A couple of years ago, a lead (a contact who could become a potential client) called me requesting a custom CRM software. I was pleased to learn about his business—he was engaged in the importation and national market sales of auto parts. He had six salespeople, a sales manager, and an operational team that, in short, handled customs clearance and dispatched products to various mechanical workshops nationwide.
I was pleased with his growth over the past few years and his strategies for selling auto parts at the best price and to the largest number of workshops. I thought it was great, and he had ambitious projects and ideas for the custom CRM system. However, my recommendation surprised him a bit.
“I see that your business processes are currently standard, and there is a considerable range of CRM SaaS software providers that can meet your requirements for now. I can accompany you through the implementation process until it is standardized, and when your business processes require more differentiation due to sustained growth, we can evaluate migrating to a custom CRM.”
Custom CRM development or CRM SaaS: The Foundation
I provided the following justification with the following figures
Since his processes were standard (I congratulated him on this, as many small businesses do not have that culture), we were able to organize them as follows:
- Lead acquisition through events and phone call campaigns.
- Business opportunity management, generating quotes and different versions of them.
- Customer management and their activities such as calls, meetings, and visits.
- Closing of won opportunities through approved quotes.
- Customer support when a part fails (warranty) and recording the service through ticket management.
- Inventory management (simple inventory, SKU, and quantities).
- Reports on approved quotes (sales), reports on new clients by season, and sales funnel reports.
Most SaaS solutions handle all of that. As for inventory management, about three specific CRM SaaS software providers offer it, but there are definitely providers available.
Then we moved on to the numbers: He has one sales manager, six salespeople, two people in operational support, and himself—a total of 10 users. The cost of a CRM SaaS software license is based on modules and users. In this case, it would cost approximately $50 per user, meaning about $500 per month, $6,000 per year. I estimated that he would use it for about two years before his operation would require a custom CRM, totaling $12,000 over two years.
Some of you might say that spending $12,000 on software that will only be used for two years may not be a good investment. However, the answer is simple—most small businesses need cash flow, and paying $500 per month was a more attractive option for him.
Part of the consultancy we provided was ensuring that the CRM SaaS software met all his processes. Because, let me tell you from experience (and pain), asking the CRM SaaS provider to modify even a little bit of their software to adapt to your processes can sometimes be more expensive and costly than developing a custom CRM from scratch.
The joy of a good calculation and the unpleasant surprise
A couple of years passed, and as predicted, the operation grew further, and the CRM SaaS started to highlight its limitations.
- Slow resolution of support issues.
- Need to adapt information registration forms due to regulations or process improvements (processes always evolve).
- Need for new types of reports.
- Use of other software packages to optimize operational processes, but they did not integrate with the CRM, causing delays in data synchronization.
- And more.
So, the solution naturally led to developing a custom CRM software that, with a reasonable support hours package, would allow for continuous improvement as the organization transitioned from medium to large.
However, another “consulting” company convinced our client that it would be better to use a packaged version of a globally recognized CRM product. I won’t mention the name, but let’s call it “ELCARO” (for those who understand, few words are needed). They proceeded with the implementation project, and as expected, the “consulting” company was not the software owner. They did, however, hold the country’s official representation—an authorized partner with all the badges—but instead of adapting the software to the company, they forced the company to adapt to the software.
They argued that all those processes were already standardized worldwide and that the company needed to adapt to the methodology of the “ELCARO” software. The project lasted almost a year, and the consulting firm sent “Account Managers,” “Product Managers,” “Project Managers,” “Software Integrators,” and “Software Developers” (from India). They delivered the project—amid frustrations, deadline reschedules, and additional adjustments—but they finally delivered it. It turned out to be incredibly expensive… EXTREMELY expensive. In the end, this consulting firm was not a developer; it merely placed the product, while others handled development, creating a terrible mess. And, of course, my client—or rather, my ex-client—had to foot all the bills.
They finally started using the software, and with it came the failures—issues with reports, system crashes when entering information—it became a nightmare, the kind you can’t wake up from. Amid complaints and disputes, the consulting company argued: “Your company was not ready for a world-class software like ‘ELCARO’.” Then they canceled the support contract and left.
By the way, I occasionally visit the consulting firm’s website, and my client’s company logo is still there, listed under ‘clients’ and in the ‘successful projects’ section
I found out about this because, naturally, my client called me. Between embarrassment and regret, he confessed that he was stuck in operational limbo. They had gone back to paper and Excel, completely abandoning the CRM and only using the ERP. He asked me to help him solve this problem.
The Solution: Custom CRM development
We must understand that while many companies use globally recognized software, this software must first be adapted to the national reality and the organizational culture of each country.
Secondly, a software “consulting” company may be an official representative, a certified partner with all the credentials. However, if it is not a developer with its own programmers and extensive knowledge not only of the product but also of the business it is serving, the project is most likely to fail.
So I got started. I conducted a detailed process assessment, outlining each of the screens the CRM system would have and how it would interact with his ERP and other systems he had to implement as the company grew. Our client actively participated in this process, providing suggestions, corrections, and envisioning new functionalities.
We developed the system, and as we completed each module, we tested it with users using real data to ensure that every process was correctly handled.
And finally, we launched it. In just over three months, he had a fully operational custom CRM, delivering successful results at a fraction of the cost of the consulting firm behind the “ELCARO” software. A happy and loyal client.
Conclusions
There is no exact rule for everything; each organization has its own culture and methodology. While many processes are standard, a company’s IT needs evolve as it grows. A CRM SaaS may fit well initially, but as the company expands, a custom CRM becomes necessary in most cases. Software is like suits… tailored is always better.
