Crm tools – evaluation approach

AbstractThis paper presents a systematic approach for evaluating CRM tools considering multiple business critical param-eters via three different metrics based on CRM functional-ity, quality & reliability, and price. This paper suggests that CRM tools should be evaluated on multiple parameters, rather than evaluating only on the basis of the price. Met-rics presented in this paper are applicable for both cloud and on premise CRM solutions. This paper recommend that the tool which meets maximum business requirements, has a high score in quality & reliability based evaluation with lower total cost of ownership (TCO) should be selected for implementation.

CRM Tools– Evaluation Approach

ProblemWhen a company decides to implement a CRM solution, the biggest question comes in the mind of a decision maker is, “Which CRM tool should I select for implementation”? There are hundreds of CRM tools available in the market. Some leading CRM tools are based on cloud computing and some tools are on premise based. Both types of CRM tools are successful in specific business sce-narios, however each type of tool has its own pros & cons. It is really difficult for a company to decide whether they should go for a cloud based or on premise based solution. Even if the com-pany is able to decide between cloud and on premise based solution, there are many tools avail-able in each category. Other major challenge the company faces is to identify the parameters based

Contact andAccount

ManagementSales

Automation

CRMMarketig

Automation

Integration

CustomerService

Solution: This paper presents a systematic approach of evaluating CRM tools on multiple param-eters, not only on the basis of the price. It suggest to evaluate CRM tools on following criteria’s.

1. Functionality based evaluation 2. Quality and reliability based evaluation 3. Price based Evaluation

In this paper a metrics has been presented for each evaluation criteria and it also explain how to assign score to each parameter given in the metrics. This paper presents a method for calculating a composite score for each CRM tool in evaluation scope, based on the weightage assigned to each evaluation criteria and points worked out from the score. It recommend to go with the CRM tools which has highest composite score.

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White paper CRM Tools–Evaluation Approach

1.2. Assign requirement weightage & customization level score to each functionality

Once the business has identified its current and future requirements, table created in step 1.1 can be extended to evaluate CRM tools against these requirements. A CRM tool being considered for evaluation should meet current requirements and should also have the capability to meet future requirements of the company. As given in below table, we can assign weightage to requirements based on its priority ranking.

Approach for shortlisting CRM tools

1. Evaluate CRM based on its Functionality

1.1. List down high level business requirements and prioritize them: While planning to imple-ment a CRM solution, the team responsible for selecting and implementing CRM should have a detailed discussion with all stakeholders, document their high level business requirements, and assign them a priority ranking. In this process, help from responsible function / department can be sought. E.g. Sales Dept. can provide their inputs for Lead Mgmt., Account Mgmt, Opportunity mgmt. etc; Given below a sample requirement checklist format, this format can be further custom-ized as per business need.

Ideally the team should try to identify and document current and future requirements of the CRM system. There may be some functionality which a company might not require now, or it does not want to implement initially. However, it may decide to implement those extended CRM functionali-ties in near future. So while selecting the CRM tool, emphasis should be given to fulfillment of both, current and future requirements. Given below a sample format which company can use to list down, and prioritize their high level business requirements:


Functionality Required Responsible Business function Priority Ranking Requirement type

Campaign Mgmt. Marketing Must Current

Lead Mgmt. Marketing / Sales Must Current

Account Mgmt. Sales Must Current

Contact Mgmt. Sales Must Current

Opportunity Mgmt. Sales Must Current

Pricebook Mgmt. Sales Must Current

Product Mgmt. Sales Should Current

Activity Mgmt. Marketing/Sales/CC Must Current

Case Mgmt. Customer care Must Current

Quote Mgmt. Sales Should Current

Reporting & Dashboards Marketing/Sales/CC Must Current

Forecasting Sales Should Future

Mobile Access Marketing/Sales/CC Nice to have Future

Knowledge Base Sales / Customer Care Should Future

Call Center Integration Customer care Nice to have Future

Customer Self Service Portal Sales / Customer Care Should Future

Partner Portal Sales Nice to have Future

• Requirement weightage based on priority ranking In order to evaluate CRM tools on functionality based parameter, business team can use a customi-zation level score for each CRM functionality as given below.

