Elements of a Successful Outsourced Solution
Outsourcing CRM solutions is a growing phenomenon that is generating a good deal of interest. For the purposes of this article, outsourced CRM solutions are defined as marketing automation applications that may include: hosted marketing databases, campaign management, lead generation/management, reporting and/or data mining. These applications may be hosted singly or in a turnkey solution. The benefits of outsourcing a CRM solution can be substantial, both in terms of revenue enhancement and cost reduction.
Typically, marketers see benefits accrue slowly in the first few months after implementation, as the new technology and processes are thoroughly learned and integrated into the organization’s operations. Then they see a period of significant payback as the new tools are mastered and learnings are applied to optimize the outsourced CRM solution capabilities. Eventually outsource users hit a point of diminishing returns, but the overall level of performance has been taken to a higher level.
Success Resides in the Implementation
While many companies are pursuing outsourced solutions, it pays to remember the Economics 101 axiom that “there is no free lunch.” Yes, there are substantial benefits to be gained from outsourcing a CRM solution, but before the first measurable benefit is realized, there is the simple matter of implementation.
As many of you may have experienced, implementing an outsourced CRM solution is not a trivial task for many reasons:
Dynamic project management—This requires coordination of many parties and resources. Internal participants may include marketing, sales, IT, customer service and/or legal. External parties may include the outsourcer, software providers and consultants.
New technology—Implementation often involves the use of newer technology, which may be challenging to internal organizations such as marketing and IT.
New way of conducting business—Some groups within your company may be resistant to outsourcing, and present business processes will likely be affected.
Time and expense—Outsourced implementations claim to be “rapid,” but typically span months and may entail significant expense, which must be carefully managed.
High corporate visibility—Outsourced projects usually garner the attention of senior management.
The key to a successful outsourced solution is a thorough evaluation and selection of an outsourcing partner. Work with a provider that has a track record of proven technology and successful implementations. Often, success also can be driven by aggressively adhering to an outsource-implementation methodology that typically involves the following steps:
#1 Contract negotiation. Negotiate a contract that protects your position and is very specific in its Statement of Work (SOW)—outlining tasks, timelines, deliverables and costs. This not only will protect your company, but it provides commonly understood parameters for both you and your outsourcing partner to follow. The SOW should:
• Include a detailed list of CRM services to be provided.
• Identify the aspects of the technology/solution owned by the provider and the customer.
• Establish the length of time for which services will be provided. As expected, longer terms justify lower costs.
• List fixed versus add-on costs, annual fees, anticipated increases, and the billing approach for development.
• Identify your responsibilities for implementing the outsourced solution.
• Spell out the terms of support, types of support provided and availability (days and time of day).
• Provide early termination criteria and processes.
• Include contact information for business questions, technical issues, etc.
#2 Kick-off meeting. This meeting between the marketer and the outsource provider reviews the entire implementation work plan, roles/responsibilities, timelines and outcome. These meetings should set the level of expectations and ensure consistent understanding of the project.
#3 Business-requirements gathering. Conduct a series of interviews to determine the functionality required of the solution.
#4 Technical requirements. Identify the technical specifications and system requirements needed to support the solution.
#5 Solution design. Develop the technical specifications required to build the outsourced solution.
#6 Development/Integration. Build and integrate the solution.
#7 Test. Conduct user-acceptance testing and system testing to ensure the system performs as designed.
#8 Training and deployment. Conduct thorough user training and distribute written documentation to support new-user orientation and to provide a first line of service support.
Outsourced CRM solutions can provide extensive and long-term benefits to marketers. The secret to success is aggressive adherence to a well-thought-out plan.
Brad Connard is executive vice president of client relations for Quaero. He can be reached at email@example.com.