Comparing On Demand Customer Relationship Management Service Alternatives

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CRM Evaluation Considerations

In a recent Forrester Research report, it was noted that while functions and features are important in selecting customer relationship management (CRM) software, they are not the "be-all and end-all" deciding factor.

It was also noted that when organizations looked back in terms of the criteria they used, or would use, to select CRM software, product capabilities were not nearly as important as most users initially thought they were.

Two of the top three criteria listed by companies focused on a CRM system's flexibility (i.e. configuration and customization) and the ease with which the application can be integrated with other systems.

Interestingly, a few features that some vendors have worked hard to incorporate into their products fell near the bottom of the evaluation-criteria lists. Vertical market specialization, for example, did not rank high among potential CRM buyers.

CRM Functions and Features

So, what exactly is core CRM functionality?

To come up with our answer, we researched hundreds of CRM products, and as a result of this process, we defined twelve functional areas that we believe cover the functionality that should be core components of any (and every) CRM solution.

The following is a list of these "core" CRM areas.

1 CRM interface
2 Account management
3 Campaign, lead, and opportunity management
4 Customer service
5 Document management
6 Workflow automation
7 Desktop tools
8 Reporting, analytics, and dashboards
9 Administration and setup
10 Internationalization
11 Customization
12 Integration

Core CRM Area Definitions

  1. CRM interface. This is the overall user interface, including home, pages, tabs, menus, dashboards, etc., as well as all the factors that affect the usability of the system.

  2. Account management. The area of a CRM solution where all of the information about the companies (and the contacts or people at those companies) that the user enterprise has relationships with, is centrally maintained and managed. In addition, this area includes all calendar and activity management functionality.

  3. Campaign, lead, and opportunity management. These areas of a CRM solution are where all of the selling opportunities are centrally maintained and managed.

  4. Customer service. This area of a CRM solution is where customer service questions, requests, problems, and issues are input, tracked, and escalated (if need be), so that customers are able to get what they need handled in the most efficient and effective manner.

  5. Document management. This functionality typically includes a document library where users can store files that other people can access via the web.

  6. Workflow automation. This functionality can keep a business running smoothly by automatically assigning tasks (or sending e-mail alerts) based on a business's pre-defined processes. Workflow rules put workflow alerts and workflow tasks into action whenever the designated criterion is met.

  7. Desktop tools. This functionality provides integration with desktop office tools like Microsoft Excel, Word, and Outlook, as well as wireless support and off-line access.

  8. Reporting, analytics, and dashboard. This functionality monitors an enterprise's performance utilizing a variety of pre-defined (yet customizable) reports covering each of the services' main data areas. CRM solutions also allow users to use data filters, so they report on only the information needed, and to subtotal or chart the data to help analyze trends and get a concise picture of what's happening.

  9. Administration and setup. This is the area of a CRM solution where an enterprise can import or export data and manage user roles (for information access) and security.

  10. Internationalization. Internalization provides support for foreign language and real time currency conversion.

  11. Customization. This is the ability to customize the CRM solution to meet industry- and company-specific requirements.

  12. Integration. These are tools for integrating the CRM solution with other third party or legacy systems.

Other CRM Functionality

All of the other many functions and features that we found in our CRM product research (that were not part of our definition of core CRM) fell into one of the following categories:

  • non-core CRM functionality,
  • vertical industry specific features, and
  • accounting-related CRM features.
Enterprises that are evaluating CRM solutions that include "non-core" CRM functionality need to be aware of the potential issues associated with these features.

From our experience, there's absolutely nothing wrong with a CRM solution that incorporates any, or all, of these types of functionalities. However, enterprises that are evaluating CRM solutions need to be aware of the potential issues associated with functions and features that are not part of core CRM functionality.

Non-core CRM Functionality

Some CRM vendors seem to be competing for business based on the number of functions and features that they offer. Their assumption is that the more functionality they offer, the better. The thing that distinguishes these features from core CRM functionality is that many enterprises don't need all of these things. Some examples of non-core features are

  • Event management
  • Project management
  • Proposal generation
  • Vendor management
  • Product defect tracking
  • Partner management
The issue is that if you don't need all of this non-core CRM functionality, you don't want any of it to negatively affect the usability (i.e., increase the complexity) of the system for your enterprise.

Of course there's nothing wrong with any of this functionality being incorporated into a CRM solution, particularly because there are enterprises that can benefit from one or more of these features. The issue is that if you don't need all of these things, you don't want any of them to negatively affect the usability by increasing the complexity of the system for your enterprise. So, when evaluating CRM solutions that include functionality that will not be needed by your company, it is imperative that you understand what will be required to remove (or hide) any unneeded functions and features from the user interface.

It is absolutely critical that you evaluate whether or not the process flows embedded into the functionality of each CRM solution being considered match your enterprise's needs.