Priority Ranking of Requirement WeightageMust 1

Should 0.8

Nice to have 0.5

• Customization level score definition Definition0 No customization is required, All requirements can be meet using OOB functionality

1 Low level customization requires (<= 5% customization)

2 Medium level customization requires (>5% to <=10% customization)

3 High level customization requires (>10 to 20% customization)

4 Entire functionality need to be developed custom (>20% customization)

While comparing a final score of CRM tool based on required level of customization, a tool which has lower score is good for business because it will result in quick implementation, easy maintenance in long run.Given below is a sample metrics filled for two CRM tools. In this case CRM Tool 1 is an on premise solution while CRM Tool 2 is a cloud based solution. This metrics can be either filled by business team during demonstration of the CRM tool by the vendor or business can ask CRM vendor to fill this metrics against their CRM requirements. While preparing the final comparison sheet, last two columns can be copied for each CRM tool being evaluated. (This is just a sample matrix only.)

Customization Customization

Score ScoreA*B A*C

Campaign Mgmt. Marketing Current Must 1 Yes 1 1 Yes 2 2

Lead Mgmt. Marketing / Sales Current Must 1 Yes 2 2 Yes 2 2

Account Mgmt. Sales Current Must 1 Yes 1 1 Yes 1 1

Contact Mgmt. Sales Current Must 1 Yes 1 1 Yes 1 1

Opportunity Mgmt. Sales Current Must 1 Yes 3 3 Yes 2 2

Pricebook Mgmt. Sales Current Must 1 Yes 2 2 Yes 1 1

Product Mgmt. Sales Current Should 0.8 Yes 1 0.8 Yes 1 0.8

Activity Mgmt. Marketing/Sales/CC Current Must 1 Yes 2 2 Yes 2 2

Case Mgmt. Customer care Current Must 1 Yes 3 3 Yes 2 2

Quote Mgmt. Sales Current Should 0.8 No 4 3.2 Yes 2 1.6

Reporting & Dashboards Marketing/Sales/CC Current Must 1 Yes 3 3 Yes 2 2

22 17.4

Forecasting Sales Future Should 0.8 No 4 3.2 Yes 2 1.6

Mobile Access Marketing/Sales/CC Future Nice to have 0.5 No 4 2 No 4 2

Knowledge Base Sales / CC Future Should 0.8 No 4 3.2 No 4 3.2

Call Center Integration Customer care Future Nice to have 0.5 Yes 3 1.5 Yes 2 1

Customer Self Service Portal Sales / CC Future Should 0.8 No 4 3.2 Yes 3 2.4

Partner Portal Sales Future Nice to have 0.5 No 4 2 Yes 3 1.5

15.1 11.7

Requirement weightage based on priority ranking (A)

Current requirements customization score CRM Tool 1 CRM Tool 2

Future requirements customization score CRM Tool 1 CRM Tool 2

Functionality Required Responsible Business functionRequirement

typePriority Ranking

CRM Tool 1 CRM Tool 2

Available out of box

Level of customization required (B)

Available out of box

Level of customization required (C)

Since we are evaluating a CRM based on current and future requirements, so while calculating a final score, it is advisable to assign a slightly lower weightage (0.7) to the future requirements score. Customization level score for CRM tool 1 = Current req. score + Future req. score*0.7 = 22+15.1*0.7 = 32.57 Customization level score for CRM tool 2 = Current req. score + Future req. score*0.7 = 17.4+11.7*0.7 = 25.59


• Point table for Functionality based scoreWe need to assign points to the customization level score of CRM tool 1 & 2. In this case low score means low level of customization, and high score means high level of customization, so we need to be assigned high points to low score and low points to high score. To do this we need to work out a reverse scale so that the tool scoring lowest score can get highest points.

