CRM software: Customer service for a song

When Mike Gillespie arrived in January 2000 at SecureLogix Corp., a firewall and security management firm in San Antonio, he knew he had a big job ahead of him. In September 1999, the 90-employee company had begun deploying a powerful customer relationship management (CRM) software package to help it keep up with a growing customer base. Four months later, that effort had stalled badly. An experienced manager of CRM systems, Gillespie had been hired to help pick up the pieces.

"When I got here, I looked at the cost/benefit of moving forward with the [existing] software [vs.] scrapping it and putting in another system," Gillespie explains. "It was a lot more economical to deploy another system."

After evaluating several CRM packages, Gillespie and his team chose SalesLogix from Interact Commerce Corp. in Scottsdale, Ariz., because of its substantially lower cost and faster deployment time. It's an affordable CRM package tailored for small and medium-size businesses that allows companies to gather, analyze and act on information about current and prospective customers. Such packages unify access to this data, ensuring that sales, marketing, customer service and even product development teams all work from a common set of contacts, customer histories and other information. The result: more-focused interaction, fewer embarrassing gaffes and -- hopefully -- increased sales and profits.

Six months after Gillespie arrived, the company had the new CRM system fully deployed and operational.

"I didn't have time to mess around. We were a start-up, we had guys in the field, and we needed to get it done," he says.

CRM writ small

Gillespie's experience is hardly unique. CRM systems have been hailed as a way for companies to find, influence and retain customers. Packages from companies like Onyx Software Corp., Pivotal Corp. and Siebel Systems Inc. go far beyond simple contact and sales management -- they link sales, marketing and customer support operations into a single, cohesive chain.

But the complexity of CRM systems can turn deployments into expensive, time-consuming mistakes. SecureLogix, for example, had poured nearly $200,000 into its aborted CRM project. Many companies need low-cost, easy-to-implement CRM software. Fortunately, affordable packages have finally matured.

"Anecdotally, there's a fairly high failure rate attributed to CRM implementations," says Jocelyn Young, program manager for CRM services at IDC in Framingham, Mass.

Industry experts cite failure rates for CRM rollouts of up to 70%. That's a disastrously high figure for initiatives that typically cost hundreds of thousands, or even millions, of dollars. For smaller businesses or for departments within large companies, even successful implementation at that cost is out of the question.

Jerry Norman, president of Market Answers LLC, a CRM consultancy in Austin, Texas, says the broad definition of CRM is part of the problem. "If you ask 100 people on the street what CRM is, you are going to get 100 answers. The executives know that they need CRM, but they don't know what they are getting."

One way to sidestep the issue, says Norman, is to narrow the focus of the CRM effort. Lower-cost CRM products such as Microsoft Corp.'s bCentral Customer Manager, Salesforce.com Inc.'s online tool and SalesLogix provide common CRM features like lead generation and management, deal tracking and customer support management. These packages can be installed on a company's servers or hosted by an application service provider. But while a Siebel deployment can cost several hundred thousand dollars, a package like SalesLogix can be had for less than $50,000 for 20 users -- a relative pittance by CRM standards.

"If you've got a sales force of 20 people, there is no reason to be spending more than $40,000 to $60,000 on sales force implementation," says Norman.

Bob Thompson, founder and president of Front Line Solutions LLC, a consultancy focusing on CRM issues, urges smaller firms to consider shrink-wrapped sales tools as well. "[Interact Commerce's] ACT and [FrontRange Solutions Inc.'s] GoldMine have been around a long time," says Thompson. "The reality is that they have five times more functionality than most sales reps need anyway. And you can buy it at a store for a couple hundred bucks."

Both ACT and GoldMine fall under the rubric of sales force automation software. These packages help sales representatives maintain contact lists, manage schedules and close leads. While not technically CRM software, sales force automation products help companies find, capture and keep the most profitable customers. These products typically integrate with desktop productivity software like e-mail and office applications to streamline interactions and provide improved account tracking. The result: improved customer satisfaction and lower turnover.

Small names, big companies

Lower-cost CRM tools don't appeal solely to small and medium-size businesses. Departments in large companies often turn to economical CRM packages as a stopgap measure while they wait for completion of enterprisewide initiatives.

"You'd be shocked at how many [corporations] buy Siebel and then still have to buy and implement our package," says Clark Dircz, CEO and founder of Worldtrak, a provider of CRM products that integrate with Microsoft Outlook. "We have clients that have been told that they won't see their part of a Siebel implementation for two and a half years. What are these people going to do? Two and a half years is an eternity in most of these businesses. So a lot of these people will come to us, and we'll do a departmental or divisional solution."

