Is CRM Dead?

Is CRM dead? Tom Siebel certainly seems to think so, at least if the comments he reportedly made at the DCI Customer Relationship Management conference earlier this month are any gauge. The future of CRM, according to Siebel, lies in vertical business processes and Web services.

To be sure, both of those areas are becoming increasingly prominent in many software implementation projects, not just CRM. Web services in particular — that is, software designed to be used by other software via Internet protocols and formats that integrate applications within and without a company — hold great promise for CRM, which can be difficult to implement and integrate.

It Just Seems That Way

But CRM is definitely not dead, although it may seem that way to many vendors, especially those dependent on the multimillion-dollar implementation projects of yesteryear. The market — especially the small business market — is still woefully under-penetrated, meaning is too early to start writing a requiem mass for the CRM industry.

But the software space, not to mention the perceptions of it, has definitely changed over the last 18 months. Early adopters of CRM applications have been disillusioned, and the word has spread: CRM can be a hassle and does not always deliver quick ROI (return on investment). To survive, vendors need to tailor their products, or at least their marketing pitches, to address those concerns.

But the benefits CRM delivers are too good for companies to ditch it entirely. Plus, buyers now have the added benefit of learning from early adopters’ mistakes — not to mention benefiting from a very soft IT market — if they are crafty enough in the negotiation process.

So, for buyers who want to take the CRM plunge, I offer the following suggestions for a successful project.

Before Jumping In

1. Needs Assessment. Only the largest multinational conglomerates need — or, perhaps more accurately, can afford — a soup-to-nuts implementation of a complete suite. Pick and choose the capabilities you think you need the most, and do so by querying everyone the application might touch, including partners, major customers and suppliers.

A word of warning: Without a doubt, one of your needs is going to be a user-friendly interface. Don’t expect this to be easy to find: To be blunt, most CRM applications stink in this regard.

2. Experiment. So, you think your sales processes can be revamped by a sales force automation application? Very probably, they can be. But before you commit yourself to a licensed application, it wouldn’t hurt to experiment with a hosted application. The main vendors in this space are Salesforce.com, SalesNet, UpShot and NetLedger’s NetCRM. Who knows, you might decide to stick with it as a permanent solution — some of these vendors offer applications that are very robust.

But before you decide, don’t commit to a multiyear contract, and make sure you keep tabs on your data at all times. Have it sent to headquarters on weekly basis via a database export function, perhaps, just in case your vendor should suddenly tank. This is an appropriate rule of thumb for any hosted application in any software space.

3. Give Yourself Time. Negotiating a software contract can be a tricky affair. If these negotiations are for a complex or expensive implementation, and especially if they include systems integration services, get professional assistance, or at least the most current pricing information.

Most importantly, leave yourself enough time — or at least don’t reveal your project time frame to the vendor during negotiations. If negotiators know you have to be up and running in a matter of months, and you have no time to go through another RFP (request for proposal) and due-diligence process, they will be much less inclined to compromise.

4. Don’t Underestimate Costs. Hidden costs are the biggest complaint companies have about any IT project, and CRM is no exception. Simply put, to accurately budget for a CRM project, one has to consider the total cost — and this includes hardware, software, professional implementation services, ongoing application maintenance, training and ongoing end-user support — and, of course, the license itself.

During the Implementation

1. Piece by Piece vs. All at Once. There are enough success stories on both accounts to make a case either way. But strictly anecdotally, it seems as though the companies that rolled out projects in bite-size pieces were most successful in the long run. Deloitte Consulting recommends announcing a successful win every 100 days to keep morale high and to let shareholders know you have not embarked on the dreaded black-hole IT project.

2. Employee Buy-In. By hook or crook, involve users as soon as possible in the process. Poor user adoption is another oft-cited reason for CRM failure. Some suggest a carrot approach, offering further incentives, say, if a lead has been properly entered and tracked through an SFA application. Other executives sniff at such coddling and say a company-wide mandate is the best approach. Do whatever works for your particular corporate culture. (Hint: Either way, spell out the benefits for the employees and the firm.)

After It’s Live

1. Benchmark Progress. Once the project is up and running, it still needs maintenance. Set benchmarks and diligently monitor progress against them. If a project is askew in some manner, better to identify and correct it early on.

Most of all, remember: While CRM is not dead, you might find yourself wishing it was if you don’t pay attention to what you are doing before, during and after a project implementation. Early lessons notwithstanding, it still is a very complex space.


Note: The opinions expressed by our columnists are their own and do not necessarily reflect the views of CRM Buyer or its management.


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