How to Develop a CRM Roadmap

The correct CRM strategy can cultivate intimate, loyal relationshipswith consumers and render competitive advantage in the marketplace.

CRM Roadmap

http://fadia.CRMproject.com

Is it any wonder that the new mantra inbusiness today is to become a customer-

driven company that develops enduring rela-tionships with its consumers? An Accenturestudy, titled “How Much Are CRMCapabilities Really Worth? What Every CEOShould Know,” established for the first time,a strong link between excellence in a com-pany’s overall interaction with customers,what we call Customer RelationshipManagement (CRM), and financial perform-ance. It showed that companies that have notinvested in developing specific CRM capabil-ities are leaving millions of dollars in profiton the table. And that difference in perform-ance in executing specific CRM capabilitiesaccounts for roughly half the inequality infinancial performance between top and aver-age performers.1

So it is no surprise that companies areinvesting an enormous amount of effort andmoney in CRM technology that aims to getthem closer to their customers. In fact, somestudies have estimated that the overall CRMmarket will exceed $180 billion by 2002(including services, applications tools, andoutsourcing) and is growing at 35% com-pounded annual growth rate. It is also no sur-prise that the top two concerns of many CEOsand CIOs about CRM are how to improve loy-alty (customer retention and development)as well as the bottom line (acquiring new andprofitable consumers). These two concernssummon the need for companies to considera holistic view of their customers. This can beachieved through an innovative approachknown as the “CRM Roadmap.”

But how are companies presently respond-ing to this challenge in an environmentwhere customers are now savvy, harder toplease, more informed, have more choices,and have limited loyalty?

Some companies are implementing point-

to-point technology solutions, but, whiletechnology can play an important role, it isonly a fraction of the overall solution.Companies need to ensure that technologysolutions complement their overall strategicapproach, and that those solutions are flexi-ble enough to work with an evolving strategy.Companies, therefore, need to think morebroadly about the potential of CRM (e.g.,viewing the company as a cohesive unitrather than fragmented divisions, improvingcritical customer processes, etc.).

Constructing a CRM Roadmap thatincludes a comprehensive customer strategyis the first step in achieving the full potentialthat CRM has to offer in becoming a cus-tomer-driven company.

What Is a CRM Roadmap?A CRM Roadmap is a strategic plan that iden-tifies how a company can meet and exceedits customers’ needs. This includes, but is notlimited to, assessing how the sales, market-ing, and service entities work together to: 1)gain insight from their customers (for exam-ple, purchase history, desired products/serv-ices); 2) produce valuable offerings/products(for example, personalized product); and 3)provide the ultimate customer experience(for example, multiple touch points, 360-degree view of the customer).

Figure 1 provides a “line of sight” that linksthe business strategy to customer expecta-tions, and is described in the following pages.Following these steps can ensure that yourcompany meets its CRM goals.

As illustrated in Figure 1, developing aCRM Roadmap involves aligning an organi-zation’s business strategy with its prioritizedCRM capabilities. For example, if a com-pany’s business strategy is to develop prod-ucts faster to gain unique market positioning,the capabilities that the company needs to

master should be aligned with that strategy,and might include:

• Leveraging customer informationfrom the service process (for example,integrating customer feedback duringservice calls with the marketingdepartment).

• Effectively managing product mix(measure success by campaign).

• Effectively managing sales channelstrategy (eliminate conflict betweendistribution channels).

So how do companies know which CRMcapabilities they have, and which they’llneed to realize their strategic goal? Below arethe eight primary steps (which have beenused across industries, including financialservices, electronics and high-tech, con-sumer products, manufacturing, etc.) to fol-low when developing a CRM Roadmap.

Step 1: Gain Senior-Level SponsorshipThe sponsor for a CRM Roadmap effort musthave a vested interest in the project andideally has P&L responsibility for the group.This helps develop buy-in from the seniormanagement team and the operations staff.

A roadmap effort without senior-levelsponsorship and with little cross-unit influ-ence can diminish the returns of such aneffort. As with any project a company under-takes that involves significant change to busi-ness processes, organizational structures, orroles and responsibilities, the lack of key,influential sponsorship reduces the effective-ness of the project, since there is no drivingforce for implementation.

