Questions to Ask Yourself About Quality

All businesses want to provide quality products and services, but not every business manager knows exactly how to define quality, or even where to get started. While there is no single best way to build a quality program, or to go about implementing one, there are a number of questions that, once addressed, can at least help to set your business out on the right path.

The 10 basic questions that any services manager should be asking, and a corresponding set of guidelines for addressing each of them, may include:

 1.  How do our customers define quality? What do we need to do to convince them that we have embraced the quality initiative?

Merely embracing a quality initiative may not be as well received in the services marketplace if you have not defined the key elements of quality in the same manner as your customers. For example, if your customers define quality as “delivering services faster”, but your quality program is designed to help you “deliver services better”, you will not be perceived as properly addressing your customers’ primary service quality needs.

2.  How do we know if our organization is ready for quality? How quickly should we move? How soon should we get started?

Whether or not your service organization is ready to embark on a quality program may be irrelevant if your customers think you are already long overdue. You may be undecided; but if it is time, your customers will let you know.

3.  Do we need a separate plan for quality or does it fit in with our overall services business plan? How often do we need to update or revisit our quality plan?

A good quality plan is one that is also part and parcel of your organization’s strategic services marketing plan. A quality plan that is separate from the business plan is typically doomed to failure. Further, quality is an ongoing initiative and not a fixed plan – it requires constant updating and revisiting.

4.  Is there such a thing as too much quality? How far should we go in terms of implementing quality?

There is no such thing as too much of a good thing when you are talking about quality. Rather, the main focus should be on, “Are we implementing the right kind of quality” and not, “Are we offering too much of it?’

5.  How interactive should we allow our customers or vendors to be in terms of participating in our quality program? How far at a distance should we keep these and other outside segments?

Quality must involve all of the organization’s employees, customers and strategic partners. Quality only works if every party participates in it. An “arms length” approach to quality will not be anywhere near as successful.

6.  If our competitors start to implement specific types of quality programs, should we follow them? How important is it to be the first one off the block with a services quality initiative?

Being first is not nearly as important as being best when it comes to quality. Being first does not afford any special marketing benefits either – especially if you can’t deliver. The best quality initiatives are those that “fit” your organization, and not those that mirror what other organizations are doing.

7.  How do we best promote our quality achievements to the marketplace? What can we tell our customers that they don’t already know? What should we tell our non-customers to make them more interested in considering our products and services?

Any achievements you accomplish with respect to quality should be promoted to the marketplace. Digital marketing, Webpage content, marketing collateral, print advertisements, press releases, trade shows and word of mouth are the most widely used means to communicate quality achievements. The only difference between customers and non-customers is that some just happen to be paying you for your products and services. Other than that, they should all be treated in the same manner, and should all be provided with the same positive quality communications.

8.  How well defined does our internal quality initiative have to be? Does it have to extend to all areas of our operations, at all service locations?

We’ve all heard about the chain that is only as strong as its weakest link. The question to ask is, “Are there any of our operational areas where we can afford not to implement quality?” If the answer for any areas of operations is ‘yes’, then perhaps those areas are not worth keeping “as is” anyway.

9.  Can we design, implement, execute and monitor quality on our own, or do we need to seek outside assistance to make it all happen? What types of outside assistance are available?

Your most important mission is running your services business, and not managing quality implementation. However, having a third party manage the entire quality initiative assures that there will be less burden on your part. Accordingly, the best way for ensuring successful quality implementation and maintenance is to focus on what your organization can do best without adversely impacting normal business operations, and using outside assistance where you can gain the greatest advantage.

10.  What are the total costs of implementing quality? What are the total costs of not implementing quality?

The total costs of implementing quality are – well, you can do the math! However, the costs of not implementing quality may range from losing customers and market share, to increasing operating costs and reducing profits, to reducing market potential and continually fighting an uphill battle against more demanding customers and better prepared competitors.

Having all of the answers is not mandatory for implementing a successful quality program. However, asking all of the right questions should get you off to a good start.

