This article throws light upon the five main phases involved in implementation of CRM project. The phases are: 1. Develop The CRM Strategy 2. Build CRM Project 3. Needs Specification and Partner Selection 4. Project Implementation 5. Evaluate Performance.

Phase # 1. Develop The CRM Strategy:

CRM strategy can be defined as follows:

CRM strategy is a high-level plan of action that aligns people, processes and technology to achieve customer-related goals.

Situation analysis:


Development of the CRM strategy starts with a situation analysis. This analysis sets out to describe, understand and appraise the company’s current customer strategy. It helps to have an organizing framework to guide your analysis. Another useful framework is the customer strategy cube.

This is a three-dimensional analysis of your company’s served market segments, market offerings and channels (routes to market). The situation analysis answers the questions, ‘ Where are we now? ‘and ‘ Why are we where we are? ‘in terms of the three dimensions of the cube.

Customers or segments:

Which segments do we target?


Which segments do we serve?

What are our customer- related marketing and sales objectives?

How much do we sell to customers?

How satisfied are they?


What is our market share?

What is our share of customer spending?

How effective are our customer acquisition strategies and tactics?

How effective are our customer retention strategies and tactics?


How effective are our customer development (cross-sell and up-sell) strategies and tactics?

What are the customer touch points?

What do our customers think about their experience of doing business with us?

Which customer management processes have most impact on our costs or customer experience?


Which technologies do we use to support our marketing, selling and service functions, and how well do they operate?

Market offerings:

Which products do we offer?

What is our branding strategy?


How well known are our offerings?

Who do we compete against?

What advantages or disadvantages do we offer vis-a-vis our competitors?

How do we augment and add value to our basic product offer?


What benefits do customers experience from our offerings?

How do our prices compare with our competitors?

What are our margins?


Which channels do we use to distribute to our customers – direct and indirect?

Which channels are most effective?


What level of channel penetration do we have?

Which channels are becoming more/less important?

Where do our competitors distribute?

What do channel partners think of their experience of doing business with us?

What margins do channel members earn?

Which channel management processes have most impact on our costs or channel member experience?


The goal of this audit is get a clear insight into the strengths and weaknesses of the company’s customer strategy. Data can be collected from executives, managers, customer contact people and, importantly, customers. Business plans can be studied.

One of the outcomes might be a customer interaction map, that identifies all customer touch points and the processes that are performed at those touch points. Normally, the interactions that have important impact on customer experience or your own costs become primary candidates for reengineering and/or automation. The audit will serve as the start point for thinking about what you want to achieve from a CRM implementation.

Commence CRM Education:

There is considerable misunderstanding about it. If you are about to embark on a CRM implementation, it is important that all stakeholders have a clear understanding of what CRM denotes.

Your IT people might think that it is a technology project. Your marketing people might think it is something to do with a new approach to market segmentation. Your sales people might think it is about a new centralized database for customer records.

Education has the twin benefits of allaying any fears that people might have, based on their misunderstandings, and encouraging participation from people whose jobs might be impacted. Education enables stakeholders to identify opportunities to improve their workplace. There are very few educational programmes available.

The Institute of Direct Marketing offers a suite of introductory study materials, the American Marketing Association publishes a narrow range of tutorial materials, but the Chartered Institute of Marketing offers nothing. Some of the richest resources are to be found in online CRM communities – self-help groups organized around a shared interest in CRM.


Some of the better websites are www(dot)customerthink(dot)com (formerly www(dot)crmguru(dot)com), www(dot)mycustomer(dot)com (formerly www(dot)insightexec(dot)com , and before that www(dot)crmforum(dot)com), www(dot)sharedinsights(dot)com , www(dot)eccs(dot)uk(dot)com , searchcrm(dot)techtarget(dot)com, www(dot)crm2day(dot)com , www(dot)crmdirectory(dot)com and www(dot)intelligententerprise(dot)com. CRM vendors publish case histories which can give you a good idea of what is possible. Alternatively, you could use this book!

