February 2000

Choosing A CRM Software Vendor

BY EBEN FRANKENBERG, ONYX SOFTWARE

Customer management. What is it? The ability to know your customers? To talk to them via the Web? To send them only the literature they request? To make your business more profitable? It is all of these things and more. The Internet is accelerating companies� sense of urgency about getting to know their most valuable customers. When the competition is only a click away and customers are more educated than ever, loyalty is at a premium. Given this hyper-competitive climate, today�s businesses are faced with the challenges of how to best serve this complex customer base, how to incorporate the Web into their business and what to focus their resources on as they migrate to the Internet. Many companies are finding the solution by implementing customer relationship management (CRM) software. But in an industry that is projected to reach $17 billion by 2003 according to AMR Research, determining which software can be a difficult proposition. At the end of the day, checking a vendor�s customer references thoroughly is always the best advice.

There are hundreds of vendors out there calling themselves �CRM experts.� These players can be organized into three general categories. First are the enterprise resource planning (ERP) vendors. ERP companies have a strong background in delivering accounting, human resources and manufacturing applications. But as the ERP market has become ever-more saturated and competitive, many of these companies have found they need to extend their offerings to include CRM modules, both to retain current customers and to attract new ones. Many have chosen to buy this capability rather than build it.

Industry observers seem to agree, however, that notwithstanding their CRM acquisitions, these ERP companies have not yet become successful players in the CRM market. This is because CRM is neither their core competency nor their primary focus.

The second category is comprised of the numerous �part-of-the-solution� CRM vendors. These companies deliver add-on products and supporting applications that enrich core CRM systems. Their products include automated e-mail handlers, market reporting and segmentation tools, self-service knowledge bases and the like. Also in this category are contact managers and the many �dot.com� and e-business niche vendors. In general, these companies offer strong complementary technology and make good partners for horizontal CRM companies.

The third group is the independent, horizontal CRM vendors. These companies pioneered CRM and have taken it to the next level of enterprisewide front-office automation. To a large extent, this is where CRM innovation, technology and thought leadership originate.

These vendors aim to automate and enhance the vast majority of interactions companies have with their customers. They provide broader functionality, spanning marketing, sales and customer service functionality, and integrate with all channels of interaction across all constituents. This is the main street of CRM, where the lion�s share of corporate budgets is being spent and where those applications that form the core of a company�s CRM systems can be found.

Given all this noise, how does one effectively choose the best CRM vendor for their needs? To help narrow it down, here is a checklist of 12 things to look for when starting a search.

12 Pieces Of An Effective CRM System
Enterprisewide customer management. Customer management by department is not enough. The software you choose should be able to address and integrate marketing, sales and support processes across all departments facing the customer. Some fundamental pieces include a single integrated data model centered not on incident categories, but on the customer; the ability for users to access all customer information across all departments; and a reliable security infrastructure.

Web integration for e-business backbone. Your CRM software should reflect the increasingly critical role the Web is playing in customer management and business today. Whether or not your CRM system is 100 percent Web-based, it�s vital that it allow seamless Web-based interaction with partners, customers and prospects in the following ways to meet the Internet demands of customers:

• Customer interaction,
• Real-time access to customer and company data,
• Access to company knowledge bases and the ability to submit, check the status on and update support requests via the Internet,
• Prospect interaction,
• Self-qualification features, self-service/e-commerce,
• The ability to request literature,
• Immediate response to information inquiries, and
• Immediate Web-based lead capture.

Single, consolidated user interface. Whatever their title or industry, employees are working at high speeds today trying to market, cross-sell, upsell and serve customers. For these employees to be the most effective, they need an intuitive interface that gives them rapid, easy access to information about customers, partners and prospects and some kind of �dashboard� feature that contains a customer�s most generic and widely relevant data, while allowing ready access to additional information.

Collaboration among teams. A good CRM system should provide for intra- and inter-departmental collaboration. This communication may be the key to effective customer management. Ask yourself if the software permits you to share and access customer-related data and internal marketing, sales- and support-related information; easily reassign/transfer customer opportunities; and send/post alerts and customer information companywide.

Usability. This is really the linchpin of success for all collaboration-dependent enterprise applications. A short list of usability must-haves includes easy navigation, individual-level default settings, automated notifications, recent update indicators and prior activity logs; consistent information presentation, including cross-departmental tasks and opportunities, customer demographic information and employee task activities; unattended synchronization for mobile users; and Web applications that pull third-party applications and relevant Internet content in with the CRM system.

Process automation technology. The software you choose must be capable of housing customer information and improving departmental productivity and processes. Typical process automation features include lead assignment, opportunity management, two-way channel management, forecast rollup/reporting, literature fulfillment, marketing campaign execution, problem-resolution, knowledge retrieval and support contract monitoring.

Customer management cycle reduction. This just means your CRM software should be able to help you reduce the sales cycle and cut customer support response times, both of which can be costly if they are not addressed. It is also critical that it provide you with a picture of the overall health of your organization (e.g., sales forecasts, support response, tracking, etc.). You need to consider automated Web-based lead entry and literature fulfillment, and automated lead allocation (to internal sales personnel and channel partners); Web-based customer service and self-service, automated reminders and event notification, immediate lead/request reassignment, and sales/support knowledge tools; full customer data access; and immediate Web-based forecasting/reporting capabilities.

Low total cost of ownership (TCO). The best CRM systems promise a low TCO. Are the following components among the software�s offerings?

• Strong Internet integration?
• Rapid implementation (in months, not years)?
• Easy upgrades and customization?
• Use of industry-standard development tools?
• The ability to leverage your existing business applications?
• Customer references to verify these capabilities?

Self-service. Prospect and customer self-service should also be a central feature of your CRM system. This functionality is an important tool for improving service levels and reducing costs. Check that the system�s processes can, at minimum, be conducted over the Web in real-time, be directly integrated into your customer management database and allow for immediate automated response to customer service requests.

Knowledge management tools. To keep up with the variety of resources available to customers on your site, make sure your CRM system is equipped with a Web-based knowledge management tool that enables you to effectively share and reuse information.

Integrated marketing automation. Effective CRM software should offer a complete marketing automation capability, including tools that address the following: integrated campaign management, customer and prospect analysis, feedback to and from sales, product/enhancement feedback from customers via technical support and integrated analysis of marketing costs to sales revenue

Rapid implementation. This is one effective way to promote the success of your CRM projects. During your planning process, aim for an effective system design (an important part of creating a rapid implementation cycle), vendor expertise/customer references in your industry (to better map out your specific business processes) and realistic implementation cycles. As a guide, consult historical metrics on the length of the vendor�s implementation projects

In the end, customer references will tell you if a CRM system and company are right for you. Fail to do your homework and you are apt to see little benefit. Give thought to the ingredients above, put the right pieces in place, check references before you buy and your customers are likely to reward you with a growing business.

Eben Frankenberg is responsible for corporate marketing functions as well as sales and channel distribution worldwide for Onyx Software.