The CRM selection process is a project in itself; one that should be handled no differently than any other major company initiative. It needs dedicated staff, budget, time line, research, deliverables and success metrics.
Establish a CRM Steering Committee
A CRM project needs input and impetus not only from IT and all affected departments, but especially from C-level executives. When directives are formally handed down from the top of the organization as top company objectives, most staff will comply out of enthusiasm, respect of fear of repercussions. Executive sponsorship is one of the key success factors in a CRM implementation - and its absence is frequently cited among CRM project failures.
Be sure to set up a steering committee to see the project through from software selection to implementation, adoption and ROI. The initial committee should consist of the CEO, CFO, department leaders of sales, marketing and customer service and the IT executive. If outside consultants are to be involved, they may take a facilitation or leadership role on the committee. This executive team is responsible for communicating the vision, strategy and purpose to the entire company over the course of the project.
The committee will expand and morph as the project progresses. During the implementation and training stages it should include staff representatives from each of the functional departments who will help with employee adoption and the general cultural transformation into a customer-centric company. As the project timetable and deliverables are established, the committee is responsible for measuring incremental goals and delivering appropriate incentives as each step is accomplished.
Budgeting a CRM Project
The amount of money at stake in purchasing and implementing a CRM solution is significant, and missteps at the selection and/or implementation stages can be costly, if not disastrous for the company and its customers. According to William Band of the Forrester Group, large enterprises can spend $1 million or more on a CRM project, while smaller companies usually spend less than $250,000.
When considering budget it's important to distinguish the cost of software, hardware and licenses from the cost of implementation and training. In many cases the cost of implementation will far exceed the actual cost of the software itself. Finally, with the historical failure rates of CRM implementations running high (see below), starting with the CRM solution that is best suited to your company and industry is critical.
In its CRM Journey Help Guide, CRM Landmark lists and discusses the following expenses as part of a CRM investment:
- Licensing - typically a one-time up-front purchase fee plus annual maintenance fees
- Hardware - servers and equipment acquisition with periodic upgrades and refresh cycles
- Implementation services - consulting investment during the initial deployment and future new version upgrades
- Alignment of business processes - often consulting costs associated with business process improvements
- Software customization - main cost incurred during implementation, additional costs with new version upgrades
- Ongoing training and support - recurring costs for user support
- System integration - main cost incurred at implementation, additional costs with new version upgrades
- Future upgrades - often delivered on a near annual basis
- IT infrastructure
- Disaster recovery and business continuity
Establish Metrics and Goals for Your CRM Project
The first step in a CRM project is to establish the specific, measurable goals you aim to achieve with your CRM implementation. Sales, revenues, market share, customer acquisition and retention, campaign results—every measurable result should be set up as a metric. Then business processes must be aligned with the metrics. This critical process will become the basis of establishing ROI in the post-implementation stage.
Hiring a Consultant versus Handling It In-House
Very early in a new CRM initiative a company will need to decide whether to hire a consultant to facilitate the selection process or to handle it in-house relying on IT resources and other expertise. This choice is generally dependent on the skills and availability of internal resources. Larger enterprises looking at large implementations tend to hire consultants to guide them through the software selection process, thereby accelerating the process, reducing risk and increasing the likelihood of achieving a predictable success. Smaller companies often face budget constraints and are more likely to evaluate CRM software solutions on their own. Note, however, that even consultant-lead projects require sponsorship, ownership and considerable participation from the staff.
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Larger companies tend to hire consultants to guide them through the CRM software selection process, thereby accelerating the process, reducing risk and increasing the likelihood of a predictable success. Smaller companies often face budget constraints and are more likely to evaluate CRM software on their own. Note, however, that even consultant-lead projects require sponsorship, ownership and considerable staff participation.