Step 2: Gather Information It is critical to gain insights of various keystakeholders and decision makers within thecompany. These insights can be acquiredmost effectively by holding one-on-one meet-ings. We use an “interview template” thatconsists of more than 30 questions. This tem-plate serves as the foundation for framing ini-tial discussions with the client.

Alpesh FadiaHeidi A. AndersonPeter A. WhitingAccenture

52 • Defying the Limits

Alpesh Fadia and Heidi A. Anderson are Managers in Accenture’s Customer Relationship Managementpractice with a focus on developing CRM Roadmaps. Peter Whiting is a Senior Manager in Accenture’sElectronics and High Technology Practice and specializes in CRM strategic visioning.

CRM Roadmap

Defying the Limits • 53

Examples of questions that help us gaugethe health of a client’s CRM include:

• How would you define CRM? • What types of customer information is

captured/tracked (acquisition/reten-tion costs, churn, cost to serve, etc.)?

• What information would you like toknow about your customers that youcurrently do not?

Depending on the scope and effort of theproject, these meetings may include not onlyexecutives, but also individuals all the way tothe front line. Given their more frequent anddirect interactions with the customer, front-line personnel may know more about cus-tomer needs, preferences and concerns thatmay not have been communicated to theexecutive level.

Step 3: Assess Current State and Define Future State GapsThrough these meetings, we gain an under-standing of the client’s current CRM capabil-ities and significant opportunities to improvetheir customer relationships and map out ourfindings. We also strive to understand thecompany’s future direction (usually betweensix months and two years).

We use the results to determine how closethe company is to meeting and exceeding itscustomers’ expectations, and present thegaps between its current state of CRM and itsdesired state.

We then compare the current state of CRMagainst best practices within the clients’respective industry and across industries thatreveal opportunities to help our client

become not only an industry leader, but alsoa cross-industry, world-class leader.

Step 4: Identify Value Opportunities Value opportunities represent the potentialbenefits delivered by being more customer-centric. We identify and categorize valueopportunities along the lines of people,process, and technology by analyzing the

gaps between the company’s current stateand its desired future state. Once valueopportunities are identified, meetings shouldbe held with the executive team to prioritizethe opportunities.

Examples of “process” value opportunitiesinclude improving how data is captured forall customer contacts, across sales functionsand touch points (for example, phone, email,etc.). “People” value opportunities mayinvolve additional training on service proce-dures for capturing customer data.“Technology” value opportunities mightinclude developing a data warehouse.

Step 5: Link Value Opportunities to Strategic CRM CapabilitiesOnce we determine where the value oppor-tunities lie, we map each to the 21 world-class CRM capabilities detailed in the studymentioned above. Identifying which strate-gic CRM capabilities are needed enablescompanies to more effectively direct theirCRM efforts and ensure they derive the projected value of any CRM projects.

Figure 2 illustrates an example of the linkbetween a specific value opportunity and itscorresponding strategic CRM capabilities.

Step 6: Define CRM Projects and RequirementsOnce value opportunities are prioritized, spe-cific CRM projects need to be developed.Defining and executing CRM projects willensure the company masters the relevantstrategic CRM capabilities.

An effective way to define relevant projects is through brainstorming sessionswith the client. Examples of the outcome ofa session might include:

• Increased understanding of customerprofitability

• Enhanced call center operationsachieved by implementing sophisti-cated touch point technologies

• Decision to establish a data warehouse • Decision to improve sales force training

Once CRM projects are defined, it is criticalto go one step further and identify the busi-ness and technical requirements needed.These requirements should be specific andaddress the necessary people, process, andtechnology components of each project.

For "Understanding Customer Profitability,"functional requirements might include:

• Creating a common definition and prof-itability formula for products, channels,sales staff, customer segments, individ-ual customers, as well as ensuringconsistency across the company

• Defining components of the formula(acquisition, marketing, servicingcosts, etc.)

Step 7: Develop the Business CaseOnce the projects and requirements aredefined, it is necessary to develop the busi-ness case to support or refute the criticality ofa specific project. The business case seeks tojustify the dollar investment needed and theROI that will be realized over the course ofthe investment (usually three to five years).