Functionality based evaluation points assigned to CRM tool 1 (P11) = 7Functionality based evaluation points assigned to CRM tool 2 (P21) = 8

2. Evaluate CRM based on its Quality and reliabilityIn second step,CRM tools should be evaluated based on param-eters related to its performance, data security, scalability, user’s feedback etc. We can use following score definition in order to work out a score for CRM tool on quality and reliability based evaluation.Below quality and reliability based metrics has been filled for both tools to calculate score of both tools on the parameter given in the metrics.

Score Definition1 Low2 Medium3 High

Parameter Definition CRM Tool 1 Score CRM Tool 2 Score

Data Security Data is highly secured, no incident reported for data loss 3 3

Reliability System is highly reliable, unplanned down time not seen 2 3

Robust scalabilityThe tool should be scalable to support large user base across the globe.

3 3

Integration capabilitiesThe tool should be able to integrate with ERPs, and other systems by custom code as well as using ETL tools.

3 3

Ease of use for end usersUI of the tool should be user friendly, and it should make end users work more fruitful.

2 3

Ease of implementation Implementation and rollout of the tool should be quick. 2 2

Ease of administrationOnce implementation, an in-house administrator should be able to manage day to day activities.

3 3

Ease of change managementChange mgmt. is easy, CRs can be implemented in production without OEM involvement.

2 3

Resource AvailabilityTechnical resource required to work on the tool are available in the market at reasonable price

2 3

OEM Support & CommitmentOEM has 24*7 support coverage and issues are resolved with- in agreed SLAs.

3 3

Feedback from referenceMultilevel feedback (end users, Admin, head of business etc.) should be sought from at-least 3-4 references.

2 3

27 32Total

• Point table for Quality and reliability based scoreIn case of quality and reliability based evaluation, the tools scoring highest should be given prefer-ence because higher the score, more reliable the tool. So we will use a normal score scale to assign points for quality and reliability based score.

Quality and reliability based points assigned to CRM tool 1 (P12) = 3Quality and reliability based points assigned to CRM tool 2 (P22) = 4


Score Range 0-10 11-20 21-30 31-40 41-50 51-60 61-70 71-80 81-90 91-100

Points 10 9 8 7 6 5 4 3 2 1

Score Range 0-10 11-20 21-30 31-40 41-50 51-60 61-70 71-80 81-90 91-100

Points 1 2 3 4 5 6 7 8 9 10

3. Evaluate CRM based on its PriceWhile doing the price based evaluation of CRM tools, we should consider implementation cost and recurring cost, annual resource cost etc. There are many tools which have initial lower cost but annual maintenance and resources cost is high and in other case, initial cost is bit high, but the annual recurring cost is low. The tool with lower TCO (total cost of ownership) should be given pref-erence in final selection.

Points table for price based score In case of price based evaluation, since lower TCO should be given preference and need to be assigned highest points, we need to work out a reverse scale as we did in case of functionality based points table score.

Price based evaluation points assigned to CRM tool 1 (P13) = 6Price based evaluation points assigned to CRM tool 2 (P23) = 7

4. Assign weightage to each evaluation criteria and calculate composite score for each toolOnce above three comparative metrics are filled and final score is calculated and points are assigned to each evaluation criteria, the organization needs to assign a weightage to each evalua-tion criteria based on its criticality for the business. In general, the following weightages are assigned to these three evaluation areas. Evaluation Criteria Weightage

CRM functionality based evaluation (W1) 50% or .5

Quality and reliability based evaluation (W2) 30% or .3

Price based Evaluation (W3) 20% or .2

Total (W1+W2+W3) 100% or 1

Now we have weightages assigned for each evaluation criteria and points assigned to each evaluation criteria score.

