Putting a Lid on CRM Implementation Costs

Until recently, implementing CRM software meant either engaging an implementation company that has been trained and/or certified by the vendor or using internal IT resources.

Until recently, implementing CRM software meant either engaging an implementation company that has been trained and/or certified by the vendor or using internal IT resources.

Neither choice is optimal. By using an external implementer, you are theoretically buying expertise and experience, but be prepared to pay an extra 0.5 to 2.5 times the cost of your software for it. Also, be sure that the personnel assigned to your project are skilled and available throughout the implementation.

Using internal IT resources also has pros and cons. Once the CRM software vendor has properly trained your IT personnel, you can look forward to substantial long-term cost savings. But remember that your IT people will be on a learning curve and that mistakes and project delays will occur.

The deficiencies of each option are helping to drive the following alternative approaches:

Combine internal/external skills. One of my customers, a leading payroll services vendor, was tasked with implementing a 2,000-person CRM system. External implementation quotes hovered around $6 million. The customer, instead, opted to have six internal IT staff members go through training by the CRM vendor. The six were complemented by three external CRM software implementation experts. The customer also engaged a leading CRM authority for overall project guidance. The cost for this combined skill set was less than 20 percent of the $6 million alternative.

The vendor owns the implementation. Another customer, a leading oil and lubricants manufacturer, had a 400-person CRM system to implement. Officials asked the CRM software vendor to implement the system. In this case, the CRM software vendor accepted the challenge and placed four internal project managers and developers on the implementation. This project was on time and below budget.

The ASP route. Be prepared to give your data to the application service provider and understand that it may not be cost-efficient for the ASP to tailor the CRM software to your every whim. The drivers here are lower startup costs, and you can write off all ASP fees as an expense item.

Barton Goldenberg is the founder of ISM Inc. (www.ismguide.com), a CRM consultancy in Bethesda, Md. He can be reached at bgoldenberg@ismguide.com.