CRM Can Be a Great Success, if You Have Buy-In at the Top: An Interview With Mike Overly

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One of the challenges a large company has is maintaining consistency and integration in processes and technology. When things break down, people can be quick to blame the problems on “just another CRM failure.” But HP has avoided those pitfalls, thanks to an involved CEO who has made a visible commitment to the CRM system and CRM strategy. In this edition of Inside Scoop, CRMGuru.com founder Bob Thompson interviews Mike Overly, who at the time was head of HP’s CRM program, on how CRM is practiced at the company.

This interview, which was recorded Jan. 12, 2006, was edited for clarity.

Bob Thompson

I’m very pleased to welcome to the CRMGuru Inside Scoop program Mike Overly, the director in charge of HP’s customer relationship management program. He’s been involved with that for several years and has tremendous insight about CRM and, of course, about what’s been going on at HP. I’m delighted to have Mike on our program. Thanks for joining us.

Mike Overly

It’s great to be here, Bob. Thanks.

Bob Thompson

Please tell our members a bit about what your current responsibilities are. What’s your job at HP?

Mike Overly

I’m the global director of sales support operations. What that, essentially, means is I have global responsibility for Hewlett Packard’s CRM solution, all of the sales tools and sales reporting.

Bob Thompson

How long have you been involved with this?

Mike Overly

I’ve been involved for several years.

Bob Thompson

Several years? Wow! I thought you’d be done by now. A few months or a year, and then it’s over, right?

Mike Overly

Our CRM program has been evolving for quite a while. While our vision has remained the same—the vision has always been to provide an industry-leading customer experience—what we’ve found is that we’ve tuned our CRM solution and the focus areas on the top business priorities over those years.



Bob Thompson

I’m looking forward to getting into some of those issues with you. But let’s start by going back to when HP’s CRM program was started. Can you give us a quick historical view of when it was started and why and what the whole point of it was back in the early days?

Mike Overly

Sure. As you had mentioned earlier, it’s been around for several years. And from Day 1, what we were after was an integrated view of our customers. Over time, we moved to globally consistent processes. We continued to evolve the alignment to our top business priorities that I had mentioned earlier.

Some examples of top business priorities include a global view of our funnel pipeline and global visibility of our marketing spend. More effective lead management was another key area that we were after, more consistent and effective account planning processes. Those kinds of things. Today, we’re really deploying a single set of integrated business processes focused around our customers. So we’ve come a long way through the years and continue to tune it.

Success story

Bob Thompson

I know this is kind of putting you on the spot here, but there’s been a lot of—if not bad, at least disturbing—press about CRM: It doesn’t work. It’s been hyped. And all the projects are failing. I’m just wondering if you would put a stake in the ground for us here, Mike, and look back over all those years. Is the program at HP a success?

Mike Overly

The short answer is yes, I think it has been considered a success and is a success. Let me give you a couple of examples that show that. One is when we initially got started. This goes back to when we had originally purchased Compaq. We were able to reduce our marketing spend as a result of the CRM processes and enabling technology by a significant amount, simply by having global visibility of our total spend.

Another kind of success measure, or success criterion, would be a reduction in our IT spend by tens of millions of dollars. So there’s a cost reduction area, as well, for our IT group.

The final example I’ll give would be one around significant improvements that we saw in our lead-to-revenue dollars. We would generate leads, mostly focused on quantity and not, necessarily, quality. So we’ve really streamlined and improved the lead-to-revenue process to qualify and close those. There are three examples, I think, that would dictate some success criteria.

Bob Thompson

But how would you view the results as you rolled out? If I had asked you this question after Year 1 of the program, what would you have said?

Mike Overly

Well, certainly the marketing spend was just an easy example by our CRM solution, providing global visibility of our total spend.

Bob Thompson

And that was in what time period?

Mike Overly

That was back when we purchased Compaq, so about three years ago.

Bob Thompson

That flowed relatively quickly?

Mike Overly

That flowed very quickly. That was simply getting visibility, getting our marketing budget entered into one spot and giving our chief marketing officer the ability to view that.

Bob Thompson

You can’t manage what you can’t measure.

Mike Overly

Exactly.

Bob Thompson

And then, following that, the IT spend was more about consolidating systems. As I’ve heard you describe it before, HP had—maybe I’m exaggerating just a tad here—one of every vendor installed somewhere. Is that too far from the truth?

Mike Overly

No, I think that’s exactly the case. The IT savings really came from what you had mentioned, the consolidation, and it came from, really, just a fundamentally different approach. We went from consistently inconsistent processes, depending on which business and country you were in, to globally consistent processes. We really focused our time and attention on the few processes that we felt would be competitive differentiators. And when we found those, we would develop them one time, and then they would be globally leveraged vs. developing them many, many times in the prior world.

