January 2000

BY DAREN NELSON (WITH LISA KIMERY)

The most common mistake people make is the assumption that customer relationship management (CRM) is a technology that can be purchased at your local software reseller. CRM started as a management philosophy, and despite the best efforts of all of the software manufacturers touting solutions, it is still a management philosophy. Simply put, CRM is about building loyalty and value with your customers while streamlining your ability to do so. Individuals in all departments need to understand that quality of service and quality of product contribute to the goal of building valuable customer relationships. Every employee should relate to this common goal. They should understand how they can contribute to it and the benefits of achieving it. Without a basic commitment to changing your organization to being more customer facing, you will never achieve the CRM benefits we so frequently hear about.

To build loyalty and value, all departments must respond to customers quickly and effectively. They need to be able to quickly identify customers and their specific problems and questions. Most important, they need to be able to anticipate their product needs. An integrated application will streamline this process, allowing all departments to access and exchange valuable customer data, and translate it into useful sales and support information.

Buyer Beware
CRM is a catch phrase that means many things to many people. When working with a vendor to find the appropriate technology to assist you in your CRM initiatives, you have to carefully define what CRM means. Many vendors consider CRM to be simply sales automation; others integrate sales automation and support. Look closely at the few vendors who understand the entire customer relationship lifecycle and provide an integrated application for all departments facing the customer: marketing, sales, support and service, while adding robust e-business functionality that truly automates your customer interactions from end-to-end.

To reduce confusion between the technology and the management philosophy, I am going to use the term "front office" to describe the software solutions that can help you in your CRM initiatives.

The best way to purchase front-office technology for your CRM initiatives is to organize a small group of individuals representing each department affected by the solution and have them identify a common set of business goals that can be regularly referred to during the front-office-solution selection process. It is important that this group not get caught up in identifying features of the new software; because of the breadth and depth of front-office solutions, it is very important to continually refer to your business objectives and not try to make a purchasing decision based solely on its features.

More specifically, what are the technological issues you should be concerned with when purchasing front-office software to assist in your CRM initiative?

• Features: Don't get caught up in the hype created by the hundreds of front-office software manufacturers. Every company has features in their software that you need, but they also have hundreds more that sound great but in reality will never be used by your organization. This is what I call "feature overkill". When evaluating solutions, refer regularly to your original goals and purchase a front office solution that helps you meet those goals.

• Scalability: When most people think of scalability, they think of systems that can grow with them. I don't want to suggest that you shouldn't purchase a system that will grow with you, but my definition of scalability is more about purchasing a system that is appropriate for the size of your organization today and looking forward the next 24-36 months. Many companies make the mistake of purchasing a front-office solution from the biggest vendor because they're the biggest. What you must take into account is that large multinational organizations have much different needs than mid-sized multinational or small domestic operations. Most vendors will claim that their front-office solutions scale from one to millions of users. Do your homework and be sure that you are dealing with a vendor that addresses the market segment that your organization falls into.

• Vendor reputation: It goes without saying that when purchasing front-office software, the reputation of the vendor is extremely important. As good as the vendor may be in manufacturing the software, they must be equally as strong (if not stronger) in deploying and supporting the solution. In the past, companies often changed the way they conducted business to meet the needs of the software they purchased. Because you are changing your management philosophy as much as you are changing your technology, your vendor must stand ready to work with you to modify the solution to meet the way you want to do business. Also look at the vendor's commitment. Newer vendors to this space will have significantly less experience and will be therefore may be less capable of suggesting options you may have not considered during your planning process.

Don't Forget Your Users
Until now I have not addressed, and you will need to, employee buy-in for you CRM initiatives. Remember that change is difficult. Not only will your front-office solution require your people to do more than they do now, you will also be changing the management philosophy of the organization they work for. The best advice I can give you is to help them understand the larger picture, help them see that extra effort today will pay off in the future.

CRM is not a passing fad; it is a unique way of doing business. Those companies that embrace it and the technology that goes with it will be the new economic leaders of the 21st century.

Daren Nelson is the founder and chief executive officer of GWI Software, a provider of client/server and Web-based e-business customer relationship management (eCRM) solutions. In this role, he is responsible for the strategic management of the company, building relationships with Alliance Partners, as well as the overall product direction for GWI's eCRM solutions. GWI Software develops shrink-wrapped CRM solutions for the Lotus Notes/Domino/Web platform and has over 1,500 customers worldwide.