For example, a typical CRM investmentranges from $10 to $25 million (or more) overa three-to-five year period. The amount iswholly dependent upon the number andextent of initiatives identified. For instance, amarketing insight initiative is typically veryexpensive and often requires the creation ofa company-wide data warehouse with linksto legacy systems dispersed throughout thecompany. In addition, to perform the analy-sis necessary to glean insight requires spe-cialized software and training for the staffthat will use it. Other initiatives can be quite

Business Strategy &Objectives

CRMImplications

CRM CurrentState

Gaps &Value Opportunities

Strategic CRMCapabilities

Project Roll-Out Strategy

CRM Projects Business Case

FunctionalRequirements

TechnicalRequirements

Figure 1 – The CRM Roadmap involves aligning an organization’s business strategy with its prioritized CRM capabilities.

CRM Roadmap

54 • Defying the Limits

simple. Salesforce automation initiativesoften fall into this category and offer the addi-tional benefit of introducing CRM conceptsand execution to a company on a small scalewith a high probability of success.

The investment cost takes into accountnumber of users, internal and externalhuman resources, training, infrastructure,hardware, software, and implementationcosts. The typical ROI for this range ofinvestment, though, could vary from $22million to $110 million.

Each business case should include:• Details and costs of required resources

(people, technology, training, out-sourced resources, etc.)

• Projected duration time of each project• Options for completing the project

using internal or external resources

Once the costs are quantified for each proj-ect, potential benefits are estimated. This ismuch more difficult than simply quantify-ing project costs. The use of our study “HowMuch Are CRM Capabilities Really Worth?”provides significant value here. We are ableto quantify the benefits of mastering spe-cific CRM capabilities (identified in Step 5)and thereby, complete the most difficultpart of the business case. A key require-ment is to ensure that senior executives arein agreement with and will support theextent of expected benefits.

Business cases enable a company to prior-itize each project’s value to the company.

With the creation of a “value realizationplan,” client executives have a tool to judgethe impact of changes to the CRM invest-ment plan. An accelerated implementationcould be modeled to quantify the effect ofearlier CRM benefits. Similarly, an extendedinvestment plan allows them to quantify theimpact of a slower implementation in termsof “lost benefits” over time.

Step 8: Develop a Roll-Out StrategyDeveloping a roll-out strategy enables com-panies to focus their resources, money, andtime on the most important projects that helpthem become customer driven.

Prioritization and phasing of projects isconducted with the executive team, whichevaluates the results of the business casesand considers: financial results, duration,

level of effort and technical impact requiredfor each project.

Critical Success Factors To successfully develop a CRM Roadmap,several critical success factors must be keptin mind:

1) It is vital to have buy-in from top management.

2) A strong sponsor is required (skilled,knowledgeable, and politically savvy).

3) It is essential to have buy-in andinvolvement from all process owners.

4) It is critical to have a strong leader whocan hold constructive, productive

brainstorming sessions, and who isgood at maximizing participation fromthe client team. Also, it is helpful tohold brainstorming sessions duringnumerous steps within the develop-ment of the roadmap.

5) Feedback from all affected internal andexternal parties (customer groups, otherinter-dependent internal departments)must be obtained and considered.

6) Do not lose sight of your customers’needs.

7) Installing technology without changingsupporting processes and people/organizational elements will not resultin a comprehensive CRM Roadmap.

8) Lack of communication can be lifethreatening to a CRM Roadmap proj-ect. You cannot over communicate.

A Final ThoughtAchieving success in developing intimateand enduring relationships with customersbegins with a holistic consideration of a com-pany’s functions and abilities that affect itsconsumer’s objectives. Developing a CRMRoadmap, therefore, is a continuous processand not just a one-time exercise, because cus-tomers’ needs and preferences change con-stantly. The correct strategy can help yourcompany form deeper relationships with itsconsumers, and also obtain a competitiveadvantage in the marketplace.

Reference1 “How Much Are CRM Capabilities

Really Worth? What Every CEO ShouldKnow.” Accenture 2000.

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Value Opportunity Strategic CRM Capability

• Improve customer understanding

• Possess thorough knowledge of the customer• Leverage customer information from the service process• Understand customer profitability and cost-to-serve

Figure 2 – Value opportunities and corresponding strategic CRM capabilities

WEBLINK

Wendy Close of Gartner, Inc. discusses otherCRM strategies in her white paper at The CRMProject website, http://close.CRMproject.com.