Secondly, when evaluating CRM solutions, it is not nearly enough to determine whether or not the needed functionality is available in the CRM solutions that are under consideration; you must evaluate whether or not the process flows embedded into each solution match your enterprise's needs. For example, a CRM solution that inherently assumes that four or five people are involved in a particular process (e.g. developing and approving new entries into a customer support, frequently asked question-type knowledgebase) and segments the process into four or five steps will not be a good match for an enterprise that has only one or two people who will want to perform this process in one or two steps.

Vertical (Industry Specific) Features

We are often asked which approach is better: customizing a basic CRM solution to meet an enterprise's industry-specific requirements, or buying an industry-specific CRM solution.

Some customers recognize that there is still a price to pay for accepting easily customizable solutions and opt for vertical market solutions that reduce the need for even further customization. Vertical solutions have built in advantages such as business rules and a data logic that are industry specific. The customer does not have to build in the rules, specific numbering systems, or the common reports that their industry normally uses to track customers, services, and leads. In addition, industry specific workflows can be created, and back-end integration becomes easier as the database logic is likely to be close to the industry norm.

Some companies that tout industry-specific CRM solutions may have something to hide; namely that their software is not that easy to customize, so they've done a lot of it for you.

But, as noted previously in this report, vertical industry specialization did not rank high among many potential CRM buyers.

From our experience CRM best practices don't change all that much from one industry to the next. Sure there are unique data and workflow requirements, but this should be easy to implement. After all, doesn't every business in a given industry have different company-specific needs that they'll want to implement? True, but by all means, be careful out there! Some companies that tout industry-specific CRM solutions may have something to hide; namely that their software is not that easy to customize, so they've done a lot of it for you.

Since most industry-specific CRM solutions are generally more expensive then horizontal (non-industry-specific) CRM solutions, one of the most important evaluation activities is to compare the additional cost of the industry-specific solution to the cost of customizing the non-industry-specific solution, so it will meet your enterprise's needs.

Accounting-related CRM Features

Some CRM vendors incorporate functionality that will ultimately result in financial entries in an accounting system. When a vendor offers a fully integrated accounting solution (like NetSuite does) that your enterprise already has, or is planning to implement, then this functionality is not an issue—except that it will probably add to the complexity of the system's implementation.

The more accounting related functionality that a standalone CRM solution offers, the more difficult, time consuming, and expensive it may be to integrate it to a back-office accounting system.

Problems arise when accounting related features are offered in a standalone CRM solution. For example, when a standalone CRM solution includes functionality for processes, like managing return material authorizations (RMA), job and project management, time tracking, and commission tracking, each of these processes ultimately should result in entries (or access to additional information from an entry) to an accounting system. The more of this type of functionality that a standalone CRM solution offers, the more difficult, time consuming, and expensive it may be to integrate it to a back-office accounting system.

CRM Configuration and Customization

No two companies operate the same way, even if they are in the same industry. In addition, businesses are dynamic and to ensure their continuing success they must continue to adapt to their changing environment. Accordingly, the CRM processes and technology solutions that support those processes must be continuously re-engineered.

One of the most important areas that should be analyzed when evaluating a CRM solution is the ease with which it can be configured and customized.

We believe that one of the most important areas that should be analyzed when evaluating a CRM solution is the ease with which it can be configured and customized.

When new data must be captured using new or modified input/view forms, with re-worked automated processes and customized reporting and analytics, who in the organization will be able to implement these changes?

It's our experience that the best CRM solutions are those that are so easy to configure and customize. Ones where users with administrator privileges can implement most, if not all, of the needed changes on their own, without the need for assistance from technical information technology (IT) personnel.

Why? Because in many companies, ongoing technical resources (or budgets for third party assistance) are often not available to continuously reconfigure and customize the CRM solution.

Over the years, we have been approached by hundreds of enterprises that are looking to change from one CRM technology solution to another because they have become frustrated with the limitations of their current solution.

For many however, the truth of the matter is that this frustration has grown over time because of their inability to continuously configure and customize their CRM solution to meet their ever-changing needs.

When evaluating CRM solution alternatives, be aware that just about every CRM solution provider will claim that their offering is very easy to configure and customize. Have vendors demonstrate these tools to you so that you can gauge the ease of configuration and customization for yourself. And remember, your long-term satisfaction with your CRM solution may end up being directly related to having the ongoing needed resources to work with these tools. The more that non-technical people can do for themselves, the better.

This is part one of a two part series. Part Two will appear Tuesday December 6.

About the Author

Jim Berkowitz is the founder and chief executive officer (CEO) of CRM Mastery, Inc., where he provides independent CRM technology research, analysis, and technology-enabled CRM planning and implementation guidance services to the small and mid-sized enterprise (SME) marketplace. He is also the editor and primary contributor of The CRM Mastery E-Journal ( Berkowitz has over twenty-five years of experience and has helped hundreds of companies design and implement CRM solutions, including Sprint, Apria Home Healthcare, Hewlett-Packard, and Times Warner. Berkowitz has a BSBA in business management from Boston University, and a MBA in accounting from Babson College.

For detailed reviews and analysis of the and NetSuite CRM+ on-demand services, see the CRM Mastery web site at

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