The Evolution of CRM

An introduction to hosted CRM, xRM and Social CRM

For a number of years, having a Customer Relationship Management (CRM) system was seen as a nice to have rather than a must have for the day to day operation of a business. However, recently this has changed, as more and more organisations are realising the business benefits of building relationships with existing customers and prospects. After all, it costs more to attract new customers than it does to retain existing clients.

Customer Relationship Management (CRM) is a way of improving business efficiency. It is all about building and strengthening customer relationships to keep them coming back, while helping businesses gain new customers. Essentially, a CRM system will help an organisation manage all of its relationships.

Properly implemented, a CRM solution will streamline internal business processes and by effectively integrating marketing, sales and customer service functions, will make it easier for everyone inside an organisation to work together and share critical information - irrespective of company size.

The world of CRM is evolving from being a static source of information, to being a fully interactive business management tool. In the past, CRM projects have been notoriously high cost and as a result have been associated with larger companies. However, implementing a CRM system is now achievable for smaller companies as a result of the development of smaller applications for the mid-market.

The "customer" part of the term customer relationship management is misleading as the strategy, software and processes apply equally to the management of nearly any business relationship, irrespective of who the relationship is between. This satisfies the demands of a number of organisations which require the ability to monitor every relationship which occurs, not just those with customers.

Another phenomenon which has had an impact on the lifecycle of CRM is the explosion of the social networking world. The rise in social networking sites such as Twitter, Facebook and Linked In have facilitated the introduction of social CRM. This has bought a number of benefits to businesses, including providing them with a new medium through which they can communicate with customers, prospects and suppliers. Social CRM helps manage the development of relationships using social networking.

Why do Organisations Need CRM?

One of the main reasons, often cited for business failure is because they are bad at managing people, both in terms of the staff they employee and the customers they have. In business, effective communication, both with staff and customers is key to success. However, this can be difficult and often there are gaps in knowledge which mean that effective and relevant communication can become near on impossible. However, through implementing a CRM system, all forms of communication and therefore knowledge can be significantly improved.

For many companies, customer data is held in variety of places including in people's heads, on spreadsheets and in different files. Essentially, this can result in 'islands of information' which only certain individuals have access to. This can have serious implications on the level of knowledge employees have and therefore the level of customer service which they deliver. In addition, employee knowledge can differ between departments due to a lack of internal communication. For example, a customer may have a significant opportunity associated with them, but if the finance department don't know about this they could impose some payments terms which are not appealing to the customer and subsequently the opportunity could be lost.

This kind of experience is likely to have negative implications on the company as a whole as customers will tell others of their bad experience, damaging the company reputation. What's more, these customers are not likely to become loyal and subsequently the company will need to spend more capital attracting new customers.

So What is Customer Relationship Management and how does it work?

CRM is a combination of business strategy, software and business processes which when implemented correctly bring significant tangible benefits to companies of all types and sizes, regardless of sector.

Essentially, Customer Relationship Management (CRM) is a way of improving business efficiency. It centralises company and contact information and tracks all activities and communications. CRM is all about building and strengthening customer relationships to keep them coming back, while helping the organisation gain new customers. CRM systems streamline internal business processes by effectively integrating marketing, sales and customer service functions.

Correctly deployed a CRM system will provide one centralised database and therefore:

  • Reduce duplication of data and data entry
  • Enable complete visibility throughout the organisation
  • Facilitate greater employee knowledge & improve communications
  • Improve customer service
  • Improve the sales process and, marketing management
  • Ensure greater customer loyalty

Put simply, CRM systems make the front-office functions of a business more efficient. By providing a single source of reliable, accurate and timely data, combined with powerful tools and features to manage workflow and automate day to day tasks. CRM reduces duplication of effort, saves time and enables detailed analysis of sales, marketing and customer service activity. In addition, it provides a clear insight into what's happening within a company, helping users forecast, adjust and plan strategically for the future. Essentially, a CRM system will improve efficiency, effectiveness and will help a company gain competitive advantage, as the more an organisation understands about its customers and their needs, the more productively and profitably they can manage relationships with them.

