Just when your company decides it's time to implement
a CRM system, you uncover a horror story that casts
fear and uncertainty into your mind. How can a
software system designed specifically to automate
complex business processes and add extraordinary value
to the bottom line be so -- shall we say --
The software isn't the cause of the problems. It's
the operational infrastructure and implementation
Lengthy implementations translate into business
disruptions that most mid-sized businesses simply
cannot afford. In addition, these same businesses
typically do not have the information technology (IT)
resources required to implement, maintain and support
a CRM system.
What these businesses want and expect is a fast,
dependable solution that delivers CRM benefits
quickly, along with the technical guidance to do it
right the first time and at a cost that is
economically feasible and practical.
There is a way mid-sized businesses can quickly
realize the benefits of their CRM system --
outsourcing to an application service provider (ASP).
Outsourcing can eliminate months from the
implementation schedule by helping build, implement
and, most important, manage CRM operations. Businesses
can focus more on customers and less on the underlying
Good examples are two businesses that decided to
have their CRM software delivered to them as a
service. The first, a provider of multichannel
customer interaction solutions, needed a robust CRM
system quickly so it could service its own customers
and bring new services to market quickly. With its IT
staff already committed to product development, the
company could not quickly deploy a CRM system on its
own. Outsourcing was the most practical choice. As a
result, the company's system was up and running in
less than eight weeks, roughly half the time of an
The second, an electronic messaging company, knew
its success depended on deploying a CRM system that
would allow the company's geographically dispersed
sales force easy access to key customer and prospect
The company was already familiar with the benefits
of CRM, but it was also well aware of CRM's reputation
for lengthy and costly implementations. The company
decided to outsource its system to an ASP that
implemented it in less than a week.
Outsourcing Can Reduce Complexity
Outsourcing to an ASP changes the way mid-sized
businesses buy and access skills and technology by
delivering software as a service. The outsourcer
supports the software in its own centralized and
secure data center and provides it to customers
through the Internet or private lines.
This is an important point when you consider that
customers use multiple channels of contact to conduct
business at any place and at any time of the day. As a
result, CRM systems integrate activities across a
number of business functions and processes, meaning
that more departments and employees are involved in
the implementation. This introduces a level of
complexity that mid-sized businesses may be
ill-equipped to handle.
Added to this is a demand for round-the-clock
uptime. With the advent of the Web and e-mail,
customers directly interact with a company's systems,
making application availability a customer
satisfaction issue. A customer placing a Web order,
for example, won't wait for a downed server to
recover. The customer will click to the competition.
This idea is reinforced with research from Boston
Consulting Group, which found that 1 out of 4 online
purchases fails, and 25 percent of those who
experienced failure say they won't shop online again.
For a monthly fee, users can access their CRM
solution unburdened by the need to manage the
challenges of availability, responsiveness, expertise
and system complexity. The desktop environment can be
simplified with thin-client technology, which enables
desktop PCs to become terminals and allows all
computations to take place at the server level. This
keeps all the complexity at the data center.
Experienced outsourcers know how to determine
bandwidth, size servers and interconnect with devices,
partners and suppliers to get the most from a CRM
solution because they work with these solutions every
day. Some outsourcers also extend beyond basic
implementation and services, so it is important to
select one that takes full responsibility for all the
day-to-day operations and maintenance of the
application, which can simplify the lives of internal
IT staffs. As a result, companies can focus less on
the technological underpinnings of a CRM solution and
more on customer satisfaction.
In addition, some outsourcers provide help-desk
services that serve as a single point of problem
resolution, thereby reducing end user support burdens
on internal IT staff. Application-focused outsourcers
may offer support at every technology level, including
application experts, operating system and database
administrators, and network and security engineers.
Automated performance management systems and a full
staff of experts allow help-desk personnel to diagnose
and fix problems quickly.
As a result, mid-sized businesses can buy a CRM
application for its benefits. They will not need to
worry about the infrastructure.
Overcoming Data Conversion And Integration
Two major challenges for any CRM implementation,
regardless of whether it is done in-house or by
outsourcing, are data conversion and data integration.
One reason is the poor condition of customer and sales
data. Many companies have not installed tight
disciplines around customer data management, which is
compounded by the fact that conversion data are
typically drawn from many decentralized systems, all
of which store data differently.
For instance, a company may have to convert data
from as many as 30 different copies of contact
management software, such as ACT. Without centralized
control, each person may code and record data
differently. One salesperson may use "A," "B" and "C"
to designate the rank of a prospect, while another
might use "hot," "warm" and "cold." Importing and
consolidating data can slow down the implementation
The conversion process also requires technical
expertise. Converted data need to conform to the table
structures and the business rules of a new CRM system.
