By CommenceCRM

It’s Time to Get Serious about CRM

In today’s highly competitive environment companies of all sizes are looking to become more efficient with how they market, sell and provide service to their customers. This is certainly not a new concept, but the ability to successfully execute programs that address this critical need has eluded small to mid-size businesses for decades.  For years these businesses have aggressively pursued automated programs that promised to help manage customer relationships. These products formerly known as contact managers, collaboration tools and customer interaction software have now evolved into what the industry has termed Customer Relationship Management or CRM.

What’s perplexing about the CRM software sector is why so many companies that have engaged in the implementation of CRM software programs have failed to realize a return on their investment.  The CRM software industry has matured very rapidly and there are a number of very good products that provide robust functionality, are affordable and relatively easy to use.  There are now CRM products designed for specific market segments such as small business, mid market and enterprise solutions and we are beginning to see an increase in vertically based solutions as well.   In addition, the introduction of web based or on-line CRM programs have made the deployment of these systems easier and less costly than ever before.  Despite all of this, the failure rate for implementation and utilization of CRM software remains one of the highest in the software industry with analysts documenting failure rates higher than 70 percent.  This is almost inexplicable, unless you dig into the reason why.

About a year ago I wrote a CRM white paper comparing the implementation of accounting software with customer relationship management or CRM.  While CRM had an exceptionally high failure rate accounting software did not, so I took the time to look into this a bit further to discover why.  Here is what I learned.  The successful implementation and proper utilization of computer software is traditionally the result of three specific components: mature business processes, professionally trained people, and quality software solutions.

Accounting departments, and the profession for that matter, are quite structured with mature processes that have been defined over the years by the federal government.  The staff traditionally consists of professionally trained people with accounting degrees that understand the principles of accounting and follow the regulatory requirements.  The software programs that automate accounting processes have been around for decades and are quite mature and trusted. The implementation process is also well defined with everyone knowing exactly what is required in order to realize a successful implementation.

The sales department has quite a different pedigree. Most small to mid-size businesses do not have a well defined structure or methodology for managing the sales process.  This means that each sales representative goes about their business their own way, which results in a lack of consistency and inaccurate sales and revenue reporting. The staff is often made up of people from different educational and business backgrounds who more often then not, have had little if any professional sales training.  The systems and the requirements for implementation, while more mature than years ago, are not fully understood by the end user and require management to make decisions about processes and procedures they may not fully understand or are prepared to manage.  The end result of this is a failure rate that simply cannot continue.

In order to address this, companies that are considering the implementation of CRM software need to fully understand the core competency of their staff and take an active role in managing the change that will occur as a result of its implementation.  They need to place the same level of importance to their CRM implementation as they have done with their accounting software.  In many businesses CRM software is looked upon as just something the sales team uses and that nobody else really cares about, yet the sales organization is one of the costliest and most critical components to the success of the business.  In order to ensure the proper implementation and use of CRM software, it is critical to assign an implementation manager that has the backing of senior management and the decision making authority to implement and manage changes in internal policies and procedures.   Then and only then will we begin to see more successful implementations and a return on investment from CRM software.

About the author: Larry Caretsky is the President and CEO of Commence Corporation, a leading provider of web based and on premise crm software for small to mid-size businesses. Caretsky is considered an expert in the subject of CRM and has written several white papers on the subject. They may be accessed via the company’s web site at Commence supports several thousand customers in more than 22 countries around the world and has outlets in North and South America, Europe and Asia.