Solve the CRM nightmare: A buyer’s guide

Customer relationship management has a history of failed deployments. Myriad vendors — from mainstream ones to the more obscure — offer CRM in a variety of ways, from on-premise to partner-hosted to software-as-a-service. CRM is not a one-size-fits-all solution, and finding the right fit for your organization is essential to its success.

From an IT perspective, CRM is a software package they buy, implement, support and maintain. Along with that comes new data that has to be shared, archived, managed and secured — and this is why software-as-a-service has found a niche with CRM. But the value of CRM is found less in how you deploy it, and more in why you’re deploying it in the first place. If deployed correctly, it can be used to capture valuable information about customers, such as how they buy from you, when they interact with you and who they interact with.

The bane of most CRM applications, and what has historically been seen as a challenge, is getting that information to the right person in a meaningful way, said Joel Martin, vice-president of enterprise software research with IDC Canada. If a sales rep uses CRM to establish that a particular customer buys a particular product in January of each year, but the CRM system doesn’t let operations or inventory management or essential partners in on that, then the CRM system isn’t going to be of much use.

To be successful, said Martin, CRM must tie back into a company’s traditional ERP, payroll, procurement and inventory management tools. And it should have analytics and reporting tools so line-of-business managers can see what’s going on across the organization. Components of CRM have been built into SAP, Oracle and Axapta solutions, but they tend to be components of capturing data activities. What we want now, he said, is a CRM tool that allows us to capture information on mobile devices.

Where and how

To get the most out of CRM, certain IT decisions have to be made — but you shouldn’t start thinking about on-premise, hosted or SaaS until you’ve figured out what exactly you’re trying to do, said Martin. That way, the vendors will have a better appreciation of the business processes that CRM will fit into.

If you’re looking for a small point solution for employees who are always in the office, for example, then maybe on-premise is the way to go, but you should tie your CRM solution into your total apps platform. If you’re looking at hosted content management, can that partner also facilitate CRM? If you’re sales-oriented and looking for a pure play point solution, software-as-a-service might work. And if you’re looking for something industry-specific, that’s where a partner-hosted solution comes into play. Or, you might seek a partner that can host a solution that enables mobility.

A partner can also help if you want a mixed solution, where some of it’s managed internally and some of it’s managed by a partner. For example, you might want a portion of your CRM on-premise, but then want a partner to ensure that the other half of your sales business, which is out in the field, has access to the solution.

“The choice of delivery should be one of the last things,” said Martin. “It’s not a strategic differentiator from the standpoint of the vendors — the vendors have invested in deploying their solutions on all three of these models.” This includes Sage SalesLogix, SAP CRM, Microsoft Dynamics CRM and Oracle with Siebel. When making a decision, a company has to figure out what it’s going to do with the information that’s captured, and what the role of the IT manager will be with regards to management, distribution, training and support. Once that’s decided, you can choose which method is going to work for you. Here are three approaches:

Mainstream vendors

Microsoft is one of the mainstream vendors offering customer choice in deploying CRM, including on-premise, partner-hosted or CRM Live (which is the direct-from-Microsoft software-as-a-service offering). The downside is that the customer has to know which method will suit them best. The upside is that they can switch methods, since they all use the exact same code base, so they can switch from, say, hosted to on-premise, without having to reengineer, reinstall or reconfigure the CRM system. That’s important if you’re a small business that grows into a mid-sized enterprise and you want flexiblity to upgrade (or downgrade) as required.

Another consideration is how to access the CRM system. “Most sales forces are mobile, so being able to access the CRM system through a mobile device or a Web browser [is important] if you’re on the road and need to access it from your hotel room or from Outlook,” said Frank Falcone, CRM product manager with Microsoft Canada. Dynamics also offers CRM built right into Outlook.

Most importantly, Falcone said, look for integration with your back-office applications, such as your ERP system. “You don’t want your organization working in silos,” he said, “so it’s definitely a big bonus if your front-end CRM system can talk to your ERP system.”

Microsoft Dynamics Live Professional Edition is priced at $44 per user per month, while Enterprise Edition is $59 per user per month.

Software-as- a-service

“We host everything for our customers, so they have no infrastructure to worry about,” said Mini Peiris, vice-president of product management with NetSuite. “All they need is a Web browser and an Internet connection.” This means the SaaS vendor takes care of uptime, security, scalability and maintenance — all of the issues a customer would normally have to deal with if they brought that solution in-house.

Aside from CRM, it offers everything from warehousing to core accounting functions within one system. (However, if you’ve invested heavily in a back-office system and don’t want to switch that out, it offers a CRM-only product as well.)

The first thing to consider is what you want to gain from the software, said Peiris. If you’re expecting it to be a cure-all, that’s probably the wrong approach to CRM. What are your pain points? What’s the motivating factor? Also, what expertise or skill sets do you have in-house? If IT resources are at a premium, do you want to take on the maintenance of the software? Answering these questions can make the process of finding a solution that much easier.

As your organization grows, the system you choose should scale with you, and that’s a big consideration if you go in-house. “If you’re looking at a hosted model, it’s already built for scale,” she said. Customers don’t want vanilla CRM anymore, so NetSuite is targeting solutions based on industries and verticals — a service company’s business model, for example, is different from a company selling a physical product or good.

NetSuite has a small business product that starts at $49 per user per month and the NetSuite product is $99 per user per month.

Open source

While there are a number of projects out there, SugarCRM is probably the most common when it comes to open source CRM. SugarCRM began as an open source project in 2004, when the founders discovered there was a huge pent-up demand for usable, affordable and easily accessible CRM.

When you compare SugarCRM to other CRM systems on the market, it’s a really different model, said Chris Harrick, senior director of marketing with SugarCRM. With other models, the software vendors tell you how you’re going to interact with their software, and you can’t see the source code, nor can you have much influence over it.

SugarCRM, he said, is more innovative. “It’s not five product management people sitting in Silicon Valley saying this is what the world needs — it’s us soliciting ideas, opening up the application, so smart people in Japan or Belarus or Brazil can participate as well.” This means anyone can build extensions that can be plugged into Community Edition.

Open source also helps mitigate risk. “If a bomb were to hit Wolfe Road in Cupertino and we were all to disappear tomorrow, that project would still be out there,” he said. “The code is open. There’s 150 business partners out there supporting it, so first and foremost you’re assured the product’s not going to go away.”

If you’re a company that doesn’t like the idea of vendor lock-in, and wants a shared-risk model with your vendor, then open source could be for you.

Other options

In Canada, Microsoft and a Canadian company called Maximizer Software have the lion’s share of the CRM market, according to IDC Canada. We’re also a couple of years behind the U.S. in the adoption of SaaS.

But there are a number of other options out there, including pure play SaaS, open source and lesser-known applications you can choose from. Some examples include Landslide, which is a work-style technology that embeds a selling process and selling tools into the daily life of a salesperson (as opposed to a database-driven technology).

Another is Onyx, which offers an integrated suite of customer process automation applications including CRM, process management and analytics, as well as Avidian, which offers Prophet as a contact manager in Outlook.

What works for competitors may not work for you — so find the right fit.

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