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CRM Gets More Professional
Service providers respond to changing market conditions with greater CRM deployments.
For the rest of the May 2012 issue of CRM magazine please click here
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In the professional services arena, large and small firms alike are finally abandoning spreadsheets in favor of CRM systems made especially for them.

In fact, commercial CRM adoption among professional services providers stands at 86 percent, according to "The 2012 Professional Services Maturity Benchmark" by Services Professional Insight (SPI) Research. That's in stark contrast to 2009, when the Technology Services Industry Association (TSIA) reported that only 55 percent of professional services teams were using an enterprise CRM product and 29 percent had budgeted for new or additional CRM tools in 2010 and 2011.

This surge in service industry CRM adoption underscores the increased emphasis service organizations are placing on selling and marketing. In the services industry, more than in any other, customer references are the lifeblood of sustainability and growth. "Client references have a strong correlation with service marketing effectiveness, the length of the sales cycle, and the ease of getting things done," the report's authors, Jeanne Urich and R. David Hofferberth, managing directors at SPI Research, wrote. "Client references are a leading indicator of organizational success. As this percentage increases, so does the probability of high levels of growth, higher bid-to-win ratios, and lower sales costs."

Vincent Scarinci, director of business development solutions at Hubbard One, a Chicago-based solutions provider to the professional services industry, also sees greater competition among service providers as a motivating factor. "What we're seeing now is a bigger uptick in people shopping around for services based on experience, pricing, etc.," he says. "Customers are putting work out for bid. That trusted source now has to compete for business that it previously would have secured over a luncheon. They are fighting for business harder than they've ever had to before."

Also driving this trend are other outside pressures, including market consolidation, tighter government regulations, and economic conditions. "The professional services market is getting sandwiched between market contraction and pricing competition," Scarinci says.

The industry, he adds, is still lagging behind other verticals in its overall CRM adoption, "but it's closing in fast. In the past two years, we've seen an amazing turnaround in business processes and the way firms handle those business processes."

One of those business process changes is a move toward the adoption of cloud-based solutions.

The SPI Research report notes that in the professional services sector, cloud services providers have "significantly outperformed" on-premises software providers.

One problem is that few CRM systems are integrated with other business applications. Less than 15 percent of respondents in the SPI Research survey have integrated their CRM and financial systems directly. "Greater integration among enterprise applications yields greater operational and financial results. Ideally, these solutions [should be] integrated out of the box or easily integrated through standard interfaces, which do not require extensive upkeep and expensive maintenance," the report noted.

Scarinci acknowledges a lack of integration, but says that is starting to turn around as well. Professional services firms today "see a bigger need for integrations with CRM and their front-end solutions. As work comes in, they see the need to integrate all the data earlier."

Gone, too, are the days when CRM systems were used primarily for basic list management and customer contact information storage, according to Scarinci. "We see a lot more sophistication in the process," he says.

Of particular note is a greater emphasis on analytical data, with firms wanting to know more about the success of marketing campaigns, and being able to apply that information to customer records and other CRM system information. "Companies want…better data around customers and business prospects," Scarinci says.


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