Strategies for Tight Budgets

Don't despair: You can still drive efficiencies and effectiveness in marketing, sales, and service, despite constrained budgets. The key is to select a strategy that adapts to short-term imperatives while also serving longer-term needs and objectives.

Four such strategies are available. Two involve leverage of existing CRM platforms; two enable migration to new platforms. All can drive more value than tight budgetary times seem to allow.

For those organizations that have already consolidated onto their preferred CRM platform (i.e., their limited and standardized set of applications for marketing, sales, and service), the best strategy may be to enhance organizational adoption of the processes and tools that are already in place.

Low adoption of a CRM system often comes from poor design of processes or interfaces. The design mistakes may occur as the system is being implemented or as it's maintained and enhanced over the years. (Incremental changes, each of which made sense at the time, can easily come to make no sense whatsoever in aggregate.) But a substantial impact can come from low- or even no-cost fixes within the application: rearranging the screens; adding workflows and automations; or deploying new reports and dashboards.

Low adoption often has another cause: inadequate executive commitment (e.g., the person in charge of sales failing to enforce the process for managing the pipeline). The fix here is straightforward: invigorated top-down leadership, a strategy that may entail no expenditures whatsoever.

For those with a preferred CRM platform that is not yet broadly or uniformly deployed, the best strategy may be to extend that platform's reach. This strategy might entail the expansion of the platform's footprint, or the extension of the preferred CRM processes and tools to new branches, divisions, acquisitions, or geographies. The sales force automation system might be extended upstream to the marketing function; downstream to the order management function; even outward to channel partners.

Another extension strategy would involve adding analytical capabilities to unlock significant value and intelligence trapped in transactional applications.

Whatever the variant, an extension strategy is limited by budget constraints. But as part of a longer-term strategy or roadmap, even incremental extensions of the preferred CRM platform can have substantial impact not only in 2009 but beyond.

For many, baseline CRM is so inadequate—a barrier to growth and profitability—that migration to a new platform is an imperative. The organization needs to transform itself, but at a time of fiscal stringency, it needs to do so with limited resources.

One option has become viable only recently: a platform delivered on the software-as-a-service (SaaS) model. With SaaS, the software does not offer the depth or breadth of functionality of traditional on-premises CRM, but it can be implemented at a faster pace with lower cost and risk. (For more on this, please see my previous articles in this space.)

For enterprises, a SaaS solution may not be the final stop on the multiyear CRM roadmap (due to functionality constraints and the long-term impact of the subscription model). But SaaS can certainly enable a short-term boost to CRM capabilities and achievement of CRM value. SaaS can also position an organization for migration in whole or in part to on-premises CRM at a later time, with customer-facing processes already having been standardized and customer-oriented data already having been centralized.

For some large organizations, a better strategy may be to embrace the on-premises model for CRM applications, but with more time devoted to preparing for transformation and defining processes and requirements. As discussed in a previous article ("Even SaaS Requires the Right Approach," October 2008), these relatively low-cost activities within a CRM transformation program are the most crucial to achieving CRM success. Regardless of budget, many organizations would do well to devote more time and effort to these up-front activities in the CRM program.

Constrained budgets are no excuse for CRM stagnation. Several value-creating strategies are available; a partner can bring diagnostic tools and outside perspective. However you forge your strategy, you cannot afford not to be aggressive with your CRM. How else will you be ready to seize opportunities when the economy rebounds? 

J. David Lashar (dlashar@us.ibm.com) is an associate partner in the CRM practice of IBM Global Business Services and the leader of the IBM CRM Center of Excellence for SaaS.

Every month, CRM magazine covers the customer relationship management industry and beyond. To subscribe, please visit http://www.destinationcrm.com/subscribe/.

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