CRM Selection Criteria

Developing a Decision Matrix

Chris SellandReservoir Partners, L.P.

CRM is…

An IT project with business benefit?

A business project with IT support.

Key Decision Criteria relate to

business alignment.

• Technical criteria important, but

secondary

Metrics – Soft and Hard

Soft Metrics Hard Metrics

•Customer Loyalty

•Customer

Satisfaction

•Quality of Service

•Sales Effectiveness

•Customer Lifetime

Value

•Churn Rate

•Cost of Service

•Close Rate

A New Year Indeed

A (Still) Consolidating Market

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

2002 2003 2004 2005 2006 2007

Worldwide CRM Spending(millions)

Worldwide Hosted CRMSpending (millions)

Developing a Decision Matrix

Key Issues

• Financial Strength/Market Presence

• Functional Breadth

• Integration

• Vision

• Management Team

Financial Strength

Revenues?• Trend?

Debt/Equity Ratio?

Investors (VC) or Stock Price (public)• How many rounds of financing?

• Terms of financing?

• Can you speak with investors?

What is your tolerance for risk?

Market Presence

What is their market share?• In segment I care most about?

• In my vertical industry?

What are the industry analysts saying?

Key Customers?• Can you speak with them?

How frequently are they mentioned in the media?

Functional Breadth

Relevant to problem(s) to be solved

• Sales

• Marketing

• Customer Support

• Integrated (useful) customer data

• Order Management

• Returns

• Fulfillment

IntegrationWhat are key current applications?

• Which do we intend to keep short- and long-term?

What is the current ‘system of record’ for customer data?• Is there more than one?

• Will new CRM system replace?

Web Services support?• EAI Partners?

• Own initiatives? (NetWeaver, UAN)

Technology Vision

What are the vendor’s future

development intentions?

How have they met past intentions?

How much customization are you looking

for?

• How much do you really need?

• Level of consensus within your company

SuppliersSuppliers Channels &Channels &CustomersCustomers

BackBackOfficeOffice

FrontFrontOfficeOffice

Supply Supply ChainChain

Demand Demand ChainChain

Front/Back OfficeFront/Back OfficeIntegrationIntegration

BuyBuy Sell & ServiceSell & ServiceMake/Add Make/Add ValueValue

ManufacturingManufacturingFinanceFinance

EngineeringEngineering

SalesSalesSupport/ServiceSupport/Service

MarketingMarketing

IntegrationIntegration

IStore credit card processing

The Extended Enterprise

Management Team

What is the management team’s

background?

What do the analysts (financial

and industry) say?

Who are their key investors?

The Matrix

Financial

Strength/

Market

Presence

Functional

Breadth

Integration Vision Management

Team

Weighting

Vendor A

Vendor B

Vendor C

ConclusionsOnly you can determine weightings

• Understanding your corporate risk profile critical

Simplify, don’t complicate

• Determine system (not systems!) of record for

customer information

Integration strategy is critical

• Solve individual problems

• Don’t create ‘islands’

0%

15%

30%

45%

10%

1 2 3 4 5

How much vendor 'stability risk' is your company willing to take to get best fit?

1. Not an issue – we don’t care about vendor stability

2. A great deal of risk – we’re relatively risk tolerant

3. Some

4. Very little

5. None

60%

40%

1 2

When you deploy new applications, do you normally view them as replacements or enhancements?

1. Replacements

2. Enhancements

262%

138%

Have you invested in an EAI platform?

1. Yes

2. No

250%

150%

Have you invested in an XML initiative?1. Yes

2. No

14%

27%

18%

41%

1 2 3 4

Who makes CRM decisions in your company?

1. IT

2. Line of Business

3. Executive

4. Combination

Questions?