More bang for your CRM consultancy buck...

One area where a CRM consultant can deliver a very immediate and significant bang for the client's buck is the area of negotiation of pricing and terms. Yes, some organizations are excellent negotiators, and without outside help can probably substantially reduce costs, but a good CRM consultant with a good understanding of what’s achievable with a given vendor, can often guide the negotiations more effectively.

However there’s only so far you can take negotiations over software and day rate costs. The biggest impact a CRM consultant can have is in determining whether the number of service days proposed to implement the project is appropriate for the actual amount of work involved. Vendors typically factor in way too much fat in their estimates, and we generally find we can reduce the man day estimates substantially.

This isn’t always the case; conversely some vendors propose too few days to get the job done. This provides its own set of issues, so, wishing to avoid vendors coming back for more money half way through a project, or trying to cut corners, sometimes we find ourselves persuading a vendor that they may have undercooked things.

The other area that a consultant will pick up on is whether the software proposed is appropriate to the task at hand. Does the client need the advanced version for what they are trying to achieve or would the entry level version suffice for the time being? What are any additional modules for, and are they needed at this stage?

On this point, the timing of software purchases is something that’s worth managing carefully. I’m always mystified by companies who lavish money on software licenses that are going to sit on the shelf, attracting support and maintenance costs, while implementation is underway and no-one is actually able to use them. Recent research by Gartner shows that 37% of CRM software licenses purchased are not actually in use, which is pretty frightening.

The basis of good negotiation, as outlined in my in the first of my ‘What a CRM consultant would tell you about buying software’ articles, is have a detailed specification completed before you start the purchase process. Unless you are crystal clear about what you are trying to achieve there’s no real basis for comparison and negotiation. It’s a case of when you don’t know where you are going any road leads there.

The monthly CRM fireside...

In the first of what I’m intending to be monthly series of interviews primarily focusing on some of the challenges of implementing high pay-back CRM systems I sat down with Anita Clifford of ETC Global Solutions, one of the key implementers of Microsoft Dynamics CRM in the UK.

Can you introduce yourself and ETC?

I’m a director at ETC Global Solutions and head up the CRM team. ETC is a Microsoft Gold partner and has been involved in deploying ERP and CRM solutions since 1989. Our relationship with Microsoft, which is a major focus for the company, came about as a result of being Great Plains partners in the 1990’s. We specialise in Microsoft business solutions which, for us, revolves around Microsoft Dynamics CRM, Great Plains and Navision. As part of that focus we also specialise in complementary Microsoft technologies such as BizTalk for integration and SharePoint for document collaboration and Portal solutions.

How does ETC look to set itself apart in a crowded market?

ETC has been around for a long time and I think that’s one of the key differentiators of our company, we are very stable. Many members of our team have worked together since the early 90’s, and some customers from as far back as the 1970’s. We have a reputation for customer service because we look to build long term relationships with our customers. For us it’s not a quick sell, in and out, deploy and run. We work hard on those relationships and as a result have some that go back many, many years.

I know you were one of the early pioneers with Microsoft CRM – I would imagine that’s been an interesting journey at times

It’s been a very interesting journey, and certainly there have been some challenges along the way. We were invited by Microsoft to get involved with Microsoft CRM because, as Great Plains partners, we had been heavily involved in their relationship with Siebel. We were very successful at deploying Siebel under the banner of Great Plains Siebel Front Office. Prior to that we had also implemented Goldmine. Our background in implementing CRM solutions was quite rare in the Great Plains channel at that time.

Microsoft CRM was released in the US in 2003, and January 2004 in the UK. My team actually did their training on it back in late 2002 due to being selected as an early adopter partner here in the UK. We were involved in meeting Microsoft personnel who had come across from Redmond to the UK to identify functionality that Microsoft CRM needed to address the European market, such as multi-currency and multilingual requirements. I have to be honest and say the first release didn’t necessarily reflect all our European requirements but that’s been something that Microsoft have been keen to redress in later versions.