Develop the CRM Vision:

Your CRM vision is a high-level statement of how CRM will change your business as it relates to customers. The software-as-a-service (SaaS) company, sales-force(dot)com, provides a number of examples of CRM visions.

We will work with our members in a trust-based relationship to represent their interests and to satisfy their needs for high value, security and peace of mind in motoring, travel and home.

a) Nurturing relationships one cup at a time. Deliver a customer experience that consistently develops enthusiastically satisfied customers in every market in which we do business.

b) Build and maintain long-term relationships with valuable customers by creating person­alized experiences across all touch points and by anticipating customer needs and provid­ing customized offers.

c) Nothing is more important than making every user successful. (This is sales force com’s own CRM vision.) The CRM vision gives shape and direction to your CRM strategy. The CRM vision might be senior management’s perspective, based on what they learned from the education process, or it could be the product of a wider visioning process that engages more members of your company, perhaps even customers and partners. The vision will eventually guide the development of measurable CRM outcomes.


Set priorities:

CRM projects vary in their scope and can touch on one or more customer-facing parts of your business – sales, marketing or service. Clear priorities for action, normally focused on cost reduction or enhanced customer experience, might fall out of the situation analysis, but more time and debate is often necessary.

Priority might be given to projects which produce quick wins, fast returns or are low-cost. Longer term priorities might prove more difficult to implement. For example, you may want to prioritize a new segmentation of customers based on their potential profitability.

An impediment to that outcome would be your company’s inability to trace costs of selling, marketing and service to customers. You may need to prioritize the implementation of an activity-based costing system before performing the new segmentation.

Establish Goals and Objectives:

Goals and objectives emerge from the visioning and prioritizing processes. Although the terms ‘ goals’ and ‘ objectives ‘ tend to be used synonymously, we use the word ‘ goal’ to refer to a qualitative outcome and ‘ objective’ to refer to a measurable outcome. For example, a CRM goal might be to acquire new customers.

A related CRM objective could be to generate 200 additional leads by the fourth quarter of the next financial year. CRM goals generally cluster into three broad areas: enhancing customer satisfaction or loyalty, growing revenues or reducing costs. Measurable objectives created at this time will later serve to evaluate the performance of the CRM implementation.

Identify People, Process and Technology Requirements:


The next step is to begin the process of identifying the people, process and technology requirements for the goals and objectives to be achieved. You’ll return to these matters repeatedly as the project unfolds, but at this stage you need a general idea of the changes that are necessary so that you can begin to identify costs and construct a business case. If your goal is to enhance cross-selling opportunities you might need to invest in training sales people to ask the right questions, engineering a new opportunity management process and acquiring sales-force automation software.

Develop the Business Case:

The business case is built around the costs and benefits of the CRM implementation and answers the question: ‘ Why should we invest in this CRM project? ‘ The business case looks at both costs and revenues.

CRM implementations can generate additional revenues in a number of ways:

a) conversion of more leads from suspect to prospect to opportunity

b) more cross-selling and up-selling

c) more accurate product pricing

d) higher levels of customer satisfaction and retention

e) higher levels of word-of-mouth influence

f) more leads and/or sales from marketing campaigns

g) incremental sales from more effective selling processes. Costs can be reduced by:

h) improved lead generation and qualification

i) lower costs of customer acquisition

j) more efficient account management

k) less waste in marketing campaigns

l) reduced customer service costs

m) more efficient front-office processes.

However, these benefits need to be assessed against the costs of the CRM implementation. The costs of a CRM project may extend well beyond the costs of CRM software. Additional costs may be incurred from systems integration, infrastructure costs, new desktop, laptop or hand held devices, software configuration, data modelling, beta-testing,help desk support, change management, project management, process reengineering, software upgrades, training and consultancy services, let alone the opportunity costs of diverting your own staff members from their routine work. For a simple CRM project IT costs may represent one quarter of the total project cost; for a complex project IT costs may be a slow as one tenth of the total project cost.

