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Resources for evaluation and purchasing a CRM software system
CRM Industry Perspectives
Let's start off with the most basic of concepts. By now most VPs of Sales understand the concept of Hosted (or on-demand) vs In House varieties of CRM...why should this executive choose one over the other...How do you determine which direction your company should take?
- The gap between on-premise and hosted solutions in terms of capability as fallen dramatically, so that's not the criteria any more.
- This is also a cultural question - does your IT department want total control over the application? And is the company willing to sacrifice the happiness of the sales and service team, and a whole bunch of money just so IT can have the final word on how things get done.
- The question comes down to this - do you want another IT project? If the answer is yes, than an on-premise system is going to be a better choice for your organization. If not, then hosted seems to make more sense.
- But the bigger picture is that the technology delivery method is a bit of a red herring - end users don't care about technology, they just want something that works and helps them be successful.
- It's really pretty interesting, because we're seeing some of the hosted players follow the same enterprise business model, introducing cost and complexity into their hosted applications - so it's not even clear that the hosted offerings from some vendors are easier anymore.
- CRM solutions are working to make hosted simple again, and work for the user first and foremost.
Lets take the same question in another direction…why should a company who has previously invested in an in-house version, move to a hosted…or maybe the question should be…what symptoms, what pains is a company experiencing that would lead them to consider such a move?
- CRM has historically been a battle between managements and front-line users, where managers get the sophisticated reports they want, but with a poor user experience. Then you have the very basic things that salespeople do like - Outlook for example - that don't tell management anything.
- What this points to is user adoption - you really need a solution that makes it easy for reps to get the data in, so management reports are more reliable.
- Whether it's hosted or on-premise, that's where the value of CRM is.
Three years ago, we were wondering at the viability of hosted CRM…are we now at the point where we are wondering about the long term viability of in-house brands?
- I don't think so. Some IT departments will want more control, others less. The big enterprise guys will try to move toward the mid-market, like big CRM solution provider has tried and hosted CRM software solution vendor has hinted at - but it's will be very difficult for them to understand what the mid-market needs.
How easy is it to go from a perceived secure in house environment to a hosted version?
- When you look at the facts, security isn't an issue in hosted - I don't think it ever was. Many hosted companies - whose entire business rests on how secure they are - have more sophisticated security than FORTUNE 500 firms.
- It's is again at culture issue for IT to decide, some directors are never happy when they aren't in control
Now let's compare apples to apples. There are many hosted brands out there...what sets the real CRM providers apart from them.
- Focus on reducing cost and complexity. You'll notice this theme the more you learn about other hosted guys - recruiting high-priced developers, building new platforms and operating systems, just what does that have to do with making sales and service people more effective?
- User adoption. Everyone knows that user adoption has the #1 CRM deployment risk, but we're one of the only firms doing something about it, and putting the user at the center of everything we do.
What about the perception of renting' software. Do companies find that an acceptable alternative.
- Absolutely - it's still the wave of the future, just look at a recent research report from AMR, where hosted CRM is up 105% for 2004.
- http://news.zdnet.com/2100-3513_22-5842098.html
- The biggest beneficiaries are companies who just could never afford the high-priced systems - which actually turned out to be a blessing in disguise, since the majority of companies who deployed those never realized ROI.
What about the financial considerations... What do you say to companies that say it might be cheaper to rent than to make the commitment to change the IT infrastructure, the implementation time and costs, license purchases etc…but with renting there is no asset equity, and the equivalent cost is amortized over several years—where's the ROI?
- The ROI is from your salespeople spending more time selling and less time inputting data into a complex system
- The ROI is from your IT dept focusing on more pressing needs, like corporate email, network security and other mission-critical tasks
We hear a lot that user adoption is the key issue facing the CRM industry. Do you agree? What do you think is the biggest challenge facing the success of the hosted CRM business today?
- Leading hosted CRM applications are developed with the same enterprise mentality that software has always had
- The big software companies only know how to do things one way, and that's certainly not user-centric
- Users spend more time working for the app, rather than having the app work for them
- Too focused on management needs, not user needs
- Every large software company does this - many hosted players are no different, despite the hype to the contrary
- Deja vu all over again - it's now enterprise software but the internet is the platform
Let's talk workflow…You come from both the creative world - from your time and the business-process world from the two workflow companies you've founded and grown. How has this background helped you understand where CRM is going?
- The business software world has a lot to learn about what people like to do with technology - there is nothing that says business can't be both fun and productive at the same time.
Are companies shooting themselves in the foot who don't anticipate automating workflow into their CRM packages and using the tool more as an information receptacle or is the whole concept of CRM workflow overrated?
- The industry has done businesses a disservice the way they talk about workflow, who really knows what it means anymore?