It’s interesting you mention Siebel there. The CRM market is kind of interesting at the moment. You have some of the pioneers in Siebel, Pivotal and Onyx being acquired. Microsoft CRM has clearly established itself with Version 3. Salesforce.com has made a big splash in the hosted market. It seems as if there’s a new hosted player everyday, and there’s some interesting developments in the open source space. How do you see the market playing out over the next five years?

Looking in my crystal ball, there’s any number of ways it could go. I think generally the adoption of the hosted model will continue to grow. So far, the UK has been quite slow to adopt it, but attitudes are changing, and that’s not limited to CRM. I think you’ll see the hosted model generally much more prevalent over the coming years.

I also think, though I’m not privy to any inside information from Microsoft, that Microsoft CRM’s close links to Microsoft Office will increase to the point where perhaps it might actually ship as part of Office. I think Microsoft have found a unique way of marketing the product with elements of it embedded deeply within Microsoft Outlook. This is very compelling to a purchaser when they consider the cost of deploying, and promoting the uptake of a new system, which is key to its success. If you are asking your user base to work with something which, to them, appears to be part of an application that they already use every day, such as Outlook, the likelihood of them using it is much higher. My view is Microsoft will continue to enhance the link between CRM, and probably some of their other ERP systems, with Microsoft Office in particular.

There’s still a lot of statistics about CRM technology failing to deliver the anticipated benefits – where do you feel companies go wrong?

I don’t think it’s entirely the fault of the companies. I think historically there has been an element of overselling in respect of the capabilities of CRM. I also think that a lot of vendors don’t set expectations clearly. I think quite often organisations don’t put enough thought into what they are actually trying to achieve, their key business drivers. That can apply to any system implementation, but in the CRM world it tends to apply a little more.

I think another issue though is that for larger projects with long implementation timeframes, by the time the system has been delivered, the business may have already changed. Perhaps the biggest issue is that organisations often don’t invest to the degree they should in user training which is critical to the successful uptake of any product.

You mention user uptake, this has been a big issue for a lot of organisations, what additional advice would you give in this respect?

I think it’s to ensure the involvement of the user base. I think participation of a cross section of the user base in the whole project is important, particularly in terms of requirements gathering where we look to understanding the processes people follow. Quite often the senior management think that certain business processes are in place, but in reality, things are quite different at the user level. They aren’t actually doing things in quite the way that management think they are. When you deliver a system the users will quickly identify things that won’t work for them in performing their daily tasks. At ETC we tend to recommend lots of show and tell sessions for our larger or more complex projects, so that before you go too far down the route of customisation and development, you are giving the customer an insight into how the system might look, and you can identify very early on whether that will work for them in terms of their day to day business process.

How has your own approach to implementing systems changed over the years?

I think it has changed in certain areas. I think for the larger implementation projects we still adopt the same basic implementation methodology. As a Microsoft Dynamics CRM partner we worked out very early on that we have to be a lot more flexible in our approach to deployments, and we recognised the fact that some customers do want to be more self sufficient. And actually, in a way, our skill set had to change to accommodate that approach. We have focused on knowledge transfer, and that’s become a key part of what we have to offer, teaching and helping customers to become more self sufficient with their own systems.

What advice would you give to a company who was considering implementing a CRM system today?

To make sure they understand why there are doing it, and to take the time to fully define their key objectives or business drivers for the project.

How about those companies that are sat on systems that aren’t producing the results – what advice would you provide on re-launching?

You need to look at what’s wrong with the system you have and learn from your mistakes. It comes down to the fact that you have to make one major decision – do you change the system you have to accommodate what you now realise you need, or do you go out and look for possible alternatives.

Some organisations are clearly more successful at running productive CRM systems than others – what do you see as the character traits of these that do get it right?

I think for the most part, the people who have made a very good go of it are those organisations that plan projects carefully and break them down into bite size pieces. I’m anti the big bang approach in large CRM projects because, in my opinion, by the time you get to the point where you deploy the solution, requirements have often changed and moved on, and elements of the system you have delivered may no longer be as relevant.

In your experience where are your customers seeing the biggest pay-back areas for CRM?