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Invitation to Register for Two Webinars Covering the U.S./Canada & UK/Europe FSM Markets

To All Field Service Management (FSM) Professionals:

We invite you to register for our two complimentary Webinars on Thursday, February 7th – less than one week from today!
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  • Webinar #1*: UK/Europe Still Lags Behind the U.S. with Respect to FSM PerformanceThursday, 7 February at 13:30 GMT (8:30 am ET)
  • Webinar #2*: “The State of Field Service Management (FSM) in 2019 – and Beyond”; Thursday, February 7, at 11:30 am ET (16:30 GMT)

Click here to register for one, or both, Webinars

Based on the results of the 2018 Strategies for Growth℠ FSM Benchmark Tracking Update Survey, here are some of the key Market Drivers that will be revealed:

  • A majority of global Field Services Organizations (FSOs) presently manage their service operations as a profit center (60% for UK/Europe, and 55% for the U.S./Canada)
  • A majority of global FSOs are currently using CRM and Contract Management apps to drive their services business
  • The average services profitability realized by U.S./Canada FSOs is 32%, compared to 36% for UK/Europe FSOsx

[BTW – If you haven’t taken it yet, the survey link for SFG℠’s  2019 Field Service Management Tracking Survey is: 

Thank you in advance for your participation. Hope to see you there!
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Bill

Using Service Lifecycle Management (SLM) to Support Your Customers While You’re Servicing Their Equipment

[Before you read our latest Blog, why not spend 15 minutes or less taking our latest Field Service Management (FSM) Tracking Survey? This is our fifth FSM Survey since 2011, and we would love to share the results with you once we’re finished with the data processing and analysis – sometime in late March! The survey link is: https://www.surveymonkey.com/r/2019_FSM. And, oh yeah, after you finish, please don’t forget to read our Blog!. Thanks, Bill] 

Every day you deal with a multitude of customers who vary by type, size, installed base, usage, personality and everything else that ultimately differentiates one customer from another. However, one thing always remains constant – their business systems and equipment are critically Important to their day-to-day business operations. Despite this common thread that runs through virtually all of the customers you support, it is still important to recognize that each customer account will likely be different in terms of:

  • The various types, brands, models and numbers of units they have installed at their respective sites;
  • The ages of the individual units that are covered under their various Service Level Agreements (SLAs), or supported via a Time & Materials (T&M) basis;
  • The usage patterns of the equipment at their individual locations (i.e., continuous intermittent use; single vs.multiple shifts; simple vs.complex multifunctional peripheral applications; and so on);
  • The volume, capacity or throughput they regularly execute; and
  • Many other unique and/or specific differentiators.

For some of your customers, their equipment is an integral component of what they do on a day-to-day basis. Customers in all industry segments, whether it be legal, financial, medical, real estate, government, or other highly-demanding markets, will tell you that their systems and equipment are essential to their business operations, and that when their equipment is down, their production is severely affected. For some, even a small piece of connected equipment may be the only means they have for providing their customers with a receipt, order confirmation, or other important transaction-generated documents. In fact, for many in the latter category, their reliance on the equipment you support may be even more critical to them (at least on a relative basis).

Regardless of the specific industry market segment or type of customer, there will always be a basic level of reliance on the business systems and equipment they have installed at their facility. In addition, you will find that your customers will also be relying heavily on your organization to ensure that their equipment is always up and running as required – and as expected. As such, it is important to recognize that in the customer’s mind, if the equipment is not working optimally – regardless of the technology that may have been built into it – it is worthless.

Since there is just so much that the customer is either inclined or permitted to do in order to get the equipment back in working order following a failure, in most cases, your field technicians will be the sole entities that they can count on to make that happen (that is, aside from remote monitoring and diagnostics, etc.). Accordingly, they will need to approach the servicing and support of the equipment with a great deal of professionalism and responsibility. Customers usually do not care whether the cause of an equipment problem is due to a hardware or software failure; a paper jam; or whether it was the unit’s fault, their fault, or nobody’s fault in particular. All they know is that when they needed to use the equipment, it simply did not work.

