Adoption of Cloud CRM Forces Change to Mindset of Over-Customization

There is a story in my book, Lessons Unlearned, about a speech Larry Ellison gave at Oracle OpenWorld in New Orleans in 2001. Oracle was pushing big time into the enterprise applications space with their new CRM offering, and Larry was talking about ‘out of box’ verses customization. To the chagrin of the audience, he said something along the lines of, “Oracle matches your business processes 80% out of box, and you should consider changing your processes to fit ours for the other 20%.” Larry was right of course, though I didn’t necessarily realize it at the time.

In fact, if I were to characterize the first “wave” of CRM, from around 1997 to 2007, I’d say it was “spend millions of dollars on complex software, and then customize the hell out of it because it wasn’t complex enough.” Large companies had CRM projects going on for years, customizing field names, screens, process flows, etc., until the product was practically unusable with dozens…if not hundreds…of required fields, pop up screens and non-intuitive flows.  This of course frustrated the heck out of CRM vendors, who built those vertical-specific screens and processes using ‘best of breed’ process flows from real companies.

I was involved in many CRM implementations during my vendor days, and I have audited many CRM implementations during my analyst days, and usually what I find is consistent: companies were so convinced they were unique that they took packaged applications and rewrote them until they were unusable  Then they started shopping for another CRM platform, and started the process all over again.

Let me be clear: when it comes to CRM, the more customizations, the less successful the implementation. I have seen this over and over and over again, and unfortunately, I still see it happening today. But luckily, a new dynamic is emerging.

Over the last year I’ve seen some of the largest companies in the world decide to implement OnDemand CRM. They recognize that the new cloud platform is far less sophisticated than their existing system and processes, but these companies are on a mission from god to simplify their operations and try to use Salesforce.com–or whatever cloud solution–as ‘out of box’ as possible. This is an unbelievable shift, and definitely a shift for the better. I like to think TSIA has a hand in this shift, because through our benchmarking programs, we show companies that their peers are struggling with the identical challenges, and best practices identified by one company are wholly repeatable within another company. In other words, tech companies are more alike than they are different.

With tightening budgets, shrinking margins, and unstable revenue streams, companies no longer have the luxury of repeating or prolonging mistakes with technology projects. They need to streamline and automate, and they need to do it fast. If that means swallowing your hubris and accepting the Salesforce approach to a process instead of your own, so be it. Those changes are HARD to make, especially for large firms, but I’m seeing it happen.

This is great new for CRM, and for the rest of enterprise applications as well.  I predict that CRM success will become more common, and the usual failure statistics for CRM (50% or higher of CRM projects don’t meet expectations) will begin to fade.

Bottom line: if your CRM implementation takes more than 6 months, you are doing it wrong. Once you remove ego from the equation, you will find those out of box processes are well designed. If you identify an internal process that is radically different from the packaged application, don’t assume your way is better–I’m almost positive it isn’t. If in doubt, talk to the vendor’s product management team about why the process is designed the way it is, and go back to the drawing board and do a real assessment on your approach vs. the industry best practice. And be ready to change.

We are all in this together. Let’s learn from each other, leverage our successes industry wide, and do our best to stamp out over-customization. And thanks as always for reading!

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5 Comments on “Adoption of Cloud CRM Forces Change to Mindset of Over-Customization”

  1. vikas Says:

    good point John and couldn’t agree more. the less customization the better.

    however, convergence of BPM and CRM allows one to have both – tailored (not customized) processes while not straying far from the out of the box implementation.

  2. Minesh Says:

    Well, guessing from the explosive growth of Bitrix24 in 2012, cloud-based social CRM, integrated into intranet is the future of customer relationship management.

  3. Alanna Says:

    You hit the nail on the head! Too many times we want to make things more complicated and customized, which really just creates more problems down the road. I think companies need to start off with out of the box and get acquainted with all of the features that come with it and then move to any needed customizations (if needed). Seems like in today’s world we try to make things more complicated than we need to. 🙂


  4. […] Europe who were in the midst of a migration from a legacy CRM system to a lower cost cloud suite. As I’ve written about before, large companies moving to cloud tools have to streamline and consolidate processes as the […]


  5. […] Europe who were in the midst of a migration from a legacy CRM system to a lower cost cloud suite. As I’ve written about before, large companies moving to cloud tools have to streamline and consolidate processes as the […]


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