The customer relationship headlines may be awash with talk of cloud CRM, but not everyone has made the jump. In fact, numerous organizations still use software such as ACT, SalesLogix, or even outdated versions of Siebel, and have trouble moving to cloud CRM, despite their need and desire for new sales force automation (SFA) software.
The issue, as I hear it time and again, is: “We know we need a new SFA application, but how can it be justified?”
The answer is that there are only three ways to justify SFA:
- Breakdown: As with cars, wait until the software becomes so unwieldy, costly, or unusable that you’re forced to buy something new (used 50% of the time).
- Transformation: Deploy new SFA software to support business transformation (30%).
- Reengineering: Use business process reengineering (BPR) to overhaul existing ways of doing business to achieve productivity increases (20%).
Is there any difference between the three approaches? Indeed, because while waiting until something breaks might be the easiest justification technique, from a business results standpoint, it’s also the least effective. By contrast, adopting SFA to support reengineered business processes offer the potential for significant increases in productivity, across the business. Unfortunately, BPR is also the most difficult justification strategy.
SFA Justification Challenges Businesses
When is the best time to invest in new SFA software? Per my “breakdown” reckoning, 50% of businesses invest in a new SFA system because their existing CRM software is “too old.” If this doesn’t seem like an especially rigorous or rational justification for buying software, you’re right. Then again, justifying CRM software is quite difficult.
Any SFA justification, however, is arguably better than none. For example, I recently met with the CIO of a high-technology company that’s been discussing implementing a new SFA system — for the past five years. In the meantime, for SFA, this business is still using an ancient version of SalesLogix, which doesn’t integrate with the company’s call center, which runs a really old version of Scopus (which Siebel purchased in 1998).
Something needed to be done, said the company. But they asked, “How do we justify it?”
Wait For A Breakdown
The first way to justify investing in new SFA software is what I call the breakdown model, and it’s personal. Namely, I drive a 2002 Mini Cooper. It’s 10 years old, now sports 60,000 miles, and was the first of the rebooted Minis to be released the States. Whenever I first drove it, everyone would stop and gawk.
Now, my old Mini is like the SFA system at the aforementioned company. It works. It might not shine, but it gets me to work and home. At some point, I’ll decide to buy a new car, but it won’t be a rational decision, and will likely involve my current ride becoming too costly to maintain, or simply breaking down altogether. Already, the windows don’t work well (I have to open the door to pay tolls). The little windshield wipers on the headlights haven’t worked for years. And the car leaves a puddle of something wherever I park it. But it runs.
Likewise, the aforementioned high-technology company’s SalesLogix runs a version of SQL server from about five years ago. Meanwhile, its version of Scopus only runs on Windows NT Server. But five years into trying to justify much-needed new SFA software, the CIO has pretty much settled for waiting for a breakdown. Maybe then, he’ll get the new SFA software he wants.
Business Transformation Angle
A more effective strategy, which I see applied in 30% of projects, is using SFA to support business transformation. In this scenario, the decision to adopt new SFA software underpins some level of strategic business change. Oftentimes, businesses pursue this approach after merging operations.
For example, a large U.S. software developer and Innoveer client bought and merged with one of its competitors, resulting in it having two SFA tools. But using two SFA tools wasn’t going to cut it for order forecasting and sales management. So the merged company launched a strategic review to identify which SFA tool to adopt.
About 10 minutes into that discussion, however, senior managers realized that with the merged product offerings, they actually required a brand-new selling model, thus taking the company down the business transformation path, and leading them to evaluate entirely new SFA applications. Because at the end of the day, it’s not about which tool you have, but what you do with it.
80% Of SFA Projects Could Do Better
We see the two above approaches — justifying SFA like a broken-down car, or investing in SFA to support business transformation — used about 80% of the time. And it’s no wonder, as the third and most difficult technique, which we only see used in one out of every five projects, involves taking a business process reengineering (BPR) approach to sales.
Interestingly, the majority of SFA project teams begin with a focus on BPR. But that fizzles, oftentimes due to lack of buy-in, or the timeline, since BPR does take time. In fact, some businesses stand to gain more by pursuing a rapid SFA implementation and gaining needed capabilities as quickly as possible, rather than taking the time to plan a BPR approach.
Whenever possible, however, businesses should pursue BPR to justify their SFA projects. What’s the best way to do that? For the answer, stay tuned for part two of this blog post, coming soon.
Learn More
What’s the next, best step for your organization’s SFA program? To answer that question, take our SFA program quiz, which is built using our benchmarks of the CRM practices of hundreds of companies. We’ve used those best practices to build Innoveer’s CRM Excellence Framework, which identifies where your current SFA program excels, or needs work.
Post and thumbnail photos courtesy of Flickr user Sean McGrath.
