Introduction

I must admit that in 2018, I feel a bit surprised that I am still writing about the choice between a bespoke or custom developed solution and the benefits of off-the-shelf CRM software.

But for many companies with some technical software expertise, they have seen the choice as more complex than just choosing between different pedigree systems. If there is technical resource internally or often available locally, then you may consider your choice as being between:

• Build your own CRM

• Off-the-shelf CRM

"Build your Own" ...Before you start

This option has in recent years become less of a factor as Cloud based, subscription Customer Relationship Management systems have brought the initial up-front licence costs down significantly. This was often a key reason for reviewing this choice and the benefits of cloud have also moved the choice of implementing CRM from an Capex (capital expenditure) decision to more of an Opex (i.e. operating costs per month) financial and budgeting decision.

But for some organisations, this can still be seen as a relevant choice where they may have strong connections with external partners or more likely where there is a high degree of internal software development expertise. Other clients may feel that their needs are so unique that a custom solution has to be developed.

However, whilst this may seem initially to be a good solution and may be seen as cost effective since you own both the IP and the software, you do need to be aware of some of the pitfalls that in 20 years in CRM I have frequently come across when clients make this decision, or more relevantly After they have made it.

At first sight, a straight-forward comparison between developing your own and the cost of the off-the-shelf licences and services may be easy to calculate. But, first take some time when you compare these costs against your own developed solution to review and estimate the Total Cost and commitment.

Whilst the comparison at first glance may appear more cost effective, say over a three or four year time frame for Build your Own, if you have the relevant skill-sets. But you do still need to undertake some extra care and due diligence and look below the iceberg surface at the other, sometimes hidden costs including:-

• Management and Project Management time. This can often be the biggest consumer of time and effort, not to mention stress.

• Understand true cost of focusing on non-core activity. Even if you are a software development house, ideally you want your highly skilled and expensive developers working on fee able activity.

• Linking to MS Outlook. One of the most common issues encountered when replacing internally developed or bespoke systems is there is no link to email or it has not worked or been updated, so you may be back to having islands of information.

• Other Office 365 links. Users expect integration with MS Word, Excel as standard.

• ERP systems integration. You may have to develop your own links and then support these, for example to your ERP or Finance software.

• Hardware costs. Even if Cloud services are now preferred, there is still a hosting subscription cost and commitment here.

• Marketing Integration. These applications are almost always off-the-shelf solutions, after all, who wants to recreate an email marketing tool when you have MailChimp, ConstantContact and many others already available? Unless there is integration in place, this will lead to yet another island of information outside the bespoke CRM.

• Staff costs and morale. Working on an internal project can a take up a lot of time and effort and be wearing on the developers and the project team, since often there is no clear documentation or specification plan and whilst this can be seen as a somewhat Agile approach, the project can continue longer than anticipated.

• Upgrades. Once the system is rolled out, everyone breathes a sigh of relief, but then a new requirement appears. A good example in the last few years is the advent of Social Media and how this is now included within most CRM systems. This development was driven by competitive activity and market requirements. Bespoke systems may struggle to keep up with new and evolving needs.

• Planning and documentation. Again, as above, it is rare indeed for a system to be fully and thoroughly documented. Time is usually focused on a core brief and then ‘getting on with it’. Projects are often seen as smaller tactical solutions to begin with, but can then acquire a life of their own as more features/functions are asked for.

• Competency. With over 300 systems or more now to choose from according to just one leading software review site, most organisations competency is in their main business and not in developing a CRM system. Just because you can, doesn’t mean you should, and the unseen management and other costs mentioned above can all take away from the central competency of the business.

And finally let’s not forget…

• Mobile. Every major vendor now provides a Mobile app capability. We live in an increasingly smart phone age so your system will need to have mobile capability. This is involves even more development work and testing, but without this option, you will find sales buy-in and adoption can be especially tough.

When added together these visible and hidden cost should be estimated and compared against the somewhat clearer costs of purchasing an off-the-shelf system, professionally implemented and configured.

I would argue that these actual hidden costs, often not fully allocated or estimates at the outset can end up being a lot more than first envisaged.

And after you started the project...

