Ten ways to implement CRM on a tight budget…

With the economic environment getting tougher, the need for effective CRM systems increases, but with budgets often getting tighter, the scope to introduce much needed technology decreases. I often work with companies who are looking to implement CRM technology on tight budgets, so in this post I’ll set out ten ways to implement CRM technology more cost effectively:

1. Get your requirements carefully mapped out first – The more detailed a specification of your requirements that you can generate, the better positioned vendors are to provide firm pricing. Firm pricing let’s you identify the most competitive offerings, and helps you identify which capabilities you can do without if you a struggling to hit budget. Many organisations rush to select a vendor with an ill defined set of requirements in the expectation that the vendor will develop the final specification. As it’s in the vendor’s interest to maximise the commercial value of the project, and at this point you are pretty much locked in, you can expect to pay around 50% more by adopting this approach.

2. You don’t need to go for premium brands – While the temptation may be to go for well known CRM brand, they may not be the most cost effective option. A tight requirements specification will help you identify the functionality that you do and don’t need, and you may well find that lower cost options can comfortably meet your needs. Even some of the free open source and low cost commercial open source offerings can represent a viable route forward if your needs are not too sophisticated. It’s advisable to undertake careful due diligence however to give assurance the vendor you’ve selected is likely to remain trading in tougher market conditions.

3. SAAS is not by definition cheaper – Despite what the software as a service (SAAS) vendors may suggest, hosted software may or may not be cheaper than ‘on premise’ alternatives, even when just measuring the year one costs. Unless there’s a compelling need to deploy technology in a certain way, it’s wise to keep an open mind between hosted and on premise options.

4. Shop around – Organisations often pay too much because they unnecessarily limit choice. As a case in point, we recently issued a RFP for a fairly straightforward system, and included several resellers for the same CRM technology. Pricing estimates from those resellers ranged from £30,000 - £150,000. Had we had a more limited distribution we might have ended paying substantially more than we needed, or discounted a potentially attractive technology.

5. Negotiate well – While your budgets may be tighter in a down economy the vendors are likely to be feeling the pinch too, so there’s generally plenty of scope to negotiate. While software costs and day rates tend to be the key target for negotiation, it’s also worth looking the number of service days the vendor is proposing to determine if they are appropriate for the project. If in doubt speak to an independent CRM consultant, they can often add a lot of value in this area for modest outlay.

6. Don’t overload on software – There are already billions of pounds worth of unused software out there sat on shelves gathering dust; don’t add to it. There can be a tendency to buy software for a much wider group than will actually use it. Few CRM vendors penalise you for buying software incrementally, so it often pays to start off small and add licences as you need them. You may well find you need a lot less software than you originally thought.

7. Keep it simple to start – It’s generally best to phase projects. Just implementing the basics can often add a lot of value, and further capabilities can easily be added over time. This reduces the amount of costs up front, and as organisations often only see the realistic potential of technology after they have been using it for a while, it often avoids the development of expensive white elephants.

8. Take on more yourself – There’s little point in paying vendors to perform tasks that you can easily perform yourself. With many of todays CRM technologies being highly user configurable there is plenty of scope for organisations to do the basics themselves and let the vendors handle the more technically demanding parts.

9. Rent a developer - Some of the most cost effective deployments we’ve worked on came when we paid for a developer by the day; got them on site where we could keep an eye on them, asked them to turn off their mobile phone, and told them what we wanted written. It requires a good understanding of the business and functional requirements and knowledge of the technology you’re deploying, and isn’t advisable in all circumstances, but we’ve implemented systems at under 20% of the originally quoted costs by operating this way as opposed to letting the vendor do the initial design work.

10. Use third parties – You don’t have to use the vendor for everything. You can often find capable, well qualified third parties and independent contractors to involve on a project without having to pay a vendor premium. Sites such as Rent A Coder can also expand your options by giving you access to cost effective developers located across the globe. You may have suck it and see a few times before you find people that have the right skills and that you can work with, but as the rates are so competitive you can afford a few false starts.

By using your imagination and defying a few of the conventions of CRM implementation, it’s amazing how cost effectively CRM systems can be deployed. Perhaps sometimes budget constraints can be beneficial; necessity is after all the mother of invention.

Six pieces of CRM implementation advice...

