Three Areas Of Lowering CRM Implementation Cost: (1) Requirement Finding and Software and Partner Selection

In many boardrooms CRM has a bad name. Horror stories of low user acceptance, uncontrollable cost explosions and never-ending projects seem hard to distinguish, even though these stories often concern projects of more than a decade ago, that had a not comparable scope, and were carried out under completely different circumstances. And of course it is always wise to try and learn from the past so as to avoid making the same mistakes again, but your view on the past does have to be accurate and based on true facts. In the case of the CRM horror stories accuracy and true facts most of the time are hard to find. Especially when talking about the cost aspect and the assumed low Return On Investment (ROI) of CRM, the stories seem to have a fairly high myth-rate. Because, truth of the matter is that the cost of implementing CRM might be relatively high or at least higher than estimated at first, but these cost are definitely not uncontrollable. In fact, there are even many opportunities for implementing companies to reduce the cost concerned with the implementation drastically, and to considerably increase the ROI of the implementation.

In the coming days in this CRMHOW.COM blog will discuss three areas of cost reduction. The areas that we will cover today, tomorrow and the day after tomorrow are:

  • Lowering the Cost of Requirement Finding and Software and Partner Selection
  • Lowering cost of External Consultancy and Project Management by Using Self-Service Implementation Tools
  • Lowering Cost of Training and Aftercare by Involving Users at an Early Stage

Don’t waste your project budget on requirement finding

Before a CRM software implementation project starts, often a preliminary phase of requirement finding is taking place. And of course it is smart to clearly define the goals and success criteria for the implementation, and to discuss and describe the customer engagement strategies. In fact, however, what is happening is that tens of thousands of dollars land in the pockets of external consultants, who claim to help the organization in finding their unique requirements, in selecting the appropriate software solution and finally in finding the right implementation partner. Most of the time these very well paid consultants consume a big trunk of the entire project budget by helping to invent the wheel. Because let’s face it: how unique can an organization really be? Would it really be true that none of the best practices already available in most standard software packages would not work for them? Many, many times I have seen that selection committees spent days at an expensive offsite location to discuss the requirements for their CRM software system. In many occasion they then concluded that the CRM system they were about to purchase should be not only be able to store customer data, but must also automatically update the customer address data. And actually it would even be best if the system predicted the customers altering family composition on forehand, so as to be able to automatically adjust the recording of households within the system. Well, as you will understand, such a system will not be easy to find. And definitely not as a standard solution. And since budgets are limited, then often is decided to drop (parts of) the requirement. Wouldn’t it have been wiser to avoid spending time on describing and evaluating requirements that are not to be fulfilled. Wouldn’t it have been better to look at so called Commercially Of The Shell (COTS) available applications?

The approach of requirement finding of the externally led committee always makes me of the process of buying a new washing machine. Should a consumer then just look at the differences between the available models and pick one, or should he start to fantasize about all potential options to end up looking for a washing machine with an extensible arm, that is – after ironing – capable of putting all his shirts neatly in the closet, sorted by color of course…

Don’t make the software vendor lose money too

And by sending out all these hardly realizable, non-realistic requirements by means of a Request for Proposal (RFP) to many different vendors, a huge investment is being asked from them. Often they have to work through dozens of pages of requirements, put crosses and have to prepare for scripted demo sessions, were most of the time nobody really understands what is shown on the many different screens that some smart dressed presales consultant is clicking through, while treating you on a tsunami of words… But, obviously, at the end of the road only one consultancy organization wins the deal. This of course means that every consultancy organization has to calculate with many unbillable presales hours. And guess what these mandatory investments in sales finally lead to? Exactly: to higher tariffs! So, why not stop with this RFP-terror, and select the implementation partner at an earlier stage, relying on its position in the market, reputation and references and – most importantly – their knowledge and understanding of your business and branche-specific processes. I do believe that most consultancies today would be open to offering you lower tariffs if less of their efforts are being required during the sales stage.

For years I’ve been working in the world of Microsoft Dynamics CRM. There I often saw that a so called “Microsoft unless…” policy was in place. If the organization wanted to purchase a certain software solution, the policy then was to look at Microsoft first. Did Microsoft have a suitable solution? Then a further selection was not necessary. This way these organizations saved a lot of money in the early stages of their implementation projects. And I’ve seen exactly the same happening with Salesforce (“we want a cloud solution, so we go with the cloud-based CRM market-leader”), and for reasons of ease of integration with SAP and Oracle.

The traditional selection approach of market orientation, requirement finding, long listing, sending out RFP’s, requesting demos, shortlisting etc. most of the time is mainly beneficial for the external consultants guiding the selection process and is consuming a disproportional portion from the CRM implementation project budget.

Tomorrow in this CRMHOW.COM blog we will discuss the options of lowering consulting cost during the implementation by using self-service implementation tools.


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