2. How Will You Connect With Customers?

For Blue Cross and Blue Shield of Minnesota, building self-service Web capabilities meant the difference between winning and losing several major clients, including retailer Target, Northwest Airlines and General Mills.

"Without it, they would not do business with us," explains John Ounjian, CIO and senior vice president of information systems and corporate adjudication services at the $5 billion insurance provider.

So when Ounjian explained to executives that the customer relationship management (CRM) project would cost $15 million for the first two phases, they didn't blink.

Companies worldwide will spend $15.4 billion on CRM initiatives this year, according to research firm Aberdeen Group Inc. in Boston.

Computerworld's Premier 100 IT Leaders will also spend big on CRM, enough to rank such projects second on their priority lists for 2003. Here, some of the Premier 100 honorees offer their advice for making these initiatives work.

Clarify Project Goals

Not all IT executives are having money thrown at them for CRM projects. But many say the best way to win allies and manage expectations is by sitting at the boardroom table.

At Cardinal Health Inc., a $7 billion maker of medical, surgical and laboratory products in McGaw Park, Ill., Richard Gius, senior vice president of IT, is on the company's capital review and operating committees, where IT projects are approved and funded. "That way, there are no surprises," he says.

Too often, business units approve projects and then confusion sets in when the IT staff is asked to deliver on something that's unclear. At Cardinal Health, "all of that is resolved before approval," Gius explains. His IT team is using CRM service tools to improve product returns, pricing and availability, and order fulfillment.

Dr. John Halamka, CIO at CareGroup Healthcare System, wanted to Web-enable medical records so that patients could access their own lab results, X-rays and doctor's notes, as well as make appointments and refill prescriptions. But he needed to take a creative approach to funding at CareGroup, a network of 17 hospitals associated with Harvard Medical School.

In the mid-1990s, academic health care faced rampant communication problems between doctors and patients, Halamka explains. The ability to solve this problem via the Web created "an incredible marketing value. So the board took a portion of the marketing budget [$250,000 for rollout and $500,000 annually] to fund the project," he says.

Involve the Business Side

CRM projects can redefine a company's entire operational infrastructure, so cooperation among executives and business units is critical to CRM project success. "Even the CEO must say customer service is Job 1," says Halamka.

St. Paul-based Blue Cross and Blue Shield of Minnesota learned the importance of communicating with business units during the design phase of its Web self-service screens. Ounjian and his technical team designed drop-down boxes that they thought were logical, but a focus group of end users found the feature cumbersome and the wording hard to understand. "We had to adjust our logic," he says.

Data integrity issues can also involve business units. At LexisNexis Group, a legal research provider in Dayton, Ohio, the IT staff added telesales and campaign management capabilities to its call center. But during that time, the end users changed from law firm librarians to the lawyers themselves, which affected customer data. Allan McLaughlin, senior vice president and chief technology officer, recommended to the marketing group that it hold off rolling out a $6 million CRM system, because data was unreliable.

"They didn't want to hear that. But we showed them that ROI would go negative," McLaughlin explains. Today, both marketing and IT are working to clean up contact information.

Overall, CIOs agree that disruption to the organization is inevitable with CRM projects and that the entire company should be prepared. "Management must understand that pots and pans are going to fall off the shelf," Ounjian says. "These transformations are disruptive and need an initiative right at the heel to add quality improvements, which will bring stability."

Collett is a freelance writer in Sterling, Va. Contact her at stcollett@aol.com.

What You Can Learn

Minimize customization of off-the-shelf software.

Don't add technical features just because they're available.

Manage data movement, and insist on data integrity.

Copyright © 2003 IDG Communications, Inc.

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