This is typically where the organization’s field technicians come into the picture. In many cases, they represent the only “real” physical manifestation of the service and support that keeps their equipment up and running – or at the very least, they may represent their first line of service and support defense. Your customers may rely heavily on the equipment itself to support their day-to-day business operations; but they rely even more on your organization and your field technicians to ensure that the equipment can continually do what it is supposed to do.

This is a unique area where most services organizations – and their dealers and distributors – can use some help! The good news is that there is a Service Lifecycle Management (SLM) software solution available for users in every industry, size and geographic coverage segment. The implementation of an SLM solution can provide a comprehensive set of integrated business solutions that empower strategic initiatives while driving tactical execution.

Companies that install, repair, and maintain business systems and equipment can increase their competitive advantage, grow top-line revenue, and bolster bottom-line profitability through the use of an effective SLM solution. Among the basic features and benefits of SLM functionality for a typical Field Services Organization (FSO) may best be summarized as follows:

  • Comprehensive Contract and Service Level Management
  • Service and Sales Integration
  • Increased Help Desk/Contact Center Effectiveness
  • Field Service Efficiencies

Comprehensive Contract and Service Level Management

  • Through SLM, customer contracts and Service Level Agreements (SLAs) can be structured in ways that best fit the business, as well as the businesses of their respective customers. Key items such as maintenance and repair service; preventative (or predictive) maintenance; remote monitoring, diagnostics and repair; and draw-down contracts can all be easily established and managed. As such, the organization’s services management can be assured that all of the obligations of its customers’ SLAs are well-planned for – and met – and that all of its mission-critical commitments to the customer are being honored.

In this way, services revenues are maximized, and there is little risk of experiencing lost revenues. Company representatives can quickly and easily verify both the customer and vendor entitlements, thereby eliminating any costs that might otherwise be associated with providing customers with parts, consumables or services they are not entitled to under the terms and conditions of any existing warranties or contracts. This also ensures that any and all dealer claims will be quickly processed.

Service and Sales Integration

  • The Service and Sales Integration functionality of an SLM software suite can be relied on to enable the manufacturer’s and dealer organizations’ field service technicians and contact center personnel to more thoroughly service the company’s accounts, while also driving increased revenue in the process. By placing intuitive, easy-to-use sales tools into the hands of the appropriate service employees, the number of new opportunities to up-sell and cross-sell equipment, parts and consumables to existing customers will increase multifold.

The organization’s service technicians are out in the field every day talking to, and interfacing with, its customers; why not also provide them with the tools and resources they can use to close – or at least open – additional sales opportunities within this virtually captive customer base!

Increased Help Desk/Contact Center Effectiveness

  • SLM can also allow the organization to increase its call handling efficiencies, especially in the areas of first-call resolution and call avoidance rates. This will ultimately result in the lowering of internal service costs, and commensurate improvements in existing levels of customer satisfaction and retention. In many ways, business systems and equipment services have been somewhat commoditized over the years, and the only way that one services organization (or its dealers) can establishment a competitive advantage over another is to differentiate (i.e., improve) the way in which they support the customer base after the initial sale.

The best way to do this is to provide superior levels of help desk and call center support empowered by a robust SLM capability. By arming your call center personnel with accurate and up-to-date customer and installed equipment base information – be it entitlement, configuration, or marketing campaign data – the organization will be able to greatly increase its ability to sell, cross-sell, and upsell its entire portfolio of products, services, parts and consumables.

Field Service Efficiencies

  • Leveraging the field service automation tools inherent in the SLM software allows the organization to optimize its field force capacity utilization, resulting in significant operational efficiencies as field technicians quickly become empowered to increase revenue generation and recovery. By streamlining and managing the invoice process, billing cycles will be lowered, as will other key areas, such as Day Sales Outstanding (DSO), etc.

