The right way to implement a CRM initiative is to first determine what business functions (e.g., sales, marketing, customer service, e-customer, business analytics, or some combination of these) must be addressed. Second, a company must prioritize these functions (remembering to bite off only what it can chew, since successful CRM initiatives get rolled out in iterations). Determine how well the current business processes support or enhancethen apply technology to optimize these enhance business as appropriate, and then apply technology to optimize these processes.

Sure, there are dozens of CRM (customer relationship management) and SFA (sales force automation) solutions claiming to improve the lives of individual salespeople. But a look under the covers shows that they are focused on contact management, reporting and forecasting -- activities much more important to executive management than everyday salespeople. In fact, these solutions tend to add more work for salespeople and keep them from doing the most important part of their job -- actually selling.

When vendors such as Salesforce.com and RightNow emerged on the enterprise application scene, offering CRM via the Software as a Service (SaaS) model, traditional software vendors argued that the model made little sense for large enterprises. After seeing successful deployments and losing business to the SaaS upstarts, however, both Siebel and SAP came out with SaaS offerings of their own. Now, recent research from Cambridge, Mass.-based Forrester Research suggests that on-demand deployments do offer an economic advantage for smaller organizations, while on-premise is still a better choice for large enterprises.