CRM Upgrades: Promises and Pitfalls

Updated: April 30, 2009

A CRM upgrade can be an opportunity to reassess your company's business goals and improve its services, efficiencies and costs. But switching to a new CRM version requires forethought, planning and a company-wide agreement that an upgrade can substantially improve client services.

For JLL (Jones Lang LaSalle), a real estate and investment management firm that has 35,000 employees and operates in 700 cities located in 60 countries, the idea of moving to Microsoft Dynamics CRM 4.0 began 20 months ago at a global meeting in London.

At that meeting, the company laid out its requirements and thrashed out its difficulties. Among them, JLL was running CRM software from a number of vendors simultaneously, the result of the company's acquisitions of several global firms.

To understand the importance of JLL's CRM system, it's important to know the nature of JLL's business. Essentially, the company's brokerage, sales , marketing and customer relationship personnel use the CRM system internally to track customer requests from clients who want to buy real estate globally. For instance, if a client in Europe or the U.S. gives JLL the right to represent them in the sale or purchase of a building in Dubai, a JLL representative in Dubai will log onto the CRM system, track and update the transaction with real estate quotes, locations, names, numbers, dates and other relevant information pertaining to the transaction.

"Because we are so big and cross so many borders, we may be transacting business for one client in 10 places around the world," said Riaan Vandermerwe, global architect and development manager at JLL. "That's normally hard to pull together if you don't have a single really good CRM system in the middle."

In 2007 alone, the company completed 15 mergers and acquisitions, including the transaction that created Jones Lang LaSalle Meghraj, the largest real estate firm in India. JLL also acquired Upstream, a leading consultancy business in the U.K., and a property adviser company in the Netherlands. Among the software that came along with the acquisitions were CRM systems from Inc ., Microsoft Corp ., Seibel and SAP AG .

According to Vandermerwe, it was an easy decision to choose Microsoft Dynamics 4.0 for its global CRM system, especially since JLL's headquarters in Chicago ran Microsoft's previous version. More importantly, Vandermerwe said, the alternative to an upgrade would have meant integrating the different CRM systems, which would require hiring several outside consultants in different regions to customize the system.

"It's hard to say how much it would have cost, because there are so many systems out there, but the amount of money we would have spent to integrate would have been a big deal," Vandermerwe said.

To make the system more user-friendly, JLL executives said the upgrade offered excellent multilanguage and multicurrency support so that the equivalent currency quotes from one country to another could be calculated instantly for users in Asia, the U.S., Europe and the Middle East. Another benefit is users can input their notes in their own language.

To prepare the business for the transition to 4.0, which JLL hopes to complete in the fall, the company hired Sonoma Partners LLC , an integration firm that installs Microsoft Dynamics CRM software. Sonoma's IT consultants work side-by-side with JLL users who are trained on the new system, Vandermerwe said.

"You really want to make it as painless and stress-less as possible for your current staff. You don't want them to feel that this new system will crowd them out," Vandermerwe said.

JLL's example of using multiple CRM systems from different vendors is typical and part of a company's CRM evolution, according to Chris Fletcher, research director at AMR Research . Fletcher said that as companies work out the costs of upgrading, such as licensing fees, maintenance fees and systems integration work, it also becomes easier for customers to upgrade more successfully on their second or third attempt.

"I think this is tied into some of the learning curves or learning mistakes companies have to go through before they hit success," Fletcher observed.

Yet, while companies move to an updated version of a vendor's CRM software product, companies must be prudent, said Isher Kaila, research director for global CRM strategy in Gartner Inc .'s CRM practice. Consensus on what the to-be operating model and value proposition for CRM will be within the organization prior to upgrading a CRM system needs to be secured. The company should focus on what it hopes to achieve through the upgrade as it links back to overall business value.

"In addition to justifying the CRM spend, companies must distinguish between the enhancements they need to have versus what is nice to have," Kaila said. "These are still some of the most fundamental principals of successful program delivery, yet continue to be some of the most common challenges facing CRM upgrade projects today."

Indeed, many company executives are not sure what they want when they approach a CRM upgrade, said Mike Snyder, co-founder of Sonoma Partners. "I'm always amazed when we sit down with executives and ask them, 'What are your goals ? What do you want to achieve? What do you want to do with this software deployment?' You can be in a room with 10 different company executives and hear 10 different ideas," Snyder said.

Another aspect of CRM improvements doesn't involve software at all, according to Gartner's Kaila. "Today, over 25 percent of global CRM projects implement no software at all. Instead, there is a focus on change management, business process optimization and re-engineering and organizational restructuring," Kaila said. "A CRM technology will only be as successful as the robust business process architecture that it is supporting," Kaila observed.

Finding the right reason to justify an upgrade is still a difficulty that many companies face, said Lior Arussy, president of Strativity Group Inc ., a global research firm focused on CRM. Arussy observed that many companies are buying CRM software before knowing its operational and strategic implications.

"The majority of companies that we are dealing with do not know what it means to move to a customer strategy; to implement CRM not as a technology but as a strategy," Arussy said. "What I would tell IT managers is find out why they are upgrading. What is the real justification and what do they need to change from a process standpoint in order to enable the CRM tool to be more effective?"

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