I had the pleasure of going on a CRM site visit during the week. It’s always interesting to discuss other people’s experiences of implementing CRM systems. I always ask what advice they would offer to others about to undertake an implementation, and thought it might be refreshing to pass on some thoughts that weren’t mine for a change. So six pieces of advice for those implementing a CRM system:

1. Be aware that the implementation of new technology also provides a temporary window for more far reaching business change. Use it or lose it.

2. Don’t underestimate the internal resources that CRM projects soak up.

3. It’s easy for key implementation activities such as testing, documentation and training to get crunched at the end of a project as deadlines loom. Make sure these are not compromised.

4. Make sure you engage key users early, this has a big impact on how quickly and effectively the technology is adopted.

5. Don’t try and do too much – phase it.

6. Find the right vendor.

Late and over budget – the hidden traps of implementing CRM systems…

While the instances of outright failure are few and far between these days, CRM technology implementation projects continue to be a source of pain and frustration. Recent research relating to IT projects in general indicated that the average project came in 56% over budget and 84% later than expected. While I’ve no figures for CRM specifically, I’d hazard a guess that that the performance of the sector was even worse.

So what catches organisations out? Before I try and answer that, I’ll make the point that I’m referring to the meaningful use of CRM technology; technology deployed in a way that will deliver significantly beneficial results. It’s easy to throw some software on a server, or sign up for a hosted provider, however high pay-back CRM systems generally require considerable work in setting up these technologies in order to generate results.

Here are the six aspects of CRM deployment that tend to ambush the unwary:

Poorly defined requirements – many organisations initiate CRM implementations with only a hazy notion of what they are trying to achieve, or what the final solution will look like. As a consequence requirements tend to change as the project progresses, and new requirements emerge, which puts pressure on resources, schedules and budgets.

The availability of internal staff – CRM projects are hungry on the use of internal resources. For example users will be involved in requirements definition activities and training, the IT team in project management, key users and sponsors as part of the project team, and senior management in overseeing the project. When fully mapped out, the demands on internal staff can be considerable, and, as most will have ‘day jobs’, projects often suffer disruption as staff struggle to balance their day to day activities with the demands of the project.

Sign offs – as the project progresses there are generally a series of sign off points at key milestones. It’s common that sign offs will involve a range of individuals in the organisation as well as senior executives making up the project board. The logistics of coordinating sign offs can be complex. The simple act of diarising review meetings that all required parties can attend can add months to a project, and is a phenomenon that isn’t well catered for in many project plans.

Data – good systems require good data, and, if the new system is to be populated with existing data, it’s important that the quality of that data is high. Many organisations are surprised at how many data sources they possess and how poor the data quality is. The cleansing of data and reconciliation of different versions of the same record in multiple data sources can be very time-consuming. While there are tools that can help, this process tends to be very manual, and is not something that can be fully outsourced as it requires considerable input from the data owners.

User acceptance testing – once the customisations and configurations to the software are complete, there’s generally a phase of user acceptance testing to ensure that the requirements will be met. This can be a surprisingly extended process as many members of staff representing each functional area may be involved. The process is also highly iterative in that bugs and issues detected in the first round of testing will require re-testing, and it’s not uncommon for ‘fixes’ to prove not to be, or break other previously working areas of the system. It’s not unusual to have to go through several rounds of testing. This is also at this stage that additional requirements emerge particularly if the original requirements were lightly specified.

User adoption – an effective system requires consistent and systematic usage. The system can be ‘live’ but not generating the desired returns. Organisations generally underestimate what’s involved in achieving comprehensive user adoption and often put too much faith in the value of classroom training. Classroom training has its place but adoption demands a host of proactive measures such as targeted training and interventions for reticent or struggling users. It’s not uncommon for user adoption programmes to take many months of sustained efforts before the new habits and practices become ingrained.

While effective requirements definition will go a long way towards addressing budget and cost overruns (though the importance of this should not be underestimated), for many aspects of CRM deployment there are no easy short-cuts. The key is to be realistic about the demands these projects will place on the organisation and manage expectations accordingly. Too often CRM projects are deemed failures because they failed to meet impossibly demanding and often self-inflicted deadlines. A better review of what’s involved and a more analytical appraisal of the availability of resources to meet those demands will go a long way to ensure project success.

Removing the c from rm...

