Training employees in using customer relationship management software may seem more like an additional expense than a necessity in running a business, but when you realize that customers are the "bread and butter," whether corporate or consumer, CRM is critical to any businesses' growth and success. Sid Lejfer, president of Waltham-based Harvest Solutions, says, years ago when companies were looking for ways to cut costs, training was one of the first things to go. Now more often, companies realize the importance of education and include training costs in their budgets.

A critical pitfall for companies implementing CRM is focusing too much on technology and process and not enough on people. This can often mean not putting enough money aside to pay for training

Whether you pay a lot of a little, buying the latest and greatest CRM technology doesn't guarantee instant success. And, while CRM solutions greatly enhance an employee's ability to provide better customer services, make a more informed sales pitch or market more effectively, it's using CRM tools effectively that will make all the difference And, why CRM training is a guaranteed return on investment.

However, a one-size-fits-all approach to CRM isn't the way to go for most companies. Most CRM solutions are customizable and scalable to the needs of any size company and the first step is assessing a company's specific needs and then designing a training program to fit.

Finding the right fit
Of the various types of training, Web-based training includes both self-paced programs and instructor-led programs. The advantage with this type of training is that it allows employees to participate anywhere there is Internet access.

Self-paced programs allow employees to do it at their convenience. It can be designed to include testing and can provide progress reports to both participants and management. It provides a consistent approach for all users and is an effective way to provide continuous product enhancement training or as a supplement to other training methods. The biggest downfall can be the somewhat rigid content and the inability of the program to interact with the user.

Web-based training with an instructor has all the advantages or e-learning and the additional benefit of a trainer with which trainees can interact. Participants can be geographically dispersed and still be part of a "classroom" setting. While this approach costs far less than physically bringing people together, the one drawback is unlike self-paced programs, this method requires scheduling, which can be a challenge across geography and differing time zones.

CD-based training programs are self-paced and don't require Internet access. So, they can be used on any computer allowing employees to train at work or at home. However, they can also have rigid content and offer little or no interactivity. The biggest disadvantage is the initial development costs for CD-based training programs and the additional expense necessary to update these training programs to reflect improvements and updates in the CRM systems.

Classroom training can be used in conjunction with any of the above. Its greatest advantage is that it allows human interaction so people can participate openly in questions and discussions that come up in a classroom environment. However, cost can be considerable if it involves bringing personnel to a centralized training location. And, this method is subject to scheduling considerations.

Feeling disconnected
Miki Hall, marketing coordinator for Waltham-based Electronic Fasteners Inc., a distributor of commercial and industrial hardware, knows first hand the necessity of matching employees to the right kind of training. While the company's employees had experience using web training to learn computer applications, such as spreadsheets and e-mail, Hall says it wasn't the most effective method because employees were stuck in front of a computer and were unable to ask questions or discuss specific issues.

"We had a previous CRM program that was giving us a lot of difficulties." she says, "The support person was located in New York so it cost us a lot of money to keep having him fly over to help us." So, adds Hall, the CRM solution the company was using caused more problems than it solved because it didn't work the way they needed it to. In addition to consulting fees they were paying for the consultant's hotel, flight, etc.

Seeking an alternative, the company turned to Harvest Solutions, which was just down the road. After several months in the design phase, Electronic Fasteners went live in May 2003 with SalesLogix to handle its CRM needs. And, adds Hall, they were keenly aware of the critical role training would play not only for employees understanding the new CRM platform, but in making them comfortable during the training. "We were conscious [of the training] because a lot of our employees were not computer savvy."

Many of the company's sale force were from the "old school" and thrived on face time with clients versus e-mail, so the decision to use a classroom setting easy. Hall knew the best training would come from a comfortable and conducive atmosphere.

In the case of Boston software firm, The Macgregor Group, which specializes in trade order management systems and network services for investment management firms, brokers and other financial service companies, the need for a new CRM system came from outgrowing their current system. For years the company used an in-house tracking system, ACT and a combination of databases for its CRM initiatives until it got to a point where it was no longer efficient. "Finally, the sales process and the sophistication of the organization matured to the point where it made sense to make the plunge," says Brian Hardy, who manages IT services for the company.

In August 2004 the company went live with SalesLogix. Hardy's company also opted for training in a classroom setting. "When you're dealing with sales people who are distracted by all the stuff in their day-to-day [routine]," says Hardy, "it makes more sense to sit them down in a room, leave their cell phone, [and] make them focus for a couple of hours."

Investing in people
In both cases, the companies opted for classroom training because it best served their needs. So not only is training clearly important, but how its deliver is as well. This requires a company to evaluate its employee needs, logistics and costs for training.

CRM training costs vary but Lejfer estimated the average cost on a per-employee basis falls between $500 and $1,000. This includes initial and follow-up training in the first year. But, depending on the company's needs and the sophistication of the products, training costs can go as high as $5,000 per employee.

CRM training can represent anywhere from 5 to 20 percent of a total project budget, according to research firm Gartner Inc. Some analysts put the cost of integration, customization, networking and training for CRM software at up to four times the cost of the software itself.

For Electronic Fasteners, 40 of the company's 49 employees -- mostly in sales and marketing -- were involved in CRM training. In all the company spent, $35,000 on its CRM project and about 21 percent, or $7,500 went towards training.

For The Macgregor Group, 30 of the company's 200 employees were involved in training. The company spent $70,000 on its CRM project and training represented about 8 percent that cost.

Gartner reports that many companies severally underestimate the cost of CRM initiatives any where from 40 to 75 percent because they only look at the cost of the software license and consulting fees. They don't take into consideration the project planning, testing, documentation, maintenance, integration, management, and of course, training.

With CRM spending projected to reach $30.6 billion by 2005, according to Cahners In-Stat, companies can't afford to not include training in their costs, if they hope to make the most of their investments in both the technology and the people.

"In any IT project the training is one of those often missed and critical components," says Hardy. "You can't put together a deployment plan to implement any system… and not block out a significant dollar amount for training and follow up." He says, not spending on the training is "like shooting yourself in the foot."