For those who viewed the SciFi Channel’s recently-concluded series Battlestar Galactica, you might recall the pilot episode that set the stage for the entire series.  You might ask, what does Battlestar Galactica have to do with CRM?  I’ll pull it all together later in this post, but now, back to Battlestar Galactica. As the pilot episode starts, we see an advanced human civilization living on planets called the Colonies.  On one of the planets, Caprica, an old Battlestar ship called the Galactica is being de-commissioned and converted into a museum.  Its usefulness appears to be long gone because its technology is a relic of a bygone age. The war with the robotic Cylon race ended over 40 years ago and nobody has heard from them since.  Things are about to change very quickly, though.

Within a few minutes of the inauguration of the Galactica museum, the Cylons emerge from their long 40-year hiatus and begin to attack. No problem, everyone thought, because all of the fighter ships have now been networked using the new state-of-the-art defense grid.  But as the Cylon attack progresses and one-by-one, all of the networked ships in the Colonial fleet are neutralized and destroyed by the Cylon attack, it becomes apparent that the Cylons have infiltrated the defense grid.  Within minutes, human life on the defenseless Colonies is annihilated.  The Galactica, being a legacy ship, was not connected to the defense grid and it is hurriedly put back into operation while the attack is under way. With a few surviving civilian ships, it and human civilization manage to escape total destruction.

What is the moral of the story, as interpreted by your friendly, neighborhood CRM consultant?  Dependence on a totally online model might not be a good idea if the network backbone fails.  Sometimes the old legacy product is the one that survives in all of the chaos left behind.  All too often, companies embrace new technologies and paradigms without evaluating the risks as well as the rewards.  On-Premise CRM is definitely the legacy technology, while CRM-as-a-Service is much newer.  Does newer automatically mean better, though?

With the CRM-as-a-Service model, sometimes the true costs are not apparent until it is too late and you are locked into a contract.  With many providers, if you reach a threshold of a certain number of users, you might pay more.  If your database gets larger, you might pay more.  If you have more than a certain number of emails sent per month, you might pay more.  To know whether CRM-as-a-Service will be cost effective, a company has to have an idea of what their requirements and usage estimates are.  Otherwise you could be in for a big surprise when your bill arrives.

In a CRM-as-a-Service environment, your data is only as secure as your host is.  Do you have easy access to your data if you needed to recover from a disaster or are you at the mercy of the host?  While a physical attack on the scale of the Cylon attack in Battlestar Galactica may seem remote, we have seen attempts by criminals and hostile governments to infiltrate commercial and U.S. government computer systems through cyber-terrorism.  What if your company’s confidential data were lost, corrupted or even made public because your host was compromised in some way?

On-Premise CRM systems can be compromised as well, but at least you know where your data is and you can back it up locally and even remove servers physically from the premises in the event of an emergency.  Still, there are other risks with On-Premise CRM systems. Unlike CRM-as-a-Service, where there are multiple redundant systems in place to maintain uptime in the event of a catastrophic failure, you are responsible for the infrastructure of your on-premise system.  Even if you outsource your IT department, the ultimate responsibility rests with you.

The CRM-as-a-Service model excels in its accessibility to the system wherever your employees may be.  If you have an on-premise system, you would have to create that remote access environment yourself.  The reliance on the Internet for the CRM-as-a-Service model has its drawbacks, though.  What happens if you have no Internet connection?  Does the online CRM product have an offline version that resembles the online experience so that you don’t have to train users in both versions?

Finally, the CRM-as-a-Service model normally includes software upgrades in the contract, while in an on-premise environment, you would have to purchase upgrades or software maintenance separately.

Whether you choose to adopt CRM-as-a-Service or choose an on-premise system, you have to pick the one that fits your business the best.  If you make the wrong choice, you might find out too late that you have been believing in a little science fiction yourself.

Many people who travel can’t ignore the impressive ads for CRM (Customer Relationship Management, for the acronym-challenged among us) software that have been in airline magazines for the past 10 years or so.  If you are fortunate to strike up a conversation with a businessperson on your flight, the subject of your conversation might turn to what CRM software you might be using.  Don’t be surprised if your fellow traveler tells you how disappointed he or she is with the CRM software that they have at their company.  They are not alone.  The Gartner Group, one of the world’s leading information technology consulting companies, has had several studies indicating 65% of all CRM projects fail.  That is a staggering number, considering the amount of money spent on these projects and the glamorous press that the CRM companies are receiving.  Why does CRM have such a miserable track record?  I’ll begin what I think will be a spirited discussion in my post here.

1. Lack of Planning and Insight.
CRM systems are implemented often without any planning.  The companies purchase or subscribe to CRM systems as a cure to their customer-relationship problems, expecting the software to solve their problems for them.  That is never the case.  For CRM to work in an organization, an organization has to evaluate how they interact with their customers and prospects, how they capture information from those customers now and what goals they have for making that information more complete and useful before they can even consider implementing CRM in their organization.

2. IT Department drives the implementation.
Most CRM systems fail because the people who interact with the customers, such as salespeople or customer service personnel are not consulted when selecting a CRM solution.  If the IT department is the principal driver in selecting the CRM system, its agenda might be at odds with the end users.  For example, the IT department might be impressed with the technology of a particular CRM system, but that means very little to the person that has to use the system.  In most cases, an IT department would benefit from working with a CRM consultant that understands both the IT world and the business-process world.

3. Pilot-projects aren’t done.
In larger companies with many departments and other complex requirements, it is best to select a small group that will pilot the system before rolling it out to the entire company.  During the pilot phase, a company can detect whether problems with the CRM system could be solved before the company-wide implementation.  You can avoid a costly mistake by identifying if the problems are fixable, or if you are up against a limitation in your chosen product that cannot be resolved without scrapping the product altogether and selecting a different solution.

4. Everyone doesn’t use the system.
In my most successful CRM implementations, everyone that contacts customers or prospects uses the system, regardless of what level they are in the company.  There are no excuses for not using it.  The CEO uses it and the customer service trainee uses it also.  All too often, CRM systems are put into place and nobody at an executive level uses it and no one makes sure that their employees are using it either.  Without the pressure to use the system from the higher-ups, the end users get the message that the CRM system isn’t very important and stop using it themselves.

5. CRM is used to distance the company from its customers.
The goal of a good CRM implementation is to get a company closer to its customers and prospects, through centralized and shared customer information, records of phone calls, face-to-face meetings and emails.  All too often, though, these systems have an unintended result of distancing the company from its customers by creating another layer of bureaucracy that didn’t exist before.  Just because you have a system in place doesn’t guarantee that your customers will like it.

6. The CRM system fails to evolve as the company evolves.
As your company changes, the CRM system has to evolve to meet those changes.  If it can’t, your company may face significant costs and downtime if you have to move to another system, not to mention that you’ll have a high probability that much of your data won’t convert to the new system.

Choosing the proper CRM system can be an important part of your company and the choice should be made with care.  In today’s market, investments have to be considered wisely and the choice of a CRM system is no exception.  The wrong decision could be devastating, both financially and organizationally, so do your homework, and enlist the help of a CRM professional if you need assistance.