As I’ve mentioned in previous posts, I’ve always been a bit uneasy about the ‘Customer’ in CRM. I prefer to view the deployment of CRM technology as a means of bringing about process efficiencies which may, or may not impact the customer. So a good example of a ‘may not’ might be using CRM technology to improve the effectiveness of salespeople. i.e. an organisation might have invested in the latest sales methodology and wants to ensure that the benefits are maintained when the original training is but a distant memory, and encompasses the new working practices within the CRM system. The salespeople are more effective as a result and the company hopefully more profitable, but the customer is unlikely to feel much direct benefit themselves.

In practice most process efficiencies have both customer and non-customer benefits. We have a system going live currently where we’ve spent a lot of time automating and streamlining a range of order management and fulfilment processes. These processes were previously handled by a range of Excel spreadsheets, Access databases and hard copy files, and were time consuming and lengthy. The changes we’ve implemented should improve fulfilment quality, reduce lead times, and require less resource, which should lead to a desirable win/win. The customer gets a higher quality product delivered in less time, and the organisation deploying the technology lowers its costs of fulfilling orders.

I don’t want to dwell on it, and of course it’s not going to change any time soon, but in my line of work I see a lot of people delay introducing potentially highly beneficial technology because they want to get their ‘customer’ strategy sorted first. If we removed the c from rm then perhaps, more people would understand the wider potential of the technology.

If Warren Buffett ran a CRM company...

If you ever want an object lesson in candour and taking an objective long term view then look no further than Warren Buffett’s annual shareholders letter. Observing on the mayhem in the financial markets in his 2007 letter he notes ‘You only learn who has been swimming naked when the tide goes – and what we are witnessing at some of our largest institutions is an ugly sight’.

Whether or not it involves lending money to people who can’t pay it back, short-termism is a hazardous practice, and one that’s rife in the CRM market. There are two key manifestations of this in my view. Firstly there’s an undue focus on initial project profitability at the expense of customer satisfaction. While I have no issue with vendors looking to make money on the work they do, I think there’s a tendency to obsess on protecting margin, generally through the heavy handed use of change requests, rather than concern as to whether they will have a customer who wants to retain their services at the end of the implementation process.

Secondly the emphasis tends to be on getting the project ‘done’ and moving on to the next one regardless of whether the system is generating any genuine business value for the customer. Partly this is a question of capability – CRM vendors ‘know’ the technology, but few have an understanding of how to apply it, and partly because it’s easier not to: injecting the inconvenient reality that there’s more to achieving CRM success than buying technology and plugging it in, introduces the sort of uncertainty that can distract from the fundamental objective of selling software.

If Warren Buffett were to suddenly find himself running a CRM company, I’d imagine it would become a rather profitable one, because Mr Buffett, unencumbered with a background in the IT industry, would quickly deduce two things 1) unhappy customers are unlikely to make you very rich, and 2) the greater value you can generate for your customers the more they are likely to invest in your products and services. Sadly there aren’t many Warren Buffetts out there, rather fortunately for the CRM industry I suspect.

Which in turn...

As someone very sagely noted in a meeting last week - while the initial stages of a CRM implementation pick off the low hanging fruit, the real benefits accumulate over time. To illustrate the point I’ll tell a rambling and probably not very grammatical tale of one of our older clients:

Our initial involvement was to help them implement a CRM system that delivered better customer service metrics, which in turn the client used to improve the quality of support they were offering. However the system also started to provide better insight into the issues that customers were reporting, which in turn led to a series of product improvements, which improved product reliability, further enhanced customer service, but also reduced the number of customer support calls, which alongside productivity improvements meant, over time, that customer service reps weren’t replaced when they left, and staff costs for the unit dropped 30%. Customer service continued to improve despite the reduction in numbers, and became a key point of differentiation in respect to their competitors, which in turn facilitated a series of large contract wins, which in turn put a key competitor – who at one stage had threatened to engulf them - into full retreat, and with this as less of a distraction, and with the increases in revenue and reduced costs to fund the new initiatives the client was able to attack and break into two substantial new markets, which in turn…

…and hopefully you get the picture, so in essence the system, over a period of three years, provided the infrastructure for a fundamental transformation of the business, with one benefit spawning another to create a virtuous circle of improvement over time.

Recognition that the real pay back from CRM takes time is an important insight. Too many CRM implementations are geared around the concept of a one off CRM project rather than recognition of a long term CRM programme, which means the low hanging fruit might get picked but the bigger benefits are never harvested.

