By Dan Hooper

Now is the best time for organizations to evaluate their customer relationship management (CRM) strategy: Plenty of vendors are offering reliable, highly functional products that perform. However, it’s likely—with more than half of CRM implementations failing to meet management expectations—that many people in your organization will be skeptical about CRM.

To help make your CRM initiatives a success, we have compiled a top 10 list of our most prominent observations on CRM. Use them to find the best solution for your organization and shield yourself from common mistakes.

1: Beware of the “Big X”
With many major consulting firms changing their roles from service providers to product resellers and implementers of enterprise applications, you can engage Big X firms to perform a requirements analysis and then buy their recommendation and their implementation services.

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PeopleSoft is the exclusive sponsor of TechRepublic’s special series on Enterprise Applications.
For more information, check out TechRepublic’s Enterprise Application Center, or visit PeopleSoft

But while buying every service from one firm might seem like an obvious flaw, many companies we observe fall into this common CRM pitfall.

So the first item on our list is to hang on to your obligations and know what you’re getting from a consultancy. Conduct your own research to back up what a consultancy tells you and make your own decisions about CRM. After your research, be sure to buy from a firm that best meets your needs and not from the one that best defines your requirements in a proposal.

2: Complete a needs analysis
Perform a needs analysis but keep it simple. Focus on a list of five to 10 major mission-critical business issues. Under these issues, identify the business processes or rules that you believe make your enterprise unique. Make this as diagrammatic as possible and don’t proceed to the next step until your key user and user managers have consensus on this process list. Hire a consulting firm if you’re stuck or need validation.

3: Avoid analysis paralysis—don’t publish an RFP
Don’t build an exhaustive list of mundane requirements and do not publish these in a lengthy request for proposal (RFP). Any viable CRM product today will meet most needs right out of the box.

RFPs can make an organization lose perspective and cripple its ability to choose a solution (thus, the “analysis paralysis”). Often, RFPs can become repositories for vendor propaganda instead of objective information.

4: Don’t offer a demo script
Do not give your vendors a “demo script.” A key part of your evaluation is how well vendors demonstrate their capacity to understand and answer your critical business issues. A demo gives this away. Let your top vendors script their own solution and rate this as part of your evaluation.

And along these lines, don’t invite an army of vendors to the party. The old idea of “Let’s see who’s the last standing” will most likely leave you with the vendor most desperate for your business.

Take ownership of the early research to arrive at a shortlist of two to four vendors.

5: Beware of product bias
It’s likely that someone on your evaluation team has experience with different CRM products. Get this information on the table but weigh these experiences against current product information and other pertinent data points.

6: What will it cost if you don’t have a CRM strategy?
Answer this question, “What is our cost for not having a CRM strategy?”

There are many ways to measure this. For instance, studies by itROI, a CRM consultancy, show that not having a CRM strategy:

  • ·        May deduct five percent or more from your revenue.
  • ·        May cost you 20 percent of your customer base.
  • ·        May cost you 15 percent of your marketing and sales administration overhead.

You do the math, chances are your CRM budget just went up.

7: Software is less than 50 percent of your solution
If you’ve made software selections before, you know that who implements it is equal to, if not more important, than whatis implemented. You should know that vendors, in general, are not the best at implementations. They definitely know what they are doing, they just don’t know when.

You might be better off implementing with or buying from a qualified implementation partner. But first, ask for references.

8: This is not an IT decision
Your managers and end-users must own and drive CRM. Do not default to your IT staff. Instead, engage your IT staff to validate and guide CRM.

Remember, the needs of managers and users in other departments should weigh in heavily in the evaluation process. Keep those using the CRM solutions in the forefront.

9: Who are you?
If you feel the project slipping away from you, take a step back and reevaluate where you are with CRM and why your organization needs it in the first place. You may find you need new people and skills, or you may find now is not the time to tackle CRM.

10: Watch for implementation atrophy
Gartner claims that CRM fails because implementation takes too long. To avoid such “implementation atrophy,” contain the phases of the implementation to simple steps. Make sure your implementation partner has a clear understanding of what constitutes a completed phase.

Bring CRM to departments where it will have the greatest effect first and always take full ownership of the process—don’t relax while a partner completes the work and then complain about the results.

Dan Hooper is cofounder and CEO of itROI, Inc., which provides consulting services and evaluation tools for maximizing CRM and knowledge management ROI. For assistance or more information, you can email

What has CRM taught you?

Have you worked with CRM or already started on a project? What have you learned during the past year that TechRepublic could add to this list? Let us know by dropping us a line or starting a discussion below.