Loading ...Small businesses often believe the benefits of CRM are beyond their reach. Although these companies have a lower turnover and a smaller workforce than large enterprises, they often have the same business processes, some times the same disparate back-office systems and even the same complexity as large companies.
As a result, they face the same challenge: to create a single view of the customer across the organisation, so that they can offer consistent and profitable service.
Business growth brings the small and medium-sized enterprise (SME) to the realisation that it can no longer sustain the informal, regular personal interaction with its customers – often a differentiator that allowed it to compete successfully with larger rivals.
Disparate information systems are a characteristic of the information technology infrastructure of most businesses, small and large. Companies traditionally buy software to fulfil a particular business need – financials, e-mail, inventory, manufacturing, distribution. They have bought the product best suited to the business at the time.
Over the years the number of systems has increased, along with complexity and the lack of integration. This means the company faces difficulties basing decisions on different versions of the ‘truth’ emanating from information that could be duplicated, conflicting and incomplete, resulting in several versions of the ‘truth’.
What benefit, therefore, would be yet another software package with yet another data source ‘bolted on’ to the others – similar in its isolation and inability to draw from the information generated from others?
Complex organisations
CRM applications aimed specifically at small businesses often fail to measure up to the organisation’s complexity. The lack of close integration with the rest of the business’ IT infrastructure can rob the SME of CRM’s full potential. The lack of customisation and configuration options can make the applications inflexible.
At this stage the small business owner needs to consider the most effective way for a CRM system to be incorporated into its IT infrastructure. CRM is best thought of as a strategy – not a technology – and correctly implemented it can significantly reduce errors and costs of sale in addition to increasing sales revenue.
An effective CRM strategy involves, in the main, the closer integration of existing systems. Valuable customer information already resides within existing information systems and the creation of a completely new application that requires a complete new set of information is a duplication of effort, which resource-strapped SMEs can do without.
Information integration entails looking at the business from two points of view – processes enabled by applications, and data stored in databases. Installing a database from which all applications can be run is a low-risk first step towards achieving a greater level of integration.
Large companies battle with the problem of having individual databases for each application – one for financials, one for HR, one for inventory, and so on. A smaller business moving to the next step of expansion could implement a single database and achieve a level of efficiency to which many larger companies still aspire.
The next step – deciding on applications – should be taken with integration in mind. Disparate systems cost money to integrate and manage, and could prevent the company from delivering the necessary business strategy.
IT industry watcher Aberdeen Group pegs the cost of integration systems at between 40% and 60% of an IT budget. This is a quite staggering amount to be spent, not on enhancement, but merely on keeping existing systems running effectively.
Cost implications
It’s a cost trap smaller businesses can avoid with some planning. Software vendors such as Oracle make their software available for smaller companies. Before the buying decision is made, the small business must ask the question ‘will this application talk to the others and what will it cost to integrate?’
SMEs do not usually have staff to spare to work full-time on a CRM implementation project, so the best approach is for SMEs to work with an implementation partner who can bring the resources and expertise needed. The partner can help with selecting and implementing technology, introducing best-practice CRM processes, managing change and deploying training throughout the organisation.
Too many SMEs in the past may have focused solely on the cost of the licenses and not taken into account the time, effort, and expertise required to make a CRM strategy successful. Many Oracle partners are SMEs as well and will have as much at stake in the successful implementation as their customer does.
A phased implementation might begin by improving the process efficiency in a call centre, delivering quick returns in cost reduction. The greater the number of processes and applications that are integrated into the CRM system, though, the more effective it becomes.
Customers will often phone a call centre with questions relating to products, a pending order or billing. If the call centre is able to access all the relevant information directly, it can improve customer satisfaction while cutting the cost of handling callbacks.
The CRM strategy is about driving information down to staff so that they can offer informed services, and up to management so they have the data they need to make well-informed decisions.
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I agree with this comment. Too many people think about license cost, which is the tip of the iceburg. At BizAutomation.com we always tell people about how important TCO is, and module integration, which is why we’ve consolidated all our modules into a single suite.