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I believe " Successful CRM/CXM " is about competing in the relationship dimension. Not as an alternative to having a competitive product or reasonable price- but as a differentiator. If your competitors are doing the same thing you are (as they generally are), product and price won't give you a long-term, sustainable competitive advantage. But if you can get an edge based on how customers feel about your company, it's a much stickier--sustainable--relationship over the long haul.
Thank You for visiting my Blog , Hope you will find the articles useful.

Wishing you Most and More of Life,
Dinesh Chandrasekar DC*

Friday, March 4, 2011

One Penny Saved is Two Pennies Earned: Optimize your CRM Implementation Cost

Dears,

The Celebration Begins and Spending has no limits, This is very much true with CRM implementation. We welcome the celebration but we can look at optimize the spending so the ROI could be achieved without comprising the quality of the CRM Vision. Lets look at some means and options before you.

Brand New CRM
Sometimes organisations already have CRM software, but it just isn’t working well for them. The temptation is often to replace it with something new. However, the fault may not be with the software itself, but in the way it’s been implemented or used. Re-implementing what you already have is likely to be significantly cheaper than buying a new system.
Phase It
It’s generally best not to try and do too much in one go. If you can focus on the areas where you can achieve the greatest impact, you can lower costs, and increase the return on investment from the project. Plan multiple phase with clear statement of direction and objective what you want to achieve in each phase and then move forward.
Devil is in Details
Make sure you have the complete requirement and then that requirements in detail.This will allow you to solicit firm bids from prospective vendors in a competitive environment which will allow you to buy more cost effectively.
Locked In
one very expensive mistake a lot of organisations make is to commit to a vendor before the final costs for a project are known. This removes the incentive for a vendor to offer competitive pricing, and it’s is a lousy position to try and negotiate from.
Ask for Discount
Many companies like Microsoft, Salesforce.com, Oracle and SAP  offer highly discounted software to certain sectors such as charities, Public Sector and educational establishments. If you think you may qualify, then it’s worth asking the question.
Negotiate on List Price
Most CRM software and service pricing is negotiable, so don’t be afraid to negotiate. If there’s a large number of service days involved it may be worth getting an independent CRM consultant involved to verify that the quoted amounts are appropriate for the work involved. Quarter and year ends are time when vendors are most motivated to cut deals, and you will tend to negotiate much more successfully the less optimistic the prospective vendor is about their likelihood of winning your business.
Collaborate
There are a couple of dimensions to this, but you may be able to offer the products or services that your company provide in full or partial payment. You may also be able to trade in other ways, particularly in terms of you ability to act as a reference site.  Vendors are always anxious to secure new references particularly if they have a new product or are entering a new market. Your willingness to act as one could secure a substantial discount.
T&C Aware
 it’s not just what you pay for software and services that’s important, check the small print as well. There can be a range of hidden terms and costs that can become very expensive over the life of the system. Be aware of these and address them in your negotiations.
Limit Customization
The more customization you do, the greater the implementation costs. While you should always tailor the system to meet your unique needs, organisations can be prone to adding unnecessary ‘frills’ to the system, or capabilities that later prove to be expensive white elephants. Keeping as close as possible to the out of the box capabilities and ruthlessly cutting out any development requirements that don’t add significant value can be a very effective way to cut costs.
Don’t get carried away with Branding
It’s often tempting to go for the known names in the industry, but you may be able to purchase much more cost effectively by looking to newer, less established vendors, where you aren’t paying a premium for the brand.
Match It.
 your detailed requirements specification should tell you the functionality you do (and don’t) need from your CRM software. Understanding your needs and matching them to the most appropriate product can save you lavishing money on a suite of capabilities you don’t require.
Make use of Freewares /Less Expensive
There are a raft of free to low cost CRM offerings available on the market. These may not be as sophisticated as some of bigger ticket options, but if your needs are pretty straightforward they may well do the job. But be cautious not to underestimate the potential problems you may get in if there is no enough support from Freeware Developers.
Clear and Crystal
 there are two approaches to CRM. You can use it in an ad hoc way or a process driven way. The ad hoc way is cheaper and the returns lower. The process driven way requires a lot more resource, but will produce much higher returns. It pays to understand which approach you are aiming for. The thing you want to avoid is going for process driven approach without the necessary resources, because you will end up spending a lot, to achieve very little.
License Rules
CRM implementations can take a lot longer than people expect. Buying licences during the implementation phase, when no one is able to use them, needlessly ties up capital. Since most CRM software companies do not penalise you for adding users incrementally, it’s often better to buy as you need them as this avoids you buying for users who don’t end up using them. This can save you a fortune in expensive ‘shelfware’.
Drive it Right
It’s a lot cheaper to implement a project right first time than to try and turn it around later. It’s easy to underestimate what’s involved in a successful CRM project and it’s easy to come unstuck, so it’s a cost effective strategy to plan it and mange it carefully.
Do it Yourself , Try
There’s a lot on a CRM project that you may be able to do a lot more cost effectively than the vendor. With many systems it’s relatively easy to set up the basics such as adding fields and pick-lists, so a good way to reduce costs can be to use the vendor for the more complex tasks and use internal resources to carry out the more straightforward work.
Keep them @ Site
In my experience developers tend to be much more productive when they are working outside of their own offices. This is perhaps less of a problem if they are working to a fixed price contract, but if it’s time and materials, then I’ve found that you get a lot more for your money if you have them working in your own site rather their own.
Experience
A capable, experienced, developer will generally be many times more productive than an inexperienced one, but the day rate you pay is often the same. It therefore pays to be very selective about the team members you have working on your project.
Independent Specialist – vender implementation staff can be an expensive resource. Independent Specialist can be considerably cheaper. If you can find experienced staff with the required skill-sets, then this can significantly cut project costs.
There are a number of independent CRM consultants out there, and they are well positioned to advise on the negotiation of pricing and term, as well guide your around some of the potentially costly implementation pitfalls.
The cost is only one dimension of a CRM project, and we shouldn’t forget the value generated by the system is critical. However if you keep costs under control, then the overall return on your investment becomes potentially significantly higher.

"One Penny Saved is Two Pennies Earned"

Loving P&C
DC*

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