Carlos Leyva

Silicon Stories

Chapter 8: Knowledge Management & Infotainment

Screwing the Pooch Revisited

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Industrial Age marketing organizations have been slow to rid themselves of their mass marketing addiction, even though they have readily embraced enterprise CRM (Customer Relationship Management) “solutions”. I am no CRM expert, but I am always suspicious of product categories that include the words enterprise and management in their sales pitch. In the past, they always had a big-bang stench surrounding them, proving to be anything but the promised panacea; often creating more problems than they solve. Big Business is enamored with Big Solutions, even though they are often anathema to the mission and completely miss their mark.

Perhaps by now the reader has the impression that I have an axe to grind against enterprise implementations of any packaged software (I can’t imagine why), and by implication the usual suspects that rake in millions from these consulting engagements. I have first hand experience with these death-march projects and they tend to create long lasting negative work related memories. In a recent report by the Meta Group they had the following to say about the relative success of ERP implementations:

The average ERP implementation takes 23 months, has a total cost of ownership of $15 million and rewards (so to speak) the business with an average negative net present value of $1.5 million. And the news gets worse.

The anecdotal evidence about CRM implementations that I read about in the trade press indicates that they are suffering the same fate. What is the dynamic at work here? Rarely is it that software does not work as advertised. Almost always the failures are the result of people and process problems. But how can this be? The usual suspects are hired because of their experience and the long list of stellar reference accounts that backs them up.

Clearly there are systemic root causes for these problems since the same patterns emerge over and over. It is not surprising that the majority of implementations grossly exceed the allocated budget. There are well-understood hidden costs that neither the executives who are often trying to camouflage a serious organizational issue, nor the usual suspects that are trying to win a deal, are interested in discussing. Since the magnitude of the hidden costs tend to be quite large, the ROI calculations of the project’s value are exaggerated, to put it mildly.

Getting with the Program

News organizations adopted enabling web technologies faster than any industry I have observed, including technology. For example: all the leading news sites are heavy users of video as a means of enhancing their product offerings. Why don’t we see the same level of multi-media use with respect to marketing of old economy products and services? Labeling marketing departments as luddites or (when kind) laggards, and ascribing to them sinister motives related to defending their turf is too simplistic to be useful.

The best and brightest in these organizations are aware of the power and potential of new media, but have been deprived of much needed organizational support. What sort of support might that be? Philosophic and strategic endorsement of new media by the corporate power structure as well as technology support and training required to drive down the costs of production. These setbacks are temporary. Soon we will begin to see online marketing efforts take on a completely different look within successful leading edge companies.

The aforementioned companies are likely to be the ones that discover that better results are achieved through a cultural transformation based on radically reoriented thinking than from the implementation of a canned solution. Skunk works projects, and lots of ‘em, will get you where you need to be faster than any big-bang project designed primarily to treat symptoms of the disease, while further destroying the patient’s health in the process.

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