10 Things to Do (and 1 Not to Do) Before Implementing CRM

Updated: April 30, 2009

Before you go shopping for a CRM package, consider this simple statistic. "Every dollar spent in preplanning saves seven dollars in deployment," said Neil Mezabish, director of business development at Light Industries Service Corp. Inc. , a CRM VAR (value-added reseller) and consultancy.

Mezabish said the statistic is a commonly quoted industry number, and one that he believes absolutely. He likened detailed preplanning for a CRM system to an architect's drawings for a building: Just as you wouldn't tell a contractor to start building without the drawings, you shouldn't start choosing CRM software until you've done detailed planning.

One key reason for this is that various CRM solutions tend to be superficially similar but very different underneath. Or, to put it another way, CRM packages may have the same text but put the emphasis on different syllables. One reason for the differences is that many CRM packages were originally written to do one job, such as sales management, and have evolved over time by adding features. As a result, they tend to be strong in their original area of competency and weaker in others.

If you don't know your company's requirements very precisely, it's easy to end up with the wrong software. "Any decent salesperson can demo CRM software showing all things you want to do," Mezabish said. "But that commonly doesn't account for detailed requirements, IT strategy, and it doesn't account for long-term strategic CRM planning."

Here are 10 important things to do before you start actually looking at software.

Know Exactly What You Want to Accomplish

"A lot of times customers don't understand what they want," said Chris Herrick, senior director of product marketing at SugarCRM Inc. , a CRM software vendor. And, of course, if you don't understand what you want, you're not likely to get it.

Obviously, you want CRM to help the bottom line. How do you want CRM to do that? Do you want to increase sales to existing customers? Do you want to capture more customers? Do you want to integrate your marketing and customer-support efforts with sales? Do you want to increase customer satisfaction with better customer service? Are you looking for a single view of all your customer relationships for strategic planning? Do you want to track sales performance more closely? Do you want collect data to support and direct marketing campaigns?

CRM can do all these things, and it has helped companies make money by doing them. But if you don't know exactly what tasks you're tackling, it's hard to accomplish them. Avoid suffering from dashed expectations because your CRM software doesn't do what the various interest groups in your organization thought it was going to do.

Decide on Your Precise Goals as Early as Possible

You'll probably have several reasons for implementing CRM, so you'll need to rank them. Usually this is an exercise for top management. Management support is critical; they need to know exactly what they're supporting and why.

Figure out how big your CRM effort is. CRM is not a one-size-fits-all application. Different vendors tend to aim at different-sized companies. For example, implementing CRM in a smaller company puts a greater premium on flexibility. It's hard for a large company to achieve the same kind of flexibility that comes easily to a small company. Products aimed at large companies, on the other hand, tend to assume a much more detailed planning and implementation policy.

Note that the effort is not always related to the overall size of the company. A single division or field office of a very large organization may be better suited to using one of the CRM systems focused on smaller companies. However, if you're implementing CRM in a small division of a large company and considering rolling it out companywide later, you may want to use software that's designed for the size you're planning to scale to, rather than what's appropriate for the initial deployment.

Decide Who's Going to Run the Effort

Someone in your organization has to take responsibility for selecting and implementing your CRM software. In a medium-to-large organization, that person will need to be backed up by others. Choose your team early, including the leader. It's a good idea to pick team members who have clout in their areas of the company, as this makes it easier to get buy-in.

The implementers need to work with the stakeholders but not let them run away with the process. "You can't let a bunch of salespeople take over the requirements-definition process," said Herrick. "Otherwise, you get project scope creep, and it's difficult to build consensus."

Look at Your IT Interfaces

You're probably going to want your shiny new CRM system to integrate with existing applications , such as accounting and your supply chain. Preplanning is the time to start looking at what applications you want to support, the kinds of information you'll want to exchange and the kinds of data formats you'd like to use. Note that this step is about starting to look at the IT issues, not about nailing anything down. You won't be able to get specific until you're further along in the process.

Determine If You Need Outside Help, and If So, from Who

If your CRM system is at all complicated, you're going to need help from someone who understands CRM and has been through the process a few times. In medium-to-large organizations, this usually means an outside CRM consultant . However, it's generally difficult to decide on a consultant until you've picked the package you're going to implement. For smaller companies, one alternative is to use a VAR who handles several different CRM packages. A multiproduct VAR should have people who understand implementing CRM without being locked in to a specific package.

