March 23, 2010, 7:50 PM — Extensive academic research shows that the majority of mergers fail to increase shareholder value, often because the integration of acquired business units takes longer than anyone planned. So the ability to effectively integrate the information systems of merged business units is a key success factor for any acquirer. Even though there are a lot of corporate integration consultants, the execution of their strategic plans seems to go awry...particularly when it comes to CRM systems.
If you've been following these articles or read my book, you know some of the reasons why:
• CRM systems are different. Unlike most Enterprise software, they cannot work without happy and participative users.
• The metric of success for a CRM system is its credibility: how often management actually makes decisions based on its data. It matters less how many people are using the system than how representative the CRM system is of the state of business relationships and transactions.
• CRM systems are more vulnerable to data quality problems than are other types of enterprise software. In most companies, most CRM data is typed in (directly or indirectly through integration points) manually. Beyond simple data quality, the big headache of merging CRM systems is getting the data to mean something.
• The more advanced your CRM system is, the more likely it is to be integrated to a large number of internal and external systems. Unless you've used a comprehensive integration broker, SOA, or ESB, extricating a CRM system involves a lot of technical risk.
OK fine. So what are you supposed to do? Here are the basic alternatives.
Keep Both CRM Systems Indefinitely
Since CRM systems tend to have a relatively short life (5 years isn't unusual), "indefinitely" here may mean "until the next system transition," which may be 18 months away.
Keeping both systems alive indefinitely makes sense if the CRM systems are really serving different masters. Look at your corporate org chart: is each CRM system focused on a different chain of command? Next, examine your supply chain and demand channels. If the acquired business unit is a separate product line, selling to a different customer base, or working with a different channel or sales model, there's less intrinsic advantage to integrating the CRM systems.
Finally, look at the feature set of the two systems. Are they really comparable? Do they support very similar business processes? Is one of them antique and the other Web 3.0? If the users think that the two systems are night and day, the system transition will be tougher.