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