Know Your Existing Business Processes

Before you automate anything, you need to know how it works. You need to be able to draw a diagram showing the workflow of every major process your CRM will touch: what happens; who does it; how the work moves from one stage to the other; and that, yes, things really do work the way you think they do.

This isn't easy, but you'll find that documenting your processes will pay off even if you never implement CRM. By examining workflow you can find ways to speed up processes and make sure things don't fall through the cracks. Once you implement CRM, these workflow diagrams will be the basis of your effort. They will show you exactly what you're automating — or where you're changing it to make it more efficient.

Most CRM packages come with predefined workflows for common processes. However, you almost always want to use your own workflows rather than the stock ones. In making necessary workflow changes, you want to preserve the existing businesses processes that work. That's hard to do if you don't have a clear understanding of your current workflow.

If your staff can work with CRM in much the same way they did without it — or ideally, work in a better way that produces obvious benefits to them — you can both increase their comfort level and make them more willing to buy into the CRM system.

Get Input, Especially from the Sales Force

The sales department will make or break most CRM efforts. If they get the feeling that CRM is something that's being done to them instead of being done for them, you're going to have a hard time getting them to use it. Since the sales force is the major source of the information the CRM system requires, it's extremely difficult to make use of CRM if the sales force doesn't use it, or worse, doesn't take the trouble to gather information accurately.

One of the most important things to find out when gathering input is what's working in your present processes and what isn't. Identifying pain points and using CRM to remedy them will generate a more enthusiastic response to your CRM efforts. It will also keep you from trying to apply CRM to bad processes, what Mezabish called "paving a cow path."

Note that this is very different from collecting a wish list from sales and using that to evaluate CRM packages. In this phase you're interested in problems, not solutions, because it's unlikely your sales team knows enough about CRM — or even the overall business process — to generate a solution.

Make sure you have buy-in. Along with input, you need buy-in from the major stakeholders, from management down to the customer-service reps. Adopting CRM is at least as much political as it is technical. In effect, you need an internal marketing campaign to sell CRM to your organization .

The two critical groups to get on board are top management and the sales force. "If top management doesn't believe that implementing CRM is going to make at least three or four times what you're spending to implement it, don't do it," said Mezabish.

One way to get buy-in is to show the users how they will benefit — you need to convince them that CRM will be worth the effort they'll have to put into the process. This is something that should start in the preplanning phase, run through implementation and continue after implementation.

Plan Your Deployment

If your implementation is at all complex, you'll probably benefit from a phased introduction. Herrick recommended leaving enough time between implementation phases (especially of the early modules) to make sure you've got all the bugs out. Start with the low-hanging fruit: the parts of CRM you know will implement easily and produce obvious benefits. "It's important to get the win," said Herrick. "Get the base process automated and expand from there."

The natural tendency is to swing for the bleachers by concentrating on the areas which will produce the greatest ROI immediately. This is usually a mistake for two reasons. First, the CRM modules that produce the highest returns are usually the ones that touch the most people. Starting with these makes it harder to build the kind of positive momentum you need to make CRM successful. Second, the high ROI (return on investment) modules are the most important ones to get right. Implementing simpler modules first will give your organization more experience with CRM, making it easier to implement the later modules.

Avoid Paralysis by Analysis

While there's a great deal of detail work involved in preplanning CRM, it should be focused on precisely specifying your needs and expectations, not on the details of implementation or, worse, drawing up a laundry list of features in the software. Violating this rule leads to what Herrick described as the "1,000-cell Excel spreadsheet" full of requirements. In the beginning, this is not only useless, it can bog the process down.

When you start shopping, you absolutely must know what you need, but you probably are going to have only a vague idea of how the software is going to meet the need. In other words, you want to solve problem X, not specify feature Y. Start by concentrating on defining problem X and decide on feature Y later.

And Finally: Don't Start with the Technology

There's a natural tendency to look at CRM as a technology and to want to start talking about software immediately. In fact, the technology is just about the last step. At bottom, CRM is about process. It's about developing processes that will let all your customer-facing operations run more efficiently and profitably.

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