CRM project design and planning process

The key phases of CRM implementation project are:

1. Develop the CRM strategy
2. Build the CRM project foundations
3. Specify needs and select partner
4. Implement the project
5. Evaluate performance.

Please note: Depending on the scope of the project some of these phases or processes may not be applicable.

1. Develop the CRM strategy:

• Situation analysis

Development of the CRM strategy starts with a situation analysis. This analysis sets out to describe, understand and appraise the company’s current customer strategy. It helps to have an organizing framework to guide your analysis. 

• Commence CRM education

If you are about to embark on a CRM implementation, it is important that all stakeholders have a clear understanding of what CRM denotes. Education has the twin benefits of allaying any fears that people might have, based on their misunderstandings, and encouraging participation from people whose jobs might be impacted. Education enables stakeholders to identify opportunities to improve their workplace.

• Develop the CRM vision

Your CRM vision is a high-level statement of how CRM will change your business as it relates to customers. The software-as-a-service (SaaS) company salesforce.com, provides a number of examples of CRM visions. The vision will eventually guide the development of measurable CRM outcomes.

• Set priorities

CRM projects vary in their scope and can touch on one or more customer-facing parts of your business – sales, marketing or service. Clear priorities for action, normally focused on cost reduction or enhanced customer experience, might fall out of the situation analysis, but more time and debate is often necessary. Priority might be given to projects which produce quick wins, fast returns or are low-cost.

• Establish goals and objectives

Goals and objectives emerge from the visioning and prioritizing processes. Although the terms ‘goals’ and ‘ objectives ’ tend to be used synonymously, we use the word ‘ goal ’ to refer to a qualitative outcome and ‘ objective’ to refer to a measurable outcome. For example, a CRM goal might be to acquire new customers. A related CRM objective could be to generate 200 additional leads by the fourth quarter of the next financial year. 

Strategic goals for CRM

• Identify people, process and technology requirements

You’ll return to these matters repeatedly as the project unfolds, but at this stage, you need a general idea of the changes that are necessary so that you can begin to identify costs and construct a business case. If your goal is to enhance cross-selling opportunities you might need to invest in training salespeople to ask the right questions, engineering a new opportunity management process and acquiring sales automation software.

• Develop a business case.

To write a business case, you can refer to my blog "How to write Business Case". The business case is built around the costs and benefits of the CRM implementation and answers the question: ‘Why should we invest in this CRM project?’ The business case looks at both costs and revenues.
Please keep in mind that CRM implementations can generate additional revenues in a number of ways:

• Conversion of more leads from suspect to prospect to opportunity
• More cross-selling and up-selling
• More accurate product pricing
• Higher levels of customer satisfaction and retention
• More leads and/or sales from marketing campaigns
• Incremental sales from more effective selling processes.

And costs can be reduced by:

• Improved lead generation and qualification
• Lower costs of customer acquisition
• More efficient account management
• Less waste in marketing campaigns
• Reduced customer service costs
• More efficient front-office processes.

2. Build the CRM project foundations:

• Identify stakeholders

The first step is to identify the stakeholders. Stakeholders include any party that will be impacted by the change – this could include senior management, users of any new system, marketing staff, salespeople, customer service agents, channel partners, customers and IT specialists. Their participation in the CRM project may be required at some future point. Research suggests that the early involvement of parties affected by change helps pre-empt later problems of resistance. Vendor experience indicates that the early involvement and participation of senior management is likely to promote more successful implementation.

• Establish governance structures

Governance structures need to be put in place to ensure that project roles and responsibilities are properly defined and allocated. The program director (PD) plays an important role in this structure. Ultimately, the PD has responsibility for ensuring that the project deliverables are achieved and that project costs are controlled. In larger projects, the PD will be a full-time appointment. The PD has a boundary-spanning role – one foot is in the CRM steering committee, the other is in the program team. Another key member of the steering committee is the executive sponsor. This is typically a board-level senior executive who commits real-time to the project and ensures that resources are

made available. The steering committee makes policy decisions about the CRM implementation – for example, which technology to buy, which consultants to hire – and ensures that the implementation stays on track and within budget. Other senior executives may sit on the steering committee to ensure that the project remains business-focused and does not slide into becoming an IT-dominated project.

• Identify change management needs

Even small CRM projects can prove challenging in terms of change management. According to consultants Booz Allen & Hamilton, ‘ Leadership teams that fail to plan for the human side of change often find themselves wondering why their best-laid plans go awry’. They describe change both in terms of top-down leadership and bottom-up buy-in, as does John Kotter whose eight-step approach to managing change is widely cited and deployed. The eight steps are as follows:

1. create a sense of urgency so people begin to feel ‘ we must do something ’
2. put together a guiding team to drive the change effort
3. get the vision right and build supporting strategies
4. communicate for buy-in
5. empower action by removing organizational barriers to change
6. produce short-term wins to diffuse cynicism, pessimism and skepticism
7. don’t let up but keep driving change and promoting the vision
8. make change stick by reshaping organizational culture.

