Essentials in CRM selections

When it comes to choosing an enterprise-level CRM, one size does not fit all – particularly if you are a financial services firm. For years, CRM vendors made millions selling the same off-the-shelf products into different vertical markets.

This strategy had no greater failure than within the financial services sector. Unique workflows, data requirements and complex integration scenarios resulted in poor implementations as these products were an awkward fit in the organization and/or required substantial additional investment for customization.   Accordingly, most firms that have elected to implement CRM within financial services have chosen a vertically-focused offering that caters to the specific workflows and data requirements of financial services firms.   There are also many different flavors within financial services and what works for a commercial bank will not necessarily work for an institutional broker.  Understanding the specific needs of your firm is paramount to a successful CRM implementation.

Here are the main things you need to think about, and the right questions to ask of any provider you may be considering:

1.    Business Case for CRM:  It is critical for your firm to have a strategy and legitimate agreed-upon business case for implementing a CRM system.  The software needs to support the business strategy, not the other way around.  Before even thinking about solutions, organizations must consider the basics, involve all stakeholders and get executive buy-in for the objectives behind implementing a CRM.  If senior management does not believe in CRM, it will be difficult to ask employees to.  Most often, the difference between a successful CRM initiative and a waste of time and money is a management team that has clear objectives, understands the value that the CRM is intending to bring to the organization and gets involved in a meaningful way.  Additionally, it is crucial for the decision makers to consider as many downstream impacts as possible, as well as focus on people and business processes rather than letting the technology drive the workflow.

2.    Buy vs. Build:  Given the maturity of the vendor market in the financial services sector and the availability of vertically focused offerings, this is practically a rhetorical question. A typical CRM implementation cycle can range anywhere from 6 – 12 months. The development cycle for a project of this nature can take at least – or even twice – as long as the implementation depending on the scope of the project, making in-house development a very risky proposition.  In the time it takes to develop an in-house CRM system, most firms can actually implement a vendor solution and realize the benefits from it before an in-house build makes its way into production usage.  Most small to mid-sized firms do not possess the requisite IT development staff required to undertake a substantial development project. and given the complexity and the requirement for an innate knowledge of your firm’s business process, this is a project left to consultants, will cost substantially more than if a vendor product was chosen.  Moreover, the ongoing support and maintenance of an in-house build involves retention of IT staff with specialized skills, which in the long run will cost significantly more.  Simply put, building a CRM just doesn’t make sense.

3.    Selecting the Vendor:  CRM implementation, if executed correctly, becomes an integral part of the fabric of your organization.  It is critical to find a technology solution partner that truly understands the needs of your business, can provide solutions that match your company’s objectives and whose professional staff are well-versed and knowledgeable about what drives your business.  While you need to be concerned about a vendor’s financial stability – since you are after all, investing in their products – the largest vendor is not always the obvious choice. The larger CRM vendors may lack the flexibility and agility needed to adapt to your business and will sometimes delegate any “personal attention” you may require to an integration partner.  Small niche players tend to be hungrier and will provide much personal attention, but may lack the scale to support multiple customers’ implementations occurring simultaneously. During the course of the CRM implementation, you will develop an intimate relationship with the vendor.   It is important to select a vendor that has the wherewithal to continually invest in their products; that will enable your products to grow as your business grows while at the same time can ensure you will get the personal attention and service necessary.

4.    Implementation Time:  When determining the scope of a CRM implementation, you want to do as little as possible and implement functions incrementally to avoid throwing too much at users at once. It is also very important to minimize the time between selection of the desired product and the time that end-users will actually start to use the product.  If firms are smart about their decision making process, they will involve end-users in the evaluation process, and as such these users will feel some sense of ownership. If too much time passes between the selection of the product and actual usage, these users may become disenchanted and lose some of the enthusiasm they had for the initiative. Small manageable projects can yield quick wins, build momentum and result in higher end-user adoption.  It may be critical for some features to be in the first wave of the implementation, but your implementation strategy should factor in the phasing of features over time.

5.    User Adoption:   This is the single-most important aspect of CRM success.  CRM software that cannot be easily adopted is money down the drain.  It is crucial to get adoption early in the process, and the overall timeline for adoption across the organization should be 6 months.  Any implementation plan that calls for rollout longer than one year should be revisited.  Like data quality, a CRM loses its value if your users cannot use it effectively as part of their natural workflow.  The CRM system must closely resemble and support the specific workflows of the end users as anything too difficult opens the door for end-user frustration and dissatisfaction.  If the implemented CRM software doesn’t provide instant value to the end user, it’s likely that users will find solutions on their own that better suit their needs.  It is also imperative to have sponsors and evangelists amongst the user community that other end-users may turn to if they have questions about functionality or processes, as end-users are more likely to take advice from their peers using the system than to pick up the phone to call the vendor. 

6.    Training:  This very important aspect of a CRM initiative is frequently overlooked in the process and is often considered the last stage in implementation.  Training typically receives the least attention and results in end-users receiving a new application right before they are expected to use it productively.  This most often results in high degrees of end-user frustration and poor adoption rates.   There are countless examples of users, who at first experience high levels of frustration due to inadequate training, but become experts later once they’ve invested the time to learn the product and the benefits it provides.  End-users should be given as much time as possible with the new system before going live to make the transition easier.  Training on the new system should start well in advance of the actual live implementation.  This is often difficult to achieve as most financial services end-users have little time or inclination to use an application until it is literally in front of them.   However, your project planning should account for training as early in the cycle as possible. The sooner training begins, the sooner end users will realize they are part of the process and start to realize the benefits of the new system. 

7.    Data Quality:  For many firms, this is actually the most often overlooked factor, despite the fact that it is probably one of the most important aspects of CRM success.   Many firms overspend on technology solutions and bypass this very critical step in gaining an accurate view of their customers. No matter how powerful the platform or how flawless the implementation, out of date, inaccurate and duplicative data can undermine your relationships with customers.  It can also hinder user adoption and professional usage by discouraging confidence in the system, resulting in a diminished return on investment.  By providing their customers with better options for achieving overall data quality, vendors offering data solutions alongside their software will help customers avoid data quality pitfalls, increase success levels, and lower their overall cost of ownership in the system, which translates into greater success for your CRM implementation.

Finally, a word on what NOT to focus on…

There’s enough to think about without spending valuable time and energy on criteria that get you caught in an endless cycle of justification and take you AWAY from establishing a system that increases your staff’s productivity. Beware of these common pitfalls (that will most likely come from upstairs!) and be prepared to steer your colleagues towards more productive criteria.

“What is everybody else doing?”  While recommendations from trusted peers can be helpful, be sure you are selecting a solution that fits your particular firm’s workflow and customer service needs – not just one you keep reading about in the news. You are unique and you are going to have to live with this system for a long time.

“What’s the ROI?”  The key here is to properly define what form of “R” really matters. For most, Return = Revenue. But revenue as a direct result of an internal system installation is always very hard to quantify (although that certainly doesn’t stop people from throwing numbers down on paper). A better question might be: “Will this system make our people more productive? More collaborative? Better informed? Better prepared?” If the answer to any of those questions is yes, then the revenue will come naturally.  As stated at the beginning of this paper, the business case for CRM must be well defined and understood. Knowing what the expected ROI is at the outset of the initiative is crucial to knowing if you have achieved it.