a fascinating read posted by:

Andrew McAfee

Associate Professor, Harvard Business School

The main thread of the post is around the role of IT in productivity growth and whether it has reached its limits. I would like to review and comment only on some of the excellent points I found in this post that resonate with my experience and understanding, and I encourage you to read the article yourself for a more complete understanding of this issue.

“… companies have been re-engineering their processes and value chains as long as there have been companies, and that there has been a rich mix of legitimate innovations, tools, and fads around process and performance improvement over the past hundred years. This mix has included total quality management, Six Sigma, re-engineering, just-in-time, quality circles, lean manufacturing, Taylorism, Sloanism, etc. etc. Is IT, () really such a great leap forward in companies’ abilities to better themselves that it’s more than another process improvement program? Does modern IT really deserve a place alongside electricity and the internal combustion engine? “

IMO the answer is a resounding “Yes” and the examples given are very compelling. Humanity moved cargo around long before combustion engines were invented, and used different forms of energy to produce before electricity was invented. All of these allowed us to do the same (more or less) things much faster and better. Quantitative analysis could be very interesting, but results would largely depend on initial assumptions rather then the fundamental premise. The most challenging part, IMO, is measuring the impact of IT on social change, democratization of knowledge (or at least of information), re-evaluation of institution’s role in our lives, etc.

“A process embedded in IT work the same in the 100th location as it does in the first, and will process all transactions the same way. Propagated with confidence that they’ll actually be executed as designed. In many circumstances, once a new process has been embedded in Enterprise IT it’s simply not possible to execute it the old way. These technologies act as a ratchet, making backsliding impossible. Re-engineering efforts that don’t involve IT often fail because people simply ignore the new methods and keep doing business the same old way. IT can be used to remove this option. Propagated with confidence that they’ll actually be executed as designed. In many circumstances, once a new process has been embedded in Enterprise IT it’s simply not possible to execute it the old way. These technologies act as a ratchet, making backsliding impossible. Re-engineering efforts that don’t involve IT often fail because people simply ignore the new methods and keep doing business the same old way. IT can be used to remove this option.”

This statement explains why so many Enterprise Software implementation initiatives fail so miserably. It completely ignores that knowledge workers have enough autonomy to ignore imposed business process. Billions of dollars invested into Sales Force Automation were written off because the most successful salespeople refused to conform to the processes embedded into these applications. I have personally witnessed Accounting Departments breaking business processes flowing info from one application (Project Accounting) into another (AR) to produce invoices in Excel. This risk needs to be understood and mitigated, because when ignored it leads to ROI disappointments, which leads to management skepticism of IT’s claim to importance, which leads to reduced investment in IT. Adoption and compliance management is a pivotal issue.