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As with all enterprise software initiatives, the Customer Relationship Management (CRM) software selection process can be tricky. There are plenty of solutions to choose from, multiple delivery options, and large amounts of software vendor hype. In addition, companies such as, Microsoft Dynamics, NetSuite, and Oracle are aggressively pursuing the market with competing messages.

CRM evaluations should include elements inherent in effective ERP software selection processes. For example, a CRM software selection process should include the following steps:

  • Clearly define business requirements
  • Evaluate the technical fit of potential options
  • Assess vendor viability
  • Evaluate functional fit via a scripted demo process
  • Develop a business case
  • Negotiate with vendors
  • Create a realistic implementation plan

In addition to the above, there are five factors that are somewhat unique to CRM software evaluation processes:

  1. Evaluate how you might extend CRM to ERP. It’s short-sighted to choose a CRM system without defining a plan for integrating with other key functions such as order entry, product configuration, inventory management, and financials. If your longer-term plan is to implement other enterprise software modules, it is important to have a sense of which will be the right fit beyond CRM so you don’t back yourself into a corner later on.
  2. Clearly understand your business and technical integration needs. CRM can be powerful software with tangible benefits, but some of these benefits may be undermined if processes and data are not integrated with other enterprise modules. For example, sales reps need to see inventory levels and order status and to determine available-to-promise dates based on available capacity and production plans. Another example is the finance department, which may want to see how product costs compare with sales pricing models. Needs such as these may be met via integration with additional enterprise software modules or business intelligence and reporting solutions.
  3. Don’t forget that it’s about the people, not the technology. The beauty (and the curse) of CRM is that there are plenty of viable options with sophisticated functionality in the marketplace. Whether it’s software as a service (SaaS) deployment models, cool bells and whistles, or other sexy functionality, it can be easy to get caught up in the technology. However, it’s important to remember that as with any enterprise solution, CRM is more about people and processes than the technology itself. It is key to find and implement a CRM solution that is a good fit for your business, processes, and organization.
  4. Understand the tradeoffs of SaaS vs. on premise CRM delivery models. Before jumping straight on the SaaS bandwagon, it is important to carefully consider the pros, cons, and tradeoffs of different deployment models. As we outlined in our 2010 ERP Report, SaaS implementations are typically implemented in less time and at a lower initial cost, but average business benefits realized and likelihood of going over budget are also higher. It is important to determine which CRM delivery option is best for your business.
  5. Set realistic expectations for implementation cost and duration. One of the most common reasons for CRM failure is not allocating sufficient time and resources to the implementation. Whether you are implementing CRM to 1 or 100 users, there are key project activities that need to be factored into your implementation plan. Business process design, training, and conference room pilots are just a few examples of key implementation activities that need to be included when budgeting the time and resources required.

These key steps will ensure you begin on the right path toward a successful CRM evaluation and selection. Read more about actual CRM and other enterprise software results from over 1,600 organizations in our 2010 ERP Report.