The same issues apply when integrating data from
legacy systems or loading new marketing databases.
Many companies underestimate the time it takes to
convert and integrate data, particularly if they do
not have the tools or knowledgeable resources that are
familiar with the applications.
If conversion and integration are not carried out
correctly, upgrades to new versions and enhancements
will be delayed and more difficult to accomplish. Many
companies are stuck on an old version of a CRM system
because the links into legacy systems are too
difficult to change or because system modifications
during the initial implementation were done
Some outsourcers bring integration expertise to the
hosting table by providing integration between all
customer touch points, sales channels and business
functions. While some outsourcers are integration
experts, others merely function as hosting agents.
They may implement quickly, but also may have limited
knowledge of integrating solutions with back-end, Web,
supplier or partner systems. Choose an ASP with a
proven record of integrating CRM applications or get
your integration services from elsewhere.
System Availability And Performance Impact
Data conversion and integration issues aside, another
challenge arises from the very nature of a CRM system.
These systems demand availability like no other
applications preceding them because they "touch" the
customer like no other business solution.
Customer-facing employees from sales, customer
service, marketing and field support will come to
depend on these solutions as a source of all customer
information, such as account contacts, products used,
outstanding quotes and orders, service records and
agreements. In addition, customers will depend on
systems being available at each interaction channel,
such as the Web or e-mail.
With CRM solutions, system, application and network
availability become a customer satisfaction issue. The
"just reboot it" mentality used for running other
systems simply does not work for CRM.
When a customer contacts the call center with a
problem, the CRM system must be available for
answering questions about order status or product
pricing. When a field agent refers a customer to a Web
site for product information, the Web site must be
available. When a sales representative is ready to
place an order, the CRM system must be available to
accept it. All of these examples set customer
expectations for availability and open the door for
either satisfying customers or losing them to the
Outsourcing plays a critical role in bringing
consistency to system availability and performance by
maximizing uptime and minimizing business disruptions.
Many outsourcers offer service-level agreements (SLAs)
that promise a high level of availability for both
server and application environments. Additionally,
some offer a money-back guarantee to back up their
Load balancing, multi-tiering, redundancy and
fault-tolerance technologies should be at work in a
managed operations data center to keep systems
accessible round-the-clock. Fully redundant electrical
systems and isolated power supplies must be
implemented to decrease power fluctuations and spikes
that can damage servers. Battery backup and generators
provide automatic cutover during power outages for
To maximize uptime and ward off problems before
they occur, some outsourcers may offer proactive
system monitoring and regularly scheduled maintenance.
The results are continual uptime for CRM solutions and
uninterrupted business operations.
Outsourcing For Long-Term Success
Beyond initial deployment, implementing a CRM
system is about properly maintaining and continually
improving the system. As soon as companies go live
with CRM solutions, internal IT resources can become
consumed with the day-to-day tasks of supporting the
expanding user base and systems environment. Desktop
support, internal help desk issues and daily
operations prevent them from working on more
strategic, value-added projects.
As solutions are rolled out, additional users and
new layers of technology will increase the burdens on
internal IT support staff. When new applications are
added and the user base grows in different locations
and time zones, support becomes a round-the-clock job.
More employees and customers will come to depend on
CRM systems, making high availability and fast problem
resolution a must.
Research also shows that significant costs are
associated with the ongoing management of the
computing environment. As more users and technology
are added to the solution, these costs are hard to
determine and budget. IT labor shortages and budget
constraints compound the problem, as IT resources are
already stretched too thin. These ongoing issues
emerge quickly after implementation and can have a
tremendous, negative impact on the value a company
gets from its CRM solutions over the long term.
Outsourcers can provide a staff of experts in CRM
technologies, including servers, applications,
databases, operating systems, networks and back-end
systems for inventory, shipping and finance, as well
as business-to-business interactions. With outsourced
offerings, CRM solutions become available to even
resource-strapped companies for a manageable and
practical monthly fee.
As a rule, businesses should place heavy emphasis
on the outsourcer's expertise and experience with the
specific applications being deployed, especially since
there is more to managing applications than just ping,
power and pipe. Outsourcers who bring true value to a
CRM solution should have proven track records in
implementing and managing the specific technologies a
company wants to adopt. Given that most problems
impacting productivity are related to the application,
choosing an ASP with an application-centric focus can
give businesses the edge they need to get the most
from a CRM solution.
Tom Brennan is the vice president of marketing
a managed operations service provider based in
Bedford, New Hampshire.
To The September 2001 Table Of Contents ]