How to successfully select a CRM consultant
Do you need a third party consultancy to ensure your CRM project successfully crosses the finishing line?
The complexities surrounding a CRM deployment are sometimes only compounded by the number of third parties that are involved in such an endeavour.
Richard Boardman, founder of Mareeba Consulting, summarises the activity that typically characterises a large CRM project.
“While a business can buy something like Salesforce.com, subscribe to it and customise it themselves so that there is only the one party involved, if there is any kind of complexity, you are going to have at least an implementation partner and a technology provider. The technology provider is what sells the likes of Salesforce.com, which develops the technology, while the implementation partners are smaller organisations focused on product-specific implementation services – so their job might be to configure the system to sort processes, do some data migration from your existing CRM system and integrate your system to the financial system, for example.”
But then there is also the option to bring in independent CRM consultancy.
“Traditionally, the CRM consultant has been heavily involved in the technology selection process because choosing the right CRM software has never been the easiest of tasks,” notes Boardman. “There’s a lot of technology options, and then throw into the mix the marketing hype, the claims and counterclaims of competing salespeople, and the knowledge that the wrong selection can doom a project; it’s no surprise that organisations turn to the independent consultant for help in making the right choice.”
However, this is only part of the consultant’s role. And Boardman suggests there are five other key areas where CRM consultants can earn their crust:
- Feasibility and planning – consultants are helping businesses determine whether a CRM project makes sense in the first place and in what form. This involves helping define the business case, estimate cost and resource requirements, evaluate different options and identify key implementation considerations so that organisations can make a dispassionate assessment whether to proceed, and can structure a project in a way that the potential return on investment is maximised.
- Requirements definition – defining and documenting business and functional requirements for a CRM system, and helping organisations re-engineer or introduce new business processes in order to benefit from the technology, can be a demanding process. It is also essential to being able to make the right technology choice, and has a big impact on the speed of the downstream implementation. However, it’s not easy to do unless you have a good working knowledge of CRM technology, which means it’s often an area best performed by an outside specialist.
- Negotiating pricing and terms – while many organisations would feel they are strong negotiators, CRM consultants have very specific knowledge as to what’s achievable through negotiation with each vendor, and perhaps more importantly can review implementation estimates to spot any excess fat. It’s not uncommon for a consultant to reduce the initially quoted price very significantly, and clients can get a very big return from a very brief engagement.
- Implementation - the implementation phase is also an area that consultants are increasingly playing a role, either as project managers, or more commonly mentoring the client’s project manager, who may not have extensive experience of managing CRM projects. While the instances of outright project failure are rarer these days; budget overruns, and missed live dates are common place, which means that companies look to get specialist advice to keep things on track.
- Working with existing systems - the big growth area in CRM consultant involvement has been for businesses wrestling with the decision as to whether to replace an existing system. Systems often under perform as a result of a poor implementation or user adoption issues, rather than a fault with the underlying technology. Re-implementing existing software can be considerably cheaper than buying a new system, but organisations often need outside guidance as to whether they are ‘salvageable’. For those that choose the re-implementation option, getting help ensuring ‘it’s done properly this time around’, is also common theme.
Whether you would best off hiring in the skills of a CRM consultant is dependent on your company’s particular circumstances. But in all likelihood some consultancy usually proves valuable. This is borne out by the popularity of this kind of third party assistance, with statistics demonstrating just how big a part consultancy plays in most CRM projects.
According to Ed Thompson, VP and distinguished analyst at Gartner Research, while there are examples at either extreme, on average 55% of work on a CRM project is done internally, and 45% is done by external third parties – meaning either by the software vendor or a business consultant or an IT technical system integration consultant.
Software vendors often provide assistance beyond mere provision of the tools, including the likes of training, so there is a temptation to rely solely on the provider for external consultancy, if only to keep costs down. However, as noted by Bill Band, VP and principal analyst at Forrester Research, vendors can have their limitations in this capacity.
“Most software companies traditionally have good technical skills, but they don’t have the strong strategic of business process skills,” he warns. “For this reason we generally always recommend you should work with a systems integrator to implement CRM solutions, whether they are Cloud or not.”
Thompson also highlights that of the four types of head count that typically characterise a CRM project – which is internal business people, external business people, internal IT people and external IT people – there is a tendency to under-estimate the value of external business consulting advice.