It varies, but I think consolidation is an important factor. Many organisations are using a complex mix of data sources from Excel spreadsheets to legacy systems and databases. Information is therefore spread across a wide number of areas, in different formats. The most obvious benefit, and the thing that most organisations are trying to achieve when they deploy a CRM solution, is to get some form of centralisation and consolidation of that information.

You’ve done a lot of work with public sector organisations, what are the key issues CRM tends to address for them?

For the most part public sector organisations are driven by customer service, so they tend to respond to issues and requests rather than proactively market. The key with public sector organisations, taking for example a local authority, is the centralisation of information, as we’ve just touched on, it is absolutely essential.

A major issue for a local authority can be something as simple as managing a change of address in a situation where they have many specialist computer systems for example: council tax, revenues and benefits, even car parking. A person or resident may exist on each of those systems. So if I call the council with a change of address, somehow they have to deal with that across all these systems, ideally in one go. Whilst, for very good reasons, they’ve got your information spread across different systems, it becomes a real challenge to avoid people getting passed from department to department to make a minor change. It’s a simple example, but one that gives a good measure of the challenge public sector organisations are often facing.

There’s a native American proverb - Never criticize a man until you've walked a mile in his moccasins – what aspects of the life of a CRM value added reseller do you wish customers understood better?

It’s important they realise that whilst we may be may be very experienced consultants, we still rely on the information they give us. Every business is different, so while we have to ask the right questions, we are clearly dependent on the answers given. It’s a partnership, and the more accurate information they give us, the better we will be able to use that information to deliver a successful solution that meets their expectation.

Fire half the sales-force?

Nice piece in Seth’s Godin’s blog today about axing half the sales-force.

I’ve long held a theory – though haven’t seen it tested yet – that cutting back to a core number of star salespeople, with excellent administrative and IT support to make them as productive as possible, may prove the most fruitful and cost effective way to run a sales team.

Why do CRM projects really fail?

Having just read yet another self serving ‘six reasons why CRM projects fail’ article which follows the usual well trodden path: CRM projects fail because CRM software isn’t easy to use. However we at XYZ software company have developed some really easy to use CRM software, so problem over, no more failed CRM projects.

Degrees of ease of use are not the reason CRM projects fail. CRM applications have been intuitive for years now, and I find it a trifle bemusing that each new kid on the block seems to position their product as the easy to use offering. Maybe it’s a safety in numbers thing - or perhaps a lack of market research thing - but I think there’s ample scope for software developers to be a little more original in differentiating their offerings.

In terms of why CRM projects really fail, I think the number one culprit is a lack of goal and process orientation. To put this more basically – too few organizations embark on CRM projects with well defined outcomes in mind. There’s often an expectation that good things are going to happen, rather than any specific understanding of what they may actually be. Even those organizations that do understand what they are trying to achieve often fail because they don’t embed (and persuade users to follow) the set of business processes necessary to attain these goals. As a consequence the CRM system becomes a hive of directionless activity, where little is achieved as a result.

To illustrate better what I mean about goals and processes, a company may feel that it is losing out on sales because it’s failing to consistently follow up and nurture the leads it is receiving. A goal for the CRM project may be to improve lead management. In order to do this a whole range of processes need to be implemented in order to achieve this goal. So this might include processes to log and qualify leads, nurture the relationship until the lead is developed to a sales ready status, assign to the most appropriate salesperson, recycle the lead if it turns out to be long term, escalate leads that haven’t been followed up in a timely fashion etc etc.

This seems simple enough, but it invariably doesn’t happen. I’m not a 100% clear in my mind why not, but I’ll take a punt that most vendors feel the business process specification part falls outside their comfort zone, and most customers either don’t recognize that it needs to be done, or are insufficiently experienced with CRM technology to make a good go of it. The fact that this falls between two stools is a great pity because CRM technology has the potential to create significantly profit generating efficiencies by either automating previously inefficient manual processes, or facilitating new effective business processes that couldn’t exist without enabling technology.

In fairness to the software vendors, some organizations will struggle with the discipline necessary to generating high returns from CRM anyway. However it sure would help improve the returns from CRM overall if vendors stopped fixating on the technology rather than the process, but as Abraham Maslow noted – ‘When the only tool you own is a hammer, every problem begins to resemble a nail.’