• Identify project management needs

CRM implementations can place considerable demands on project management skills. A CRM project plan spells out the steps that will get you from where you are now (customer strategy situation analysis) to where you want to be (CRM vision, goals and objectives), on time and within budget. The CRM program director generally performs the project management role, but sometimes it is outsourced to a consultant.

• Identify critical success factors

Critical success factors (CSFs) are the ‘ must-haves ’ that underpin project success. By definition, CSFs are attributes and variables that can significantly impact business outcomes. CRM consultants and vendors offer a range of opinions on CSFs, mentioning the following: 

• a clear customer strategy that defines your company’s offers, markets and channels; 
• an organizational culture that promotes coordination and information-sharing across business units;
• an agreed definition of what counts as CRM success; 
• executive sponsorship of the CRM program’s objectives; 
• availability and use of pertinent, accurate, timely and useable customer-related information; 
• a clear focus on people and process issues, not only technology; 
• starting small with quick wins that are then promoted within the company as success stories; 
• focus on automating processes that have major implications for costs or customer experience;
• engagement of all stakeholders, including end-users and customers, in program planning and roll-out.
  

• Develop a risk management plan.

It has been claimed that a large number of CRM projects, perhaps as many as two-thirds, fail. Of course, there can be many potential causes of failure, ranging from inadequate project management to resistance of end-users to the adoption of new technologies. At this stage, you’ll be trying to identify the major risks to achieving the desired outcomes. Once identified, you can begin to put risk mitigation strategies and contingency plans in place.


3. Specify needs and select partner:

• Process mapping and refinement

The first task of Phase 3 is to identify business processes that need attention – making them more effective or efficient or flagging them as candidates for automation. Business processes can be defined as follows: 

"A business process is set of activities performed by people and/or technology in order to achieve a desired outcome."

Put more simply, business processes are how things get done by your company. Processes can be classified in several ways: vertical and horizontal; front and back-office; primary and secondary.

Vertical processes - are those that are located entirely within a business function. For example, the customer acquisition process might reside totally within the marketing department.

Horizontal processes - are cross-functional. New product development processes are typically horizontal and span sales, marketing, finance and research and development functions.

Front-office - (or front-stage) processes are those that customers encounter. The complaints handling process is an example.

Back-office - (or back-stage) processes are invisible to customers, for example, the procurement process.

• Data review and gap analysis

Having identified processes that require attention, the next step is to review the data requirements for the CRM implementation and to identify shortfalls. Strategic CRM uses customer-related data to identify which customers to target for acquisition, retention and development, and what to offer them.

Operational CRM uses customer-related data in the everyday running of the business, for example in handling billing queries in the contact center or mounting campaigns in the marketing department. Analytical CRM uses customer-related data to answer questions such as ‘who are our most profitable customers’ and ‘which customers are most likely to churn’?. Collaborative CRM uses customer-related data to enable channel partners to target their communications more precisely. The fundamental issue companies have to ask is: what customer-related data do we need for strategic, operational, analytical and collaborative CRM purposes?

• Initial technology needs specification, and research alternative solutions

Earlier in this process, you began to consider technology requirements. Now you can return to this question with a clearer focus on the process and data issues. There are a huge number of software applications that fall under the heading of CRM. You need to decide what applications will deliver your CRM vision and meet the business case requirements. You can learn about these applications

by visiting vendor websites, joining online communities such as CustomerThink, or attending physical or virtual (online) exhibitions. 

Source: Gartner Inc

A decision has to be made about whether to build, buy or rent the CRM applications that are chosen. Your options are to build your CRM applications from scratch, to buy an on-premise site license or pay a monthly per-user charge for an on-demand solution. If you opt to build from scratch you may find that some open source modules provide much or all of what you need. Open-source software is peer-reviewed software that gives CRM application developers the opportunity to view and evaluate source code. Open-source advocates suggest that being able to modify source code leads to improved software with fewer bugs and that free distribution leads to more developers working to improve the

software. The second alternative is to license CRM applications. Yearly license fees typically vary according to the number of users. License fees give you the right to use the CRM software, but additional costs may be incurred for CRM application support and maintenance, training, customization, integration, IT infrastructure and end-user support. The final alternative is to pay a monthly per-user cost for an on-demand solution which generally includes implementation, maintenance, training, support and application management services delivered directly by the application vendor. Most companies opt for either hosted (on-demand) or installed (on-premise) solutions.

Few hosted CRM vendors are:

• Salesforce.com
• Microsoft Dynamics 365
• Siebel Systems
• HubSpot CRM
• Sugar CRM 
• SalesLogix 
• Soffront Software Inc. 
• RightNow Technologies 
• NetSuite 
• Oracle 

Hosted versus installed CRM – first-year costs for a 500-user deployment:

Sources: Triple Tree; Software & Information Industry Association (SIAA); salesforce.com; Yankee Group.

