May 2003

‘Customer Relationship Management Overkill’?

An online report published in January by said that customer relationship management (CRM) system projects are most likely to be pulled off course and off budget by lack of appropriate checkpoints for reviewing assumptions, scope, and business problems.

According to the report, CIOs wary of buying too much software or not getting value out of their current licenses might be best off getting back to basics:

On Knowing What You Need, and Other CRM Advice

The CPA Journal asked John Lipsey, director of communications for CRM software provider Interface Software, Inc. ( and author of “Relationship Intelligence: A Strategic Asset” (News & Views, Novem-ber 2002), for his assessment of this report and his own perspective on the current state of CRM applications for the accounting profession.

The core message of’s report is that organizations should have a clear picture of their goals and objectives for implementing a CRM solution, and they should use these goals and objectives as selection criteria in choosing the best CRM package for their business.

For instance, the report speaks of good planning and oversight. This should not, however, simply be a tactical exercise. Firm management should have a clear picture of their CRM vision and strategy before discussing technology:

What does the firm want to accomplish? Does it want to increase new- client acquisitions? Prevent client defections? Bolster cross-selling capabilities? What business processes are currently in place to support these activities, and where must new processes be established? What are the needs of accountants, staff, and administration in order to advance these goals, and how can the CRM solution support these needs? What relationship intelligence would be required from the CRM solution, and what data sources are required to deliver this intelligence? What metrics has the firm established to help gauge the success of the program?

A firm should address all of these questions before they start deploying their CRM software. By doing so, it will have a much clearer understanding of what it wants to accomplish, and will be in a better position to make the right buying decision.

Needs analysis and good project planning are not enough to ensure CRM success. If the CRM package is not tailored specifically to the needs of the business acquiring it, the chances of success are lower and the costs will be higher. For this reason, verticalization has become a major issue in the CRM marketplace.

Most CRM solutions are designed to be “one size fits all.” But because they don’t provide market-specific domain expertise within the off-the-shelf package, firms must incur greater consulting and development charges to tailor the package to meet their needs. To avoid these unnecessary charges and delays, accounting firms should seek out CRM solutions that have been developed specifically for professional services organizations. These packages focus on the ability to access, manage, and leverage a firm’s complex network of relationships, which form the basis of revenue generation, cross-selling, client retention, and client service.

By focusing on relationship intelligence as opposed to salesforce automation—which is the primary purpose of traditional, horizontally based CRM solutions—these accounting-focused CRM packages will not subject firms to superfluous modules and functionality that they will never use. As a result, the firm is paying only for what it wants and will use. In addition, a tailored relationship intelligence solution will mean lower implementation costs and higher return on investment.

Another important issue that the CRMdaily report didn’t cover is hidden costs. One of the most dubious hidden costs in any CRM implementation relates to data quality, which has emerged as a major challenge at most companies.

Contact data erodes at a rate of 33% per year. Without proper attention, data can become incorrect, unusable, and ultimately untrustworthy. In its groundbreaking 2001 report, the Gartner Group cited poor data quality as the single greatest inhibitor to successful CRM implementation.

Missed opportunities top the list of costs resulting from poor CRM data quality. Outdated relationship intelligence means accountants may not discover critical relationships necessary to win a new client or cross-sell services to an existing client. The firm’s image also suffers when communications are disseminated with incorrect contact information, or when some clients receive duplicate copies and others receive none. Poor data quality also exacts high costs in labor and waste as firms execute marketing and other business development initiatives with bad data. Finally, if users don’t trust the data in the CRM system, they won’t use it, placing the entire CRM implementation at risk.

Although most CRM vendors place responsibility for data quality squarely in the court of the customer—their attitude is essentially “It’s not our problem, it’s yours”—some CRM providers that cater to the accounting profession have built into their products data-quality and data-change management features that drastically reduce the time and cost associated with maintaining a high-quality CRM database. The importance of data-quality functionality to a successful CRM implementation cannot be overstated.

Finally, another critical success factor for CRM that cannot be understated is the software vendor itself. Businesses require a great deal of support from their software vendor after the sale. Technical support, training, implementation services, and new releases are just a few areas that require strong vendor presence.

Because the type and level of service provided by CRM vendors varies remarkably across the industry and can substantially impact a firm’s success, it’s incumbent upon the business to assess the software company standing behind the product. Is this an organization that invests heavily in research and development to constantly improve the product? Are the customer support representatives knowledgeable and easily accessible? Do the vendor’s employees understand the accounting business? What is their reputation with other professional services firms? Is the company profitable and in sound financial condition? Understanding the company providing a product can be every bit as important as understanding the product itself.

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