One way to speed things up is to avoid deploying servers and software at all. That's the tack taken by offerings like Microsoft nCentral Customer Manager, Oracle Corp.'s Small Business Suite CRM, and Salesforce.com -- all Web-based services. These browser-based applications store CRM data on remote servers, making it easy for users to access the data anywhere that they can get an Internet connection.

Online customer relationship management seems to be gaining appeal. Both Autodesk Inc. and BroadVision Inc. have standardized their CRM on Salesforce.com.

CRM in the house

Not all companies are ready to take their CRM business online. The prolonged outage of Microsoft's MSN Messenger service in July offered a cautionary lesson for IT managers who considered hosting business processes on remote vendor servers. For companies that prefer to keep their CRM efforts in-house, packages like Optima Technologies Inc.'s Optima ExSellence and SalesLogix can cost less than half as much as software from IBM or Siebel.

Dick Lee, principal of High Yield Marketing and author of four books about CRM, warns that no package can cover the broad range of CRM tasks. "When Siebel says, 'We do it all,' forget it. Nothing does it all. Not at a best-of-breed level. As you downscale the packages, they get more specialized."

The secret, says Lee, is to find a package that dovetails with your organization's priorities. Lee singles out SalesLogix as a good sales force automation package, and he feels that Clarify excels in customer service. He says the best all-around alternative, however, may be Optima ExSellence, which Lee says offers enterprise-class functionality at a reasonable cost.

Companies looking to bulk up contact management while preserving ease of use might consider packages that integrate with Microsoft Outlook. By serving up information in the familiar Outlook interface, CRM products from companies such as Worldtrak piggyback CRM onto the popular e-mail client and interact with Microsoft Exchange Server to provide users access to CRM data.

Walk the path

Deciding between using a Web-based CRM package and hosting an application in-house should be the last thing to worry about, contends Lee, who speaks frequently about CRM. He says CRM adoption must start from a well-defined strategy that focuses squarely on the customer.

"The single most important thing is for the business to step back and take the time to develop customer-centric business strategies," urges Lee. "If you don't, it doesn't matter what kind of technology you put in -- it's not going to work."

Market Answers' Norman agrees, but he warns companies not to overanalyze. "I think it is a huge mistake for midmarket companies to analyze their sales process and get [it] down to a gnat's whisker. It's going to just stall them."

Ultimately, says Thompson, CRM is about people and customers. "Good businesses understand intuitively that good CRM is about taking care of your customers," Thompson says. "If customers don't like what you are doing, you're toast."

Make sure you get off on the right foot

Choosing and deploying a customer relationship management package involves more than just selecting the most appealing software. Here are a few things to keep in mind as you start your CRM odyssey.

Make it easy to use: Look for a package that won't confuse users and burden administrative staff. Remember, says Norman, "you are asking your salespeople to do things in a way they weren't doing it before."

Get executive buy-in: It seems obvious for a project that could change many of your business practices, but don't overlook the need for an executive champion. Your CIO or chief technology officer would be a good ally, but your CEO would be better.

Take charge of the rollout: Make sure you assign someone below the vice president level to oversee the day-to-day supervision of CRM operations. This person can monitor staff compliance with the new software and help manage troubleshooting, while the executive concentrates on the big picture.

Don't delegate to IT: Your IT folks may know technology, but they don't have expertise in the processes that drive sales, marketing and customer services. Lee is blunt: "I've been in this business since the beginning, and while IT is critical, I have never seen a successful IT-led implementation. Never."

Be quick: No company can afford a two-year CRM rollout. Regard anything that may take more than 120 days with caution. Divide long projects into blocks that can yield success independently.

Work with your employees: Ultimately, your people will help determine the success or failure of your CRM efforts. Fail to train your staff, and your CRM system could end up stuffed with bad information that does more harm than good. Also consider establishing staff incentives or perhaps tying commissions to CRM use.

Form a partnership: Find a value-added reseller or consultant who is experienced in CRM and who knows the ins and outs of the packages. All software has quirks, and all business processes pose challenges. After the rollout, make sure to keep up your relationship with the consultants -- you'll benefit from their insight down the road.

Michael Desmond is president of Content Foundry, which provides editorial content and services to high-tech companies.

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