CRM in Manufacturing Doesn't Need to Be Perfect

Why IT deployments are better off flawed


Phil Mickelson became the first wire-to-wire winner in the 68-year history of the Pebble Beach Pro-Am tournament on February 13, 2005, missing the tournament scoring record by only one shot. However, his accomplishment didn't come without mistakes; he missed six birdie putts and had back-to-back bogeys.

Customer relationship management (CRM) implementations in manufacturing are a lot like golf. They don't have to be perfect to be hugely successful. Despite what many companies claim as near-perfection in IT projects, industry analyst firm Gartner says that 83 percent of IT projects fail to achieve their anticipated return on investment. The majority of companies struggle with IT projects and if Gartner is to be believed, eight out of 10 fail.

Don't Wait to Deploy

One major reason for this is the fact that IT departments wait too long to deploy the applications, hoping for perfection. This hesitancy to deploy until every bit of the functionality is included causes projects that might have only taken a few weeks to achieve value end up taking months or even years. If time was not a factor this approach would have merit and is certainly easier on the IT department who rarely gets credit for business success but always gets the blame when applications have flaws.

The dirty little secret is that software is never perfect, and time is always a factor. The paradox that causes these CRM initiatives to fail, or at least fail to meet expected results, is that in a development initiative where IT is building or modeling the application:

  • Functionality rises at a decreasing rate over time while
  • Expectations rise at an increasing rate over time.

The longer it takes to deploy, the more functionality and less flaws users expect or tolerate from the system. The sooner the deployment, the lower the expectations and the sooner the organization will receive value. Managing expectations is just the beginning.

Figure 1 illustrates the functionality vs. expectation over time and the ideal timeframe for deployment. Click here to view.

Measuring Value in an Organization

The value to any organization as measured in ROI and customer satisfaction is the ultimate measure of success. If the business anticipates a $10 million improvement over five years, each month of delay in deployment represents $167,000 in lost opportunity ($10,000,000/60 months). If a project can be deployed and achieve just half the functionality in three months versus all the functionality in 24 months, the value to the company would be $1,750,000 (half of $167,000 over 21 months after the three-month deployment). In other words, delaying the deployment to achieve full functionality costs more than just time, it threatens the success of the project.

In addition, these initiatives are usually competitive advantages for the company. Competitive advantages have a decreasing finite life, so the longer the delay, the smaller the advantage. The largest competitive advantage is early in the implementation. Time moves so fast for businesses today that this advantage cannot be regained and is gone forever.

How to Get the Most Value Out of Your Implementation

The most successful implementations share three factors:

1. They manage expectations. Managing expectations is critical in setting up the project plan. The promise of a fully functional application in record time is foolish.

2. They implement in phases. By breaking down the project into quarterly phases with tangible deliverables that bring value to the business, momentum is maintained, value is achieved and expectations remain in balance.

3. They put the application into the hands of the business users early in the process. By doing this, the project has a far greater chance of catching problems when the price of failure is much lower. If a boat is off course, the longer it continues off course, the more difficult it will be to reach the final destination. The sooner the course is corrected, the less wasted energy and money.

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