CRM is a strategy. There are a variety of software solutions which enable the implementation of this strategy. Concentrix is an independent CRM specialist and provides best in breed solutions including Sage CRM, Microsoft Dynamics CRM and FrontRange's GoldMine.

What are the implementation options?

For the majority of companies, there are two main CRM hosting alternatives:

  • On-Premise CRM
  • Hosted CRM (sometimes referred to as 'Cloud Computing' or Software as a Service 'SaaS')

Traditionally all CRM systems were on-premise solutions. However, the fully functioning, highly flexible solutions were often only found in larger organisations as typically these were the only companies who had the budget which matched the on-premise price tag needed for the solutions and the hardware. Often the CRM solutions found in smaller organisations had limited functionality. However, the benefits of a highly customisable and flexible CRM solution apply to all companies so the need for a cheaper alternative became more prominent and gave rise to the hosted CRM platform.

Both forms of CRM implementation - on-premise and hosted provide a way to manage the key customer facing aspects from within a CRM software solution. However some businesses are more suited to hosted CRM, while others are more suited to the on-premise platform.

For small businesses, the hosted solution provides a cheaper and often more convenient method of implementing a CRM system. With hosted CRM you pay on a monthly basis and often there is no additional hardware or infrastructure needed. Essentially, the hosted platform is the lower risk solution. However, for larger organisations, the thought of having all of their customer data stored off site is not an option. What's more large organisations often require more customisation than is possible with the hosted solution and as a result the on-premise CRM solution is often more suitable. However, the hosted solution can be used as the starting point for a much larger project.

Typical benefits of the hosted solution include:

  • Quick to set-up
  • Low initial set up costs
  • Unlikely to need extra hardware or infrastructure
  • You can use the software as soon as you have bought the licence.

On the other hand, the benefits of the on-premise solution include:

  • Greater control of the system
  • Easier integration
  • More secure
  • No monthly fees
  • Total ownership of the solution
  • Unlimited customisation potential

It is clear that the decision about whether to opt for the hosted or the on premise solution is not an easy one and often depends on a number of factors which are specific to the businesses requirements including:

  • Business processes. Which, and how many functions within the business need to be part of the customer interaction systems.
  • Integration - What customer data or processes need to be linked to other systems and departments
  • In-house hardware and IT expertise
  • Total Cost of Ownership

CRM & ERP

The popularity of ERP (now more often called Business Management Suites) has increased significantly over the past few years. Business Management Suites facilitate the complete management of an organisation from within one piece of software. Many Business Management suites including Sage 200 and Microsoft Dynamics NAV have CRM functionality. The CRM functionality facilitates the development of long term relationships between an organisation and its customers and also enhances the level of employee knowledge throughout a business.

CRM - The next steps

The 'customer' part of the term customer relationship management is misleading as the strategy, software and processes apply equally to the management of any relationship, irrespective of who the relationship is between. What's more, in today's environment there is more and more competition for less and less business and as a result organisations want and need the ability to manage everything which occurs within the company, not just the relationships with customers. And because the technology is highly flexible - CRM can facilitate this.

Microsoft refer to this concept as xRM, where the 'X' can be replaced with anything. Essentially xRM provides organisations with a structured way to store and access information, provide better customer service, make more informed business decisions and ultimately ensure the long term profitability of the organisation. The concept of xRM has the ability to provide organisations with a real competitive advantage and in tough economic times this can be a key differentiator.

With xRM the sales, marketing and service features of CRM will be carried over so that the same functionality will be available across all relationships, facilitating improved communication, knowledge and ultimately productivity.

The Benefits of xRM

xRM will bring real business benefits to many organisations - irrespective of size or sector. The solution will provide businesses with:

  • One central database - providing a complete view of all prospects, customers and suppliers
  • Complete customisation to specific business requirements
  • Improved Communication
  • Automation - making it easier to perform administrative tasks
  • Enhanced staff efficiency and effectiveness

Social CRM

Social CRM is a relatively new concept which encompasses the web 2.0 technologies. The growth in popularity of social networking and the rise of websites such as Facebook and Twitter have effectively forced CRM solution providers to encompass social networking features into the standard CRM solutions.

