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CRM: Taking a Cautionary Approach

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Posted March 14, 2002 By Staff     Feedback

Industry experts warn that a prudent approach to CRM could save companies undue hassle.

Industry experts warn that a prudent approach to CRM could save companies undue hassle.

Hoping to cash-in on a CRM-orientated market, many vendors are hyping instant large-scale CRM rollouts. In an uncertain economic climate, however, implementing large and costly packages isn't an ideal solution.

With estimates holding that the market for CRM will grow to $46 billion by 2003 vendors like Siebel Systems and Oracle are offering hefty CRM rollouts that promise to provide seamless legacy system integration and increase the corporate bottom line. Such ostensibly "instant" cure-alls that offer to boost revenues and keep track of customers may be tempting, but at $70 million plus, companies shouldn't be taking any chances. The fact is that only a fraction of the cost lies with the software - hardware expenses, software customizations, application integration and training frequently make up the bulk of CRM costs.

While vendors are lauding the 'instant benefits' of large CRM investments, many consultants and industry experts are advising companies to start off with small with CRM pilot projects and proceed cautiously until they have a clear CRM road map into the future. "We don't do anything unless there is a pilot project ... we're completing our CRM project in bite-size pieces," notes Evelyn Follit, CIO and senior vice president at RadioShack.

Ultimately, the caveat is: 'beware of instant solutions.' One of the sad illusions of the new economy is that things happen effortlessly and overnight - the truth, however, is that it still takes good old-fashioned hard work to make things happen.

"CRM is not for the weak spirited ... it requires a lot of management and money," cautioned Ned Liddell, vice president for business applications development at "Companies need to exercise diligence when choosing a CRM package - conducting careful research and putting together a close-knit team of internal and external experts," he averred. "Instant solutions are often very complex and the more complex these solutions are, the greater the risk. Don't just accept sales and marketing pitches from vendors "

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