Some business cases are able to ignore technology costs. Many companies using enterprise software from Oracle and SAP are already paying for CRM modules in their inclusive licence fees. A licensed SAP user, for example, might be using enterprise software only for back office functions. However, the licence fee permits the company to use the enterprise suite’s CRM modules. No additional licence costs are incurred though there may be substantial customization and implementation costs associated with switching on the unused CRM modules.

Other companies that elect to deploy CRM through the SaaS approach, rather than installing software on their own hardware, treat CRM software as an operating expense. They simply treat software costs, based on a per- user monthly fee, as an operational expense that can be allocated to marketing, sales or service budgets.

Many of these costs and benefits are measurable, but there are also likely to be some important strategic benefits that are much harder to value, for example, development of a customer-centric way of doing business, better customer experience, improved responsiveness to changes in the market or competitive environments, more information sharing between business silos, improved customer service, more harmonious relationships with customers and the development of an information-based competitive advantage.

The business case should span a period equivalent to the economic life of the proposed solution. This is particularly important when comparing different implementation models such as on-premise CRM and SaaS (software- as-a-service). While the upfront costs of these two approaches are vastly different, the total cost of ownership can even out over a 3-4year period .

Phase # 2. Build CRM Project:


Having created the CRM strategy the next phase involves building the foundations for the CRM implementation.

Identify Stakeholders:

The first step is to identify stakeholders. Stakeholders include any party that will be impacted by the change – this could include senior management, users of any new system, marketing staff, salespeople, customer service agents, channel partners, customers and IT specialists. Their participation in the CRM project may be required at some future point.

Research suggests that the early involvement of parties affected by change helps pre-empty later problems of resistance. Vendor experience indicates that the early involvement and participation of senior management is likely to promote a more successful implementation.

System users are important stakeholders. The importance of involving system users in the implementation of new technologies is reinforced by research conducted by Fred Davis and others. Davis found that intention to use a new technology is predicted by the perceived ease-of use of the technology and the perceived usefulness of the technology.

This is expressed in the Technology Acceptance Model which has been subjected to considerable testing and validation since Davis’s initial work. Early engagement of user stakeholders can help ensure that the technology is perceived as both easy-to-use and useful by users.

Identify Change Management Needs:

Even small CRM projects can prove challenging in terms of change management. A sales- force automation project might involve centralizing data that is presently kept on individual representatives ‘ computers and making that information available to everyone in the team. Representatives will need to learn to share. In a distributed sales-force, these representatives may not have even met each other. If they also have to change their selling methodology, record keeping and reporting habits, there might be some worries, if not outright resistance.

According to consultants Booz Allen & Hamilton,’ Leadership teams that fail to plan for the human side of change often find themselves wondering why their best-laid plans go awry ‘ .They describe change both in terms of top-down leadership and bottom-up buy-in, as does john Kotter whose eight-step approach to managing change is widely cited and deployed.

The eight steps are as follows:

1. Create a sense of urgency so people begin to feel’ we must do something ‘

2. Put together a guiding team to drive the change effort

3. Get the vision right and build supporting strategies

4. Communicate for buy-in

5. Empower action by removing organizational barriers to change

6. Produce short-term wins to diffuse cynicism, pessimism and scepticism

7. don’t let up, but keep driving change and promoting the vision

8. make change stick by reshaping organizational culture. Kotter emphasizes that successful change management programmes adopt a see-feel-change approach. To bring about change it is necessary not only to get people to see the need for change, but also to feel so emotionally engaged that they want to change. He stresses the importance of emotional engagement with the programmer’s vision and strategies.

Organizational Culture:

The idea of organizational culture has been around for many years. In everyday language, organizational culture is what is being described when someone answers the question ‘ what is it like working here? ‘More formally, organizational culture can be defined as: A pattern of shared values and beliefs that help individuals understand organizational functioning and thus provide them with the norms for behavior in the organization.

Essentially, organizational culture is understood to comprise widely shared and strongly held values. These values are reflected in patterns of individual and interpersonal behavior, including the behavior of the business leaders, and expressed in the norms, symbols, rituals and formal systems of the organization.