Funnel health

Bob Thompson

Then this funnel health issue—if I remember your term correctly—is about getting better quality leads and then turning them into revenue, as opposed to just generating leads. So at what point did that kick in, and how long did it take to really bring it on stream?

Mike Overly

The funnel health is still something we’re continuing to evolve. As we roll out some new pipeline management processes, we’re really seeing a dramatic improvement in our funnel health. When I say that, what I really mean is the size of the funnel. As an example, the size of the funnel relative to your quota, the number of products that are attached to a typical opportunity. Those are ways that we use to measure our funnel health.

Bob Thompson

You and I have talked before about the importance of metrics. I wonder if you could comment briefly on how having these consistent processes and better systems helps you generate and manage these metrics. What does that do for the business performance, having these numbers that you can share around easily?

Mike Overly

Sure. We have, as you might expect, what I would call “business metrics,” things like funnel health; things like lead-to-opportunity conversion percent; lead-to-revenue percent, etc. And then we also have usage metrics. What we’ve found is, sometimes, the business metrics can be misleading. You can look at a metric and say, “OK, my funnel is healthy.” But, in fact, when you peel that back, you may find that it’s only a handful of people that have some significant opportunities.

So we measure also usage, and I actually have a global change leadership manager. He has a bunch of people who lead the adoption of these new processes around the world. In addition to the business metrics, they also measure people: Just how are they using and engaging with the new processes?

Bob Thompson

How about on the customer side? What do you do to ensure that the end-customer is more loyal, being retained and so forth, things that, ultimately, will translate into revenue but might or might not show up in a sales metric?

Mike Overly

First of all, we measure customer loyalty, and that’s something that we take very, very seriously. I’m differentiating loyalty from satisfaction. We’ve had satisfied customers who have chosen to purchase from our competitors. So, loyalty is a rather complex formula. And certainly, our CRM solution plays into that. We know our customers have told us that they would like to have a consistent experience, regardless of how they touch us, so whether it’s over phone, through one of our partners or through the web, they’d like that to be consistent, being able to view their orders’ shipment status and being able to do quotes and configs in a variety of different touches. They’d also like it to be seamless. Perhaps they configure via the web and then would like to actually engage with a phone rep.

The final thing that we’ve found that’s made, really, a significant difference in our customer experience has been simply the quality of customer information that we have. So, data quality. It’s often an overlooked goldmine. In our case, the CRM solution has helped us dramatically improve the quality we’ve seen. The point here is around the improvement in customer experience. It’s also allowed us to significantly reduce our costs. So those two things, I think, are a fallout of improved data quality.

Bob Thompson

I had an interesting chat just yesterday with Jan Carlzon, the executive who turned around Scandinavian Airlines years ago. He wrote this famous book called Moments of Truth: New Strategies for Today’s Customer-Driven Economy. I suspect you might have read it or at least heard about it.

Mike Overly

Absolutely.

Bob Thompson

And Jan said something very interesting, that a part of his formula for success at SAS and since then is empowering and providing the information and tools to the frontline employees. He said without the information, empowerment doesn’t mean anything. It sounds like you’re saying much the same thing, that if you want frontline people at HP to do the right job, they’ve got to have the right information. I think we’ve heard many times at CRMGuru that the data quality is one of those landmines that don’t get attention until you’re well into the project.

Mike Overly

Yes, I think we are saying the same thing. The only thing I would add to that, Bob, is the importance of integration for us. In many cases, especially with some of our larger customers, we might have many different people touching the same customer over the course of a day or a week or a month. Having that integrated view allows us to see that, “OK, today, the service rep was out, and there’s a problem with some particular piece of equipment. And one of our partners contacted them.” The integration of all of that information is really powerful and valuable when put in front of our frontline people.

Bob Thompson

But it’s powerful internally, having this integrated view: the so-called 360-degree view. But the other side of it is the ability to channel-surf, seamlessly, which is more of a customer benefit. You ought to be able to talk to, or interact with, HP online and then get on the phone or talk to somebody and be able to switch those channels. Information should be up to date, and anybody serving them on the other side should have access to that information.

Mike Overly

Yes, that’s exactly right.

Bob Thompson

How far along are you to that sort of world? I haven’t talked to too many companies that have really achieved that.

Mike Overly

Well, we’re not to the end point, yet. It’s fair to say that we still have some work to do there. But it is a pretty common request for us in most of our sales centers around the world, where a customer will do a lot of the work, themselves, via the web and then, actually, like to place the order. At one point in time, as much as 80 percent of those orders were actually configured via the web by the customer and then they, just as you described, Bob, would like to seamlessly, transfer it to that call center agent to place the order. So we’re not to our end state, but we’re rapidly approaching that.