These improvements will almost immediately go directly to the bottom line as you will be able to manage your cash flow and receivables much more effectively. Similarly, by streamlining and managing your service inventories (such as trunk stock) more effectively, you will also be able to realize significant inventory cost reductions.

What many OEMs and dealer organizations seek is an end-to-end, enterprise-wide SLM solution that addresses the complete equipment/service lifecycle, from lead generation and sales quotation, to service and billing, through asset retirement. They are looking for a solution that both integrates and optimizes the critical business processes that all services organizations have to face with respect to providing their customers with the levels of service and support they require.

Services organizations that provide their customers with any combination of products, parts, services and consumables must be able to not only fix the customers’ equipment, but to fix the customer as well; however, the ability to do so may vary greatly from one organization to another. However, the most successful organizations will ultimately be the ones that have the right mix of management, personnel, tools, resources and solutions (i.e., Service Lifecycle Management), all working together to provide their customers with the levels of service and support they require – and expect!

The Global Warranty Services Market Appears to Be Moving Toward a More Expansive Period of Growth in 2019!

[After conducting our fifth annual Warranty Chain Management (WCM) Benchmark Survey in Q3/Q4, 2018, Strategies For Growth℠ has put together a new results package consisting of an Analysts Take paper, a Webinar and a 2019 WCM Conference workshop and presentation on “The State of Warranty Chain Management (WCM) for 2019 – and Beyond!”. The Webinar was hosted by Mize, Inc. on January 17, 2019 at 1 PM EST. However, you can download a copy of the webinar at https://info.m-ize.com/webinar-on-benchmark-and-optimize-warranty-management. Mize is also distributing copies of the Analysts Take paper at the 2019 WCM Conference in Orlando, FL, March 12 – 14, 2019.

The following is an excerpt from the January 10, 2019 issue of Warranty Week. Read the entire article, including illustrative charts and additional commentary, at Warranty Week.]

The 2019 survey results reflect all of the signals for an expanding market growth over at least the next 12 months, and probably beyond. Nearly two-thirds of respondent organizations are already running their services operations as profit centers with their own P&Ls, and annual warranty-related budgets are expected to increase-over-decline by a ratio of more than three-to-one. This has all of the makings for a fast-growing market.

Further, we are seeing an uptick in the percent of warranty services organizations taking steps to improve their respective planning and forecasting activities, and restructuring, as necessary, for improved warranty management oversight and accountability.

As such, all of the key aspects that can be used to signify both operational and financial improvements seem to be there, leading to an optimistic expectation for accelerated growth in the industry over the next 12 months.

Presently, 63% of respondent organizations manage service as a profit center, keeping pretty much in line with the findings for other related components of the global services industry (e.g., the field services segment, etc.). For many organizations, running services as a profit center allows them to focus more on the processes that may be used to generate higher levels of profitability, which represents one of the three main “clusters” of key factors currently driving the global market.

Warranty Management Organizations Are, Once Again, First and Foremost, Customer-Focused

The respondents to the survey have also once again clearly identified the specific drivers that are pushing them to aspire to the attainment of higher levels of performance. In fact, they have provided responses that solidify that there are still three main “clusters” of factors that drive their respective businesses: Customer-focused, Product Quality-focused and Profit-focused – and in that order.

For example, among the Customer-focused drivers, post-sale customer satisfaction issues (60%, up from 58% in 2018, and only 42% in 2017), the desire to improve customer retention (43%), and customer demand for improved warranty services (40%) remain as the top three drivers with respect to optimizing overall service performance. No other drivers are cited by more than just over one-quarter (28%) of respondents.

The next “cluster” of drivers is Product Quality-focused, and is represented by product defect-related costs (28%) and dealing with inferior/deficient product quality (23%). The third “cluster”, Profit-focused, is represented solely by an internal mandate to drive increased service profitability (23%). As such, the warranty chain management community has made it clear that it is squarely focused on, first, satisfying – and retaining – its customers; second, dedicated to improving product quality-related issues; and third, mandated to drive increased services profitability – again, in that specific order.

