Let’s look at some of the other questions that you would have to consider to complete this phase of CRM selection. There is no significance to the order in which these questions are presented other than that they follow one possible line of thought.
Are you predominantly a business-to-business (B2B) supplier, or a business-to-customer (B2C) supplier? If you are a B2B supplier, is there only one main contact person within the customer organization or do most of your customers have multiple people with whom you deal? This is an important consideration because it will determine whether you want an account-centric or a contact-centric system. The difference is significant and you need to keep in mind whether it is possible to easily switch from one to the other if your business needs change.
Do you need a solution that goes beyond sales force and marketing automation?
Do you offer customer support in the form of a help-desk or technical services?
Does your accounting staff need back-end integration of the system?
Will you need the power of an SQL server for high reliability, high volume processing? If not, consider whether the software technology you choose will allow you to upgrade or cross grade from whatever technology you initially choose to whatever new technology you select when your needs warrant it.
Do you have users who frequently need to be able to synchronize a notebook or home computer with the system? Do you have branch offices that need to synchronize with a central office?
In-house or Cloud?
As if you don’t have enough decisions to make on selecting the right CRM system, you also have to decide whether to run the system in-house or go for a web-based system.
For a summary of the pros and cons of web-based or in-house CRM systems, in table form, grab a copy of The CRM Matrix.
Advantages of In-House CRM
In-house CRM gives you full control over the software and hardware, putting the power to make it work the way you would like it to work in your hands. The staff maintaining the system and the associated network are your staff. The people responsible for system security and data backups are your people. You know their strengths, weaknesses and capabilities – and can live with their shortcomings.
Having the system in-house makes it easier to integrate it with other in-house software, if this is a vital part of the business.
With an in-house system, data is locally available and under your direct control. This includes system security, firewalls, intruder detection, risk management, when and how backups are done, and where they are stored. This means extra responsibility for you, or someone else in your company, but it could also be more comforting if you want that sort of control.
System customization is a tricky area for any business, for any system. If you are in a vertical market and no one CRM system meets all your requirements, or if you have specialized requirements, customization of the CRM system is the only option for you. If you have an in-house system, the customization process is easier to control, and the changes are probably easier to implement as well. Be warned, though. This can be expensive.
Cost of ownership
Total cost of ownership (TCO) and return on investment (ROI) are still hotly debated. This is something of a moving target and will, just to mention the obvious factors, depend on:
- the system complexity
- the expected system lifespan
- the number of users
- the level of customization needed for the system.
Research and double check anything you are told about the systems that interest you, including demanding the right to interview a random sample, selected by you, from the supplier’s lists of current and recent-past customers. Expect some resistance to this request. If the resistance is very strong it could be a sign that the vendor knows something they would rather you did not know. The answers you get to this demand will also separate the vendors who have a high level of confidence in their product from those who are a bit ambivalent about their system.
Disadvantages of In-house CRM
Perhaps the biggest drawback of an in-house CRM system is the cost, particularly the high capital investment required. This is not only the cost of the software, but has to include the almost inevitable cost of new hardware, or at the very least, significant upgrades to existing hardware.
With an in-house system, the costs do not stop once the system has been paid for, installed and configured. There may be ongoing support charges from the vendor, plus you need to find additional funds for hardware maintenance and the cost of running an expanded IT department. You will probably need extra staff to:
- provide help desk support to users
- troubleshoot and fix hardware problems
- ensure data integrity
- do backups
- maintain security, and generally be responsiblefor system maintenance.
These tasks are usually the function of the system administrator, but it is quite possible that the demands may exceed the capacity of any one person. Chances are that they will need support from the IT department, such as it is. Seldom will any but the best resourced IT department cope with the extra workload.
In addition, the IT department will be responsible for downloading and installing security patches to the operating system software. These are frequently of such a nature that if they are not done, or not done effectively or in good time, they could leave holes in the system security, thus laying your system open to possible intrusion. Of course, there will also be upgrades and patches to the application software that have to be installed. All in all, you could look forward to having a busy IT team.
An in-house system generally has a longer period before any ROI is seen. This is a given, primarily because of the upfront capital expenditure. An in-house system may also have a longer implementation period which can frustrate both users and management. This might have something to do with the fact that a CRM vendor knows they have been paid for the system and there is therefore less incentive to get the system installed quickly, while the web-based CRM provider knows they will not get paid usage fees until the system is configured and running. Yes, there is more than a touch of cynicism in this statement, and all the parties will deny there is any truth in it, but still, we wonder.
If you are ambitious, you will want the business to grow and that means changes. It could be an intensification of what you already do, or it could be new revenue streams you are developing. Whatever it is, it will probably require changes to your CRM system. That in turn has ramifications for other systems, depending on the level of integration. Change always has a cost beyond any direct monetary expenditure. Of course there will be training costs, but there will also be unsettled staff who need to be reassured and placated, possible restructuring of reporting lines, and a host of extra administrative tasks to be completed.