Most enterprises will spend more this year on customer experience, but will fail to affect their business goals with their CRM.
This is the disturbing report from Gartner analysts, revealed at their London Customer Strategies and Technologies Summit earlier this year.
By understanding the three ways companies fail to capitalize on digital initiatives, we can be part of the minority who successfully transform their business.
If you don’t regularly look at the numbers, you may assume that Salesforce dominates the CRM landscape. While they are the single largest vendor, they are only 18-20% of the CRM market.
Most companies are still using SAP, Oracle, or a homegrown or industry-specific CRM — and many of those are on-premise systems.
None of these alternatives can match Salesforce for integrations or connectivity. There are more than 3,000 apps in the Salesforce AppExchange, and thousands more connect through the open API. No other CRM can match the interoperability of Salesforce. Companies like Microsoft and SAP compete by providing monolithic stacks with incredible power, but without the ability to choose best-of breed vendors for individual capabilities.
The result is that most companies end up relying on a CRM merely to capture records, and don’t incorporate data from other systems of record.
One popular CRM myth is that a company will achieve efficiency or revenue gains just because they digitally transformed their processes. It can be an intense and expensive transition to implement a CRM, and well worth celebrating once the system is in production. But according to Gartner analysts, there is no correlation between cloud CRM adoption and bottom-line metrics like growth, profit, or efficiency. How can this be?
CRM on its own doesn’t improve communication or processes. It doesn’t provide for data warehousing or reporting. CRMs typically do a poor job of tracking changes over time, which is critical for analysis.
So most companies quickly realize that they need to follow a CRM launch with initiatives to integrate other key apps, build a data warehouse, and adopt a visual analytics solution — all of which greatly expand the initial scope and cost of CRM adoption. These initiatives are expensive and risky, and if you haven’t prepared your board and leadership team ahead of time, it can be difficult to get the time and budget necessary to follow through.
Most CEOs are focused on improving customer experience, but organizations lack the systems or the skills to affect change.
Olive Huang, CRM research director at Gartner, says companies should focus on building expertise in customer journey mapping, which can start with a manual mapping exercise, but should end with an operationalized customer journey.
This requires buy-in from marketing, customer service, operations, and sales. That’s not easy. Unless your operations have been designed for business agility, it is impossible to respond to market shifts.
Journey orchestration is an emerging category of software that brings together integration, data unification, and a workflow engine to achieve the original goal of CRM, which is to better align a company with its customers’ expectations.
Rather than shoehorn process management into an app that wasn’t built for it, or build a complex custom solution for integrating data from disparate systems of record, journey orchestration engines unify data, actions, and analysis in one platform.
Implementing a CRM is the first step, but the key to successful digital transformation is to create an agile business, with all of its operations in alignment with the customer.