CRM chemistry....

I had a call from a reseller on Friday who was interested to know a bit more about what we as independent CRM consultants do. When I explained the vendor selection side of our services, they were interested to know which implementer I recommended for the CRM product they sold. Whether they believed the answer or not, I explained that it wasn’t a simple as product x = reseller y.

There are a number of reasons for this: if a CRM product was sold through business partners (e.g. Microsoft CRM), and if that product was a strong contender, we would almost certainly look to involve more than one reseller. One reason being that we find resellers to be somewhat schizophrenic when it comes the way they price projects. This may reflect project work load, but one time you’ll ask and they’ll come up with something very competitive, the next it can be completely stratospheric.

Secondly, the nature of the project itself and the skills required to make it successful drives the choice of potential vendors, for example a complex implementation might orientate us towards suppliers with a heavy duty implementation methodology, or a client with a tight budget might suggest an up and coming vendor looking to build their customer base.

Lastly we don’t make selections for clients. We see our role as finding highly capable suppliers, but ultimately the final choice will always be the client’s to make. While we will provide commentary and analysis, ultimately chemistry is always going to play a key part – who do they feel most comfortable working with?

Chemistry of course be a very dangerous thing if it’s chemistry between the client and the salesperson – which is they way most CRM purchase decisions get made - because generally they’re not going to be around once they’ve cashed the commission cheque, but as long as it's chemistry with the people that will be implementing and supporting the technology, and it’s a chemistry decision between well qualified vendors, then chemistry’s fine with us.

CRM and lead management...

One of the big benefits of deploying CRM technology can be systemising the handling of leads and enquiries. In his book ‘Lead Generation for the Complex Sale’ Brian Carroll notes that ‘as many as 80 percent of leads are typically lost, ignored or discarded’. Some leads simply don’t get followed up at all, which is rather mystifying but seems to be a fact of life. The bigger problem is when leads get passed to salespeople when the buying decision is not immediate. Salespeople are often poor at managing longer term leads in my experience, being rather more focussed on the here and now. Without effective systems these leads tend not to be recycled, and as I suspect the majority of purchase decisions are not immediate, this can be a big waste.

We’ve had a number of CRM systems go live lately where we are trying to increase revenues through managing leads more effectively. The key has been to define a sales process that ensures that all leads are captured and tracked through the system. This involves defining what constitutes a lead, when the lead should be passed to a salesperson, and, importantly, when they should be passed back for example to a telemarketing team should the opportunity prove longer term. By improving the visibility of the lead within the system, the organisations can ensure that opportunities are followed up effectively, and that the shelf-life of the lead is considerably extended by effective management over the long term.

One of my favourite gripes is that few companies make the most of their CRM systems by failing to invest in the supporting reporting capabilities - a theme I’ll warm to on another occasion. We’ve ensured that the lead management capabilities are supported by powerful business intelligence reports to allow the management team measure progress, and help the marketing team allocate their budgets into the most productive areas. There have already been a few surprises with different types of leads providing very different conversion ratios.

In principle this over time will translate into a big lift in sales. Brian Carroll cites an increase in qualified leads through these lead nurturing programmes between 15 and 200%. It’s early days to provide any meaningful statistics so far, but I’m certain the impact is going to be significant. I’ll report back as things progress…

The cost of CRM project failure...

I get a bit blasé about the importance of selecting the right vendor. MyCustomer.com is due to publish an opinion piece that I wrote about CRM consultants not just being about vendor selection. And I have been known to suggest from time to time that effective requirements definition is actually more important. I think this is partly because we get to work with excellent vendors and avoid the incompetent. And while I’d love to say everything works perfectly all of the time, that would not be entirely true, but we tend to be dealing with hiccups rather than major issues.

However from time to time I’m reminded as to the price organizations pay when they make a misjudged purchase decision. I made a call this week to see how the second phase of a project we’ve been working on had panned out. The client had first involved us a couple of years earlier wanting help turning round a failing project. They had installed a supposedly front/office back office solution which had been partially delivered substantially over budget, considerably late, and with a wealth of missing functionality. The internal project team was working silly hours to make the best out of a bad lot, while having to endure the inevitable finger pointing that only failed IT projects can generate.

