In and by itself, the traditional offering of enterprise software vendors, integration & automation, brings little to the sales department in terms of visibility, efficiency and manageability. As a matter of fact, the benefits that CRM might bring in principle are wiped out by the complexity of the application and its effects in midsize organizations. There is value in integration & automation in the sales department of midsize organization, but commercial CRM software is not the best way to extract it.


In and by itself, CRM brings little in terms of visibility

Front and back office systems process very different types of information. The former processes "dirty" and often unstructured data while the latter processes "clean" structured data.

For the software industry, CRM is to sales what ERP/MRP is to manufacturing - a way to integrate several functions of a firm into a coherent whole (sales, marketing, customer service and support). Yet ERP/MRP systems deal with standard enterprise processes, finite information and "docile" operators, whereas CRM systems deal with diverse and evolving markets, a variety of sales channels, sales information (by nature imprecise, patchy and ephemeral) and sales people (a result-driven and independent breed). The conventional "Enterprise Application" model is unfit to encompass this front office complexity.

CRM really deals with the "chaos" of the market (a high number of leads, prospects, customers, an ever-changing reality from which orders are extracted through a distillation-like process) while ERP/MRP deals with the "order" of the enterprise (where orders with very precise information are processed into products or services). "Chaos" on the one hand, "order" on the other; two entirely different universes that require two totally different approaches.


In and by itself, CRM brings little in terms of efficiency

Back office and front office processes have little in common. The former attempts to "tame the production machinery" while the latter attempts to "tame the market."

The software industry operates with CRM as it does with everything else. It pores over a business activity or a discipline and identifies data to be integrated and processes to be automated. It provides customizability, links to surrounding systems (e.g.: back office application, outlook, PDA's, Internet) and calculation capabilities (here, mostly analytics). In doing so, it reduces the number of times the same information has to be keyed in, and it reduces error and labor costs (in theory only, because software implementations are rarely accompanied by layoffs in midsize organizations).

This may mean something for ERP because (1) it integrates many departments. (2) These departments share a lot of information (e.g.: engineering files shared by R&D, production, purchasing and quality). (3) They exchange a lot of data. (4) They "crunch a lot of numbers" (e.g.: MRP calculations, accounting). (5) They handle functions where savings can dramatically impact the bottom line (e.g.: purchasing: in an organization where material costs represent 70% of total sales (and salaries and overheads 25%), a 7% decrease in purchasing prices has the same impact on profits as the doubling of sales).

For CRM, this is less true. It concerns but a few functions, often grouped into a single department. The quantity of information that is shared or exchanged within or between these functions is limited (contact data and notes). Most of the information they share often already resides in a back office system (product and price lists, stock availability, customer orders). The occurrences of multiple data entries are less frequent, and the resulting potential savings limited: namely (1) the conversion of leads into quotes and (2) the conversion of quotes into orders (but this can already be handled by most back office applications).


Unnecessary complexity creates inefficiencies and reduces visibility

CRM and eCRM solutions are packed with complexity because the business model of software vendors requires it. They sell licenses or charge monthly fees. The more integrated the application, the more they can charge; the more functionality-rich their product, the more appeal there is to it; the more acronyms, buzzwords and hype, the further ahead they are of their market and competitors. The more proprietary lock-in (API, file formats...) the more cross-sell opportunities. The scope of commercial sales software is determined by concerns of marketability, selling price and profit maximization which lead to over-integration, arbitrary modularization, high complexity and poor quality. CRM and eCRM vendors are "prisoners of their own DNA." The vendor's business model is "what is wrong with CRM."