These executives had a clear understanding of exactly what part of the sales process needed to be improved.
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Two questions that have come up at several CRM events this year are, What if we don't see a commercially available CRM system that meets our needs? Are we crazy to think about building an application ourselves?
To get a perspective on how to answer these questions, I took a more detailed look at the data we collected as part of CSO Insights' 2004 Sales Effectiveness research project. Of interest is the feedback we received from the 960 respondents who had formally evaluated CRM technologies. Twenty-six percent decided not to implement a CRM system, 55 percent purchased a commercially available package, and surprising to us, 19 percent of respondents implemented a CRM system that they had developed in-house.
To find out why these firms chose to build versus buy, and also to learn what their experiences were after implementing these systems, we interviewed a number of the executives responsible for the initiatives.
A trait common to these initiatives is that compared with the market as a whole, these executives had a clear understanding of exactly what part of the sales process needed to be improved. As opposed to improving the overall performance of their sales teams by 5 to 10 percent, they were focused on taking a piece of the sales process--lead generation, needs analysis, proposal generation, customer contract renewal--and spent their efforts on achieving an order-of-magnitude improvement at doing that one thing.
For example, a worldwide seed production firm identified its biggest challenge as thoroughly identifying which types of seeds would generate the best yield for farmers based on the fields they were planting. Finding no commercial systems that could tackle this challenge, the company built an application in-house that runs on a handheld computer. The application took four months to create and test, totally fits the salespeople's needs for assessing a customer's requirements, and has significantly shortened the needs-analysis phase of the sales process as a result.
A telecommunications firm shared a different approach. It sells through a distribution network and found that generating comprehensive proposals was a huge issue for its channel reps. The company opted to build a Web-based application that allows channel salespeople to generate detailed 35-page proposals after getting answers to just 14 questions.
Another example was a Japan-based electronics firm that wanted to share the details on all the projects it had done worldwide across the sales force--expecting, as a result, to significantly improve the effectiveness of sales teams in pursuing new business. Working with a systems integration firm, the electronics company built a customized sales portal to house all that data in an easily searchable format. The payback for this investment was almost instantaneous: One of the firm's sales teams in North America was able to leverage the work done on a similar project in the Far East to win a major project.
The consensus advice from these firms is twofold: Go into these projects with your eyes wide open--understand that developing an application in-house means that you own it from then on, and need to make continuous investments to maintain and enhance the programs; and don't shy away from creating your own application if you truly cannot find a solution to your problem from a CRM software provider.
Jim Dickie is a partner with CSO Insights, a research firm that specializes in benchmarking CRM and sales effectiveness initiatives. Contact him at www.csoinsights.com
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