CRM Systems
If you work in IT, you have probably had to deal with a Customer Relationship Management (CRM) system of one sort or another. A popular CRM system today is Salesforce. Salesforce is a system that allows sales staff to follow the transactions of a customer through its lifecycle (from lead to customer).
While Salesforce offers many interesting and unique possibilities, it really has not come far enough yet. Right now, Salesforce is primarily a contact management solution that offers a few extra bells and whistles. These extra bells and whistles really don't provide yet enough incentive over the cost of purchasing seats. Consider that each seat for Salesforce is relatively costly (greater than $1200 in most cases), thus, the return on investment (ROI) is not readily apparent. So, the question is, does Salesforce really provide a return of investment?
Any CRM system requires storage of customer data in a database, including Salesforce. But, consider that you can buy most databases for around $1200-1500 outright. Patches and continued support may cost you that price again once a year. Consider that if your sales department is 15 people, that's $1200 times 15 totally $18,000 a year. Couple additional costs with that including extra storage and other bells and whistles and, for 15 sales staff, that's a high dollar investment every year. You also lose one login to the administrative user. So if you buy 15, only 14 are actually usable because the 15th user must be a superuser. You probably don't want to hand out the superuser account to some random person considering they have complete control over all aspects of that Salesforce account.
Consider also that you can purchase a machine to run a database and a CRM solution for probably $5-10 grand and will handle as many seats as you can throw at it. Salesforce turns out rather pricey for small (and even medium sized) businesses.
Sales Pipelining
What Salesforce does offer is sales pipelining. This allows sales managers to login and, at a glance, see how much potential revenue is pending should it close. The downside to this is that the sales representatives must maintain this data and many sales representatives don't want to or are not taught to do this. But, when it works, it gives a good solid picture of potential new revenue.
Fully paid for CRM systems like Goldmine or Microsoft's Dynamics CRM should also offer some kind of pipelining and forecasting.
That said, I have heard for several sales managers that Salesforce pipelining and forecasting don't provide the data in the format that they want (and there's little way of getting it into this format). Salesforce also seems slow to change the way these features work.
Sales closed, contract signed
Ultimately, a CRM is to help you fully manage your customers and, additionally, help you manage potential new revenue. In that goal, the idea is to go from a lead, to opportunity, to customer. The reality is, that's really where Salesforce stops. Salesforce offers all of the up-front tools to manage customers to the point where they sign a contract. But, once the contract is signed, Salesforce does nothing to help you manage the contracts end of it.
To me, customer relationship management is about managing all aspects of the customer relationship including contracts and billing. Yet, Salesforce completely falls down in the contract and billing sides. It has little in the way of support for these aspects. It also looks as if Salesforce has put in little effort in adding this support.
Software as a Service
Software as a Service (SaaS) CRM in Salesforce is a good idea, but so far it lacks in a lot of areas:
- It's not competatively priced to standalone products
- It lacks features that make it a complete service
- The documentation is lacking and requires support calls
- Increasing security makes it more difficult to log in and stay logged in
As an IT manager, you want to enable your employees to do their best work possible. You don't want to hinder their ability to do work by making them fight with an interface that is not friendly or easy to use. Salesforce is friendly enough, but if misconfigured, can easily make the job twice as hard. Web services are prone to network outages, browser issues and other external factors (such as downtime) that can prevent an employee from being productive.
Buying your own CRM systemBuying the CRM system outright can have both cost benefits, but also drawbacks. If you purchase the software and hardware, you have to have staff to understand and support it. This can be costly per year and can be more costly than the 15 user contract above. If you don't have any IT staff, then Salesforce may be your best alternative. If you already have IT staff, then they should be knowledgeable enough to install and maintain a CRM software package on your premise and still have a cost benefit.
Cost Factors When dealing with software in business, nothing is free. You either pay for subscriptions like Salesforce or you buy a CRM system outright, like Goldmine. They both have benefits and drawbacks, but you should know what these are going into the purchase. In some cases, installing on the premise might be the best solution as you will have complete control over everything (including security). With SaaS packages, you're at the mercy of the provider to backup your data, keep it secure and prevent unauthorized access. So, SaaS vs premise based, you'll have to make the decision which works best and also produces the best ROI.
