Different Countries, Different Needs

Feature Article | September 1, 2003 by admin

Companies that want to roll out Customer Relationship Management (CRM) solutions in their national companies are faced with the question of the degree to which they have to take special country-specific characteristics into account or how much standardization is desired. If the requirements of individual countries are mapped in the solution, the rollout costs rise while a high degree of standardization reduces costs.
The companies are thus faced with a conflict. On the one hand, the existing sales, marketing and complaints resolution processes normally differ quite significantly from country to country. The same applies to the behavior of staff and customers and to the technology used. This results in differences in labor time models, purchasing behavior and technical safety standards and means of communication. Therefore, prior to the rollout of a CRM solution, the particular circumstances of the individual sites have to be analyzed. On the other hand, management is interested in maximizing the Return on Investment (ROI) of a CRM project across all countries. This requires a high degree of standardization. The right balance between the two interests can only be reached with a comprehensive CRM solution that looks at specific areas in the context of an overall CRM concept. The primary concern for a multinational rollout is optimizing the overall result. Individual national results are of secondary importance.
Coordinated multinational Customer Relationship Management is becoming increasingly important as a result of current market developments. These include global sourcing, cross-selling and upselling, increasing budgetary pressure and heterogeneous target customers. Given this background, it is vital that companies identify the various possibilities of a multinational CRM rollout and find the optimum way of doing this.

Five steps to the right CRM solution

5 Phase Model

5 Phase Model

A CRM project can be divided into five phases that build on each other. The first phase involves analyzing the existing processes, structures, technologies and documents in the individual countries. This analysis forms the basis for the second phase in which the requirements of a comprehensive CRM solution are specified and agreed by an appropriate board. Before doing this, the lead countries in the project, i.e. the countries that gain most from the CRM rollout, have to be selected. The criteria for the selection are the size and potential market volume of a country because important markets must always be included in the solution. The other decisive factors are the willingness and motivation of the company satellite, the available budget and the extent of common processes and production in individual countries.
The third phase involves mapping the required functionalities in a standard solution. In this process, experts on technical requirements should work closely together with specialists in technology implementation. The aim of the fourth phase is to develop a pilot on the basis of a CRM solution, for example mySAP Customer Relationship Management (mySAP CRM). This involves implementing mission-critical requirements such as order processing, recording expenses for field staff, and complaints management.
Prior to the multinational rollout of the standard solution in the fifth phase, it is important to determine whether it may subsequently be adapted in individual (“roll in”) countries or not (“roll-out”). The basis for this decision is the company’s business model. In a decentralized organization, the requirements of the national companies are more divergent than in a centrally controlled company. This means that fewer functionalities can be shared and local adaptations are unavoidable. In accordance with the decentralized approach to business, the responsibility for the rollout lies with the individual companies.

Successively or simultaneously

Another question is that of the chronological sequence of the rollout. The CRM solution can be implemented in the individual countries successively, simultaneously or via a mixture of these alternatives.

Successive Introduction

Successive Introduction

Successive (phased) introduction of the CRM solution over a period of time is preferred if the national companies are highly diverse or the existing project resources cannot accommodate simultaneous introduction which involves a high level of outlay in terms of personnel and costs. The adapted standard solution is implemented first in the leading countries. The other companies follow successively, cascading like a waterfall. The degree of similarity determines the sequence. The greater the degree of similarity, the earlier implementation is carried out. The level of heterogeneity increases with each additional step. This procedure ensures that the project team can deal with the increasing complexity due to the experience it gathers as time goes on.

Simultaneous Implementation

Simultaneous Implementation

If the individual companies are very homogeneous, only a few countries have to be taken into consideration or the date of implementation is critical for the benefits of the CRM solution, it is best to implement it simultaneously in all countries. For example, this might be necessary if a sales operation were to be eliminated by the new strategy. For example, a company might want to restructure its sales organization and supply to end customers itself instead of involving intermediaries. The bonuses and special conditions afforded to intermediaries are saved and the benefits can be passed on to the end customers directly. If this is initially carried out in one country, dealers in other markets can prepare themselves for this move. Simultaneous rollout maintains the element of surprise. This enables the company to improve its position over its competitors and achieve a temporary competitive advantage.

Opportunities and Risks

Opportunities and Risks

In most cases, however, neither exclusively successive nor exclusively simultaneous rollout is practicable. As a result of budgetary pressure, there is usually no time to introduce a CRM solution successively in individual countries. Moreover, the ROI is lower when successive rollout is employed. On the other hand, simultaneous rollout involves a high level of risk.

A mixture is usually best

Mixture of Alternatives

Mixture of Alternatives

It has thus proven expedient to combine successive and simultaneous rollouts. The adapted solution is introduced simultaneously in several countries with similar requirements. Implementation in the other national companies is carried out in stages according to increasing heterogeneity. This procedure is the most efficient and most commonly found strategy in practice. It minimizes the risks of the two alternatives and maximizes their chances of success. One particular benefit is the opportunity to optimally distribute resources over the whole project period and thus reduce the total costs.

Global Core and Additional Local-specific Requirements

Global Core and Additional Local-specific Requirements

The time and cost involved in a CRM project can be reduced if the largely common elements of a solution are first identified. These form the global CRM core which serves as the starting point for the individual national companies. This is used as the basis for defining the specific local requirements. Subsequent amendment of the global core is only possible for all countries if an appropriate board examines and agrees to the changes. The functionality is only included in the core after a decision has been made. All the changes are centrally controlled in this manner.

The mixture of alternatives – a practical example

The example of a leading European health care company highlights a successful case of a multinational CRM rollout using the mixture of alternatives. The manufacturer of disposable products for surgical operations and dressing wounds was looking to use mySAP CRM to improve the efficiency of its sales and marketing processes. As a common SAP backend system was already in place, various national companies were also to use a uniform CRM application. The project team, consisting of customer employees, experts from Cap Gemini Ernst & Young and other SAP consultants, developed a core application based on the requirements in the Scandinavian countries. The aim of the national companies was to manage their customer information on a common database. Subsequent modifications of the core were not envisaged at first. After a successful pilot project in Sweden, the rollout in further countries was carried out simultaneously in some cases and successively in others. This led to the CRM rollout enjoying a high level of acceptance. However, it became clear that subsequent amendments were unavoidable, since minor – but still significant – process features could only be properly dealt with after going live. Finally, the core was adapted using a formal amendment procedure (change request method).

Mario Pufahl

Mario Pufahl

Martin Baumann

Martin Baumann

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