“A lot of businesses don’t think they need any help, and then they suddenly realise that they need someone to perhaps redesign their sales process, or they would like some expertise in incentive compensation plan design or some assistance with how to do pricing configuration on an ecommerce platform or maybe some analytics expertise,” he says. “So a lot of organisations think they can do it themselves – but then further along the process they realise they don’t know what they’re doing and start getting some help in at that point.”
So if the hiring of a consultant is appealing, how can you ensure that you maximise the chances of it being a fruitful relationship? Here are some valuable tips.
Do your research
When you’re evaluating CRM consultants, do your due diligence. Chris Bucholtz, director of content marketing at Relayware, advises that you seek out consultants that have case study libraries that demonstrate their success.
He writes: “Ask prospective consultants if they have case studies for you to peruse, and then read them with a critical eye… Case studies offer a chance for consultants to show they know what they're doing and what their roles should be; if a consultant can't do that, you may want to think twice before sealing a deal.”
Marcin Malinowski, head of international services at Outbox, also suggests digging into other vital details about potential candidates. “Look at the sustainability of their business - will they exist in a few years? Losing a valuable service and finding a replacement can be an arduous process. And also consider value for money - sniff around for the best deal. After all, it is a competitive market.”
Look for experience in the same vertical as your organisation
“One thing that system integrators can bring that software vendors don’t have is an understanding of specific industries,” says Band. “We always encourage the clients to make sure they look for the consultant to bring insight and information about their industry to the project. You don’t want general consultants, you want people that know your industry, and that's where SIs can add value.”
Bucholtz recommends that when you ask for customer references when speaking with consultants, that you specifically request feedback from those in the same industry as you, and also ask to speak with them. “This will not only give you a feel for the effectiveness of the consultant in areas that are important to you, but also help you gauge the consultant's ability to think creatively about your vertical market,” he notes.
Be clear about exactly what you need/expect from the relationship
Malinowski says: “An important thing to remember is to communicate exactly what your expectations from your consultant are, and confirm those requirements in writing. This will avoid any embarrassing and difficult conversations further down the line.”
This, of course, demands that you yourselves are crystal clear about what it is that you want from your implementation.
“If you as a customer can't describe where your company wants to go, a consultant will face an impossible task,” highlights Bucholtz. “The consultant can attempt to guess and put a system in place that requires extensive retrofitting; or beg you to provide a clearer view of things; or - if you've chosen someone with a nefarious streak - view your company as a spigot from which unlimited cash may flow. All three of these less-than-optimal scenarios can be avoided if you do your homework ahead of time.”
Ensure you know who is involved
“You have to really understand what team you’re actually going to get to work on your project,” emphasises Band. “All of the big guys have thousands of people that work in their CRM practices and it really comes down to who’s going to work with you. It doesn’t really matter if Accenture has done 5,000 projects, it only matters about the ten guys that you’re going to have working on your project. And that can be a challenge to find out.”
David Taber, CEO of SalesLogistix, agrees and provides the following advice: “Don’t let the integrator play the ‘our finest staff’ game. Make them name names, show specific resumes and provide guaranteed levels of effort for the key individuals across the life of the project. Look at the CVs of the team, as much for their prior industry experience as for their consulting gigs. Titles matter. Look for span-of-control and specific process verbiage in the CV.”
Malinowski also recommends that businesses get references for the team members that are assigned to their project. “Ask for customer experiences and references – like purchasing any product or service, see what people have got to say.”
So do you need a consultant?
As highlighted earlier, whether you decide to use a consultant or not will depend on your own specific circumstances. Even then, certainly there are pros and cons.
“It is a given that there will be politics, natural born cynicism and resistance, and good old reluctance to change that will surround the implementation regardless of whether it is a consultant or in-house. There are pluses and minuses to each,” warns Mike Muhney, CEO of vipOrbit.
“The vendor presumably is exclusively focused on the challenges and requirements necessary to implement a successful CRM system, whereas internally it may be nothing more than another project. Conversely in-house would have a higher level of accountability with the greater expected understanding of the overall needs of the organisation and its culture.”
Malinowski adds: “Some of the pros of using an independent consultant are gaining experience and expertise hard to find internally. But the flip side is the strain on management that can occur when taking on a consultant. Ultimately, the quest to find your ideal CRM consultant is always the hardest part.”
However, hopefully the advice above will make your quest a successful one.
Neil Davey is the managing editor of MyCustomer. An experienced business journalist and editor, Neil has worked on a variety of newspapers, magazines and websites over the past 20 years, including Internet Works, CXO magazine and Business Management. He joined MyCustomer in 2007.