Nowhere to run, nowhere to hide

By Andrew Greenyer, Director of Marketing EMEA, Group 1 Software

Too many articles on customer relationship management (CRM) begin by harking back to the Gartner 2001 prognostication that over 50 percent of CRM projects fail. Much water has passed under the bridge since 2001; several significant barriers to CRM success have been lifted, others have appeared as new challenges and the public sector has become as interested as the commercial sector in what CRM techniques have to offer in delivering joined-up services.

More channels for established players

In the public sector, e-government targets have been set for the end of 2005, but most now recognise that e-technology must support enquiry handling across all channels, rather than yearn for the impossible idea of getting the majority to self-serve online.

In any case, the ease with which data from each of these channels can be combined has improved. Contact centres, database systems, selection and campaign management, website back-offices, datacapture operations, document management and so on all now tend to operate off some form of web-server software architecture, or at least offer interfaces with a similar level of data interchangeability. XML (internet-based) standards for information exchange between systems have certainly advanced by leaps and bounds over this period.

Data access

In parallel, we have seen significant advances in cheaply and quickly drawing ‘customer’ information out of legacy systems (billing, finance, order management, EPOS, stock management; or in the public services, taxation, electoral, health, licensing, grants, and so on). Formerly, pulling such information was cumbersome and expensive. Special interfaces had to be programmed in to extract the data without causing the legacy line-of-business system to fall over (and result in, say, the tills failing, or council tax bills not being sent on time). That barrier no longer exists thanks to a relatively new software category called ‘extract, transform and load’ (ETL). In layman’s terms, this software allows non-technical people to build new data input filters on the fly, and inexpensively.

Existing channels to the customer

Not only can customer data now be easily extracted from all around the enterprise, but existing customer communications can also be harnessed for marketing purposes. What are called ‘print streams’ for statements, bills, order confirmations, customer letters and so on, can now be manipulated to include cross-referenced messages tailored to the individual recipient, taking advantage of all the sophisticated analysis and segmentation that takes place at the database level – all at virtually no incremental cost.

Cost of entry

After experiencing a massive downturn in sales in 2002-2003, CRM software vendors pulled themselves together and started to explore lower-cost sales models. A range of options came to market, including the hosted (ASP) charged on a service rental basis, low-cost defeatured start-up packages, and even charging per transaction (like a database bureau traditionally does). The result is that the upfront cost of investing in CRM has fallen, making the whole scene more acceptable to careful CFOs.

Any new challenges?

So much for the barriers to CRM that have fallen. Have any also reared their ugly heads since 2001? One main area comes immediately to my mind – namely, permission to contact. In the UK, 27 percent of individuals have opted out of use of the Electoral Roll for marketing purposes. This may retrench now that councils have discovered they are no longer legally able to promote postal voting to opt-outs! The EU Directive on Privacy and Electronic Communications has outlawed unsolicited e-mail, and registrations with the Telephone Preference Service have soared to reach over eight million (20 percent of all consumer voice lines).

No excuse
Where does all this leave the CRM scene in 2005? Simply put, many of the technological barriers to CRM success have disappeared since 2001. The idea of a CRM excellence model is now much discussed in public sector organisations that face the twin challenges of improved efficiency and improved citizen service. CRM and organisational objectives are well aligned. On the other hand, technological problems can no longer be used as an excuse for CRM failure.