The concept of Customer Relationship Management (CRM) has been around for many years. In its truest sense, CRM is a strategy. It’s a way of managing existing and prospective customers and building and strengthening relationships to increase sales, improve market strategy and customer satisfaction. In one form or another, a CRM system is an integral component of many, and probably most, UK businesses.
Theoretically a CRM system doesn’t need to be based on software or IT. However the phrase ‘CRM’ is today generally used to refer to software-based business processes which help run, automate and improve the efficiency and effectiveness of sales, marketing, customer service and customer support. Rightly or wrongly, the phrases CRM and CRM software are often used interchangeably throughout the UK.
Who Uses CRM?
The CRM market in the UK (and worldwide) continues to grow and most organisations now use a CRM solution of some kind. One of the findings published in a recent survey by Computing, which, among other objectives, set out to find the extent to which CRM has been deployed, was that 75% of respondents had some form of CRM system in place.
CRM software has moved from being a ‘nice to have’ business tool to a key component in the operation of modern organisations. It’s used in a wide variety of different sectors and verticals, and the full range of business sizes: small start-ups, SME’s and multinational PLC’s. For example, independent CRM specialists Concentrix TSG has customers with one-user CRM systems in small manufacturing and retail companies, a wide range of mid-market organisations with 20 to over 100 users, and some well-known national organisations with over 700 CRM system users. As well as private sector clients, we also have clients in the public sector, charities, institutes and education industries.
Increased Power and Flexibility
Over the last few years, the pace of development of CRM software has been extremely rapid. Many solutions have transformed from what would now be considered contact management systems, to highly configurable, customisable, feature and functionally rich platforms. These enable highly bespoke solutions to be developed to meet the precise process requirements of just about any business, no matter how complex these requirements are. Consequently the term ‘xRM’, where the ‘x’ stands for ‘anything’ (Anything Relationship Management) has evolved.
Despite the growth in product flexibility, power and functionality, not all businesses have highly complex business processes. Many just require ‘standard’ CRM functionality for sales, marketing and customer service. So, although highly flexible, many solutions, such as Microsoft Dynamics CRM and Sage CRM, are also ideal for organisations that need ‘straightforward’ CRM. They enable organisations to gain sophisticated CRM functionality ‘out of the box’. Because their modern interface designs are easy to use and quick to implement, training is minimal and costs are reduced. Their design also helps to ensure high user uptake and ultimately successful CRM implementation. Plus, they can enhance and adapt their CRM system as their business grows.
Price of CRM
The price of a CRM system in terms of overall project costs is made up of user/licence costs, plus implementation, configuration, training, support and sometimes other costs. However, price no longer has to be excessive or a barrier to implementing a CRM solution, no matter how big or small an organisation is.
As CRM software has become more popular and developed both functionally and technically, many mainstream CRM solutions have become better value while at the same time offering increased power, choice, adaptability and features.
The growth of online or cloud CRM, in particular the release in the UK, of the cloud-based Microsoft Dynamics CRM Online, has started to shake up the market. Some CRM providers have reviewed their pricing structure or offered competitive transfer rates. Up until the release of Microsoft Dynamics CRM, ‘you get what you pay for’ was a good rule of thumb for CRM software. However, Microsoft Dynamics CRM Online is effectively the same product as the on-premise version, and is currently on offer in the UK for only £22.50 per user per month (even when it’s not on offer the full price will only be just £29.50 per user per month). This makes Microsoft Dynamics CRM Online a highly compelling proposition for many businesses, especially smaller organisations or those looking to trial CRM for the first time.
Cloud versus On-Premise CRM: Operational versus Capital Expenditure
One of the key features of cloud CRM deployment is that you effectively rent access to the software. This means that, once the system is up and running, you make your CRM solution an operational cost. This is opposed to the capital expenditure or ‘up front’ costs of the more traditional on-premise deployment. Often the main attraction of cloud-based CRM is that there’s generally little or no financial outlay in terms of hardware and IT infrastructure, certainly at the start of the project. Costs are also straightforward: you decide on the level of service and support and pay a monthly fee.
Having CRM software as an operational cost suits many businesses, but by no means all. There are a variety of reasons an organisation may prefer, from a financial point of view, to deploy an on-premise CRM solution. For example, they may prefer to ‘take the hit’ on the initial spend, to use a solution they ‘own’ rather than rent, and have a system that they can run, configure, secure and control on their IT infrastructure. There are other reasons why a business may choose cloud CRM over on-premise CRM or vice-versa, which tend to depend on an organisations culture, resources, size, processes and business strategy.
Integration with ERP Solutions
Integrating CRM software with accounts or Enterprise Resource Planning (ERP) software, effectively linking the front and back office functions of an organisation, can deliver significant benefits. The integration provides a full view of customer and sales value and enables organisations to make better, more informed decisions, and make them more quickly. Integration reduces procedural hurdles between departments as staff have an even more comprehensive view of customers from the centralised source of accounting as well as CRM information. It also reduces duplication of effort and the likelihood of errors, eliminating redundant data entries and making sure information in both the ERP and CRM solutions is kept up to date. A major benefit of ERP and CRM integration for marketing and sales staff is that they can quickly access detailed business information such as payment history, contracts, pricing and product availability.
Having CRM integration built-in by the ERP products manufacturer, as opposed to using third-party connector applications, has the major advantage of the product integration being supported by the vendor. Examples of mid-market ERP products which include integration with proprietary ‘best-in-breed’ CRM solutions are Sage’s mid-market business management suite Sage 200. This includes Sage 200 CRM (which is effectively their highly commended Sage CRM product), as one of its base modules.
Microsoft’s popular mid-market ERP solution Microsoft Dynamics NAV is also supplied with a CRM module. However it's important to note that the CRM functionality included with the basic licencing of Microsoft Dynamics NAV is not the same thing as Microsoft Dynamics CRM.
The CRM functionality in Microsoft Dynamics NAV is sufficient for many businesses, although it does lack some of the processes, general capabilities and flexibility of Microsoft Dynamics CRM. To overcome this, the latest version, Microsoft Dynamics NAV 2009 R2 (released towards the end of 2010), includes in-built connection to Microsoft Dynamics CRM (previously this required a separate piece of software). This enables integration with both Microsoft Dynamics CRM and Microsoft Dynamics CRM Online (note Microsoft Dynamics CRM or Microsoft Dynamics CRM Online are not included as part of Microsoft Dynamics NAV).
So Is CRM Right for Your Business?
In theory, because all businesses have customers, CRM should deliver benefits to all businesses. Realistically though, there will always be some organisations that decide not to implement CRM, at least in the form of proprietary or bespoke software. They may be content just ‘getting by’ without it, have a very small customer-base, or highly niche business model that doesn’t require a CRM solution. However, the number of businesses using proprietary CRM software will continue to increase. Organizations without a formal CRM system will soon be very much in the minority, potentially putting themselves at significant competitive disadvantage.
More information
Concentrix TSG is an independent CRM specialist that provides a variety of ‘best in breed’ CRM solutions. Because we’re independent, we’ll help you choose the right CRM software for your business requirements; matching your aims, objectives, processes, size, sector and budget.
If you’re in a UK business and need to find out more about the benefits CRM can deliver to your organization, or for advice and information about CRM, please contact Concentrix TSG.
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Posted by: CRM Software | 12 August 2011 at 06:11 PM