HP Canada is getting ready to adopt its parent company’s customer relationship management system as part of a global effort expected to create US$7 billion in incremental revenue.
The switch will happen next month as HP Canada moves to an Oracle-based CRM solution. Its previous system will be shut down in January. The Canadian team is the latest component of a worldwide rollout of a CRM project within HP called “Synergy” that has been underway since late 1999.
Lynn Anderson, HP Canada’s vice-president of business marketing, discussed the company’s challenges in developing a CRM strategy Wednesday at the Customer Relationship Conference presented by the Conference Board of Canada. Beyond the revenue expectations, Anderson said HP is forecasting both realized and projected savings of US$190 million worldwide in the next three years. Other potential benefits include better cross-selling and win/loss analysis, more targeted marketing capabilities and improved transfer of leads to channel partners.
The first Synergy pilot took place in February of 2000 using Oracle’s Sales 3i, she said. In North America, 1,500 HP reps have used version 3.2 of the tool. HP has created a team of 200 people to manage Synergy, including IT, business and consulting help from its own internal consulting unit.
Anderson said CRM is a particularly difficult initiative in a company like HP, which has about 17 business units working with 23 different ERP implementations. One of the goals of the project is to provide more consistent data to sales reps in other regions. Locally, for example, it could benefit an HP salesperson selling to Telus in Vancouver to know about what HP has sold to Telus in Toronto. But efforts to get its sales team to share information and use the CRM system properly have been met with “phenomenal resistance,” Anderson said.
“I think it’s something with sales people; it’s like once their information is in the system they feel that their value is diminished, or that managers are going to be looking over their shoulder,” she said, adding that the company offered incentives. “Initially we tried the carrot, but we couldn’t give them enough of them. Now we’ve mandated that it’s part of their job description to use it.”
It might be expected that a large technology company like HP might be better prepared to tackle CRM, but Anderson told the audience they would be surprised. “At the executive level, there might be more understanding,” she said. “But we’ve got 88,000 people, and probably 87,999 of them are tech-wannabes who think they could do it better.”
Vito Mabrucco, group vice-president at IDC Canada, said lack of sponsorship from the senior management level is the No. 1 reason why CRM projects stall in many enterprises. A lot of corporations cite inability to make a business case for CRM and lack of resources, he said, but these are only excuses.
“If you look across the board, the chief marketing officer has the largest role,” he said. “That’s fine, they need to be involved, but in a downturn economy, marketing is usually the first thing to go. We can’t look at CRM as purely a marketing function.”
The CEO-level support is crucial in driving changes down the line, Anderson said. “No matter what tools you use, the sales reps will hate it,” she said. “I was in sales, and I can tell you what my response would have been . . . This isn’t a case of ‘build it and they will come.’ At best, they will come kicking and screaming.”
The challenges were compounded by the fact that HP began investigating CRM as it moved from a product-centric to customer-centric organization. Specifically, HP whittled down its 83 business units into less than two dozen. In the past, each unit had its own sales force and interaction was minimal. However, as customers began buying more total solutions, it no longer made sense, Anderson said. This resulted in three major units for product development and two main front-end units for consumer and business markets. “It was a traumatic shift,” she said. “But when we looked at what we wanted to do, the current state of affairs could not support it.”
The Customer Relationship conference continues through Thursday.