The view from a service-intensive business like staffing makes Customer Relationship Management software (CRM) very attractive.
After all, CRM promises “high-quality customer care” with “24×7 customer access through web and wireless connections.”
CRM promises to transform your fuddy-duddy staffing business into an agile powerhouse — bypassing the organizational inertia of your IT staff!
Sound too good to be true? It is.
The actual practice of CRM has proven to be a disaster. With the exception of a few market niches such as call centers, CRM has routinely suffered spectacular failures despite the support of some of the mostly highly regarded consultancies.
I could substantiate this with examples of failed projects, but a search for “CRM failure” on Google generates some 85,000 hits.
Read through a few of those hits, and you will invariably find expensive consultants who claim that their CRM projects failed because of “misunderstood business objectives” and the “failure to establish metrics” or “poor methodology.”
But rarely will you find the truth plainly stated: CRM has failed because, by definition, it mistakenly attempts to serve the customer by divorcing the information needs of sales and service from those of the entire organization.
This just doesn’t work, because as your back-office manager would be happy to remind you, everyone from the star sales person to the payroll clerk is involved in serving customers.
This is especially true in the case of cash-oriented and margin-sensitive businesses – such as staffing – where speed is critical and only a fully integrated strategy will deliver real customer success.
Consider what integration means to a staffing company and you’ll understand why a CRM system cannot help but fail to make the grade.
Let’s start with order fulfillment. Most mature CRM systems do a fine job of allowing you to enter a new job order or set up a new account, but this is just the tip of the iceberg.
You need to quote a rate, but to do that you need instant access to information: contract rates, receivable data, shift differentials and safety information. Your back-office staff tracks this information on a back-office system.
At this point, a CRM advocate might say that such access can be achieved via data importation or “XML integration” with the back-office. Or perhaps the back-office staff could enter the data by hand into the front-office system.
In some cases, this might relieve the constant demand for real-time information, but in staffing – like many businesses – anything short of access to real-time integrated information is too slow and too expensive to set up.
But for the sake of argument, let’s say you’ve made it through the order intake process and are trying to fill the order. You’ve got the right person on the phone, but before the employee will talk about the assignment, she wants to talk about a problem with her last paycheck. Unfortunately, your CRM system doesn’t connect to your payroll system.
But again, let’s just say you ran a search and made the match. The employee starts the assignment. Time slips start flowing in, and the assignment ends. But your front-office CRM system does not immediately transmit the completion of assignments to your back-office, and the employee decides to send in a bogus time card. Another “Gotcha.”
Now the seasoned CRM sales rep asks, “You’re only talking about operational issues. What about sales force automation?”
True, CRM packages offer rich functionality like opportunity management, prospect tracking, pipeline analysis, e-mail campaigning, etc. But the better, fully integrated systems of today offer the same features!
Lack of data integration is a critical CRM issue. What happens in the back-office when the prospect turns into a customer? Trouble.
A separate customer structure is established in the back-office; a structure with a large account will undoubtedly encounter compatibility issues with the CRM system. That makes it difficult, if not impossible, to measure things like the true success rate of a sales campaign or accurately tracked commissions. And how can a staffing sales person make an effective client call without knowing about recent problems like the details of the employee no-show the week before?
So, for virtually every aspect of the staffing business – invoicing, online time cards, vendor management systems, unemployment claim processing, customer reporting – the difficulties of maintaining multiple systems can easily erase the profits necessary to stay in business and manage customer relationships.
The solution to this dilemma involves maintaining a single enterprise database that serves the entire organization and accommodates the implementation of CRM’s promises. The investment community has taken this strategy to heart as it has boosted the capitalization of enterprise players like PeopleSoft and SAP.
Meanwhile, niche enterprise players like TempWorks Software have thrived on this strategy. Staffing companies that ignore newer, aggressive IT solutions are not keeping up with their competitors.