The myth of simplicity...

I note 37 Signals have a CRM product called Highrise in production. I’m a great fan of the 37 Signals blog which you can find here. Though I haven’t seen Highrise, and I certainly will be looking at it, I have a few alarm bells ringing. Yes, the premise sounds good. We all want really simple intuitive software. And the notion that 80% of the users use 20% of the functionality rings true. However there’s just one flaw about the 80/20 rule in this respect which Joel Spolsky points out in his article ‘Strategy letter IV: Bloatware and the 80/20 myth’, and, as he is considerably more eloquent than I, I’ll quote fairly extensively:


“A lot of software developers are seduced by the old ‘80/20’ rule. It seems to make a lot of sense: 80% of the people use 20% of the features. So you convince yourself that you only need to implement 20% of the features, and you can still sell 80% as many copies.

“Unfortunately, it's never the same 20%. Everybody uses a different set of features. In the last 10 years I have probably heard of dozens of companies who, determined not to learn from each other, tried to release ‘lite’ word processors that only implement 20% of the features. This story is as old as the PC. Most of the time, what happens is that they give their program to a journalist to review, and the journalist reviews it by writing their review using the new word processor, and then the journalist tries to find the ‘word count’ feature which they need because most journalists have precise word count requirements, and it's not there, because it’s in the ‘80% that nobody uses,’ and the journalist ends up writing a story that attempts to claim simultaneously that lite programs are good, bloat is bad, and I can’t use this damn thing ‘cause it won't count my words.”


From my own experience of several hundred CRM implementations, I can think of no, and I mean no implementations, that I worked on where the out of the box package met the requirement without needing at least some additional development and customization. And since this was with fully featured rather than ‘lite’ software, I can’t help feeling a certain level of skepticism that 37 Signals can take a nice concept and apply it in a practical way. That said, I’m more than happy to be convinced.

What a CRM consultant would tell you about buying CRM software - part 2

Following on from 'What a CRM consultant would tell you about buying CRM software' - part one:

The second aspect of good vendor selection is to start off with a good initial short list of potential suppliers. Pretty obviously you are much more likely to make a better choice and negotiate a better deal if you are choosing from a group of top-flight suppliers. Conversely if you start off with a list of suppliers that is largely inappropriate for your business or what you are looking to achieve, then you simply end up selecting the best of a bad bunch. Therefore it’s worth taking the time therefore to research the market carefully before rushing out to tender. A CRM consultant will generally be able to put you on the money in this respect, but as this isn’t a shameless plug for our services, we’ll skip this as an option in this scenario. There are clearly many sources of information about potential CRM suppliers, such as trade shows, forums, analyst reports etc, however one of the most effective ways to find suitable options is simply to ask around similar businesses to your own to find what they are using and how well it meets their needs.

One of the things to be aware of here is that many technologies such as Microsoft CRM are sold through a network of resellers. As a rule of thumb here the selection of the reseller is more important to success than the choice of technology. While there’s a fair amount of information available on the CRM technologies themselves, information about the strength of the reseller community is much harder to find. I’m probably being kind by saying the standard of the average reseller is mediocre at best, so it’s very important to put the research in here. On a related point I’d be wary about recommendations from the software vendors about which resellers they think you should use. A lot of companies will treat these recommendations as gospel, however they are invariably based on factors that suit the software vendor rather than the supplier, for example who is likely to make a quick sale (rather than implement the software well), or which resellers territory you to happen to sit in.

We generally look to get six to eight suppliers lined up to respond to a request for proposal (RFP). This gives a little lee-way in case a few fail to respond. We also work hard to reassure the vendors that it’s an open contest (which it always is). If vendors harbour any suspicions that the decision might already be made and that the purchaser is just going through the motions, then they are unlikely to bid. Good vendors are generally very busy vendors, and responses to RFP’s are time consuming, so it’s worthwhile making the effort to promote the opportunity to them. This may sound a little counter intuitive after all surely they should be doing the selling, but the value of working with a great vendor over a mediocre one, massively outweighs the effort.

The third aspect of an effective vendor selection process, will be published in a forthcoming post…