When should you create your own CRM system?

Age old question, this – “should I use a off-the-shelf product, or should I develop my own CRM system instead”.

It is easy to dismiss this question as irrelevant in this day and age, when everyone and their dog is jumping on the cloud CRM solutions with neatly packaged features. I am not a big fan of Custom CRM systems myself – mostly because the people dependency is pretty intense, and people reserve all rights to be stupid.

But the question is not as simple as it looks at the outset.

Advantage of Off-the-shelf CRM Products

First off, you get a system that is already built to purpose!

If you choose a decent enough software vendor with reasonable vision, you are assured of continued development and improvement as time progresses. While those updates may be free/add to incremental costs, the value they deliver over time is invaluable.

The most important thing for me through – is the people dependency. You may have a star developer today who can design the system in 6 months, but will the developer be available through the years. Can others understand the system and take it forward as “easily” as it was built?

Believe it or not – maintaining software systems over time costs lot of resources. You will pay for the developers, hardware and other infrastructure, software licenses, and other such costs. While these appear trivial initially, they can add up to significant maintenance costs year after year.

Unless you are in the business of creating CRM systems, you want to focus on your core business. No matter how “simple” it looks, always know that the human mind is not good in exponentiation. And, that is what kills the product and makes it inefficient in the longer run.

Advantage of Custom Built CRM Systems

Although I can cry hoarse about using/reusing an existing system, it is always possible that the products in the market cannot satisfy what you need.

I am a big proponent of evaluating your needs and matching that with the products rather than evaluating product features and fitting your business process. Due to the very nature of software systems, they cannot be built for each and every niche out there.

You may be one of the hundred people executing a business model that no one else seems to understand, leave alone develop a system for. Commercial CRM systems are developed for generic usage scenarios with business models that are reasonably well known (healthcare, pharma, real-estate, banking/insurance, etc.). If you are in a super niche, you may not find a solution that is acceptable.

CRM systems in the market also have a standardized process. Although that is advantageous for all companies in that industry, if you have a specific process that gives you a distinct competitive advantage – you have to carefully evaluate whether it makes sense to modify one of the CRM systems in the market, or build it yourself.

I don’t see readily available CRM systems for my market. What should I do?

My preferred method – 

  1. List down the capabilities and feature set you need
  2. Develop a checklist that lists your requirements alongside the product capabilities.
  3. Select popular CRM products (max 3-5) in your niche/industry. Rate the product capabilities on a scale of 0-5, where 5 stands for a 100% fitment and 0 implies that the product cannot support your requirement even after customization. 
  4. Select less popular products that have been developed with your industry in mind. Repeat product capability fit evaluating done in step (3)
  5. Re-evaluate your business process on any possible optimization/changes depending on available information

If you find far too many zeros, you can be rest assured that your process is unique enough and may warrant a custom product.

If you have far too many 1s or 2s, you may still want to compare Custom CRM with ready-made CRM systems. While a custom CRM system may score well here, consider the costs in maintaining custom CRM (all hidden costs) vs. the customization/maintenance costs of off-the-shelf product.

Ever stuck in answering the question of off-the-shelf product vs. custom CRM system? What was your solution to the problem?

Leave a Reply

2 Comments on "When should you create your own CRM system?"

Notify of
avatar
Sort by:   newest | oldest | most voted
Shantanu
Guest
Hi Prashanth I read your blog and completely agree with you, however I still can not make up my mind about whether we should go with Custom built or a readymade one. I don’t have any previous experience of any CRM and my worry is, my requirements are specific to a particular kind of business and would need too much of customization to be done over the existing once. I fear we will end up with same issues of getting dependent on start developer as well as we will have to limit our features like unique roles and Permission, specific… Read more »
Prashanth Krishnamurthy
Guest
Good analysis, and *very* valid thoughts! The very first step for you (or your CRM team) is to find out whether the CRM solution supports *your* way of doing things. If not, what is the nearest that you can get to with the available products. There are literally hundreds of products out there, and it is quite easy to miss out on them. Then comes the interesting part of determining the cost/benefit analysis. How do Software License + Support + Customization costs for the product compare to Development + Maintenance costs? How does this look while going live, 1 year… Read more »
wpDiscuz