The post-holiday period hits hard. Your credit cards are tapped, your jeans are too tight and maybe that extra 'tini last night wasn't such a good idea. Time to face up to a few harsh realities.
Not ready to hit the gym? Put your mind on something else you've put off long enough -- doing something about customer relationship management (CRM). If you haven't yet invested in CRM software (whether deployed on-premises as an enterprise application or rented monthly in an on-demand model), your customer data is likely to be a mess.
Chances are, customer data resides in a bunch of different databases, in a bunch of different formats, making it difficult for your front-line employees to serve customers' most basic needs. Fail to address this now and you'll torpedo your chances of ever crossing over into the promised land of customer centricity (where your products and services are so special customers just can't live without you).
Manufacturers, like other types of companies, are vowing to make 2006 the year they get serious about focusing on customers. "They want to better understand and respond to their high-value customers. That is driving a lot of CRM initiatives right now," says Leslie Ament, director of customer intelligence research for Aberdeen Group Inc. and an MA.com columnist.
If this is your first run at CRM, you probably work for a small to mid-size manufacturer. The big guys have been at this -- and spending big bucks -- for years. Waiting does have its advantages. The scope of on-demand CRM offerings is broader than ever with Microsoft Corp.'s recent market entry through third-party resellers and widening every day, with the long-anticipated entry of players such as SAP (which is expected some time in 2006).
Vendors like Sage Software Inc. (Saleslogix), NetSuite Inc., salesforce.com, and RightNow Technologies are popular in on-demand CRM in the mid-market space.
Renting rather than buying CRM has obvious appeal. You can skip the upfront hardware investment, implementation/maintenance worries are minimized and application upgrades come through automatically. All this can be yours at a cost of about $60 to $125 per user per month, according to Liz Herbert, analyst for Forrester Research Inc. Not too shabby when you consider the price tag for a full-blown enterprise implementation can start in the millions and rises sharply from there.
Vendors like Sage are also offering rent-to-own models, which are even more attractive as the money spent on rentals accrues toward purchasing the software for use in-house. If you hit the three-year mark in using the software, advises Herbert, it typically will be more cost-effective to take it on-premises The reason: If you use the system for five years, say, its full lifetime, over the long haul the rental fees add up to more than the outright on premises cost.
Beyond cost, the rental model allows you to receive functionality upgrades automatically (most are minor enough not to require additional user training), sparing your IT department the hassle of dealing with them individually. In fact, unburdening IT in general is one of the best reasons to rent rather than buy. On-demand CRM is turnkey, a major advantage for overburdened mid-market IT departments. But it's not all Nirvana.
Integration, for one thing, remains a major issue (though Salesforce.com is working overtime to resolve this with its AppExchange software sharing service). Integrating on-demand CRM with other enterprise applications will usually require the services of the CRM provider (services arm providing), a third-party systems integrator or your in-house IT staff (assuming you have significant IT resources to burn). Whether you choose to integrate immediately or wait until after you have the first phase under your belt, having an integration path is critical (see below for more on this).