The real cost of CRM implementation

There is a market for a “Just enough CRM”- with necessary and sufficient functionalities, easy to use, delivered over the cloud and at a great price.
Vinnie Mirchandani in the deal architect posted a blog “TCO: Total Cloud Ownership”. Among other things, it makes a point that while the SaaS vendors have successfully positioned their lower pricing vis-a-vis the “On-premise” vendors, the next wave will see the pricing battles among the cloud vendors themselves.

The battlelines in the CRM marketplace seems to be hotting up.

Zoho just launched a bold move by offering to “Zwitch” all Salesforce.com customers to their CRM platform. This offer comes with a free assessment of the existing Salesforce implementation, free data migration and free 15 days trial. Further sweetening the deal, is the (upto six months) credit for the time remaining on existing contract with Salesforce. Considering the relative affordability of Zoho over Salesforce (Zoho claims almost 80% savings), if this was a simple pricing decision, the “zwitch” is a no-brainer.

Enterprise software purchases are rarely that simple, however. It will be interesting to see the result of this campaign, how long does Zoho plan to run this, the retaliatory action that Salesforce takes and what do the rest of the CRM vendors “in the cloud”, like Sage, Sugar etc do.

I of course do not think that Zoho thinks this is anything but a step in a journey. They have a mission to be the company that supplies all software that a small business needs: office productivity, CRM, invoicing and what have you. It is one of the most exciting companies to watch. It does great marketing, largely by generating buzz through effective use of PR. How many companies their size get written up on the Economist? It also frequently takes potshots at Salesforce, as in the most recent post by Shridhar Vembu.

With all that said, Zoho continues to come across to me as a company which is spread a bit too thin. Their UI is not the friendliest, their documentation not the greatest. Salesforce (and Sugar and Sage) have more partners, many more Apps and on the whole look like more “finished” products. Zoho continues to improve, however. When I first checked it out almost a year back, even their email used to frequently crash and most of their office productivity suite (on the lines of Google Docs) was very “temperamental”. My current experience is a lot, lot better. And, the nicest thing about their employees is that they do not come across as pushy salesmen, unlike in some others!

In the short term, I expect Salesforce to do nothing. In the medium term, if they start hurting because of this Zwitch thing, I expect them to rationalize prices under pressure from their users. And, that may not be such a bad idea for users!

The CRM implementation challenges for SMEs
The real cost of CRM implementation and the barrier to its adoption in enterprises continue to be traced to the same thing: striking a balance between usability, pricing and being feature-rich. I maintain that for SMEs, the issue is not how many features are we getting for what price, but, which features are really useful, how easy are they to use and how quickly can you “get done” with your daily dose of CRM, if you are a sales or marketing guy who uses this everyday.
CRM software is like email; absolutely essential and needed everyday. Just don’t spend your whole day on it!
There is still a market for a “Just enough CRM” delivered over the cloud and at a great price.

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