Evaluation Criteria Points Evaluation Criteria Points CRM Tool 2

Functionality based evaluation points (P11) 7 Functionality based evaluation points (P21) 8

Quality and reliability based points (P12) 3 Quality and reliability based points (P22) 4

Price based evaluation points (P13) 6 Price based evaluation points (P23) 7

CRM Tool 1

This will help us in calculating a composite score for each CRM tool based on the above scores and weightages.


One time (A) Annual (B) One time (A) Annual (B)

Avg. Implementation cost for similar business $30,000.00 $25,000.00

Annual subscription fees (50 users) $4,000.00 $3,000.00

Annual Maintenance and upgrade $1,000.00 $0.00

Avg. Annual Senior Consultant Cost $10,000.00 $6,000.00

Avg. Annual System Administration Cost $5,000.00 $4,000.00

Any other cost

Total cost of ownership (A+B)

Price based evaluationCRM Tool 1 CRM Tool 2

$50,000.00 $38,000.00

Amount in 000 $ 0-10 11-20 21-30 31-40 41-50 51-60 61-70 71-80 81-90 91-100

Points 10 9 8 7 6 5 4 3 2 1

Formula for calculating composite score of a CRM tool =

Weightage of functionality based evaluation (W1) x points scored on the basis of functionality (P1) + Weightage of quality and reliability based evaluation (W2) x points scored on the basis of quality and reliability (P2) + Weightage of price based evaluation (W3) x points scored on the basis of price (P3) Composite score for a tool = W1*P1+W2*P2+W3*P3 Composite score for CRM tool 1 = W1*P11+W2*P12+W3*P13 =.5*7+.3*3+.2*6 = 5.6 Composite Score for CRM Tool 2 = W1*P21+W2*P22+W3*P23 = .5*8+.3*4+.2*7 = 6.6In this sample CRM evaluation case, after thoroughly evaluating both CRMs on all three evaluation criteria suggested in this paper, composite score of CRM 2 is higher than CRM 1. So we recommend to select CRM tool 2 for implementation. Conclusion: Gartner Group research concludes that anywhere from 50% to 80% of CRM implementa-tions fail in terms of not meeting expectations. (Ref: Thomas Net News Tech Trends Journal – Why B2B CRM Systems Fail – 8/2013)

One of the major reasons for CRM system’s failure was due to business’ failure in selecting right CRM tool for implementation. So if the client follows a systematic approach for CRM tool selection, one can select right CRM tool for the business and can avoid risk of CRM failure because of wrong tool. It is apparent from the discussion that while selecting a CRM tool, it should not be selected/rejected only on the basis of the price. There should be a 3600 evaluation of the CRM tools based on three metrics presented in this paper. If required, more parameters can be added to these metrics. The composite score of each tool should be compared before finalizing any tool. The selected CRM tool should have the ability to meet organization’s CRM vision with lower TCO. It should add value in company’s front office processes as well as should help in increasing productiv-ity of the end users of the CRM.


About the authorRajneesh Jadon is Subject Matter Expert with Fujitsu Consulting India having close to 14 years ofindustry experience. In FCI Rajneesh is part of CRM team and has worked across Salesforce & LotusNotes technologies. Rajneesh holds a PGDM from IIM Lucknow and MCA from MDU Rohtak.

Fujitsu Consulting India is Indian subsidiary of Fujitsu which is a leading Japanese information andcommunication technology (ICT) company, offering a full range of technology products, solutionsand services. Approximately 159,000 Fujitsu people support customers in more than 100 countries.

FCI is first in India and second in the world to be awarded CMMI Services Level 5. Its integrated services and software portfolio includes Business Application Services (including ERP, CRM, AMS, BI,Mobility, Knowledge Management, Applications Packaging and Business Analytics- Rollouts,Upgrades and Implementation), Managed Infrastructure Services (Remote Infrastructure Manage-ment, System integration Services and End-user Services) and Business Support Services.WP_16.0517

Crm tools – evaluation approach

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