These results suggest a continuation of the relative “normalcy” that has characterized the Warranty Chain Management segment over the past several years – that is, a return to focusing on customers, rather than spending most of their time and resources wrestling with cost reductions and other financial issues. Obviously, while financial considerations are still critically important, the industry focus has shifted back, as it always does, squarely on the customer’s needs, requirements, preferences and expectations.

The Greatest Challenges Facing Today’s Warranty Management Initiatives

Aside from the top clusters of customer-, product quality- and profit-focused drivers, warranty services managers are also faced with myriad additional challenges that come from many different areas. The top challenge, as cited by nearly two-thirds (63%) of the survey respondents, is the ability to identify the root cause of product failures. However, nearly half (45%) also cite cost recovery from suppliers as one of their top three challenges. Further, between 28% and 30% of respondents also cite repair management (30%), claims processing time and accuracy (30%), and sale of extended warranties (28%) as significant challenges as well.

Based on the 2019 survey results, the greatest challenges facing warranty services managers today align closely with the key market drivers, as well as with the current and planned strategic actions to be taken. As a result, these data continue to reflect an environment where overall improvements are likely to transpire in the next 12 months, thereby leading to higher levels of customer satisfaction and the further stimulation of financial growth for the segment.

Analysts Take on the Global WCM Community

However, building upon the survey findings from previous years, only a small majority of warranty managers (57%) report that they are satisfied with their company’s warranty claims processing time – and only 22% are “extremely satisfied”. Although these percents represent a significant increase over previous years’ surveys, there are still more than one-in-five (22%) that are currently “somewhat dissatisfied” with their company’s warranty claims processing time performance.

Ashok Kartham, founder & CEO of Mize, concurs adding that “the companies can achieve the key goals of improving customer satisfaction and profitability of service business by connecting all stakeholders and processes in warranty and service contracts. Companies need to connect with customers directly to improve self-service and grow service contract sales. Service technicians need to be enabled to make better diagnostic and repair decisions upfront. Supplier collaboration needs to be improved to drive product quality. Companies can move beyond claims processing to drive customer satisfaction and grow additional revenues from innovative service offerings.”

Kartham further explains that “the warranty industry is facing significant challenges and opportunities with increased customer expectations for product uptime and predictive maintenance. The Mize Connected Customer Experience platform, and Warranty Management solution, enable companies to transform warranty to be a profit center. We are excited to bring the industry benchmarking and best practices to help companies optimize the entire warranty lifecycle and maximize the customer lifetime value.”

[Again, to download a copy of the Webinar, or to obtain a copy of the companion Analysts Take paper, simply click herehttps://info.m-ize.com/webinar-on-benchmark-and-optimize-warranty-management.]

Complimentary, Companion, SFG℠ Analysts Take Paper to Our “The Future of Field Service” Article

Sarah Nicastro, in her new position at IFSWorld, has just launched the inaugural issue of her e-journal, The Future of Field Service! It was my honor and privilege to have written more than 30 pieces for her while she was Publisher/Editor at Field Technologies and Field Technologies Online – and I am grateful for the opportunity to continue to write for her in her new role!

Here’s wishing that Sarah continues to enjoy the success she has built all around her for more than a decade serving the Field Services segment!

In the meantime, please feel free to download this complimentary, companion, Analysts Take paper to our first (of many) The Future of Field Service articles; The Future of FSM (Draft-18-11-28-01)

Revitalizing a Mature Product/Service Line Can Add Life to the Cycle

After a while, even the most innovative product/service lines may begin to lose some of their luster and appeal, ultimately being perceived by the marketplace more as a commodity-like offering, rather than as a unique or differentiated product or service. Classic examples range anywhere from cameras, to computers, to consulting services. What was initially offered to the market as an innovative product or service, without any direct competition, can soon become just another product or service alternative among scores of increasingly competitive offerings.

