Farming is a tough business in Canada these days, with U.S. border closings and a poor growing season wreaking havoc with farmers’ ability to harvest profits. For organizations that offer financing to farmers, these turbulent times mean it’s paramount to have a clear picture of customers’ loan activity.
Farm Credit Canada is a federal Crown corporation that provides loans to some 50,000 agricultural businesses in Canada. Based in Regina, Sask., FCC has 100 offices across the country. Its customer list includes farmers who have experienced cash-flow pressures due to Bovine Spongiform Encephalopathy (BSE), more commonly known as Mad Cow Disease. FCC has implemented a program to help customers deal with the financial fallout from BSE and other challenges, says Derwin Arnstead, FCC’s director of market development.
“”Account managers will work with customers on an individual basis to assess their situations and explore options such as deferred payments, interest-only payments or restructuring debt,”” he says.
Despite the challenges in today’s farming sector, FCC’s portfolio of loans — now $10.5 billion — remains healthy, showing growth for the eleventh consecutive year.
In 2002, FCC relied on a number of technology systems to store information relating to its customers. Because there was little integration among the systems, extracting data to gain a bird’s eye view of what was going on with an individual client was a challenge, Arnstead says. This was a constant source of frustration for account managers who often deal with clients who have a number of loans with FCC, he says.
Enter customer relationship management technology. FCC saw CRM as a tool that would enhance its ability to provide better service to its customers. After several months of homework and investigation, FCC selected PeopleSoft’s CRM software.
Getting senior management on board was key to the project’s success, Arnstead says.
“”We put the executives through a day-long CRM course and that helped to get them on side early,”” he says.
In fact, executive buy-in is a “”major contributing factor”” to the overall success of any CRM project, according to a recent study by IBM’s Institute of Business Value. It surveyed more than 200 large companies across a variety of industries in an effort to determine why so many CRM initiatives fail and what can be done to improve the statistics. The study shows that in more than one-third of companies, senior management actually impedes the success of CRM because it views it as “”useful, not critical”” to the business.
Business case not a success driver
Emphasis on the wrong drivers may be responsible for some of the failures with CRM initiatives, the study states. IBM says some of the most critical CRM success drivers include strategy and value proposition development, budget process management, change management and governance. Other steps that were traditionally thought of as critical in deploying CRM — developing a business case and ROI, metric development, stakeholder assessment — play a role, but are not “”strong contributors”” to project success.
“”A lot of organizations spend a lot of time selecting their software product,”” says Lorna Higgins, IBM’s PeopleSoft CRM Lead. “”This suggests they might spend less time on it.””
FCC devoted significant resources to change management and process change within the organization, factors IBM identifies as critical CRM success drivers. It assembled a CRM project team that included project managers from the business side, the IT side and one from IBM, the implementation vendor FCC selected. Arnstead says this combination ensured the technology would always take a second seat to the business value it was delivering.
“”It’s really easy to get excited about the technology, but the business project manager was always there to bring it back to the business value,”” he says.
FCC decided on a piecemeal approach to implementing Amigo, the moniker for the CRM system.
“”We realized we couldn’t do it all in one big bang,”” Arnstead says. “”That would drive us crazy. So we did in in three waves.””
In the first wave, which went live in March, FCC implemented PeopleSoft CRM 8.8 including support, CRM for Financial Services and CRM Portal for the front office layer. The middleware layer is comprised of BEA Weblogic Integration, PeopleSoft HRMS, loan accounting and a loan origination system as well as Microsoft Active Directory. The infrastructure layer was built on Hewlett-Packard servers running an Oracle 8i database.
With Amigo, FCC now has a 360-degree view of core customer information, which Arnstead says makes life a lot easier for account managers.