The Silver Lining to the Economic Slowdown

Although many pundits predicted earlier this year that customer relationship management (CRM) — due to its strategic importance — would be immune from corporate budget cutbacks in 2001, this has clearly turned out not to be the case. CRM has been hurt by the economic slowdown.

CRM software and specialty consulting practices have announced earning downturns and layoffs as corporate clients postpone, re-scope, and cancel CRM initiatives. CIOs are feeling the heat from their bosses to show short-term payoffs from what are essentially long-term/strategic investments in CRM.

But there’s a silver lining, and it is this: Companies are taking a more thoughtful, intelligent, and insightful approach to CRM. And as a result of this new, somber attitude, the gap is beginning to close between the outrageous marketing hype and the reality.

Living in an Evil, Parallel Universe

For those of us working with the difficulty of integrating technology to improve customer-facing business processes, the gap between hype and reality over the past few years has made for a pretty weird experience — like living in some evil, parallel universe.

If one were to believe all the CEO presentations to Wall Street analysts over the past two years, CRM has been installed and victory has been declared. Corporate America announced that it had learned the error of its product-centric ways and had embraced customer intimacy as a strategy initiative. CEOs announced that they had bought the enterprise software package, that they had hired the Big 5 consulting firm to do the systems integration, and that their business operations have been realigned, resized, re-engineered, and “reparadigmed.”

And if one were to believe the vendor community in the recent past, the answer to CRM had already been developed and could be installed easily, offering enhanced customer intimacy, deep personalization, lower customer service costs, greater customer loyalty, and maximized competitive advantage and return on investment (ROI).

Yet for those of us dealing with the task of implementing CRM systems, the reality of CRM was a very different experience.

In this strange world, businesses weren’t aligned at all. In fact, most corporate managers didn’t seem to have a unified version of what CRM was nor a clear game plan to launch it.

CRM seemed to mean everything, which is to say that it meant nothing in particular. Sharing information about customers? Forget it! Not only did the systems not talk to each other, neither did the people working in the different business units. And they had no compelling reason to act otherwise.

2001: Year of Reckoning and Accountability

As this year nears its end, it’s clear that things are dramatically different. CIOs have been put on a shorter leash, and CEOs have been demanding more practical, more sound approaches to building customer loyalty.

No longer, it seems, can boom times mask the failure of sophisticated enterprise-wide implementations.

Now is the time for reckoning and accountability. And, in the long run, that’s good news.