• Write a request for proposals (RFP)

Before calling for proposals you need to write a detailed RFP. This document becomes the standard against which vendors’ proposals are evaluated. It summarizes your thinking about the CRM program and invites interested parties to respond in a structured way. Typical contents of the RFP include:

1. Instructions to respondents
2. Company background
3. The CRM vision and strategy
4. Strategic, operational, analytical and collaborative CRM requirements
5. Process issues:
1. customer interaction mapping
2. process re-engineering.
6. Technology issues:
1. delivery model – SaaS, on-premise, blended
2. the functionality required – sales, marketing and service
3. management reports required
4. hardware requirements and performance measures
5. architectural issues
6. systems integration issues
7. customization requirements
8. upgrades and service requirements.
7. People issues:
1. project management services
2. change management services
3. management and staff training.
8. Costing issues – TCO targets
9. Implementation issues – pilot, training, support, roll-out, timeline
10. Contractual issues
11. Criteria for assessing proposals
12. Timeline for responding to proposals.

• Call for proposals

The next step is to invite potential partners to respond to the RFP. You’ll see from the RFP contents that CRM projects sometimes require input from several processes, people and technology partners. On the technology side, if your company is already paying for CRM modules as part of its enterprise IT system, you’ll certainly want to add this technology vendor to the list of those invited to respond. Between three and six potential technology vendors are typically invited.

• Revise technology needs identification

Proposals from technology vendors will sometimes identify opportunities for improved CRM performance that you may not have considered. Perhaps there is some functionality or an issue that you had not considered. For example, you might not have considered the need to provide implementation support to sales representatives in the field. A vendor who indicates that they’ll be able to help representatives learn the new technology in remote locations might be very attractive.

• Assessment and partner selection.

The next stage is to assess the proposals and select one or more partners. This task is generally performed by an evaluation team formed for this purpose and reporting to the steering committee. Assessment is made easier if you have a structured RFP and scoring system. There are two types of scoring systems – unweighted and weighted. An unweighted system simply treats each assessment variable as equally important. A weighted system acknowledges that some variables are more important than others. These are accorded more significance in the scoring process. Evaluation and selection should involve more than just written vendor proposals. Short-listed vendors should be invited to demonstrate their solutions in relevant scenarios. Vendors may be required to provide proof-of-concept for technical solutions such as e-mail integration or mobile synchronization. Finally, preferred vendors should be subject to reference checks. The results of all these inputs are then scored to support the final decision.


4. Implement project:

• Refine the project plan

The first step of Phase 4 requires you to cooperate with your selected partners in refining the project plan. Remember, this was originally defined without consideration of the needs and availability of your partners. You may find that your partner’s consultants are already committed to other projects and that you’ll have to wait. Your partners will be able to help you set new milestones and refine the budget.

• Identify technology customization needs

It is very common that off-the-shelf technology fails to meet all the requirements of users. Some vendors have industry-specific versions of their CRM software. Oracle, for example, offers a range of CRM suites for banking, retail, public sector and other verticals. Even so, some customization is often required. The lead developer, database developer and front-end developer, in partnership with vendors, can perform these roles. Customization needs are typically specified using a gap analysis

approach. The required business process is supplied to the vendor, who (after some preparation) presents how this process is supported in the software. Any gaps are highlighted for subsequent analysis and action. This continues until all business processes have been examined. The resultant gap register is then assessed, priorities are established and customization of their software and/or modification of the business process begins. Customization raises problems of ownership of Intellectual Property that both vendors and clients will want to resolve.

• Prototype design, test, modify and roll out.

The output of this customization process will be a prototype that can be tested by users on a duplicated set, or a dummy set, of customer-related data. End-user tests will show whether further customization is required. Final adjustments to marketing, selling and service processes are made at this stage, and further training needs are identified and met. After a final review, a roll-out program is implemented. In larger companies this often is a phased roll-out. For example, a new sales automation system might be rolled out first to the ‘ champions’, those identified earlier as buying in both emotionally and rationally. A new service automation solution might be rolled out to newly acquired customers first, before the existing customer base is imported. The idea is to iron out any problems before company-wide adoption.


5. Evaluate performance:

The final phase of the CRM project involves an evaluation of its performance. How well has it performed? Two sets of variables can be measured: project outcomes and business outcomes.

Project outcomes focus on whether the project has been delivered on time and to budget. Your evaluation of the business outcomes requires you to return to the project objectives, your definition of CRM success and the business case, and ask whether the desired results have been achieved.

If your single goal was to enhance customer retention rates, with a measurable lift from 70 to 80 percent, and this is accomplished then your CRM project has been successful. Congratulations! 😎

However, most projects have multiple objectives and it is common for some objectives to be achieved while others are not. Lead conversion by the sales team might rise, but lead generation by campaign managers might fall short of objectives. A critical issue concerns the timing of any business performance evaluation. It can take users several months to become familiar with new processes and competent in using new technology. Periodic measures of business outcomes can be taken over time, to ensure that the program outcomes are achieved. Ongoing training, timed to coincide with software upgrades, can enhance business outcomes.

Reference: CRM by Francis Buttle