Custom CRM right fit for mid-sized firm

Can a CRM solution developed by two small businesses compete against million-dollar suites from major players like Siebel Systems? Could be, if The Mercadien Group and Pronto Solutions hit the small and midsize CRM market at the right price with the right feature set.

Can a CRM solution developed by two small businesses compete against million-dollar suites from major players like Siebel Systems? Could be, if The Mercadien Group and Pronto Solutions hit the small and midsize CRM market at the right price with the right feature set.

The Mercadien Group, an accounting firm formerly known as Druker, Rahl & Fein, expanded its practice in 1999 to include IT consulting and outsourcing, asset management and other professional services. When Blase Salvatore joined Mercadien as president, one of his top priorities was to consolidate customer records and maximize cross-selling opportunities among Mercadien's eight practice areas. Salvatore knew he had his work cut out for him.

"Different groups were using Excel spreadsheets, the [Microsoft] Outlook contact list, even the old Windows 3.1 Card File," Salvatore recalls. "About 50 percent to 70 percent of the information was inaccurate. We sometimes sent mailings to people who'd been dead for years."

Ownership and classification of customers were also challenges for the multidivision consultancy. A given customer might be a client of one Mercadien group, a prospect for another, and just a 'suspect' for others.

The CRM system that Salvatore envisioned would need to accommodate different status flags for different Mercadien groups. "We also had to consider who would 'own' an account, who would be able to view and edit account information, etc."

Salvatore also wanted to track customer contacts, especially revenue-generating ones. "We basically look at 'tasks' and 'activities,'" he says. "Activities include all contacts with customers, starting with cold calls, meetings, mailings, etc. After a company is promoted from a prospect to a client, the CRM system would have to create 'tasks' associated with the client. Those tasks are billable 'activities.'"

Finally, Mercadien needed an integrated billing module designed for professional services.

Salvatore evaluated CRM suites from Siebel Systems and Goldmine Software. Neither met Mercadien's needs.

Siebel was going to cost $1.2 million for a 50- to 60-user license, plus customization costs, Salvatore notes. Siebel also wouldn't enable the multiple client status flags that were needed, and did not include the required billing back-end.

Goldmine had a billing module, but it was geared more toward break-fix operations, Salvatore adds. A 50- to 60-user Goldmine license would have cost $40,000 to $50,000 for the base package, plus another $45,000 or so in customization costs, he estimates.

Salvatore notes that Siebel and other enterprise CRM vendors are attempting to scale packages for the small- to midsize-business market. But in 1999, they weren't ready for firms the size of Mercadien.

So Mercadien decided to develop its own custom-written solution. Salvatore turned to Mercadien partner Pronto Solutions for design and programming services.

"Pronto has been a subcontractor on several of our portal and Web development projects," explains Salvatore. "Basically, we said, 'We'll develop the business process, you write the code.'"

Pronto had a proposition of its own. "The strategy was to develop the solution which would address Mercadien's business problem, at one-quarter of the estimated cost ... then resell this application as a standard enterprise CRM/call-center solution," explains Joseph "Jolly" Paily, business development manager for Pronto.

This was not the first time Pronto and Mercadien have partnered with a customer to develop a marketable product from a custom-made application. The partners also sell a membership management system derived from a custom app written for the New Jersey American Legion. Mercadien markets the system to other American Legion organizations, and Pronto provides ongoing support.

"But this [Mercadien] project is really unique," says Paily, "because our partner is also our customer."

Salvatore first assembled a task force to define the business processes that the new system would support. Members included Salvatore, Pronto Solutions senior project manager Sunny D'Souza, two representatives from Mercadien's IT department and at least one person from each of Mercadien's practice groups.

"Since we knew we were going to take this software to market, we also took into consideration talks we had with other small consulting groups," adds Salvatore. For example, he attended a project management seminar hosted by Micro Information Products, where "20 or so small integrators discussed the applications they used and the ones they needed."

"The security model was No. 1 on the agenda. You build your application around it," he says. "What rights and privileges should everyone have? Who will own the account? What account information will other groups be able to view, change and add?"

Next, the group defined the types of tasks and activities the system would handle. A line was drawn between activities that only the CRM module would record and billable tasks, which also were to be processed by the billing module.

"We wanted the look and feel to be very intuitive," notes Salvatore. So they kept contact classifications to a minimum-suspect, prospect and client. They defined a system that integrates with MS Outlook to enable Web links and document attachments in contact records.

Outlook's calendar functions also were useful. "We might have a project involving a firewall audit, with four people assigned to it. As tasks for that project are created, they are populated to people's calendars. The calendar is also used to record mileage, billable hours and other costs which are billed against the client's retainer."Pronto Solutions takes its name from its unusually rapid turnaround of programming assignments. "A customer can call in a change order at 5 p. m., and we'll usually have the code done by the next morning," says Paily.

A development center in India is part of the key to Pronto's alacrity. Fifty-five programmers work normal business hours while the firm's 37 U.S. engineers and consultants sleep, and vice versa.

Communicating the client's needs is handled mainly via e-mail, sometimes via voice calls. The $2.5 million company doesn't require elaborate collaboration or videoconferencing systems yet, Paily adds.

It took Mercadien seven months to develop the code, starting in September 2000. Pronto's programmers quickly turned around revisions, as Mercadien tested and refined its design.

Mercadien paid Pronto about $50,000 for its programming work, according to Salvatore. That cost doesn't include Mercadien's business-process analysis and consulting, he adds.

The new system was introduced into Mercadien's Technology Group in March 2001.

"As the newest of our groups, Technology had a clean slate as far as customer contacts went," says Salvatore. "They were able to import their contacts from Excel spreadsheets, for the most part. We hired temps to do some manual data entry, too."

The designers quickly learned of a few subtle amenities that CRM users just can't live without. For example, Salvatore cites, "We were a little surprised to learn that Marketing absolutely had to have personal data [like a spouse's birthday and pet names] in contact records."

"We underestimated the tasks of cleaning up and importing existing contacts," he adds. "We're still struggling with thousands of individuals' contact records from the Tax group."

Despite those challenges, Mercadien is saving days of CRM, billing and contract work every month. "Now it takes about five seconds to close out our billing month, instead of days," Salvatore says. What's more, manage ment has a much clearer view of the entire firm's cross-selling opportunities and account penetration.

Pricing for NetNicks, the commercial version of Mercadien's CRM/billing system, had not been determined by press time. But a product that cost $50,000 cash (plus a presumably equal amount of Mercadien's professional services) to develop probably won't break the budget of NetNicks' target market. The Web site,, will be live by the time you read this.Customer: The Mercadien Group, Princeton, N.J.

Business: Financial, consulting and outsourcing services

Size: 90 employees

Business Need: Coordinate account management of eight practice areas

Technology Need: A right-sized CRM/billing solution for small to midsize professional-services firms

Project Members:The Mercadien Group; Pronto Solutions LLC, Yardley, Pa.

Deal Maker: Pronto proposed a marketable solution costing one-fourth the price of off-the-shelf CRM software

Objective: Build, use and sell a custom CRM solution for consulting firms

Hardware: Compaq Pentium III server, with dual 800-MHz processors, 1GB RAM and 32GB of disk space

Software: Windows 2000 Advance Server, Microsoft Transaction Server, SQL Server 2000, Outlook, Citrix Metaframe Server and related client software, Visual Basic

ROI: The system costs about one-fourth the price of traditional CRM solutions