Like ERP, CRM Systems Can Be a Struggle to Launch

Y2k projects, integration of legacy systems hamper installations

Customer relationship management (CRM) systems have become the new Holy Grail of high-end corporate computing. But like the famously difficult last Holy Grail - enterprise resource planning systems - getting them up and running is harder than it looks.

For example, a few years ago, Toronto-based Canadian Tire Corp. Ltd. found itself drowning in its own systems.

In 1996, the chain of 430-plus home goods department stores decided to consolidate its 21 call centers and multiple back-end databases, said Steve Folkerts, solutions consultant at Canadian Tire Acceptance Ltd., the company's financial services arm.

"Our reps couldn't possibly take time to build a relationship with the customer because they had to take too much time building relationships with the systems," Folkerts said.

But once company officials were able to justify the cost of the call center integration, they realized they also needed a strong CRM system, he said.

Once the CRM system was selected, however, officials decided it needed to be tied to the company's legacy databases.

"We didn't own all of those back-end systems," Folkerts explained. "Nor was it cost effective to build that kind of industrial-strength integration."

So in late 1998, the company purchased Seattle-based WRQ Inc.'s Apptrieve host-integration system, which includes a graphical mapping tool, a development kit and a strong server. Apptrieve helped Canadian Tire link its legacy databases and tie them to its new CRM system.

Ironing Out the Kinks

Like Canadian Tire, many firms started catching on to CRM systems a few years ago but ran into so many kinks connecting to legacy systems that they're not done yet, said Chris Selland, an analyst at The Yankee Group in Boston.

Canadian Tire launched a pilot of its system in March 1999. But the system quickly stumbled when the company had to refocus its energies to solve unexpected Y2k date-change problems.

Now, with Y2k projects over, the company is rolling out the first phase of its new unified systems. "All of a sudden, I had a strong back end and an easy user interface," said Folkerts. "It was like my dream come true."

The next steps, he said, are to add Internet and e-mail channels to Canadian Tire's customer service system and to boost customer self-service functions on the Web.

Single Focus

Charles Schwab & Co. in San Francisco experienced similar growing pains in building its Web-focused customer system, but it worked through them faster.

"We had initially started Schwab.com as a separate company," said Martha Deevy, senior vice president of Schwab's electronic brokerage unit. "But our customers raised up their hands and said, 'We don't like this bifurcated model. . . . We want you to merge it.' " (A profile of Schwab co-CEO Dave Pottruck is on page 66.)

It didn't take long for Schwab officials to realize that the online and off-line businesses needed to come together, Deevy said.

"Customers want to go where they can get their answers most quickly and where they feel most confident that they're going to get the problem resolved," she said.

Having integrated the electronic and physical brokerages, Schwab is now hosting online forums, where customers can interact with representatives in real time, said Deevy.

The company is also piloting the use of America Online Inc.'s Instant Messenger on its sites, as well as other services aimed at "bringing that human interaction to the Web," she said.

And while Deevy pays attention to customers' online experiences, one of her colleagues is doing the same for customers in Schwab's branch offices.

"We're continually challenging each other to say, 'I can do this online. Can you do this in the branches?' " she said. "It's a very productive tension."

Copyright © 2000 IDG Communications, Inc.

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