A number of studies indicate that organizational culture affects business performance. Recent research has also shown that organizational culture is a predictor of CRM success. Adhocracy, one of four organizational cultures identified in the Competing Values model

Identify Project Management Needs:

CRM implementations can place considerable demands on project management skills. A CRM project plan spells out the steps that will get you from where you are now (customer strategy situation analysis) to where you want to be (CRM vision, goals and objectives), on time and within budget.

The CRM programme director generally performs the project management role, but sometimes it is outsourced to a consultant. A project plan sets out the tasks to be performed, the order in which they are to be executed, the time each will take, the resources required to perform the tasks (including people and money) and the deliverables from each task.

Identify Critical Success Factors:

Critical success factors (CSFs) are the ‘ must haves ‘ that underpin project success. Critical success factors can be defined as follows: CSFs are attributes and variables that can significantly impact business outcomes. CRM consultants and vendors offer a range of opinions on CSFs, mentioning the following: a clear customer strategy that defines your company’s offers, markets and channels; an organizational culture that promotes coordination and information- sharing across business units; an agreed definition of what counts as CRM success; executive sponsorship of the CRM programmer’s objectives; availability and use of pertinent, accurate, timely and useable customer-related information; a clear focus on people and process issues, not only technology; starting small with quick wins that are then promoted within the company as success stories; focus on automating processes that have major implications for costs or customer experience; engagement of all stakeholders, including end-users and customers, in programme planning and roll-out.

There have been very few independent studies of CRM CSFs. Luis Mendoza and his colleagues conducted a qualitative study of CSFs that involved a panel of eight expert judges identifying 13 CSFs and 55 associated metrics covering people, process and technology aspects of CRM strategy.

Develop a Risk Management Plan:

It has been claimed that a large number of CRM projects, perhaps as many as two-thirds, fail. Of course, there can be many potential causes of failure, ranging from inadequate project management to resistance of end-users to the adoption of new technologies. At this stage, you’ll be trying to identify the major risks to achieving the desired outcomes.

Once identified, you can begin to put risk mitigation strategies and contingency plans in place. As you’d expect, some risks reflect an absence of the CSFs identified above. Gartner names a number of common causes of CRM failure: management that has little customer understanding or involvement; rewards and incentives that are tied to old, non-customer objectives; organizational culture that is not customer- focused; limited or no input from the customers; thinking that technology is the solution; lack of specifically designed, mutually reinforcing processes; poor-quality customer data and information; little coordination between departmental initiatives and projects; creation of the CRM team happening last, and the team lacks business staff; no measures or monitoring of benefits and lack of testing.

Risk mitigation strategies are your responses to these risks. Let’s take the risk of management having little or no customer understanding. How might you respond to this? There are a number of things you could do -management could work in the front-line serving customers (McDonalds ‘executives do this), listen in to call centre interactions for at least one hour a week or mystery shop your own and competitor organizations.

Phase # 3. Needs Specification and Partner Selection:

Having built the CRM project foundations, the next phase involves specifying needs and selecting suitable partners.

Process Mapping and Refinement:

The first task of Phase 3 is to identify business processes that need attention – making them more effective or efficient or flagging them as candidates for automation. Business processes can be defined as follows: A business process is set of activities performed by people and/or technology in order to achieve a desired outcome. Put more simply, business processes are how things get done by your company. Processes can be classified in several ways: vertical and horizontal; front and back-office; primary and secondary.

Vertical processes are those that are located entirely within a business function. For example, the customer acquisition process might reside totally within the marketing department.

Horizontal processes are cross-functional. New product development processes are typically horizontal and span sales, marketing, finance and research and development functions. Front-office (or front-stage) processes are those that customers encounter. The complaints handling process is an example.

Back-office (or back-stage) processes are invisible to customers, for example, the procurement process. Many processes straddle both front and back-offices: the order-fulfiIment process is an example. The order taking part of that process sits in the front-office. The production scheduling part is back-office. A distinction is also made between primary and secondary processes.