Whenever a prospective client says they are going down the bespoke route, in my own system, I never see this as a Lost Opportunity, just merely delayed. Within less than two years, I find that in many instances, bespoke development clients become very receptive to my calls and we will start talking again in earnest about off–the-shelf solutions with some of the more common project experiences being:-

• Escalation of costs. ‘Mission creep’ happens and costs started to increase against the original estimate and plan.

• Never quite fully rolled out. Again, ‘Mission creep’, more functionality, like Mobile for instance is deemed as needed for full buy-in.

• Sales and Marketing team enthusiasm wanes. There may still have to use systems outside of the development or they start to compare against off-the-shelf systems, already available with the richer functionality they require.

• Developers needed elsewhere. A common reason is where there is a reallocation of resource to an important client project, so the project is delayed or shelved or only partially rolled out.

• Need to constantly develop the system. If internally developed, extra requests can continually come in, leading to User frustration and disengagement.

• New people arrive. And review and demand a full solution with rich functionality and inter-connectivity ‘like we used previously’.

• Poor project management and the system plan overruns.

“It never did fully meet requirements.”

• Issues with the supplier(s) This is probably one of the biggest reasons and can be split down into:-

o Personal issues. A falling out as developer could been family or friend (especially relevant in smaller SME type projects).

o Specification issues. These were never fully met, leading to a communication break-down.

o Size of Project and Company. Smaller developers are often keen to win the business and may price attractively, but they may underestimate or not have full resources needed.

o Supplier loses interest or disappears. So many items are never completed.

o Supplier costs escalated. This relates to the two points above.

• Lack of Automation. Processes were too task intensive, automation is frequently not built-in or requested until later, adding to this sense of ‘Mission Creep’ or cost escalation or both!

All of the above are reasons that I have come across where clients have then come back to an off-the-shelf solution after some painful experiences, you may have more examples!

Why Off-the-Shelf works...

When comparing with an off-the-shelf solution, the key difference is that here all your costs are visible, unlike the iceberg approach of build-your-own, where good estimating and project skills together with judgement are needed in forecasting costs over say a 3 or 4 year time-frame.

Like the Iceberg in the picture above, build-your-own can have many unseen and unexpected costs, not always easily estimated and sometimes as the examples I have given of ‘After’ the project started show, many of the most costly issues appear only after the project has commenced.

So, in spite of the first sight cost benefit felt by some companies, I would argue that with today’s cloud based software subscription model, with ever increasing functionality coming from leading market players such as Microsoft's Dynamics 365 suite and SalesForce Lightning platform, you need to be brave indeed to consider a build-your-own as your solution, however, big or however much resource you may have available at this moment.

The big players are investing heavily in R & D and in acquiring companies that can augment their own offering. This level of spend is unprecedented and in just the last 2 years alone, just Microsoft and Salesforce have approaching £40 billion on acquisitions aimed at evolving their capabilities.

CRM today is a very different beast from just 5 years ago and these companies now offer so much more than just traditional offering with most of these advances coming in the last five years as the opportunities offered by cloud computing have been developed.

Leading players like Microsoft and Salesforce are keen to augment and fill in any perceived functionality gaps and are rapidly moving towards offering the complete CRM-ERP integrated suite. Both these and many other systems have strong eco-systems of powerful third party add-on apps used to fill niche gaps and which are fully supported.

When all this rich functionality is taken into account and the fact that as cloud based systems, for instance, Salesforce release three updates per year, whilst Dynamics 365 release two major updates a year, this in my view becomes a very strong proposition, unlikely to ever be matched by any internally developed offering.

So, the question I posed at the start of this post is still relevant and it is this:-

“Why would a new to CRM client, even with their own software development expertise, really try to build your own in 2018”?

My view, is that there are just too many pitfalls to catch the unwary, too many sometimes 'hidden' costs, just like the iceberg!

The key to success is for clients to focus on their own core competencies and to take advantage of the massive investment in CRM by the Big Vendors and the almost boundless opportunities now offered by the cloud business application model.

Building your own as a choice in 2018 should only be for the brave!

If you are considering off-the-shelf or developing and building your own system, as a first step before you commit, we recommend talking to us. You may find this a refreshing experience as we can take an CRM independent viewpoint of the market leaders and do not have to just offer you one vendor. We can even undertake Fit-Gap Analysis to help you make your selection choice and support your own due diligence.