Bob Thompson

When you look back over all of the work that’s gone on with CRM at HP, what do you think is the single biggest challenge that you’ve faced and how was it overcome?

Mike Overly

That’s actually an easy one. The biggest challenge for us has nothing to do with the technology. Those kind of come and go. But it’s around the adoption of the business process change. In our case, we moved, I think I said earlier, from a consistently inconsistent environment. We sold and marketed very differently around the world. We’re moving now to a globally consistent environment, and getting people to adopt and use those is absolutely our biggest challenge. How we’ve overcome that is with a strong change leadership program. We have a formal program there with a single leader, and it’s all well orchestrated: top executive commitment and focus on value to the first level. Those are probably the three things that we’ve done to overcome the obstacle.

Bob Thompson

I wonder if you could just elaborate a touch on each of those and change leadership, an example of how you’d go about getting somebody in, say, Europe, to get on board with a new process? What’s involved?



Mike Overly

OK, sure. We have a single team that uses a variety of things to train and have the follow-on, ultimately engaged with measuring usage or adoption of those. They use all sorts of your standard change kinds of things, and they also use some creative things. We have a video with three vignettes that depict the future integrated environment. Sometimes people have a hard time crystallizing the vision of what exactly the new processes look like.

Bob Thompson

You’ve invested quite a bit of time and money to develop these programs, to explain to people what they need to do and why, having them envision it, training them on it, measuring it. It’s a quite involved process, it sounds like. How long did it take you to come to the realization you needed something like that in order to get the adoption that was so important?

Mike Overly

I came from a sales environment, so I had a good feel on how they think. That was actually something from Day 1 that we had a pretty significant emphasis on.

Bob Thompson

Good for you!

Top support

Mike Overly

Yeah.

Bob Thompson

You mentioned a couple of other things. Top executive support. What do you expect from them to really help make this adoption?

Mike Overly

I’ll give you a real-life example with Mark Hurd, our CEO. Mark came in and essentially said—I’m paraphrasing—”We have a pipeline. It’s based on Siebel. And if I don’t see an opportunity in Siebel, then it must not exist.” The point was, when you have your top executives send that kind of a message out to the sales force, you see the adoption gathering very, very quickly.

Bob Thompson

It’s like a version of “use it or lose it,” as in “lose your commissions.”

Mike Overly

Absolutely. And in addition to that, he’s a user. Once a month, he reviews big deals and determines how he and his executive staff can add value to help qualify and close the deal and, ultimately, add value to the customers. He’s a user of the system, as well. That’s probably the best example of executive commitment I’ve seen.

Bob Thompson

The third thing you mentioned was—I think you said—a focus on value. Is that just being focused on the business priorities? Is that what you meant?

Mike Overly

What I intended to say was that we have a focus on value to the first level.

Bob Thompson

Oh. To the front line, you mean?

Mike Overly

To the front line. To the first-level sales and marketing people. What we found is that the CRM solution and the associated value become very apparent. It hits you in the face as you get further up in the organization. We’ve devoted a fair amount of time to ensuring we’re adding value to the frontline sales and marketing people.

Bob Thompson

Let’s just talk about that for another second. If I was to interview one of the salespeople and say, “All right, what are you getting from this?” what would they tell me?

Mike Overly

Well, again, let’s take a step back. I mean, inherently, we’re trying to put processes in a process-free environment, right? Many of the top sales reps, not necessarily within HP but in the industry, are rather artistic. They are not, necessarily, known as ones who like to follow a process. I’ll give you an example. Some of our top sales reps gave us feedback that they would spend up to a couple hours a month simply answering phone calls for forecasting questions. They would get a number of different calls: “What’s closing this month?” Now, when they get the new Siebel and they get their pipeline properly entered, they can simply direct those phone calls to go out into Siebel and access and get the information. So in this one particular example, it is a productivity improvement and also significantly reduces their frustration.

Bob Thompson

To be fair to everyone reading this, the reality is that not every change is going to be popular. As you said, some sales reps are more artistic, or they just don’t want to share information. But your recommendation sounds much like another one that we heard from a speaker at our Summit last year, where the person in charge of trying to make the CRM program go, instead of pushing it on the organization, went out and looked for wins: What are your problems? And it sounds like, in the approach you took with the sales reps, you can solve some of the problems that they are frustrated with, but they may need to get on board with some things that they might not do of their own volition.

Mike Overly

Exactly. I could give you another quick example, and that was around the lead management process. Nothing gets a sales rep’s attention more than a good quality lead that’s ready to be qualified and closed. That’s money in their pocket, and that’s the kind of thing that the new CRM solution will provide to them.

Bob Thompson

I want to shift gears and talk about technology just a little bit.

Mike Overly

Sure.

