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The Silver Lining To The Economic Slowdown

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Posted September 5, 2001 By Arthur O'Connor     Feedback

Arthur O'Connor finds the positive among the negative: companies are taking a more thoughtful, intelligent and insightful approach to CRM.

Photo Arthur O'ConnorWhile many pundits predicted earlier this year that CRM — due to its strategic importance — would be immune from corporate budget cutbacks in 2001, this is clearly not turning out to be the case. CRM has been affected by the current economic slowdown — maybe not seriously — but hurt nonetheless.

CRM software and specialty consulting practices have announced earnings downturns and layoffs as corporate clients postpone, re-scope and cancel CRM initiatives. Chief Information Officers (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 to the economic slowdown that has affected CRM, 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 toward CRM, 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, they had hired the Big 5 consulting firm to do the systems integration, and that their business operations have been re-aligned, re-sized, re-engineered, "re-paradigmed."

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 hoary 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! No 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
This year, things are dramatically different. CIOs are being put on a shorter leash and CEOs are demanding more practical, sounder 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.

Got an opinion on this stuff? Willing to share it? If so, please write me at

Arthur O'Connor is one of the nation's leading experts on customer relationship management (CRM) and customer-facing IT systems and strategies. He's currently the national columnist for and this year serves as the chairperson of the Institute for International Research's CRM Conference. Arthur has over 20 years leadership and management experience in the area of customer management, strategy and new business development, including 15 years as a senior corporate officer of two NYSE-listed inter national corporations, and over five years experience as an independent management consultant and Big 5 firm practice manager selling and managing large-scale IT engagements.

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