The impact of the failing system was widely felt. Not only was senior management embroiled in a time consuming battle to at least get things on an even keel, the lack of a stable IT infrastructure was impacting customer service, and key new product releases were being undermined. Overall the ‘system’ disrupted operations for about two years.

While the temptation was to throw the system out entirely, many of the elements of the system were so bespoke and critical to ongoing business continuity, that this wasn’t a practical option. We helped the company install a mid-market CRM package to take over the front office functions, integrated with those back office functions that worked, and have been steadily helping them steadily migrate functionality from the failing system into the new CRM environment.

The vendor we selected to implement the CRM system has done a great job, and the client’s confidence in using and implementing technology has steadily increased. The fault for the failing project lay exclusively with the ‘rogue’ vendor, but inevitably in these circumstances there’s a tendency to blame yourself as well, and as a result there was a creeping lack of belief within the client as to their ability to implement technology successfully.

Rather coincidentally another client we later worked with had a similar encounter with the same ‘rogue’ vendor. After two years trying to implement a system the client simply gave up and wrote their own solution. The cost of the episode was enormous and the psychological scars are deep.

It’s perhaps the impact on confidence that project failures create that may ultimately be the most damaging aspect. In an era where corporate success and failure will increasingly be determined by an organization’s ability to harness technology, it will be the confident that ultimately prosper.

The ‘rogue’ vendor is still trading and still gaining (and presumably fleecing) new customers. The laws of economics don’t seem to apply well to IT companies perhaps. We seem to tolerate incompetence in IT far more than in any other field of life. For anyone looking to make a major investment in technology I’d strongly advise they perform their due diligence well, the cost of project failure may be bigger than you realize.

The role of the CRM consultant in requirements gathering...

While it’s a significant proportion of the project work we undertake it’s not always obvious why we get involved in the requirements definition phase of a CRM implementation. Before I address that point it’s probably worth summarizing why effective requirements definition as an activity is so important to a project’s ultimate success. In essence trying to implement a revenue generating CRM system without a detailed set of requirements is like undertaking a major construction project without a set of architects plans – ultimately you might pull it off but it’s going to take longer, cost more, and the finished product might not actually be what you want.

The requirements document fulfills a number of key functions:

· It facilitates effective vendor selection
· It facilitates negotiation of pricing and terms against a firm specification
· It provides a blueprint of what will be built

With respect to the first two points the timing of the requirements gathering exercise is all important. The temptation is often to undertake the technology selection first and then work with the selected vendor to produce the detailed set of requirements. The trouble with this approach is that once you get to the detail you may actually find the product that you’re now committed to doesn’t actually fit the newly discovered requirement.

Perhaps more importantly this is the implementation equivalent of publishing your email address and expecting not to get spammed. The job of any self respecting vendor project manager will be to optimize the vendor’s commercial position by expanding the value of the project (or if the implementation budget is set, dumbing down what they will deliver for the money). The customer’s ability to resist the vendor enhancing their commercial position is extremely limited once they get locked in. As a guide I’d estimate that companies pay 50% more for the projects when they define detailed requirements after vendor selection rather than before.

Even when companies commit to producing requirements documentation it invariably falls down in a number of different respects, including:

· Failure to define the business objectives
· Failure to define requirements in terms of business processes
· Failure to define requirements in sufficient detail
· Specification of requirements that can’t be economically met by available technologies

I suspect these issues emanate from one or a combination of the following three factors:

· That the person compiling the requirements has a weak understanding of CRM technology and how it can be beneficially applied.

· That the person compiling the requirements has a poor understanding of the operation of the business, perhaps coming from an IT background for example.

· That the person compiling the requirements is time poor.

In order to be effective at requirements gathering the analyst needs to combine a detailed understanding of the functional capabilities of CRM technology, a great understanding of how businesses work, and a depth of experience of applying CRM technology beneficially. The analyst’s job is to look carefully at the business and identify how the capabilities of the technology can be beneficially applied. The effective analyst works like a doctor, asking the appropriate diagnostic questions, using their knowledge to arrive at a diagnosis, and determining a cure.

The analyst hampered by a lack of technology or business understanding will tend to ask users to ‘self-diagnose’ and simply ask what they want from the system. They don’t have the knowledge to define requirements that the potential user may struggle to articulate or identify issues and needs that the user might not even be aware exist. They are like a doctor who demands the patient diagnoses their own medical condition.