Primary processes have major cost implications for companies or, given their impact on customer experience, major revenue implications. The logistics process in courier organizations – from picking up a package, through moving the package, to delivering the package – constitutes about 90 per cent of the cost base of the business, and is therefore a primary process. Customers may have a different perspective on what is important. They typically do not care about back-office processes.

They care about the processes that touch them. In the insurance industry these are the claims process, the policy renewal process and the new policy purchase process. In the courier business they are the pick-up, delivery and tracking processes.

Secondary processes have minor implications for costs or revenues, or little impact on customer experience. Strategic CRM aims to build an organization that is designed to create and deliver customer value consistently better than its competitors. Designing processes that create value for customers is clearly vital to this outcome. 3M’s mission is ‘ to solve unsolved problems innovatively ‘.

It does this in part through new product development processes that are designed to identify good ideas and bring them to the market quickly. For 3 M, the innovation process is a primary process that enables the company to differentiate itself from its competitors. Operational CRM involves the automation of the company’s selling, marketing and service processes, and generally requires the support of analytical CRM.

Data Review and Gap Analysis:

Having identified processes that require attention, the next step is to review the data requirements for the CRM implementation and to identify shortfalls. Strategic CRM uses customer- related data to identify which customers to target for acquisition, retention and development, and what to offer them.

Operational CRM uses customer-related data in the everyday running of the business, for example in handling billing queries in the contact centre or mounting campaigns in the marketing department. Analytical CRM uses customer-related data to answer questions such as ‘who are our most profitable customers’ and ‘which customers are most likely to churn’? Collaborative CRM uses customer-related data to enable channel partners to target their communications more precisely.

The fundamental issue companies have to ask is: what customer- related data do we need for strategic, operational, analytical and collaborative CRM purposes? Members of the programme team should be well placed to answer the question ‘ what information is needed? ‘For example, the programme team’s marketing lead would be expected to appreciate the information needs of direct marketers running event-based campaigns.

Typically, these marketers want to know response rates to previous mailings broken down by customer group, the content of those offers, sales achieved by the mailings and the number of items returned unopened. They would also want to know the names and addresses of selected targets, their preferred method of communication (mail? e-mail? phone?), their preferred form of salutation (first name? Mr? Ms?) and the offers that have been successful in the past. In a globalized business world, it is important to respect cultural connections.

At this stage of planning the CRM project, you are identifying the data that is needed for CRM purposes and creating an inventory of data that is available for these purposes. The gap between what is available and what is needed may be quite significant.

A useful distinction can be made between’ need-to-know ‘ and ‘ like-to- know ‘ that is, between information needed for CRM purposes and information that might be useful at some future point. Given the costs of developing and maintaining customer-related databases, companies need to be rigorous in screening data requirements.

Write Request for Proposals (RFP):

Before calling for proposals you need to write a detailed RFP. This document becomes the standard against which vendors’ proposals are evaluated. It summarizes your thinking about the CRM programme and invites interested parties to respond in a structured way.

Typical contents of the RFP include:

1. Instructions to respondents

2. Company background

3. The CRM vision and strategy

4. Strategic, operational, analytical and collaborative CRM requirements

5. Process issues:

a. customer interaction mapping

b. process re-engineering.

6. Technology issues:

a. delivery model – SaaS, on-premise, blended

b. functionality required – sales, marketing and service

c. management reports required

d. hardware requirements and performance measures

e. architectural issues

f. systems integration issues

g. customization requirements

h. upgrades and service requirements.

7. People issues:

a. project management services

b. change management services

c. management and staff training.

8. Costing issues – TCO targets

9. Implementation issues – pilot, training, support, roll-out, timeline

10. Contractual issues

11. Criteria for assessing proposals

12. Timeline for responding to proposals.

Call for proposals:

The next step is to invite potential partners to respond to the RFP. You’ll see from the RFP contents that CRM projects sometimes require input from several process, people and technology partners. On the technology side, if your company is already paying for CRM modules as part of its enterprise IT system, you’ll certainly want to add this technology vendor to the list of those invited to respond. Between three and six potential technology vendors are typically invited.