It is for this reason that it is critical to understand where your organization’s service offerings stand in the perceptions of the marketplace at any given point in time. In many cases, it will be the new, innovative, “upstart” companies that are doing the bulk of the research and market testing prior to launching their new products and services, and not the companies that are still selling their older, more mature commodity-like offerings.

However, there may still be a great deal of life left in the more mature business lines that comprise the majority of your company’s product or service portfolio. Even better, these lines generally tend to be “proven” with respect to market acceptance, and may only need a gentle marketing “push” every once and awhile to stimulate additional market interest and sales. Even NASA uses a “mid-course correction” every now and then to ensure that its space vehicles get to their targeted destinations.

A further complication may also arise from the fact that many businesses that provide both products and services to the market often find that when sales or market share takes a downturn, they are unable to determine whether the decline is more related to problems with their products, problems with their services and support, or a combination of the two. However, more often than not, it is generally a combination of the two. While this is typically a fairly easy matter to resolve, it is one that can often lead to a costly and ineffectual failure if not approached properly.

Whenever a situation like this takes place, the organization should examine a number of critical areas through the execution of a carefully orchestrated research program, focusing on issues such as:

  • An assessment of the changing, evolving or emerging customer/market needs, requirements, preferences, perceptions and expectations associated with its mature product/service offerings;
  • The identification of specific new or value-added product features, characteristics and attributes (e.g., functionality, quality, reliability, modularity, packaging, etc.) that could redefine the mature products; and the corresponding features, characteristics and attributes that could similarly redefine the levels of service required to support these products from the customer’s perspective (i.e., professional services, Web-based self-support, etc.); and
  • Suggested, or recommended, improvements to the existing products and support services required to address these changing and evolving needs.

The results of a program of this nature would be extremely useful to the organization’s sales and marketing management in terms of their ultimate ability to:

  • Modify and enhance the historical product and service offerings to address the changing levels of market demand and requirements;
  • Project the likelihood of customers switching to new, redefined or replacement, products and services in the near- and long-term future;
  • Develop a plan for migrating to new product and services offerings to reflect the evolving needs and requirements of the market;
  • Identify and cultivate expanded and/or redefined target markets based on the identified patterns of “core” vs. “value-added” product/service preferences and user perceptions;
  • Strengthen the overall product/service awareness and image in the marketplace through a program of heavily promoted refinements, enhancements and/or modifications based on the study findings; and
  • Monitor the ongoing positioning of the product/service offering in the marketplace in order to determine when it may no longer be profitable to support it.

More specifically, the primary objectives of the organization should be to first, identify the changing customer needs, requirements, preferences, perceptions and expectations that can be used to assess and “fine tune” the overall strategic and market position of the company’s historical product and service lines; and second, to ensure that the company can continue to effectively market these mature products and services, with a compelling promotional “spin”, and to the appropriate market segments.

A comprehensive examination of these key issues could lead to the development of a set of strategic and tactical recommendations for action with respect to defining/redefining the preferred product features, characteristics and attributes, and the corresponding customer service and support requirements. The recommendations would be developed to address:

  • The magnitude of the impact on the organization’s existing product/service lines resulting from the projected differences between historical and future market demand and purchase patterns in an expanded/redefined market base; and
  • The identification, assessment and prioritization of expanded/redefined product/service features, characteristics and attributes that would serve to support any recommended changes, modifications and/or enhancements to the company’s existing product and service lines.

There are many ways in which a business can determine exactly how much “kick” its historical product or service offerings still have in them – or, conversely, whether it is time to “kick” them out of the company’s portfolio altogether, and replace them with newer, more innovative and competitive products and services.

While your present business lines are probably the key factors that have helped your company to grow to its current size and market position, they may have become “dusty” over the years, and now may be in need of either a good “dusting off” or, possibly, retirement.

Putting a “cash cow” off to pasture before it is time can cost your company money in terms of lost potential. However, keeping it on as an active component of your business portfolio may cost even more in the long run, in terms of giving your company a perceived market image as either being “dusty” itself, or no longer offering anything but commodity-like products and services.