As with many of the things the CRM consultant does, requirements definition may not be the first area you might associate us with. However when you consider that effective requirements definition probably goes 80% of the way to achieving a successful project, (where performed prior to vendor selection) will lower purchase costs by about 50%, but requires considerably more time and knowledge than people often appreciate, it’s perhaps no surprise that this seemingly innocuous activity is where we spend a considerable of our project time.

from blood, brains, and beer...

In his improbably entitled autobiography ‘Blood, Brains, and Beer’ David Ogilvy quoted Louis XIV: ‘Toutes les fois que je donne une place vacante, je fais cents mecontents et un ingrate.’ – every time I give someone a job, I make a hundred people unhappy and one person ungrateful. Neither party was talking about the CRM vendor selection process of course, but it’s a very appropriate observation nonetheless.

Mastering the complex sale again...

Well the invitation to vendors regarding show-case sites didn’t illicit an overwhelming response, though that could be a reflection on the breadth of readership rather than anything else. That said I did get an unexpected email from Jeff Thull the other week after my note about his ‘Mastering the Complex Sale’ book, which was a timely reminder for me to offer a few thoughts based on actually having read it in its entirety rather than the first few chapters.

The fact the book is now liberally scribbled over is a pretty tell-tale indication there’s a lot of useful material. As I mentioned before the book is predicated on the principle that ‘customers are not experienced in diagnosing complex problems, designing complex solutions, and implementing complex solutions.’ which entirely fits with what we see in our day to day work as CRM consultants. Given that the wealth, health, and ultimate survival of organizations will increasingly come down to their ability to apply the myriad of technologies at their disposal effectively, this observation is not without significance.

For the sake of brevity in this post I’ll pick up on just a couple of other strands from Jeff’s work. The first is the emphasis on performing a formal cost calculation to quantify the benefits the solution will provide. Most salespeople shy away from this, or perhaps aren’t capable of doing it. You can get away with this to some extent in boom times, but in the tougher trading environment we are starting to experience this I suspect is going to be increasingly critical.

The second aspect I liked was what I’d characterize as Jeff’s depiction of the ‘noble’ salesperson who only sells to those that can truly benefit from the solution, who will walk away if they can’t provide the most appropriate solution, and who sticks around when the sale is complete to ensure the promised benefits are actually delivered. This is in stark contrast to the sell at all costs sort-term-ism that typifies the IT industry today. I suspect what we will see in coming years is a new generation of IT vendors that differentiate simply on their proven ability to deliver genuine business benefits.

Ultimately I guess I find Jeff’s book compelling because it mirrors much of our own raison d’etre – i.e. to bridge the gap between CRM technology and ultimate profit. And while on the topic of CRM, Jeff did note that he had plenty to say on the topic of CRM failure in his book ‘The Prime Solution’, so once I’ve finally cracked Michael Porter’s ‘Competitive Advantage’ which has stared at me reproachfully from the bookshelf for way too long, I’ll be interested to see what he has to say.

Why independent CRM consultants do more than help you choose software...

When people think about independent CRM consultants they tend to see us as advisors on technology selection. While this is a key part of what CRM consultants do, in reality we tend to be involved throughout the implementation cycle and add value in ways that may surprise the uninitiated. The following article sets out how.

First of all though it’s probably wise to add some definition to the term ‘independent CRM consultant’. I tend to see the role of the consultant as helping organizations select and implement CRM technology in a way that generates business value. For reasons that are beyond the scope of this article CRM technology and business value have not generally gone hand in hand. I’d suggest perhaps 80% of CRM implementations fail to generate more than marginal value.

While we might share the same name it’s important to point out there are two very distinct types of ‘CRM consultant’. There are those who focus on the customer experience, and there are those that help organizations implement CRM technology. If it helps clarify the difference; the customer experience can often be improved without implementing CRM technology, and CRM technology can generate all sorts of benefits and efficiencies for an organization which might have nothing to do with the customer experience. In terms of this article I’m talking about consultants that work in the later camp.

It’s also worth noting – as it’s a somewhat abused term - independent CRM consultants are by definition independent, they don’t have software to sell, are vendor agnostic, and receive their compensation from the organization buying the software and not the seller.