Technology

Bob Thompson

You’ve said that it wasn’t your biggest challenge, but you still have invested a fair amount of time and money in trying to find the right solution. I wonder, just for starters, real quick: How important is technology? Can you put a number on it? Was 25 percent of the value in technology or something like that? How important was technology in the overall scheme of things?

Mike Overly

I don’t know that I can put a percentage on it. It was certainly important. I don’t know if hardware technology is where you’re going, but from a hardware standpoint, it’s probably most important to us from a performance aspect, especially when you start getting into smaller countries and Asia Pacific, Latin America, etc. We want to have predictable, acceptable performance with the customer on the line. From that standpoint, we spent a fair amount of time, effort and dollars in having the right hardware technology to support that.

Bob Thompson

Are you talking about laptops and things like that?

Mike Overly

Laptops. Network servers. You name it. Yes.

Bob Thompson

On the software side, you made a choice early on—back in 2003 or earlier, as I understand it—to work with Oracle, and then you switched to Siebel. I think that was around the time of the Compaq acquisition.

Mike Overly

Yes.

Bob Thompson

Can you tell us why you made that switch?

Mike Overly

Sure can. I’m going to just take a step back. Prior to Oracle, as you mentioned earlier, we had you name it, anybody and everybody. We had Siebel. We had Oracle. We had PeopleSoft. We had SAP. We had names you wouldn’t even recognize. Back to your point. When we acquired Compaq, we went through a process far larger than our CRM solution. It was called Adopt and Go. We did analysis in all different areas down to which product, between the two companies, were we further along with? We chose one; we adopted that and moved forward.

The intent of that strategy was that, from Day 1 we would have a company, including the sales force, focused around our customers and not looking internally. And as a result of that Adopt and Go analysis, that’s where the Siebel selection process was made. It was primarily around the fact that our call centers were further along with Siebel. That was how that decision came down.

Bob Thompson

Now it seems that you’re going back into the Oracle fold via the acquisition. It’s not quite done yet, but I think by the time this interview is published, it’ll probably be final, toward the end of January or early February 2006.

Mike Overly

Yes.

Bob Thompson

Do you have any reaction to the impact that you expect plus or minus on that acquisition?

Mike Overly

To be totally honest with you, Bob, our analysis is no change, so assuming Oracle executes to the strategy as we understand it, we expect there to be, really, not a positive or a negative. For what we’re doing, it’s really no change, business as usual.

Bob Thompson

Let’s talk about executive leadership. You’ve already mentioned a little bit about Mark Hurd and his support early on. Have there been any other changes that are noteworthy in the change of leadership from [former HP CEO Carly] Fiorina to Hurd? Or can you at least talk more generally about what kinds of things happen when senior executives change over and how that affects the program that’s running?

Mike Overly

Sure, I can give some additional comments. I think Mark has brought additional focus, a drive to adopt the business processes. No longer is usage of the processes optional. I mentioned earlier, he’s a user. That goes a long way. I mean, actions speak louder than words. I think in summary: focus and just some clarity in the non optional use of the global processes.

Bob Thompson

That certainly helps in setting a good example, as well.



Mike Overly

Exactly.

Bob Thompson

Let’s move forward and look toward the future. Can you comment on HP’s vision for CRM today and some key things that you’re working on for 2006?

Mike Overly

Our vision hasn’t changed, so it’s to continue to provide the industry-leading customer experience. As I mentioned earlier, we continue to tune and align the CRM deliverables to focus on the top business priorities. So, as we look at those in ’06, you’re looking at things like sales force productivity. I’m expecting what you’re going to hear is not a whole lot different than what most companies are facing. But we need to be able to make our sales force more productive and, thus, make their customers happier. We need to improve our return on the marketing dollars, so both marketing efficiency and effectiveness will continue to be a focus as we move forward. Those are the two broad areas that we’re focusing on in 2006, and CRM, again, has a number of enabling solutions.

Bob Thompson

Are you involved at all in the contact center area at HP, which obviously, is a huge point of contact with customers?

Mike Overly

Yes. Absolutely. The inside sales or sales centers are part of our CRM solution.

Bob Thompson

Great. Just to wrap up, do you have a single bit of advice that you’d like to share with other executives who are interested in embarking on this journey? You’ve learned so much. What would you recommend that they do first?

Mike Overly

I think, first, is top executive commitment and a plan that has measurable deliverables focused on value to, first, the customer, then the company and then, finally, the first level, the frontline sales, marketing and service people. That would be my bit of advice.

Bob Thompson

Mike, it’s always a pleasure to talk with you, and we really appreciate you sharing your insights with us. And by the way, welcome to the CRMGuru panel of experts. We’re delighted to have you on board.

Mike Overly

Thanks Bob, I really enjoyed it.

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