CRM Solution: To Build or Buy?

Faraz Karamat
Member

Posted 14-Jul-2005 02:46 PM
I am currently working with a IT Procurement and Service company. We have been using a CRM application for trouble ticket management. The application is costing are company a lot, besides this we find that the application is too slow and hence becomes ineffective.

Since I am (one of) the Business Technology Analyst, I have been given a task to carry out research on how our current CRM application can be replaced. There are basically two options, either we build an application in-house (we have skills and resources) or should we buy technology from an established source. I understand that developing the application is time consuming and expensive process, and in the end we might find our selves with an application that is not as good as we expected it to be. The good side is that we would not be dependent on any third party for maintenance and upgrade services. Buying a developed product might again be expensive but we can save time and hance use our resources on other more profiatble assignments.

Can you advise on how our company can reach a balanced and rational decision on which path we should follow?

Best Regards,

Faraz J Karamat
Business Analyst

Gwynne Young
Managing Editor, CustomerThink
Member

Posted 18-Jul-2005 12:58 PM
[Posted for Bill Price]

Replacing a current CRM system, or "re-racking," is very challenging, so let me suggest some ways to sort the wheat from the chaff. You’ve mentioned that your current solution (1) costs a lot, (2) is too slow, and (3) is ineffective.

You have laid out three of the more important selection criteria, and should probably add four more: (4) upgrade-ability, (5) change-ability, (6) integration with other internal systems, and (7) ease of use. Most "packaged CRM" does a pretty good job with (4), (5), and (7) but do tend to be more expensive when you add integration and upgrade costs (1), and are downright poor on integration with other internal systems (6).

I would love to dig into the IT skills that you believe can build CRM in-house because it’s a real bear to do well.

You might want to ask 5-8 companies that you consider competitors OR "best practice" in related areas to your company, "Did you build your own?" and if so, "Would you do it all over again?" In my experience (MCI and Amazon), before going back into consulting, I saw internal CRM failures (MCI, until we went outside) and wild success (Amazon, but back then, Amazon rarely went outside).

So, to conduct a balanced and rational decision: (a) create a cross-functional decision team, (b) lay out the desired state CRM in considerable detail, (c) invite outside bidders, (d) compare with internal dev, (e) score against the seven
criteria above ((1) through (7)), with weighting thrashed out by the cross-functional team, (f) make a provisional decision, (g) test against references, (h) finalize the decision and go forth!

Bill Price
President & CEO, Driva Solutions
Creating and sustaining highly effective contact center strategies and solutions, locally and globally
A LimeBridge Global Alliance founding partner
http://www.drivasolutions.com
http://www.limebridge.com
phone 1-206-321-0841

Posted 18-Jul-2005 01:49 PM
I agree with you that most packaged CRM solutions can provide good upgrade-ability, change-ability and usability. Your suggested method of deciding which path we should follow also seems reasonable. The IT team that we possess has already developed some applications for our internal use though not exactly CRM solutions but more like time and expense applications. They seem pretty confident that they can develop a custom application that would allow further customization as our requirements change and grow.

But the fact remains that buying a packaged CRM solutions again leaves us dependent on the orignal developers in terms of costs and maintenance. Even the customization issue would still remain as most Packaged Solutions usually offer only marginal customization.

My organization still seems to be in favour of developing a CRM internally. So when you suggest "cross-functional decision team", should it be consist more people from the users side or development side. or it would be even better if you can suggest what kind of people should be included in such a team.

Can you also put some light on the issue of transition / migration of our current cases / data from our existing CRM to new CRM. Like what is usually involved in this sort of thing.

Best Regards,

Faraz

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Posted 21-Jul-2005 09:31 AM
Faraz -

We have recently conducted a build vs. buy scenario for building an open source telephony(Asterisks) system that integrates with out CRM application.

We can up with a feature list that we needed, compared it to what was available in "off-the-shelf" solutions, and then had our developers come up with a project plan and estimated time lines. Having done this for two other time for other larger projects, it has been wiser for us buy a solution that had all of "must haves" and sacrificed some "nice to haves" than it was to build out our own solution.

Not only do you have the initial cost of building out the solution, but then you have ongoing support/maintenance, and continued development as your business'/client's needs change.

This echoes a lot of what Bill says above, but I think on a smaller/simpler scale.

I hope this helps.

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Fused Solutions
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Gwynne Young
Managing Editor, CustomerThink
Member

Posted 21-Jul-2005 03:50 PM
[Posted for Bill Price]

Sure, packaged CRM leaves you dependent upon them for maintenance and upgrades, but hopefully they will remain in business and can provide that support PLUS you would benefit from the collective "wisdom" and experience from all of their other clients. On the other hand, you would face a real risk of losing (a) attention from or (b) the developers who created your internal solution.

The cross-functional team would include finance, dev, and user/customer service, and within the latter specialists for floor ops (best performing agents, especially), quality & training (key to transition management and ongoing fixes), project management, and planning/forecasting.

Transition issues are a deeper subject, but you should worry about (focus on) issues such as turnaround time for changes, code ownership (and version control), training, training (repeated on purpose), and TCO (total cost of ownership).

You're getting into fine points, and if you need more information, it may be time to bring in a professional consultant.

Bill Price
President & CEO, Driva Solutions
Creating and sustaining highly effective contact center strategies and solutions, locally and globally
A LimeBridge Global Alliance founding partner
http://www.drivasolutions.com http://www.limebridge.com
phone 1-206-321-0841

AP
Member

Posted 22-Jul-2005 12:19 AM
Packaged solutions might bring in a robust CRM solution, but they are mighty generic which again needs to be cutomized for your organization. Hence, packaged solutions not only cost for the licenses, but also for the customization of the package for your requirements and then the support for the solution.

For customization, you could ask various vendors to bid and choose the most effective alternative based upon a few criteria like cost, experience, previous experience & references, comfort factor, post implementation support, warranty period, etc.

Also, most packaged solution vendors might not like to support you when you have issues related to your cutomizations on their package, if you get it customized from some outside vendor. Hence, check if the vendor cutomizing the package for you can provide you with support for the customizations they have done.

You might like to add a clause that it should be they who liaison with the package vendor for issues regarding the package itself. This might save the troubles fo running between the two vendors for issues in your system.

If you are willing to build an inhouse solution though, try out some of the open source solutions. Your system is a trouble ticket management solution. Check out Freshmeat for some ticketing systems. This could save a lot of time spent on re-inventing the wheel. Whats more, you could either resolve the issues in the solution either inhouse or ask the community!

Prem Kumar Aparanji
Senior Consultant - CRM
Cognizant Technology Solutions
Phone: 201-678-3232 xt:55477 [From USA]
+91-80-51915477 [India]
Cell: +91-9845226618 [India]