Traditionally the CRM consultant has been heavily involved in the technology selection process because choosing the right CRM software has never been the easiest of tasks. There’s a lot of technology options, and then throw into the mix the marketing hype, the claims and counterclaims of competing salespeople, and the knowledge that the wrong selection can doom a project; it’s no surprise that organizations turn to the independent consultant for help in making the right choice.

However this is only part of the consultant’s role. There are five other key areas where independent CRM consultants are looking to add value:

Feasibility and planning – consultants are helping organizations determine whether a CRM project makes sense in the first place and in what form. This involves helping define the business case, estimate cost and resource requirements, evaluate different options and identify key implementation considerations so that organizations can make a dispassionate assessment whether to proceed, and can structure a project in a way that the potential return on investment is maximized.

Requirements definition – defining and documenting business and functional requirements for a CRM system, and helping organizations re-engineer or introduce new business processes in order to benefit from the technology, can be a demanding process. It is also essential to being able to make the right technology choice, and has a big impact on the speed of the downstream implementation. However it’s not easy to do unless you have a good working knowledge of CRM technology, which means it’s often an area best performed by an outside specialist

Negotiating pricing and terms – while many organizations would feel they are strong negotiators, CRM consultants have very specific knowledge as to what’s achievable through negotiation with each vendor, and perhaps more importantly can review implementation estimates to spot any excess fat. It’s not uncommon for a consultant to reduce the initially quoted price very significantly, and clients can get a very big return from a very brief engagement.

Implementation - the implementation phase is also an area that consultants are increasingly playing a role, either as project managers, or more commonly mentoring the client’s project manager, who may not have extensive experience of managing CRM projects. While the instances of outright project failure are rarer these days; budget overruns, and missed live dates are common place, which means that companies look to get specialist advice to keep things on track.

Working with existing systems - the big growth area in CRM consultant involvement has been for organizations wrestling with the decision as to whether to replace an existing system. Systems often under perform as a result of a poor implementation or user adoption issues, rather than a fault with the underlying technology. Re-implementing existing software can be considerably cheaper than buying a new system, but organizations often need outside guidance as to whether they are ‘salvageable’. For those that choose the re-implementation option, getting help ensuring ‘it’s done properly this time around’, is also common theme.

While many may continue to associate independent CRM consultants primarily with the vendor selection stage, many organizations are finding we can add value throughout the life of the system. It may not be the most common approach to implementing CRM technology – most organizations will continue to work solely with a CRM vendor- but for many, working with an independent consultant is proving the key to unlocking CRM’s often elusive promise.

It's not the done thing old chap...

I’ve been doing the CRM equivalent of wearing neon pink in a Wimbledon final, coughing when your opponent is about to take a vital putt on the 18th, or bowling underarm in a test match, in other words going against protocol. More specifically we’ve been asking for reference sites before we’ve even started a formal vendor selection process. It’s not perhaps something I would normally do, but one of the key sponsors for a forthcoming project is a great fan of learning from others, so we’ve been asking prospective vendors, if they’d like to showcase their talents and take us to one of their sites.

The response has been interesting – rather like a new mother who has been informed their baby is rather ugly – in effect ‘it’s not the done thing old chap’. Ask to see some software and you are likely to get trampled underfoot. Ask to see some real-life examples of the application of technology to beneficial effect and the room goes rather quiet.

Traditionally site or reference sites are generally an afterthought in the due diligence part of vendor selection, a rubber stamp exercise long after the actual decision has been made. They shouldn’t be, but that seems to be the accepted norm.

Which raises the question why are vendors so squeamish on site visits. There are, I suspect a number of good reasons. Firstly it tends to involve calling in favours from customers to host these events, and secondly you can never be quite sure what that customer might actually say on the day.

That said, these are manageable issues, I’m a poacher turned gamekeeper don’t forget, and in my previous lives I went to great lengths to ensure we had both good showcase sites and that customers were prepared to host visits. If we were negotiating terms on a project we would make sure that if we had to give something away we got something in return, often a commitment to host a certain number of visits per year.

I suspect the real reason is – and yes I’m going to hark back to a familiar theme – that a lot of vendors don’t actually have that many good, slick, revenue enhancing sites to showcase, for the reason I frequently go back to in this blog, that very few CRM implementations manage to bridge the gap between technology and a revenue enhancing system.

So, if you are a UK vendor and have sites that showcase you as a stand out implementer of high return CRM technology, then feel free to contact me, I have a large membership organization who might be interested in talking to you.