Assessing where your business lines stand today in terms of market perceptions, image and their ability to meet your customers’ changing and evolving needs, will allow you to determine just how much “dust” is actually on your existing portfolio of offerings, and exactly what you will need to do to “shake it off” and compete more effectively in the future.

[BTW – Are you a Warranty Chain Management Professional? If so, we invite you to participate in SFG℠‘s 2019 Warranty Chain Management Benchmark Survey Update! Take the survey, and view the final results during our January 17, 2019 Webcast (and accompanying complimentary Analysts Take summary report! Share your knowledge and learn from your peers! To participate, please click here: https://www.surveymonkey.com/r/WCM_19]

Does Your CRM Initiative Require a “Mid-Course Correction”?

Customer Relationship Management (CRM), just like any other major business initiative, requires a great deal of thought, time, planning, resources, energy, and money. But it also requires momentum to ensure that it maintains its relevance as the business evolves in an ever-changing marketplace. That is why so many well-intentioned CRM initiatives tend to “fizzle out” over time, either in terms of commitment, use, or simply because they haven’t grown in functionality at the same pace as the business itself has grown. Whatever the reason, many organizations ultimately find themselves in a position where their CRM program just flat out isn’t as effective as it once was.

Many years ago, Fram oil filters utilized an advertising campaign that stated “You can either pay me now, or you can pay me later!” This referred to the fact that you could either check (and, if required, replace) your car’s oil filter on a routine basis (i.e., before a problem manifests itself), or wait until after a problem occurs, thereby costing you more money for a “fix” after-the-fact than it would have cost had you routinely changed your oil filter as part of a self-administered preventive maintenance program. The same concept also applies to CRM: fixing (or correcting) your CRM program along the way will undoubtedly save your organization much more time and money compared to the risk of having it stray off course over time.

Experience has shown that once a CRM program strays off course – whether by alot, or a little – it is extremely difficult to easily get it back on track in terms of refocusing direction, reallocating resources, rechanneling team efforts, realigning processes, and in many cases, admitting that the program had gone off track in the first place! For these reasons, it is critical to monitor the progress of any CRM initiative on an ongoing basis in order to avoid falling into a situation where you will need to make what NASA typically refers to as “a mid-course correction”.

Taking the NASA example one step further, when a rocket is aimed at the Moon, sometimes a “mid-course correction” requires nothing more than a 10- or 20-second burst of steam released from the side of the spacecraft to ensure that its recalculated trajectory will send it to the desired landing spot on the surface. In cases where the problem is identified well enough in advance, it may only take this 10- to 20-second effort to ensure that the rocket does not miss its target by thousands of miles. In relative NASA terms, this is neither a complicated nor expensive procedure to execute, and the return is enormous (i.e., avoiding a potential total failure, and ensuring that the original target will be hit).

However, in cases where a problem is not identified until much later, or other earlier attempts have been ineffectively executed along the way, the rocket may have to be entirely reprogrammed – literally, on the fly – possibly entailing a new trajectory that will require orbiting around the back side of the Moon several times, and selecting a new landing site – or worse – sending it out into space as a failed effort. While the former “correction” would save the entire effort at a relatively low cost, the latter would – at best – require a huge amount of resources (i.e., people, time, and money) for just the chanceof being able to avoid failure. We believe that the same alternatives also apply to CRM initiatives, and that planning in advance for the most likely “mid-course corrections” should also be a critical component of any CRM effort.

Hopefully, any required “mid-course corrections” will be “minor” (such as taking added steps to improve communications between internal customer support groups, improving management and process control, upgrading existing software to the latest releases, etc.). However, some corrections may be more complicated, such as changing platforms or reengineering existing business processes mid-stream, or having to deal with other major CRM program-altering situations. Regardless of the level of correction that is required, one thing remains clear – an ineffective CRM program will provide – at best – an ineffectiveCRM solution! Further, while an effective CRM program can generally always be expected to provide a measurable return-on-investment (ROI), an ineffective program typically will not – regardless of the cost!

