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CRM definition and solutions

Thomas Wailgum | April 19, 2017
Get up to speed on customer relationship management, with CRM definitions, solutions and strategies.

 

How long will it take to get CRM in place?

It depends. If you decide to go with a hosted CRM solution from an application service provider and you are planning to use the software for a specific department like sales, the deployment should be relatively quick – perhaps 30-90 days. However, if you are deploying either a hosted application or an on-premises package (involving the purchase of software licenses upfront) on an enterprise-wide basis (that involves different departments like sales, marketing and operations), you should expect the implementation and training to take months, if not years. The time it takes to put together a well-conceived CRM project depends on the complexity of the project and its components and how well you manage the project.

 

How much does CRM cost?

Again it depends. A hosted sales automation application can cost between $65 and $150 a month for a basic sales automation package. If you want more sophisticated functionality and a greater level of support, you pay a lot more. An enterprise on-premises CRM package can cost anywhere between several thousand to several millions of dollars, depending again on how many functions you purchase and how many computers or “seats” have access to the software. For instance, one company or department might purchase an email marketing management application or a salesforce automation application, while a larger firm might want to purchase an integrated package that includes a database as well as applications for marketing, sales and customer service and support (via call centers and online). Obviously, the integrated software package is much more expensive.

Procurement analysts at market research firm IBIS World Inc. offer this advice: Be "highly selective" when choosing your CRM vendor because you're unlikely to switch vendors (it would be too disruptive to your business). But this also means that you should negotiate your rate from the beginning. Fortunately, there is some room for vendors to give you a deal. “Profit margins for CRM software providers are high at 21.7 percent of revenue, which suggests there is significant room for buyers to negotiate lower prices,” according to an IBISWorld Procurement Report on CRM.

 

Cloud CRM vs. on-premises

The market for on-demand CRM has soared particularly among small and mid-sized companies, largely because of fears about the expense and complexity of large-scale on-premises CRM implementations. And indeed, on-demand CRM is often a good choice for companies that want to implement standard CRM processes, are able to use out-of-the-box data structures with little or no internal IT support, and don’t require complex or real-time integration with back office systems.

However, on-demand CRM software is not always as simple as the vendors would have you believe. For instance, customization can be problematic and hosted CRM vendors’ API tools cannot provide the degree of integration that is possible with on-site applications. Getting a hosted CRM system working shouldn’t take as long as a traditional software package, but larger and more complex rollouts can still take a year or more. And while the hosted option reduces the need for in-house technical support, upgrades can still sometimes be technically tricky. In addition, some companies with particularly sensitive customer data, such as those in financial services and health care, may not want to relinquish control of their data to a hosted third party for security reasons.

 

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