Study Shows CPA Firms Have Yet to Leverage, Book Benefits of CRM

Unlike other professional services firms, more than 86 percent of CPA firms have yet to integrate a Customer Relationship Management (CRM) program into their organization.

Moreover, less than 3 percent were using CRM solutions that were recently categorized as leaders in the CRM market by Gartner in April 2009. In fact, the third most popular “solution” being used was Microsoft Outlook.

The survey is getting some interest from experts. For instance, John Ryan, a veteran IT channel management marketer, writes:

It’s interesting to me how service companies that are clearly in the relationship business are willing to add costs to those relationships by not using automation. If I were a client, I would be more than a little concerned since those additional costs for inefficiencies were being pass on to me in my bills. I want my accounting firm’s knowledge about my business to be fast, accurate and contextual about who I am at each touch point. That’s what a good CRM implementation delivers.

Accountants need to realize what many companies have realized years ago. That you can change all of the processes and people you want, but without automation aligned to those processes, you’re leaving money on the table. One wonders if accountants have allowed other agendas or concerns to get in the way of the most important thing they should be worried about which is the best relationship management they can deliver.

Firms might have had an excuse years ago to not use CRM since it was a nascent application at the time, but not anymore. The software is just better and the early adopters have worked through many of technical issues. CRM can now be a platform not just for marketing, selling and customer service, but for all relationships.

The firms in the survey reported that most refer to CCH’s ProSystem fx ^TM Practice Management as the CRM tool of choice. However, the product was never intended to be a CRM solution. It is a tax compliance, preparation and workflow management solution.

These findings are based on a recent 500-CPA firm survey conducted by Templeton & Company, a CPA and technology consulting firm, based in West Palm Beach, Fla.

Despite strong interest in CRM, there is still widespread confusion around the definition of CRM, what functionality this provides, what the best practices are and how to choose the right solution.  Some CPA firms are choosing simple contact management solutions, time management software and even using simple desktop software believing they will garner CRM-like benefits which is unlikely.

Accountants are in the Business of Relationships but are confused about CRM

CRM solutions contain, organize and help manage every relationship of the firm.  Accounting firms, by definition, are in the relationship business.  Therefore it’s surprising how many have not taken the time to embrace CRM and capitalize on the benefits.  Firms that value their client relationships strive to provide excellent customer service, desire to increase revenues with existing clients and find new buyers of their services.  They cannot afford to let their competition gain the benefits of CRM at their expense.

CRM is part of an overall strategic commitment to relationships

CRM is one of the fastest growing categories in the software industry and its growth is expected to continue. According to Gartner this overall segment grew 12.5% globally in 2008.  Microsoft’s CRM solution grew 75 percent and Salesforce.com grew 42.7 percent as the growth leaders.  Early software solutions lacked functionality, were difficult to use, could not be tailored to meet unique business needs and were difficult to integrate with desktop software. The result was expensive and users refused to use it. Today’s generation of CRM solutions provide robust capabilities, can be easily tailored to meet a firm’s needs and at can be integrated with everyday office software. Firms considered to be operating best practices are taking advantage of these tools.

In many cases, the factors necessary for a successful CRM implementation, user adoption and return on investment have not been articulated properly by CRM vendors to meet the needs of an accounting firm.  As with any software solution, expectations can easily be overstated while challenges are understated.  CRM efforts have failed in some companies by focusing exclusively on the technology, not complementing it with enhanced business processes that fit the business.

Firms should be utilizing the capabilities to report on business metrics which can easily be displayed as dashboards. These failures can be avoided with clear executive sponsorship, focusing on improving processes around the technology and selecting a solution that is integrated with other systems.  Accounting firms need a mandate from their partners to improve client relationship management and the improve revenue operations for the near term and the future.  CRM is the underlying catalyst that enables an improved process and business results.

Self-Fulfilling Prophecy

Accounting firms run the risk of being ignored by the CRM providers. Best practices and enhanced solutions come from real life experiences. If accounting firms are slow to adopt and understand best practice, it is likely that CRM solutions providers will bypass the accounting industry and focus on other industries that are moving more quickly to leverage CRM.

Accounting has slow Adoption even if it’s been a top Priority for other Industries

According to a report from AMI Partners in 2007, mid-market firms are more open to CRM. Almost 40 percent of respondents in the mid-market category used CRM solutions at that time, and another 25 percent were planning on adopting CRM in the next twelve months. What may be surprising to CPA firms is that professional services companies exceeded other sectors in CRM adoption and spending.

International Data Corporation

According to a recently completed return on investment (ROI) study from research giant IDC in 2004, successful implementations of customer relationship management (CRM) applications have yielded returns ranging from 16% to more than 1,000%. IDC also found that technology-related savings account for only 7% of the average return, while benefits accrued from increased productivity and business process enhancements account for 51% and 42% of the return.

Other key findings from IDC’s ROI study, The Financial Impact of CRM, include:

• 19% of the companies that participated in the study generated an ROI of 50% or less, 52% generated an ROI between 51% and 500%, and 30% reported returns of 501% or more.

• 58% of participants experienced payback in one year or less, 35% experienced payback between one and three years, and 8% experienced payback in three years or more.

See original at Templeton

Posted on July 22, 2009