After a rocky start, Customer Relationship Management (CRM) applications have grown up – Helen Bradley finds the new models offer an SME streamlined centralisation and can be hosted, leaving technical machinations to the experts.
In the past CRM applications have been like the little girl with the curl—when they were good they were very good and when they were bad they were horrid. In the last few years CRM has matured, and its developers and end users better understand its role in business. It has, at last, begun to cast off the ‘little girl’ legacy and is becoming a must-have application for businesses small and large.
CRM software can help manage three key areas of the business: sales, marketing, and customer service. In the sales area, sales force automation tools offer benefits such as opportunity management and a consolidated view of all sales opportunities that the business has in progress with the ability to forecast your future revenue stream with greater accuracy. In the marketing area, CRM applications help manage your marketing campaigns and monitor individual leads from capture to closure. They also help determine which campaigns are generating the highest returns. In the customer service area, a customer's complete history as well as answers to queries can be easily obtainable from the centralised database.
The problems that plagued early CRM applications were many. A successful CRM solution not only took time to install and get running but, in the days before the advent of reliable hosted applications, it also involved capital investment in the hardware to run it and the licences to use it.
However, the greatest issue hindering adoption was and still is, a people one. Using a CRM application requires a change in culture in the organisation, if the people who accumulate and amass the day-to-day data in the business keep it to themselves and don't enter it into the centralised CRM database then there is nothing there for managers and others to use. Many CRM applications failed for this reason alone.
CRM isn't an application that hangs around waiting for a business to decide to use it. Most businesses already use some form of customer relationship management tools but, in the absence of dedicated CRM software and associated business processes, the recording and reporting process is often ad hoc. Jeremy Cooper, vice president marketing, APAC and Japan at Salesforce.com explains: "Typically, an SME will manage sales opportunities in Excel worksheets or something similar and each sales representative may even have a different method of recording and coding. This makes it very difficult to consolidate and get a reliable, real-time view of the business data. Moving to a CRM application centralises the data so management can control it better and see everything. It gives management the ability to track progress towards meeting revenue targets in real time rather than relying on data in weekly or monthly reports. It also removes the ad hoc data recording element and offers some insurance in the case of a sales rep leaving, ensuring that their leads and data don't leave with them."
Size Solutions
One of the most commonly heard phrases in the CRM field these days is that with CRM you get a big business tool at a small business price. In the past, cheaper CRM applications lacked functionality and expensive ones offered functionality at a price SMEs simply couldn't afford. Nowadays CRM applications are available for any size business, from ma and pa businesses to large enterprises. As Ross Dembecki, lead product manager for Microsoft explains, his own company's product, Microsoft Dynamics CRM is available for small businesses with as few as five staff to larger enterprises with a thousand users or more. For very small and SOHO businesses, Microsoft has a Business Contact Manager for the Outlook contact management tool. Like most of the name CRM applications, Microsoft Dynamics CRM applications are available to be installed and run on the business' own servers or they can be purchased as a hosted model. The business data can be accessed using a web interface or via mobile devices for users on the road and, in the case of Microsoft Dynamics CRM, it can also be accessed from inside Outlook. One of the benefits of the Microsoft products, according to Dembecki, is their ease of use because they look and feel like the Microsoft applications users are already familiar with.
Imaxeon, a company that designs, manufactures and distributes niche medical products, recently implemented Microsoft Dynamic CRM technology. Like many had experienced in the past, Derby Chang, quality assurance and regulatory affairs manager, Imaxeon discovered that implementing a CRM solution isn't as simple as installing Office, for example. "The cultural issue is a big one," he says. "It takes time for people to get used to entering information into the central database rather than, for example, using a paper diary."
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In time, however, the results pay off. "We've had it in place for about a year and the tipping point for value occurred at around six months when you could see the database history being built up to a useful level," he says.
A key benefit of CRM to Imaxeon has been creating a central database for all customers replacing several smaller databases. Chang explains that having one central data source makes it easier to keep the data up to date and has resulted in improved communication between sales and service and the back office, allowing anyone to determine the status of an order or a service case by looking up the centralised data. "I don't think you really realise you need a CRM solution until you have it,” he concludes.
Hosted Service
Where CRM software is offered on a hosted or SaaS (Software as a Service) basis, a business can buy in with little or no financial or technical risk. The software is paid for like a utility bill on a per-seat per-month basis so there is no huge capital outlay on hardware and software and little IT skill is required to get started. Upgrades and maintenance are automatically performed by the SaaS provider as part of the ongoing price. According to Cooper, the Salesforce.com experience is that, on average, a business will be up and running in 15 days, which includes the time to migrate data from existing applications. The cost of an entry level contact management solution to an SME is around $14 per-seat per-month, and with additional features may scale up to around $95 per-seat per-month. Cooper anticipates a business should see a ROI in around six months. For businesses considering the benefits of a move to CRM, Salesforce.com offers a 30-day free full production trial for SMEs wanting to trial the program to see it if works for the business.
In addition to the Salesforce.com product there is an associated AppExchange which is a directory of online applications that enhance and add value to Salesforce.com by addressing specific business needs. These applications can be shared and installed on Salesforce.com with a few clicks. There are some 600 applications available on AppExchange, some of them built by companies such as Sqware Peg. Sqware Peg also offers services to SMEs that prefer not to configure their own Salesforce.com application. William Scully-Power general manager of agency On-Demand at Sqware Peg, explains that in his experience applications like Salesforce.com benefit SMEs because "they can start small and pay as they go" and the solutions are scalable so they grow as the business grows.
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While sales, marketing, and client service remain the key application for CRM, today's applications offer business solutions beyond these traditional areas, says Mike Lorge, managing director of Sage Business Solutions. "One interesting thing we are seeing is that businesses are finding creative ways to use the workflows i
n our CRM systems to help other business processes and functionality. SMEs, for example, are using CRM for implementing systems to manage processes and activities that wouldn't have been automated in the past, such as purchase orders. If you need someone to approve POs above a certain amount you can create rules to manage this workflow in your CRM application. It seems CRM isn’t just about sales and marketing anymore it’s about managing all sorts of business processes.
"The ROI is almost immediate because it is a low cost product and you only have to save an hour or two to recover its cost,” Lorge explains of Sage offerings. "For our other products, Sage CRM and SalesLogix, it's not uncommon for a business to be able to redeploy one person to other activities within a year because there's less duplication of work so the ROI on a cost basis alone is under a year without factoring in the benefits from increased sales."
In Lorge's experience, “CRM as an application is rapidly approaching a point of mass adoption—it is maturing and its functionality is being influenced by the real needs in the marketplace.
"What is helping the adoption,” he adds, “is that the industry has become a lot more experienced in implementing CRM in a way that is very useful to business. While it's easy to see how to use an accounting application, it has taken the industry time to understand how to implement CRM to be of benefit to a business."
