| Summary | | | | email management, or data mining; and a number of |
| There's a reason CRM is the fastest-growing | | | | less solid components added solely to create the |
| category of enterprise applications, with worldwide | | | | illusion of a complete CRM suite. |
| revenues projected to grow more than 50% annually | | | | Whether deployed simultaneously as a suite or |
| to reach £77 billion in 2007 (META Group). By | | | | incrementally as a set of point solutions, a CRM |
| automating and integrating a host of | | | | system is only as strong as its weakest component. |
| customer-related processes, vendors of high-end | | | | The industry would be better served if each |
| CRM suites promise enterprises the ability to increase | | | | developer focused on the functionality it's best able |
| revenues, streamline processes, and reduce costs. | | | | to deliver rather than trying to be all things to all |
| But while CRM vendors wax on about the virtues of | | | | customers. |
| their solutions, they neglect to discuss seven less | | | | Assuming, of course, that they have the foresight |
| appealing characteristics of these packages: | | | | and the skill to enable seamless, painless integration |
| 1. Excessive license and implementation costs | | | | with other point solutions. Then each customer would |
| 2. Endless implementation timelines | | | | be free to define what "best-of-breed" really means |
| 3. Technologically complex deployment | | | | to them, and assemble CRM systems where each |
| 4. Organisational upheaval | | | | component meets their needs as closely and |
| 5. Poor adoption rates | | | | successfully as possible. |
| 6. Weak links in the solution set | | | | 7. Elusive ROI |
| 7. Elusive ROI | | | | Enterprise software can be one of the wisest |
| Any one of these factors would be enough to | | | | investments a company can make but only if it can |
| trigger second thoughts about investing in an | | | | deliver results at a reasonable cost of ownership. |
| expensive CRM suite. Taken together, they cry out | | | | Meanwhile, the cost of a full-fledged CRM |
| for an alternative. Online sales management is a | | | | implementation rises quickly into the millions long |
| particularly strong alternative, offering many of the | | | | before the long-term effectiveness of the project |
| benefits of CRM in a small fraction of the time and | | | | can be known. The leap of faith this requires has |
| expense-and none of the chaos. | | | | struck fear in the heart of many IT executives, and |
| This paper covers the seven key areas of The | | | | rightly so. |
| Seven Fatal flaws of CRM | | | | Unfortunately, the ROI equation can be difficult to |
| The Seven Fatal flaws of CRM | | | | apply to a high-end CRM suite. CRM systems must |
| 1. Excessive license and implementation costs | | | | be customised so extensively for each company that |
| A full-fledged licensed CRM deployment starts out | | | | it's almost impossible to know in advance how high |
| expensive and stays that way-from the planning | | | | costs will escalate before the system is complete. At |
| stage throughout the lifetime of the system. | | | | the same time, changes in business performance can |
| The sticker price of the software itself is only the | | | | be difficult to measure with a system that doesn't |
| beginning of the implementation costs. Long before | | | | support existing processes. Even when you're done, |
| the first line of code has been written, the meter's | | | | you'll never be sure whether it was worth all the pain. |
| already running on a small army of deployment and | | | | At the other end of the market, bargain-basement |
| customisation consultants. Buying new equipment to | | | | CRM suites present a different but equally vexing |
| host the system and deploying it to the corporate | | | | problem. Offering functionality a mile wide but only an |
| network fattens the budget even further. In-house | | | | inch deep, they are "jack of all trades, master of |
| personnel from customer service, sales, marketing, | | | | none." At the same time, designed with a |
| accounting, operations, and IT must be pulled away | | | | one-size-fits all mentality, they lack the configurability |
| from the business at hand to be trained on the | | | | necessary to adapt to and address individual |
| applications being introduced. Add to their lost | | | | companies' business process needs. The price may be |
| productivity the extensive management overhead | | | | attractive, but it's still too high for a solution that |
| demanded by the project over its multi-year course. | | | | can't get the job done. |
| Meanwhile, it will be a year or more before the | | | | Fortunately, there's a better way. |
| system can even begin to recoup these costs | | | | A less fatal way to get results |
| through presumed improvements in business | | | | It's hard to blame companies for making themselves |
| performance. | | | | vulnerable to the CRM sins listed above. They want |
| Of course, CRM doesn't stop costing money once it's | | | | what everyone wants: increased revenue, |
| in place. Administrative and technical personnel must | | | | streamlined processes, and reduced internal costs for |
| be paid year-round to maintain the system and | | | | a real top-line and bottom-line impact. But a "big bang" |
| support its users, in addition to the maintenance, | | | | implementation of a full CRM suite is hardly the |
| license, and upgrade fees you're still paying the | | | | only-or even the best-way to achieve these results. |
| original vendor. | | | | Online sales management holds many virtues for |