Social CRM provides marketing and sales teams with a new medium through which they can communicate with customers and prospects. It also enables these teams to listen to conversations between others and offer advice in terms of the solution which is right for their organisation. Social CRM has the ability to:

  • Make prospects and customers see the company as a 'friend' which they will come to if they need help or advice
  • Communicate with customers and prospects at low cost and in high volumes
  • Help employees develop relationships with customers and prospects on a social level
  • Spread the name of the company and effectively act as a PR tool

Implementing CRM/xRM

Whatever solution you choose, implementing and configuring it correctly is essential to the success of any project. To implement a solution correctly, you need an effective project methodology. This will minimise the risks and costs associated with project and achieve a higher return on investment by providing maximum user adoption. However, CRM projects can often fail. Common causes cited for this include, poor sponsorship, lack of defined requirements and miscommunication between the project team and the stakeholders. However, the most frequent cause of project failure is arguably the lack of adoption of the project management methodology.

Projects are more likely to be successful if there is a defined project methodology because:

  • It reduces the time spent completing project deliverables
  • Monitoring and controlling the project is more efficient, especially during the execution phase
  • It reduces overall costs by saving time and effort to building deliverables
  • Change, risk and issues are reduced because the project is fully and clearly defined from the outset
  • Full quality assurance is in place throughout the project lifecycle to ensure requirements are met
  • By clarifying roles, responsibilities and delivery expectations, staff performance and motivation remains high

Conclusion

When implemented correctly, CRM brings significant benefits to all organisations irrespective of size or sector. What's more CRM is an evolving strategy which is developing in line with the latest technologies.

The two hosting alternatives have made CRM an option for an increasing number of companies. The hosted platform provides a cheaper alternative for smaller businesses that want to improve their efficiency, effectiveness and ultimately profitability but do not want to invest in new hardware and infrastructure. However, it does not compromise any of the functionality of the solution.

xRM is the natural progression of CRM. The strategy, software and process apply equally to all relationships, not just those between customers and a company. The xRM concept will bring significant benefits to all organisations and will provide in depth knowledge across an organisation, arguably providing the company with a tangible competitive advantage.

The popularity and success of social CRM is yet to be proven but is certainly looks like it has the potential to be a popular medium through which organisations can communicate.

About Concentrix

Concentrix is a leading UK business management software, independent customer relationship management (CRM) specialist, and IT solutions provider. Founded in 1999, Concentrix helps companies increase competitiveness, profitability and customer satisfaction by improving business processes, systems and IT.

Concentrix implements systems and business solutions that are right for their customers' requirements: matching their needs, goals and budget. Concentrix works across a wide variety of industry sectors with clients ranging from small companies with a handful of users, right up to household- name PLCs with hundreds of users on multiple sites.

Concentrix also has a beast practice methodology approach which is to implement simple and logical steps by understanding how the client works and thinks. Concentrix also spends time to fully understand their client's business objectives, processes and working practices to ensure that any solution implemented best fits their needs.

Concentrix solutions are based on recognised, 'best-in-breed' software products. These include the Sage 200 Suite, Sage CRM, Sage SalesLogix, FrontRange's GoldMine software, Microsoft Dynamics CRM and Microsoft Dynamics NAV. Concentrix has also developed a number of complementary, add-on CRM software modules, and has a dedicated team of software programmers and developers.

Today, Concentrix is a one-stop-shop for CRM, accounting, business management and supporting IT. So, as well as CRM and business management software, Concentrix also supplies leading brand hardware, a comprehensive range of support, training, courses, upgrades, advice and consultancy. In other words, Concentrix provides complete solutions: software, hardware and supporting services.

Concentrix, is a Microsoft Gold Certified Partner, Microsoft Accredited Education Reseller, a fully Accredited Sage Business Partner and a FrontRange Premier Partner.

Concentrix is based in Mountsorrel, Leicestershire, has a regional office in Bristol and a satellite office in central London.