There are essentially six (6) key reasons why CRM projects fail. They are typically:

  1. Lack of management vision and commitment – Executive involvement is critical to steer the project so that it is continually in alignment with the company’s strategic business objectives.
  2. Lack of a complete business process analysis – Before embarking on a CRM implementation program, there must first be a comprehensive analysis of the individual customer-focused business processes used by the organization – otherwise you will find yourself merely automating the existing “mess”, or still doing things incorrectly – only more quickly!
  3. Selecting the software before the analysis is completed – Selecting software before the analysis is completed is a common – and oftentimes fatal –mistake. This is why melding the organization’s workflows into the software’s functionality, in a customer-focused, streamlined (and possibly reengineered) business process is generally required before implementing a CRM solution.
  4. Implementing a system without changing the way you do business – Simply applying a new CRM software application over the organization’s existing business processes will not get the job done. Many companies that have attempted to use CRM primarily as a tool for automating their historical business processes have seen their efforts lead to nothing more than a means for preserving their status quo while the marketplace evolves in another direction.
  5. Not managing expectations – Managing expectations at all levels within the organization is critical. Cultural considerations and expectations must be continually assessed, addressed and managed.
  6. Becoming locked into a system that does not support the CRM initiative (Agile Adaptability) – Any organization’s CRM program must show quick progress and be able to adapt quickly to changing business processes. Only the built-in “agile adaptability” of the system will preclude the chances for failure.

The best way to avoid any of these eventualities is to address them head-on in your CRM program from the outset. All of your organization’s major business initiatives should already have these types of contingency plans built-in – especially those that directly impact both the customer base and the bottom line (which is certainly the case with CRM)! The key to ensuring that your CRM initiative has adequately addressed these issues is to create an ongoing process-monitoring and self-assessment mechanism that is well-defined and clearly delineated in the original plan; and to empower the appropriate internal teams to manage and monitor these functions effectively.

Some tips for ensuring that you are able to successfully avoid any of these potential CRM obstacles are:

  • Incorporate internal and external communications as integral components of your CRM design, development and implementation plans.
  • Develop “real” goals and metrics for evaluating and tracking performance over time.
  • Build effective input and feedback processes (i.e., easy to use, properly managed, and responsive) into your CRM communications model that address all internal (i.e., employee), external (i.e., customers, prospects), and channel (i.e., partners, vendors, dealers, etc.) requirements.
  • Build an ongoing monitoring, tracking, and assessment function into the plan, and designate an appropriate individual (and team) to manage it. Also, empower that team to conceptualize, articulate, and recommend appropriate corrective actions as needed.
  • Provide management with performance tracking reports on a regular basis.
  • Keep current with the CRM community in terms of what platforms, applications, or functionality may be newly available; take advantage of your existing vendor’s regular upgrades, updates, and patches; and keep up-to-date on what some of the other leading industry practitioners are doing with respect to their own CRM initiatives (e.g., by tracking them on the Internet; networking; attending trade shows, seminars, and users groups; etc.).
  • Plan ahead for tomorrow’s upgrades today by keeping a close watch on your present CRM system status; setting (and revising) your goals and targets on a dynamic (rather than static) basis; identifying alternative “what-if” scenarios for addressing changes in your customer base (e.g., growth), infrastructure (e.g., outdated hardware/software platforms), or other organizational factors (e.g., restructuring, acquisitions/mergers, etc.).

There are many ways in which an organization can forestall problems relating to their CRM initiative, or – hopefully – avoid them altogether. However, in order to accomplish this, you must always plan ahead; address the most likely “what-if” scenarios in your contingency planning; monitor, measure, and track performance all along the way; and encourage and empower both your managers and their support staffs to get their jobs done effectively.

You regularly replace the oil filters in your car – don’t you? And you can always count on NASA to use numerous “mid-course corrections” to protect any of its space launches. Therefore, it should also make sense – both philosophical and economic – to ensure that your organization’s CRM initiative is always supported by these ongoing planning processes as well.