Bo Lykkegaard, Senior Research Analyst, European Software Group, IDC You Asked What issues should we consider before selecting a CRM software solution?

When the time comes to select a CRM software solution, the project team should create a long list with all eligible vendors, boil it down to a short list, and formally evaluate the short-listed vendors. A formal evaluation should evolve around key questions related to CRM software:

1. Support of Core Processes. What is the ability of the vendor to support the core processes in my industry or my company? Does the vendor provide industry-specific functionality and pre-configurations, best practices, or templates and implementation guidelines? Is the solution able to handle special issues related to how I sell, market and service, e.g. issues related to resellers, dealers, partners, or agents, or complex product configuration and pricing issues, etc.?
   
   
2. Total Cost of Ownership. What is the estimated total cost of ownership of the CRM solution over the expected useful life of the solution? How many internal IT and business resources do we need to budget with for implementation and ongoing support? How fast will I be able to show a quick win to my manager and project stakeholders?
   
   
3. Ease of Use. How does key user groups, such as sales, marketing, service or support staff respond to the solution? Can they see obvious benefits from using the application or do they regard it as cumbersome and unproductive? What possibilities does the solution offer in terms of increasing user adoption rate?
   
   
4. Ease of Knowledge Transfer. How complex is it for my internal staff to assume ownership of the solution? When will they be able to execute configuration changes, create additional functionality or process flows, or rollout the solution to new units or user groups? Are the components based on proprietary, non-common technologies, or they based on commonly available technologies and open standards?
   
   
5. Ease of Integration. Does the CRM software support automated workflows and processes involving non-CRM applications, such as applications related to order management, billing, accounts receivable, inventory, and service management? How difficult is any required integration to other applications from a technical and semantic point of view?
   
   
6. Support of Business Intelligence. What does the solution offer in terms of pre-packaged analytics and reporting? Can the relevant managers get the information they need in time and good quality? How easy is it for local managers to develop needed reports and alerts?
   
   
7. Availability of External Resources. What is the availability of support staff, consultants, resellers, and references in my local region or country? What global resources, such as user groups, web-based forums, and phone-based support are available should I become a customer?
   
   
8. Level of Security. How secure is the confidential customer information both from external threats and internal threats, such as disgruntled employees. How well does the solution support differentiated user profiles to ensure that employees and external users only access what they need and are allowed to access?

These eight points are generally applicable across most CRM software selections. However, criteria might change as one project might have significant focus on mobile users in which case support of mobile users becomes a key issue to consider.

In IDC's experience, although the choice of technology remains an important factor, successful CRM deployments largely depend on how cultural and organizational barriers are handled. When an organization changes to a customer-focused business model that means tearing down functional silos. When you tear down functional silos, some employees are likely to fear loosing power and strongly resist change. The not-invented-here syndrome remains a powerful inhibitor to change, and early involvement of all stakeholders, in particular top management and end-users, is often critical to success.

Likewise, management-driven organizational measures to ensure adoption can contribute significantly to the success of CRM implementations. Such measures can include holding back commissions when a sale is not properly documented in the CRM system, or rewarding frequent and correct use of the application. Finally, ensuring a high data quality is critical when implementing CRM systems. Inaccurate or obsolete data in the CRM system can hold back adoption and productive use.

Selecting the right CRM software solution is an important and worthwhile activity as long as the softer change management related issues are managed as well.

Bo Lykkegaard manages the European Enterprise Applications research, market analysis, and related consulting. He focuses on composition and developments of the Western European applications software market, in particular ERP, CRM, HR and payroll applications. Bo Lykkegaard manages the European Enterprise Applications research, market analysis, and related consulting. He focuses on composition and developments of the Western European applications software market, in particular ERP, CRM, HR and payroll applications. Specific research areas include market analyses, competitive analyses, case studies, end-user surveys, and software market splits by vertical segments and company size segments. Furthermore, Bo analyzes the impact of new trends, such as open source, software-as-a-service, and Service Oriented Architecture (SOA) on the applications markets. Finally, he delivers consulting on ROI and TCO analysis in the applications software field. IDC