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Alison Diana The Top Five Factors When Choosing a CRM Solution

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 By Alison Diana

Tips on Selecting the Right Customer Relationship Management System

Businesses hoping to transform the daily influx of data pouring through phone lines and websites into revenue-generating information should plan carefully before responding to the promises of a customer relationship management (CRM) solution.

CRM software reaches deep within an organization, pooling valuable information to improve customer satisfaction, service and loyalty, reduce costs and improve profits. Given the scope and value of a successful CRM deployment, the decision-making process should involve both IT and business professionals that consider and address five key factors.

  1. Price
    Of course, knowing your budget is an important component of any IT purchasing decision. However, price is only one factor, and is often more of a constraint than a score. Do not only consider the up front costs, but also research the long-term costs—and benefits—a CRM solution will deliver. Determine what is included in the price and as importantly what's not. After all, training, upgrades and ongoing services generally come out of the same funds as the initial payment. Also consider the cost of system integration, software customization and additional equipment, such as servers, PCs or notebooks. It also is important to make sure the software integrates easily and cost effectively with your existing IT infrastructure. After all, a cut-rate CRM application that necessitates a big investment in your infrastructure suddenly inflates your overall cost.

  2. Clearly Defined Business Objectives
    Developing a clear-cut set of business goals is an integral component of any CRM software selection. In addition to the IT department, managers and a representation of end-users who will support your CRM solution, you should secure buy-in from at least one top-level executive. These individuals should not only champion the new software; they should provide input into the available data and required capabilities of the yet-to-be acquired software.

    Understand how departments currently generate, access and store data, and determine the strengths and weaknesses of each approach. Involve departments such as sales, marketing and service, tapping them to produce a compilation of mandatory requirements and a wish-list. You should have a check-list of measurable, weighted and prioritized requirements for your software selection which will also act as a benchmark for follow-up analysis of the software's success and return on investment (ROI).

  3. On-Demand vs. On-Site
    There are pros and cons to both approaches of CRM deployment. For many businesses, a cloud-based or software as a service (SaaS) CRM solution gives them speedy access to more powerful, sophisticated equipment, and negates their need to buy big-ticket or support-intensive technologies. Since a SaaS CRM provider already has the business software up-and-running, implementing the CRM software is much faster via the cloud.

    Other organizations, especially those with larger internal IT staffs and excess computing infrastructure, may prefer to purchase their CRM software and the hardware needed to run it. Despite service providers' contracts, expert security and service level agreements, some businesses are leery of hiring a third-party to run and maintain a critical business software tool. Businesses that want an on-site solution but do not have the IT staff to implement it also have the option of hiring a third-party systems integrator, solution provider or consultant to host the program externally.

  4. Scalability
    You are buying a CRM solution to help grow your business. Will your CRM software grow with you? A well-developed plan addresses the software's scalability to ensure this year's decision will not become next year's regret. Scalability is an important criteria since, once purchased, you do not want to be forced into again grappling with the costs and hours—and negative feedback from the executive suite—associated with buying a replacement system a few years down the road.

    Consider, too, the expertise level of your staff. If the customer management software is extremely complex, employees may well shy away from it, instantly decreasing the software's value and ROI. Alternately, an application with limited uses is unable to fully do the required tasks and results in either software customization or increased manual efforts. Once you have a more abbreviated list of contenders, take advantage of vendors' trial and software evaluation programs, and encourage your focus group of prospective users to examine and check-out their potential new tools.

  5. Vendor Strength and Reputation
    Whether you opt for a on-demand or in-house solution, it's important to scrutinize the reputation of vendors on your short-list. Check out the plethora of print magazines and online social networks which provide user reviews and independent analysis on CRM products. Many publish benchmarks and rankings based on their own or an external research firm's analysis of the software, support, service and training. Most vendors offer case studies, a great initial tool for comparing your operations to other organizations within the same market.

    Perhaps the most valuable step when researching competing CRM solutions is to speak directly to existing clients about the solution's strengths and weaknesses, about how well the developer supports its customers and keeps them in the loop on future developments and upgrades. If you are considering a SaaS CRM solution, then speak to some of its existing customers, focusing not only on the software but on the provider's up-time rate, responsiveness and services.

    It's also wise to consider the provider's experience in your specific vertical market. After all, financial firms have different prerequisites than an organic food wholesaler, but both benefit from CRM solutions. The less experience, the more customization may be required, increasing the up front cost of entry and ongoing maintenance. Discuss and review your implementation plan with the vendor, and go over specific objectives, business processes and forms to determine viability and any possible problems. Also consider the designated account manager or consultant assigned to you: If you lack confidence in this person's expertise, request another point-of-contact at the CRM vendor.

    Consolidation is a natural part of the business software industry, but your CRM partner should demonstrate a history of survival in both this competitive market and down economy. Sometimes acquisitions and mergers fail, putting you in the unenviable position of depending on orphan software to run your operations.

Rather than hastily rushing to embrace a new CRM solution, carefully review your objectives, requirements and expectations, and then methodically plan the process to ensure your buying decision and implementation will deliver the savings and improvements you want and expect. Your early investment in time and research will be repaid many times over by a CRM system that truly lives up to its promise and benefits. End

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Rather than hastily rushing to embrace a new CRM system, carefully review your objectives, requirements and expectations, and then systemically plan the process to ensure your buying decision will deliver the benefits and savings you want and expect. Your early investment in time and research will be repaid many times over with a CRM system that truly lives up to its promise and potential.

 

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