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The CRM Dilemma - How To Choose Wisely

The good news for companies interested in further developing or expanding their customer service programs is that there are easily 500 CRM tools commercially available today, according to Cap Gemini Ernst & Young. These products range from sales automation to marketing automation to contact center technologies to e-mail programs to customer analytics to knowledge management.

The bad news for companies interested in further developing or expanding their customer service programs is that there are easily 500 CRM tools that they must sift through to pick the right one for their operations.

Make that right ones. For unless a company is small and has very limited customer contact needs, more often than not it will have to deploy a number of disparate CRM tools -- and then integrate everything into a back-end legacy system.

"Some companies might outsource one aspect of their customer service program like their IBR [which manages the automated telephone menu prompts for callers] but then own the CRM application itself," Larry Goldman, vice president of Braun Consulting's customer solutions practice, explained to

Remedy (Nasdaq: RMDY) vice president and general manager of CRM Harold Goldberg told CRMDaily that "any one CRM vendor could represent as little as 20 percent of the total CRM functionality that is needed."

Make a List

To make matters worse, many CRM implementations –- at least the extensive ones –- tend to fail, or fail to deliver the value originally expected, according to Matt Johnson, vice president of Akibia Consulting, which specializes in CRM applications.

However, this need not be the case, Johnson told CRMDaily. "Many mistakes companies make could have easily been avoided if they had mapped out a methodical selection and implementation strategy from the beginning."

The first step, of course, is to develop a list of tech and business criteria that management would like the CRM application to have.

Some of these criteria are no-brainers. These applications, for example, should be easy to use because a company's customer service needs tend to change. "CRM needs are basically fluid," Goldberg said. "By nature, they change as a company evolves. The applications should be able to adapt to these changes without huge staff changes."

Other criteria tend to be a little more esoteric but are still important to a company's CRM initiative. For example, Johnson said many companies require CRM applications that will be used in contact centers "to be world class. Call centers have a huge turnover, and it is easier to hire people if they know they will be using a top-of-the-line package." This is, in fact, "much more common than you would think," Johnson said.

Best of Breed vs. Comprehensive Suite

Once the business requirements have been nailed down, companies then have to decide whether they want to buy one of the big CRM suites and integrate it through the whole company or buy best-of-breed applications on a piecemeal basis, Goldman said.

There are pros and cons to each approach. "Typically, these CRM vendors are not good at everything. Some of the modules in a suite are sub-optimal to a best-of-breed solution," he noted.

It gets tricky when the modules that a suite might not handle well are the functions that are most critical to a company's operations, Goldman said. "Some companies are buying the suite to get the infrastructure, then redundantly buying best-of-breed modules and implementing those on top of the CRM suite." This most often happens with marketing modules, he said.

In the end, it is not so much the technical requirements that tend to stump companies –- especially those that have survived ERP and supply chain implementations. Rather, said Goldman, "it is the philosophical issues that companies have to come to grips with before they embark on any type of CRM project."

The Vision Thing

The most important step companies need to take –- and the one that is often skipped -- is to "create a vision for what you want CRM to do for your company and then develop a strategy around that vision," Johnson said.

Johnson spoke of his work with an international cable media company that purchased a CRM application to help manage the millions of e-mails it was receiving from viewers about the company's programming.

"But when they bought this program, they didn't have an overall strategy for customer, or in their case, viewer management, so they were having difficulty deciding who would do what among the departments during the implementation," he said.

After many meetings and internal deliberations, the company developed a CRM strategy -– foremost among its goals was to develop viewer loyalty. "Besides just offering news and other programs, they also wanted to keep viewers attached to their channel," Johnson said.

"Once this strategy was developed, it became much easier to manage the implementation of the original e-mail package," he said.

As it turned out, the package fit perfectly into the company's belated CRM corporate strategy, Johnson said. "Fortunately, they had bought a comprehensive package. If they had bought a thin package with limited capabilities, it never would have fit into their strategy."

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