| Once you total up the long list of hard and soft | | | | those seeking the benefits of customer relationship |
| costs, it's no wonder ROI so rarely turns out as high | | | | management without putting their companies' souls in |
| as the software ads suggest. | | | | peril. |
| 2. Endless implementation timelines | | | | 1. Low cost |
| Companies in competitive markets need to improve | | | | Online sales management is available at a small |
| their sales productivity now, not at some theoretical | | | | fraction of the cost of a full-fledged CRM project. |
| point a year or more in the future. The opportunity | | | | Because the service is browser-based, there is no |
| cost inherent in the multi-year adoption cycle of a | | | | software to install or maintain at the client site. |
| typical CRM suite can be calculated easily and | | | | Deployable in a matter of weeks, not years, online |
| dramatically on the back of any envelope. | | | | sales management causes minimal disruption of work. |
| Giga Information Group has reported that companies | | | | Fully outsourced, the solution frees companies from |
| implementing CRM can expect to see an average | | | | the need to employ IT personnel, support staff, and |
| revenue gain of about 15% once the system is in | | | | outside consultants. At the same time, the solution |
| place. Unfortunately, even assuming a highly optimistic | | | | provider's ability to amortise costs across its entire |
| deployment time of nine months, the company will | | | | customer base results in a more cost-effective sales |
| only see these gains for a quarter or less of the first | | | | management solution than a full-fledged CRM project |
| year. At the end of the year, annual sales have | | | | could ever be. |
| increased less than four percent. For a £100 | | | | Built to support commonly accepted sales methods, |
| million company, just under four million pounds is nice, | | | | the solution can be simple and intuitive to use with |
| of course, but when the software and deployment | | | | minimal training time and expense. Total cost of |
| alone cost more than a million, it's not that much to | | | | ownership is limited to a small monthly subscription |
| have waited a whole year for. | | | | fee that is easily recouped many times over by |
| In comparison, a company that could be up and | | | | real-time gains in sales productivity. |
| running more quickly-say, within fifteen days-would | | | | 2. Saved time |
| realise increased productivity almost immediately. By | | | | With none of the extensive planning, installation, |
| year-end, annual sales would have grown to more | | | | customisation and training requirements of a CRM |
| than £114 million. Year-round, year after year, | | | | system, an online sales management solution can be |
| that £10 million advantage over a traditional CRM | | | | up and running in as little as fifteen days. Rather than |
| suite compounds into an ever-greater lead in ROI. | | | | waiting until the end of the year for productivity to |
| Time is money, indeed. | | | | improve, the company sees higher revenues almost |
| 3. Technologically complex deployment | | | | immediately. Compared with the £100 million |
| Deploying CRM means more than just installing a new | | | | company with the three million dollar increase in the |
| application suite. It involves sweeping changes to a | | | | example above, a similarly sized online sales |
| company's entire IT landscape, integrating multiple | | | | management customer can see more than £14 |
| front-end and back-end enterprise systems into a | | | | million in new revenues that compounds in perpetuity. |
| single unified ecosystem in the course of a single | | | | 3. Technologically straightforward deployment |
| project. It's hard to imagine just how difficult this will | | | | Online sales management keeps it simple. Deployed |
| be until you're in the middle of it-and by then, of | | | | as a standalone solution, the system can begin to |
| course, it's too late. | | | | deliver ROI almost immediately, while allowing for an |
| Facing a unique set of requirements at each | | | | evolutionary, phased-in integration process that |
| customer site, the vendor's consultants must spend | | | | minimises risk and complexity. |
| months determining exactly how to stitch together | | | | Increasingly rich interoperability standards such as |
| legacy databases, new and existing applications, and | | | | XML, UDDI, and SOAP, already adopted by EAI |
| interfaces with a dizzying array of internal and | | | | vendors, and Microsoft's .NET strategy for the |
| external integration middleware, services-based | | | | creation of Web services, enable an online sales |
| architectures, adaptable foundations, custom coding, | | | | management solution to leverage the latest Internet |
| and no small amount of luck. At the end of the | | | | trends and technologies for simple yet powerful |
| day-or year, in the case of the vast majority of | | | | integration with existing corporate systems-both |
| these deployments-it's no surprise that getting | | | | best-of-breed and custom-built. |
| maximum value out of new CRM systems while fully | | | | 4. Organisational simplicity |
| leveraging past investments may not even be | | | | As a self-contained sales department initiative, online |
| possible. | | | | sales management keeps the number of cooks in the |
| 4. Organisational upheaval | | | | kitchen to a minimum. The service can be designed |
| The vendors themselves are the first to admit that | | | | to support existing sales resources and processes for |
