Most managers are excited by technology.
Technology enables us to get more done, faster. And technology is practical. Concrete. It’s not about ideas; it’s about execution.
This is certainly true in sales environments. It’s almost impossible to propose any initiative without prompting the question: is there software for that?
In sales environments, the answer to that question is yes. There is always software for that. In fact there are many thousands of software applications promising to automate every step in the sales lifecycle, from the generation of sales opportunities through to the provision of management information.
The dirty secret of sales environments is that, with few exceptions, this technology has done nothing to improve productivity. Nothing!
After a generation of investment in sales (and marketing) automation technologies, sales environments look (and operate) essentially the same as they did 20 years ago. There is little credible evidence that the tens (or, more commonly, hundreds) of thousands of dollars that a typical firm has spent on sales technology has caused a rise in revenues, a reduction in costs or even an improvement in customer-service quality[i].
This chapter addresses three critically important questions:
- Why is technology failing to produce the productivity improvements in sales that it has in other parts of the organization?
- What role should technology play in the design and operation of the sales function?
- What are the practical technology requirements of an organization transitioning to the new model?
At the end of the chapter we’ll tackle another more fundamental technology issue. We’ll explore who in the organization should accept which technology responsibilities and, more critically, which responsibilities should never be outsourced.
The sales software system
If the multitude of sales-related software applications was a planetary system, the sun around which all other planets would orbit would be called CRM. CRM stands for customer-relationship management. A CRM (application) is designed to automate the numerous workflows that exist in and around the sales environment – and to store the data that’s generated as a result of those workflows.
These workflows include the generation of sales opportunities, the prosecution of sales opportunities and the management of customer issues.
The other software applications that orbit the CRM in the sales system are dependent on the CRM, either because their reason for existence is to feed it data (new contacts, perhaps) or because they leverage the data that sits within the CRM to perform specialist functions (email broadcast, report generation and so on).
CRM is a subset of a larger class of software, known as ERP (enterprise-resource planning). ERP is the software that manages operational workflows in the organization as a whole. Things like the generation of orders, the scheduling of the production environment, the management of inventory, the processing of payables and receivables, and so on.
Although ERP and CRM are now intertwined, the two technologies had quite different beginnings. ERP evolved out of inventory control systems in the 1960’s. And CRM evolved out of contact-tracking applications in the 1980’s. Contact-tracking applications (like Act!) were software equivalents of salespeople’s day-planner calendars.
Although the two technologies have grown together over the years, their usage has not. In the modern organization, ERP is pervasive – if you removed it, the organization would simply cease to function. This is not the case with CRM. In fact, in many organizations, the removal of CRM would actually unencumber salespeople and increase their productivity!
What’s wrong with CRM?
Consider the list of standard promises made on behalf of CRM by CRM vendors:
- CRM will increase salespeople’s productivity
- CRM will cause an improvement in customer service quality
- CRM will drive a tighter integration of sales and marketing
- CRM will provide management with better quality information
As I mentioned earlier, most organizations have invested a king’s ransom in CRM but few have seen any (let alone all) of these promises realized.
Technically, however, there is nothing wrong with CRM!
As we’ll shortly discover, CRM has the potential to unleash enormous productivity improvements in sales environments. The problem with this technology is that it has been designed around the requirements of a sales environment that doesn’t actually exist.
It’s useful (and somewhat amusing) to understand why this has occurred.
A candid history of CRM
It’s arguable that the first contact-tracking applications solved a real problem for salespeople. These applications simplified the tracking of the numerous interactions between salespeople and their customers (appointments, phone calls, proposals and other tasks). Continue reading “The Machine > Part 2 > Chapter 10: Technology (why CRM sucks!)” »