Revised technology needs identification:

Proposals from technology vendors will sometimes identify opportunities for improved CRM performance that you may not have considered. Perhaps there is some functionality or an issue that you had not considered. For example, you might not have considered the need to provide implementation support to sales representatives in the field. A vendor who indicates that they’ll be able to help representatives learn the new technology in remote locations might be very attractive.

Assessment and partner selection:

The next stage is to assess the proposals and select one or more partners. This task is generally performed by an evaluation team formed for this purpose and reporting to the steering committee. Assessment is made easier if you have a structured RFP and scoring system. There are two types of scoring system – un-weighted and weighted. An un-weighted system simply treats each assessment variable as equally important.

A weighted system acknowledges that some variables are more important than others. These are accorded more significance in the scoring process. Evaluation and selection should involve more than just the written vendor proposals. Short-listed vendors should be invited to demonstrate their solutions in relevant sceneries. Vendors may be required to provide proof-of-concept for technical solutions such as e-mail integration or mobile synchronization. Finally, preferred vendors should be subject to reference checks. The results of all these inputs are then scored to support the final decision.

Phase # 4. Project Implementation:

By now, you have developed the CRM strategy, built the CRM project foundations, specified your needs and selected one or more partners. It is now implementation time!

Refine project plan:

The first step of Phase 4 requires you to cooperate with your selected partners in refining the project plan. Remember, this was originally defined without consideration of the needs and availability of your partners. You may find that your partner’s consultants are already committed to other projects and that you’ll have to wait. Your partners will be able to help you set new milestones and refine the budget.

Identify technology customization needs:

It is very common that off-the-shelf technology fails to meet all the requirements of users. Some vendors have industry-specific versions of their CRM software. Oracle, for example, offers a range of CRM suites for banking, retail, public sector and other verticals. Even so, some customization is often required.

The lead developer, database developer and front-end developer, in partnership with vendors, can perform these roles. Customization needs are typically specified using a gap analysis approach. The required business process is supplied to the vendor, who(after some preparation) presents how this process is supported in the software. Any gaps are highlighted for subsequent analysis and action. This continues until all business processes have been examined. The resultant gap register is then assessed, priorities are established and customization of their software and/or modification of the business process begins.

Customization raises problems of ownership of Intellectual Property that both vendors and clients will want to resolve. Vendors have invested millions, perhaps billions, of dollars to create, code, test and protect their product. The view of most software companies is that they will maintain the rights to any customized code and the right to incorporate it into future releases of the software. It is not unusual for a client’s legal team to contest this position.

Prototype design, test, modify and roll-out:

The output of this customization process will be a prototype that can be tested by users on a duplicated set, or a dummy set, of customer-related data. End-user tests will show whether further customization is required.

Final adjustments to marketing, selling and service processes are made at this stage, and further training needs are identified and met. After a final review, a roll-out programme is implemented. In larger companies this often is a phased roll-out. For example, a new sales-force automation system might be rolled out first to the ‘ champions’, those identified earlier as buying in both emotionally and rationally. A new service automation solution might be rolled out to newly acquired customers first, before the existing customer base is imported. The idea is to iron out any problems before company-wide adoption.

Phase # 5. Evaluate Performance:

The final phase of the CRM project involves an evaluation of its performance. How well has it performed? Two sets of variables can be measured: project outcomes and business outcomes. Project out comes focus on whether the project has been delivered on time and to budget. Your evaluation of the business outcomes requires you to return to the project objectives, your definition of CRM success and the business case, and ask whether the desired results have been achieved. If your single goal was to enhance customer retention rates, with a measurable lift from 70 to 80 per cent, and this is accomplished then your CRM project has been successful.

Congratulations! However, most projects have multiple objectives and it is common for some objectives to be achieved while others are not. Lead conversion by the sales team might rise, but lead generation by campaign managers might fall short of objectives.

A critical issue concerns the timing of any business performance evaluation. It can take users several months to become familiar with new processes and competent in using new technology. Periodic measures of business outcomes can be taken over time, to ensure that the programme outcomes are achieved. Ongoing training, timed to coincide with software upgrades, can enhance business outcomes.