| CRM is more than just a technology; it calls for a | | | | a much smoother transition; coordination with other |
| fundamental change in business strategy, aligning | | | | groups is streamlined by simple best practices |
| operations throughout the company to conform to | | | | guidelines. |
| the principles embodied by the system architecture. | | | | 5. Enthusiastic user adoption |
| In other words, the company ends up working for | | | | Salespeople can be the toughest software customers |
| the software-not the other way around. | | | | around, reluctant to change the practices that have |
| Executives launching this ambitious initiative face a | | | | brought them success in the past unless they can |
| daunting task: getting the attention and buy-in from | | | | see immediate benefits in a new way of doing |
| department heads throughout the company, including | | | | business. |
| sales, call center, marketing, and accounting, IT - all | | | | Online sales management is designed with salespeople |
| with their own agendas, priorities, and sensitivities to | | | | in mind, giving them simple, intuitive functionality for |
| consider. | | | | automatic lead delivery and management, calendaring, |
| Tight coordination is essential, as ad hoc or piecemeal | | | | channel communication, partner coordination, and |
| initiatives can quickly undermine the success of the | | | | other sales-oriented functions that will improve their |
| entire implementation. Keeping the project on track | | | | sales productivity from day one. By inviting rapid and |
| and on schedule is both a challenge and a distraction | | | | enthusiastic adoption, online sales management |
| for managers throughout the company, who must | | | | ensures that companies get the results they're |
| simultaneously grapple with the business process | | | | looking for. |
| changes mandated by the new system as well as | | | | 6. A targeted, best-of-breed solution |
| massive disruptions to the ongoing business. And | | | | Online sales management does one thing, and it does |
| heaven help the company should it need to replace | | | | it well: improve sales productivity. Unlike CRM suite |
| any of these managers mid-stream. | | | | vendors who must try to please every department |
| Unsurprisingly, the Meta Group found in June 2005 | | | | in their customers' companies by being all things to all |
| that 60% of CRM failures were for non-technical | | | | people, an online sales management provider can |
| reasons such as lack of business alignment and | | | | make the sales department the first priority. At the |
| buy-in, a statistic that encompasses an infinite | | | | same time, simple integration based on open |
| number of sleepless nights and headaches. | | | | standards, as described above, enables companies to |
| 5. Poor adoption rates | | | | link the solution with other applications to form a truly |
| Even the best enterprise system in the world can't | | | | best-of-breed solution set. |
| help a company if no one uses it. CRM suites aren't | | | | 7. Proven ROI |
| designed to support the way a company currently | | | | Calculating the return on an online sales management |
| does business. Instead, they make the company | | | | solution is refreshingly straightforward. With |
| handle processes the system's way or else pay up | | | | organisational costs minimised, the size of the |
| for a time-consuming custom coding process. (If | | | | investment is little more than the initial setup fee and |
| business dynamics call for a change in processes, | | | | monthly price-typically £46,000 to £96,000 |
| you'll have to call on the custom coders yet again). | | | | for a 50-seat subscription. |
| Because they're designed to support an overarching | | | | The payoff is similarly easy to see. As mentioned |
| business philosophy rather than individual productivity, | | | | above, Giga Information Group reports than |
| the suite's applications can be a tough sell among | | | | companies deploying SFA can expect, on average, a |
| intended users such as salespeople, who will resent | | | | 15% increase in sales. For a £100,000,000 |
| any new burdens that take away from their | | | | company that deploys an online sales management |
| profitable selling time without offering useful | | | | solution in fifteen days, this amounts to |
| functionality in return. Their reluctance to comply with | | | | approximately £14,000,000 in additional revenue |
| the system's requirements, and that of other users | | | | the first year alone, for a return on investment |
| at touch points throughout the company, will quickly | | | | ranging from 14500% to more than 30000%. Given |
| cripple its effectiveness. Unless and until everyone is | | | | the small costs and high returns involved, the only |
| on board, it's impossible for management to reap the | | | | difficulty may be in believing that the decimal is in the |
| benefits of increased productivity and better, more | | | | right place. |
| timely information. Otherwise, the investment | | | | Don't let the promises of high-end enterprise suite |
| becomes worthless. | | | | vendors land you in CRM purgatory. Online sales |
| 6. Weak links in the solution set | | | | management provides a fast, low-risk alternative that |
| Every CRM suite vendor claims best-of-breed | | | | will have you counting your blessings, your ROI-and a |
| performance across its entire application set, but the | | | | lot more customers. |
| reality is far different. In truth, each suite consists of | | | | 3SLive - Empowering Your Business today and |
| one reasonably good application, like SFA, support, | | | | tomorrow... |