CRM Rising: How the Midmarket Is Embracing CRM Projects

How to Buy a CRM System
Midmarket companies need customer relationship management (CRM) systems with user-friendly features, so they should engage users in the requirements process.

But not too much.

In a typical scenario, so many users are polled "that you end up asking for a ton of features, which in turn tends to get you into a big vendor's big CRM package," says Brian Prentice of Gartner Inc.

And that's where the problem for midmarket IT comes in: Bigger is rarely agile, and agility is what gives the midmarket its edge over larger competitors.

Bigger does mean a pile of features that can sit idle. (Prentice says that only 28% of SAP CRM features get used.) It also means IT resources and a budget that can't keep up with the hefty app.

So rather than saying yes to every feature request, midmarket IT is better off going with a simpler application that it can get running quickly and add to later. Prentice says that Microsoft, Salesforce.com and FrontRange stand out in this area. "They're not obsessing on functional breadth and depth," he says. "They're building out implementation tools and [partnerships] for add-ons. They've realized they cannot beat the big guys at features and functions, so they're focusing on rapid modifications."

So how can you get started? First, ask future users to diagram their processes. Next, learn whether they're seeking to automate that process or whether they want to modify it. If the latter, work with users to diagram the new process.

Jim Benson, CTO at K/P Corp., says all this diagramming played a major role not only in his eventual decision to use Salesforce.com's hosted CRM software but also in the way he sold the process to business managers. "I did an elaborate diagram showing how many manual touches we had [without CRM], how salespeople's lives would get easier, all the info we could extract from our ERP system and so on," Benson says. "It showed we weren't just adding one more thing to maintain."


Paving the Way

"I'm not going to call our first [CRM] implementation a disaster, but it did not yield the productivity that it could have," says Nick Voutsakis, CIO at Glenmede Trust Co., a midmarket Philadelphia wealth management firm with $15 billion in assets under management for more than 1,400 clients. He hesitates, laughs and says, "I guess it wouldn't be wrong to call it a disaster."

Its first time around in 2001, Glenmede installed a package from a small vendor that "was bought out by Sybase, and then Sybase dropped the product," Voutsakis says. "So we supported it ourselves for two years." But, he adds, the application wasn't the true problem. "The CEO dictated, 'You are going to use this,'" Voutsakis says. Nonetheless, he doesn't blame business execs for the failure; put off by the CEO's edict and with insufficient knowledge about CRM, IT failed, Voutsakis admits, to help prospective users understand how CRM could help them better manage their accounts. It also didn't seek business units' input on functionality or the interface. The result: an unused CRM system.

Glenmede's experience reflects what often happens when CRM systems are imposed from above or adopted only because it seems like the thing to do, with little emphasis on securing executive sponsorship or user education. That's as true in midmarket companies as in larger organizations.

At North Shore Credit Union, the first CRM go-round in 2002 earned CIO Fred Cook an earful from tellers. The U.S. $56.5-million financial institution based in Vancouver, British Columbia, had a swank new CRM system from Pivotal Corp. The IT group failed to gather sufficient user input, Cook admits. As a result, it developed only a single data view of customers; tellers saw all the same CRM data that a loan officer or other senior exec would see.

North Shore's tellers immediately complained that this view overwhelmed them; with only a minute or so to complete transactions, they couldn't waste time paging through screens for information that was relevant to them. "They didn't have time to really look at all the CRM windows," Cook says. "They were looking at too many boxes [of customer data], and it wasn't really useful to them -- it didn't flow."

That wasn't Cook's only problem. Before he signed on at North Shore, business managers decided to encourage adoption of the CRM system by measuring the quantity of customer information employees entered in data fields. "We got garbage in, garbage out, with no substance," he says.

This was first published in March 2006

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