Karl Krogmann

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How to Select a CRM Solution
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Don't let vendor hype or the CFO's golf buddy drive your CRM decision. You need a plan based on business requirements.

There are many ways to make a bad technology decision for a customer relationship management (CRM) system, but only a few ways to make a good one.

More often than anyone would like to admit, the decision comes from a manager who's just returned from a CRM trade show with a bag full of marketing materials and a head full of slick demos. But falling prey to the vendor hype isn't the only way to screw up the choice of CRM technology. Here's a list of some of the responses I've heard to the question, "How did you go about choosing your CRM product?"

• "The salesman gave it away for free for the first year."
• "The VP of product planning plays golf with the software company's CFO."
• "Because the competition is doing it."
• "Our end users liked the user interface ... and they're footing the bill."
• "The vendor asked us to be on their advisory committee -- we're helping
  them plan how to integrate campaign response modeling into their product."
• "They pretty much convinced us they were 'best of breed.'"
• "They told us the whole thing could be done in three months."
• "We already had their database product, so we thought, 'What the heck?'"

These reasons range from possibly acceptable to dangerous. The key to CRM success is basing technology decisions on a careful definition of the business requirements -- the business need, pain or problem -- and the functionality required to solve that problem.

For example, the business may need to track the success of targeted marketing campaigns. These requirements in turn demand specific functional capabilities, such as campaign response modeling. This process will greatly clarify your technology choices, because a list of products can be mapped to each specific function.

Remember: Technology is just one part of CRM. Most companies undertake CRM technology selection without really being ready to do so. They haven't figured out how CRM aligns to their corporate objectives, how it will affect their business processes or that it will require organizational changes that will irk many a CRM stakeholder.

Change is part of CRM's territory, and technology is probably the easiest area of CRM change for users to accept -- which is why many CRM business sponsors begin with the technology choice.

Allowing technology to drive CRM is known as the "bottom-up" approach, usually driven by a go-it-alone executive or department that wants a particular capability and isn't willing to wait for more rigorous, requirements-driven planning.

But the risks of bottom-up development are far more serious than the rewards. There's a danger of spending a lot of money on low-priority capabilities. The lack of integration with other technologies or CRM projects can lead to either throwaway work or cumbersome after-the-fact integration. And the CRM product's feature set may not meet the needs of future business growth and broader CRM adoption.