Case Study: Failed Implementation of CRM

By: Casey Gollan
Submitted: 2007-01-17 15:53:56
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If you're looking to implement a Customer Relationship Management (CRM) solution into your business, this article will highlight some key areas that you may want to cover to avoid costly errors that other companies have made.

Some years back, a CRM system was integrated in a health organisation. It wanted the CRM system to re-engineer the company's IT, but within a few months it was clear that the execution had been a disaster.

The transition of it customers onto it's new CRM system did not go smoothly.

The hiccups in customer service were so major that the company lost 6 percent of its health-care membership in one year.

Even the stock value dropped by 40 percent.

So what were the reasons for CRM Implementation failure in the first place?

In short, there was not enough planning and training to ensure a smooth implementation.

In 2001, the company's new CIO began working on an ambitious plan to consolidate the company's antiquated IT systems.

The idea was to have an integrated system for enrolment, eligibility and claims processing so that customers would get one bill, medical claims would be processed faster and more efficiently. This would also give customer service reps a single unified view of members to accomplish that.

This meant there would actually be two integrated systems, one for customers of the company's managed care offerings and the other for its indemnity products.

The purpose was noble, yet the implementation failed - why? Let's examine...

To achieve the transformation to the new CRM solution, the staff had to build an entire AS400 infrastructure from scratch that could support the main platforms for claims processing.

Most of that architectural work was done in-house, but the company did hire a third party to help implement the changed management and business processes involved.

It also worked with the third party to develop and implement the new customer facing applications that would allow members to enrol, check the status of their claims and benefits, and choose from different health plan offerings. Siebel software was purchased to handle the call center functions.

Part of the problem was that the company started late. Thus, it was under considerable pressure to get the new systems in place as quickly as possible.

There were a number of reasons for the urgency.

First off, the organisation was being sued by thousands of doctors nationwide who were furious about delays in payment for patient care.

Second, the sales team, in order to win large employer accounts, had promised that the new systems would provide improved customer service and would be up and running in early 2002.

Third, the management was under pressure to cut costs after posting disappointing second quarter results in 2001.

Members were started to move to the new platform in 2001, but in relatively small numbers at a time. At the same time, the company began laying off customer service reps.

In January 2002, with new members coming on board and existing ones renewing, a massive amount of customers were moved to the new system at one time. It was too much too handle and problems erupted immediately.

Members suddenly had trouble obtaining health coverage. Workers at another company effectively lost coverage when their membership information would not load properly into the new systems.

Member ID cards were issued that contained incorrect identifiers and missing prescription icons. People couldn't get their prescriptions filled at their local drug store/pharmacy.

Not surprisingly, the company's customer service center was besieged by calls. But because of the layoffs, there weren't enough call center reps to handle the load.

People waited on hold. And when they did reach someone, the reps who had been newly hired had not been adequately trained in how to handle the new technology.

The organisation stuggled.

And it didn't need to be that way.

Despite the initial problems highligted, the CRM solution is now allowing the company to process medical claims more efficiently and better manage customers' needs.

If you're looking to implement a new CRM system - plan the implementation. Prepare the necessary training and minimise any disruption to your business.

A CRM system would be fine for your business, and any business - but only if the implementation is done appropriately.

Take the time to implement your customer relationship management system properly, and avoid the errors mentioned above.

For more information visit CRM Software Center - All the general information and resources for everything CRM - Customer Relationship Management. Visit http://www.crmsoftwarecenter.com for more articles and info on CRM.

Article source: Expert Articles