Ice cream sandwiches and fluffy dogs start out our episode today. Doug and Jess made me really hungry for something sweet at the beginning of this one, so I’d recommend grabbing a snack if you haven’t eaten much prior to this episode.
BUT that’s not what anyone is here for. I know you’re in anticipation of the continuation of our series on CRM Implementations and what they should cost. What was a two part series is now turning into a three part series! (If you have not listened to Part 1, listen to it here.)
What we’re talking about is a full implementation in the category that we’ve referred to as rip and replace. You are either coming from no real system or you’re using an existing system. Today we’re going to get into areas of consideration.
- [RevOps Show] Episode 39: What to Expect When You're Expecting a CRM Implementation - Costs, Part 1
- [Blackline Podcast] Episode 83: Beware of the Mushroom Cloud Tech Stack
- [Blog] The Ideal Tech Stack For Mid-Market Companies Serious About Smart Growth
- [Blog] CRM Evolution - How RevOps Sprung From A Change in the Status Quo
There are three platform types for you to choose from – work-in (using a single tool), build on (multiple systems tied together through good integration), or no platform (using a series of point solutions). Much of where the costs are going to get allocated are going to be based on what is that platform decision. That’s a small recap of the previous episode.
What are the key things you can consider when you’re doing a CRM implementation?
How big is the team? If you think about the team you need to think about company roles. How big is the company? How many people does the division have? Are those people market facing or in a support position? You do need to consider your financial roles because they are impacted directly by market actions. You also need to think about the indirect elements too because those are major in terms of what you decide, platform wise.
Access is a key thing. How many people are directly involved in the go to market and how many people are in interaction roles with customers, prospects, and the greater community?
The information talked about today is going to apply to those who have interactive teams or 50 seats or more or even 25 or more. Team size is a critical element of consideration and realize that what you have to take into account is Metcalfe's Law. Metcalfe’s Law states that each node you add doesn’t increase by one. It’s all about networks.
What other technology is the company using front end, back end and what is your finance system? The number of applications that companies are using are mushrooming and the costs of managing those are mushrooming too.
Everyone wants the four most damaging words in any tech implementation— all I need is. And all they need is simple. There’s a quote that ties in really well with this. “Where simplify on this side of complexity is worthless. Simplicity on the other side of complexity is invaluable.” Is your CRM build simple or is the execution simple? People want the level of effort and cost associated with a simple build with the outcomes that come from a simple execution. This is where the inverse complexity law or the inverse friction principle comes in. The inverse friction principle is the level of complexity in a user's experience has an inverse relationship to the complexity that went into creating that experience. Embracing and managing the complexity in the build is required for a simple implementation. This is where the biggest cost of CRM comes in. Depending on the research 50-70% or implementations fail to deliver on their intended results. You have to grasp what your level of complexity is so that you can make sure that you’re matching the strategy, the effort and the resources to get the payoff you’re looking for.
Let’s talk about the different types of costs that you have associated with an implementation.
The business objective has to drive the process . The process shouldn’t drive the objective. No one implements a new CRM because they want a better CRM. The danger is that CRM is a process improvement initiative, so if the process isn’t clearly connected to the outcome or to the performance, then changing the process doesn’t necessarily change the performance. Also changing what enables the process doesn’t necessarily change the process.
There’s two parts to our business, the process transformation side and the performance transformation side. One thing that makes us special is that we have deep expertise on both sides. But I’d they are not connected then you don’t necessarily get the performance improvement side and it’s that side that drives the cost.
Doug sees too often that companies add technology for the promise of enablement and they end up creating one more thing someone has to manage. As you develop more, you get more noise and it becomes harder to get the signal.
Doug was looking at someone’s setup a few months ago and they had more dashboard than they had employees. They had 700 dashboards! As a side note, Doug is going to come up with a dashboard to employee ratio where if your dashboard to employee ratio is more than 1 it’s definitely a problem.
The first type of cost here is what’s the velocity of the cost? The second cost is time. How much time chronology and time of people is it going to take to implement? How much are you going to continue to carry your legacy coats? How much is spent in development?
What salesperson or marketing person or success person is rewarded because they use the tool correctly but fail to accomplish the outcome? No one.
It’s easy to fall into “well this is how we do it” and what’s wrong with that logic is that we can’t get the information we need. Doug and Jess have had knockdown fights about this and it usually ends where they find a better solution because the other path is not the right answer.
Let’s get into the cost of the status quo.
The status quo is an interesting beast because in some ways it gets a bad rap and in other ways it deserves to be sent down to the seventh level of hell. There’s a cost to change. And the real cost of the status quote is hard to identify. This gets back to what is the outcome? What’s the performance that needs to change? There’s a cost to friction. To emphasize, not all friction is bad, but friction should be highly tied to areas of real value creation. Friction is an invisible cost.
When you don’t change, you’re making the decision not to change. You must understand the outcome you’re trying to achieve. What are the inputs you need to have? A good CRM will enable your team to focus on the process and let the outcomes take care of themselves. And remember you’re changing a core piece of technology, so you’re changing behavior. You have to make sure you define what is complete.
- The CRM implementation is a process improvement initiative
- If you want to have any impact it needs to be tied to a performance improvement initiative.
- The key is to consider the company size, team size, the roles, who is going to use the system, and the understanding of your overall tech stack.
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