Posts Tagged ‘customer relationship management’

CRM System: Buy or Build

LobbyEvery client-centric organization needs to adopt a CRM system of some kind. Many managers realize the clear value of a CRM system will have increasing productivity, institutionalizing client relationships, and providing better management intelligence about their customers and sales teams. The challenge then becomes deciding what kind of system they want to to have, leading then to an overwhelming series of options that are available to them.

Technology groups embedded within organizations large enough to have them, will be inclined to want to build their own system rather than rely on an off-the-shelf solution. They are ‘developers’ by trade. Most organizations though will opt to adopt a vendor product. The minute that managers begin the investigation process on vendors, they get quickly overwhelmed with options, benefits, and features. Often they feel that to get what they really need, they should just hire an unassociated group of developers to build them their optimal system.[more…]

Managers end up unsure as to what the ultimate solution should be. A CRM system decision is one that managers must live with for a long time. They want to make sure they are making the right call. I’ll outline some key considerations when making the decision of buy or build their system

1) How unique and complex is the organization’s business model, and ultimately their information model?

2) What is the organization’s capacity to support and enhance an internally grown system?

3) Of the available vendors, are their any that specialize in workflows and requirements of an organization’s specific industry or sub-industry?

4) How financially stable are the vendors that provide solutions to the organization’s industry?

5) Are there consultants or subject matter experts available internally or externally that can function as trustworthy and unbiased advisors who can help navigate the options?

Pros and Cons

Custom built solutions allow for the greatest flexibility for specific requirements, especially if there are particular nuances related to an organization’s unique business model or market differentiation. Custom solutions also have more agility to integrate with already existing systems and data. They provide the potential for the biggest competitive advantage. None of your competitors will have this tool. The biggest downside, of course, is cost. Firms will need to commit capital for the build-out, plus a ongoing costs for enhancements and support.

Vendor solutions will in most cases provide the majority of requirements if industry-specific solutions providers exist, and for most financial sub-sectors they certainly do. Most are out-of-the-box so require very little configuration. The challenges come when a firm has specific things they want to do, but are constrained by the technical limitations or development schedule of the vendors. It’s hard to get a clear understanding what the true advantages and disadvantages are with just direct engagement with the vendors. Their demos give very little insight on what their deficiencies are, or which vendors are better than others.

There is no one simple answer to whether it’s better to build or to buy. Each organization is going to have their own unique CRM and information requirements. If there isn’t in-house expertise, we highly recommend finding someone who can help navigate the waters.

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Five Critical Success Factors for Managers Considering a CRM System

Implementations of CRM, or Customer Relationship Management, systems are notorious for failing to achieve their promise. If you’re considering either implementing your CRM system or upgrading your existing CRM system, here are some guidelines to follow to make sure that you have the most successful implementation.

– Front-line participation: There should be significant participation from front-line business managers from the very start of the project. The most successful CRM implementation that I’ve seen actually had full project leadership coming from front office management, with IT working as subject matter experts and project managers. This isn’t saying that IT managers wouldn’t have the right project leadership skills. CRM systems are probably some of the most idiosyncratic and nuanced technologies that require constant input from a very reluctant user base: salespeople. To get the right requirements that will ensure adoption, there has to be a perception that ownership is within the business, not in IT.[more…]

Culture of information sharing: The right culture of information sharing needs to be in place (within compliance guidelines of course). This is much easier said than done, and for many organizations not very practical. But in organizations where management realizes that bringing together disparate pieces of client information held by salespeople can reveal new opportunities, an effort to change the culture is the best strategy. I’ll detail examples of this in a future post.

Usability: “Usability” is a term used by IT professionals that is often not tangible to non-tech types. In my view, there are two aspects of usability which apply to CRM. The first is intuitiveness, which should be measured by the amount of training needed to get to full use. Less training equals more intuitiveness. The second is workflow integration, which means how well the tools can be integrated into the existing workflow of the user, e.g., adding content to a client record (meeting notes, emails, documents) by simple clicks in email. This area requires the most creativity and expertise to get right. As web and mobile applications become more sophisticated, the expectations of users also increase at a rapid pace.

Data accuracy/integrity: All data-driven systems are only as good as the data within them. CRM data can get corrupted remarkably fast because the source of its key data are from the users, not from a central source. This is a key difference versus other kinds of systems. A lot of thought, and a great deal of expertise, need to be put to bear around this question to achieve a success.

Information integration: I’ve found that CRM information, as useful as it can be to understand a client, when integrated with other systems and data produces incredible insights. Integrating, for instance stock interest information garnered by the sales team with stock and fund performance information can create an interesting product profile that can be actionable. Thinking about how you will maximize the use of your CRM information at the planning stages of implementation creates intense value down the road. Three big questions emerge that change how the system is built and used:

  1. What creative ways can we organize and analyze the data to provide new insights? Your organization probably already captures enough client information to create a competitive advantage, but is not leveraging today.
  2. What sources of information can we find that, when combined with CRM information, provide unique insights?
  3. What other information should client-facing personnel ask for from clients to match with other data sources?
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