- No matter what companies throw around in press releases, workflow still comes down to helping people focusing on the important aspects of your business processes, and that's critical.
- Customer relationship management is built on a workflow engine that goes above and beyond what other folks do, and really empowers the user to focus on tasks that need the human touch
- Poorly designed CRM is overrated. Smart hosted CRM moves business forward by automating tasks that take valuable time from salespeople.
- Multiple sales processes
- Activity management
With the importance of workflow established…we need to establish, what is and what is not workflow as it pertains to CRM.
- What is workflow:
Workflow is the automation of your business processes through which documents, information or tasks are passed from one participant to another according to a set a rules (preferably according to the business rules you set for how you want your business to operate).
In the field of CRM - we could add that specifically this relates to how your company would manage the automation of these rules - by defining the process - that you want to set, to manage your sales activities, customer service or marketing campaigns.
Importantly, while Workflow is managed by software, it is more about technique than technology.
- What is NOT workflow:
Workflow is NOT the simple use of email to send an alert or notification, it is NOT just contact management, it is NOT capturing information keyed-in by a user and read by another party who shares the system, it is NOT being able to email your database from within your sales force application.
All these things may be good to some degree or useful to another. But they are NOT Workflow.
Workflow must be inherent to a software solution, it can't be an add-on.
After being in the business for over 10 years, I have found that every companies workflow , to some degree, is unique…one of the perceived shortcomings of a hosted brand of CRM is the limitations to customizing workflow…is that still a concern and how is the sales force automation industry.
- Because of the market confusion over workflow, it is still a bit of concern, and we've had to educate many of our customers on what workflow in CRM really means.
- There is a great deal of variation in how different vendors manage workflow. With the best sales force solutions, our workflow is built-in, not bolt-on.
- We don't force users into any pre-configured templates or methods
- We allow them to easily configure activity sets and other processes to match the way they work. We're unique in that sense
What about niche markets or verticalization. Can the hosted CRM industry handle financial institutions or pharmaceutical companies without being too generalized?
- Yes, because it's really the sales processes that we enhance, not the vertical industry.
- By giving customers the freedom to configure CRM to meet their needs, our app works for them, rather than them working the way we think they should.
- We have a range of customers in many different vertical industries, and it has not been an issue for us
What about interacting with the other parts of the enterprise…other products that handle workflow for departments outside of sales and marketing?
- We've remained true to our focus of making CRM the best it can be. It's our core competency.
- We don't aspire to be the heartbeat of the enterprise, so you won't see us expanding and trying to interact with other parts of the enterprise.
- We believe there's still lots of room for improvement in CRM.
Is this going to be a trend and if so, how does a company stabilize it and create long term customer revenue as opposed to depending on the latest and greatest sale?
- You won't be surprised by my answer - it's user adoption. If vendors can provide real value, where there is something for them in CRM, then the churn issue goes away.
- It's interesting you mention this issue. That number tells me that their applications are a commodity, that many of their customers aren't seeing a difference in how customer relationship management makes them more successful each day.
In a hosted environment, who owns the CRM Process?
- It has to be the business process owner - sales, service and marketing management.
- Never underestimate the power of executive sponsorship - for C-level executives to really have the insight they need to run the business more effectively, the mandate has to come from them, with junior management actually running the show.
Most hosted brands have become very proficient in maintaining up time and improved security measures, which was always a major concern, what does the next generation of hosted solutions need to achieve so that it equals or surpasses it's client server brethren?
- Businesses need to get tough with hosted providers and ask them about uptime and service level standards. This isn't really an issue - until you need access to your data when the application is down!
- Too often, vendors focus on features and functions without asking what happens after the sale.
Given how much research you've done, you must really know a lot about 'a day in the life of a sales person'. Give us some insight to what you learned.
- Most applications make it too difficult to log everyday activity
- They'd rather be on the phone calling prospects and closing deals
- Current CRM products still require them to spend too much time entering data
- Too often the CRM packages don't match the way they sell.
- They spend too much time running reports and doing other mundane tasks.
- Use the example of sending a document/contract to a prospect
- Use the example of staying up late Sunday night to run a report for the Monday staff meeting
It seems that this is a problem for the whole industry -- how can CRM providers begin to break the cycle of failed CRM deployments?
- I really wish more people took a user-centric approach like we did. Until CRM is truly user-centric, we will continue to see these challenges.
What are the trends you're seeing in CRM?
- No action around user adoption as the #1 issue in CRM
- Lack of difference between hosted and on-premise
Complicated solutions that require multiple partners and consultants
The feeding frenzy has begun - more and more companies are getting into the hosted realm to get money from businesses
- SMBs will either be left behind, or offered an inferior product by enterprise software companies