Why CRMs are not Grant Management Systems

Gartner has closely reviewed all market CRM offerings available and identified 232 distinct and different use cases and not one of these natively contains grant management functionality.

Most CRM systems are dedicated to support and serve only one or more internal functions. These functions include marketing, sales, customer service, or others, such as digital commerce or field service resources. It is crucial to define and prioritise objectives of the CRM application. Is it about choosing the best technical solution or the best business solution, or enhancing the customer experience to gain a competitive advantage? These objectives don’t often align.

Part 1 – The bottom line

Gartner recommends that application leaders add design experts to their teams. That is because CRM application vendors often design their functionalities and architectures based on the producer’s perspective of the required content and knowledge structure. They often ignore the expectations and needs of customers. (Source: "Select the Best-Suited CRM Solution with Gartner’s Evaluation Model")

Points to consider:

• Functionality acquired for an extension might also be called a "bolt-on" to the base CRM. Clients may be surprised to discover that these are not necessarily supported by the CRM vendor or by the third-party extension creator. Generally, they remain the maintenance liability of the client or become fee for service to maintain by the extension developer. As the CRM vendor subsequently makes new releases of their core CRM product, the responsibility is to keep the bolt-on functionality in sync vests with the client. Thus, long term cost of ownership is higher for CRM solutions using bolt-on’s. Long term costs are even higher the further from the core CRM application that bolt-on’s are made to extend. (i.e. the more objects that are added to the data model).
• Bespoke new development in the guise of Rapid Application Development brings with it all the usual Design, Build & Test sprint cycles and attendant quality, time and cost consideration; both for development and ongoing support.
• Grant outcomes, unique organisational capabilities, available expertise, culture and mission when taken into consideration strongly favour a built-for-purpose grants solution as distinct from an adapted solution with bolt-on functionality. Thus, equivalent granting organisations performing canonical outcomes often design and manage grant programs that have different workflows yet achieve similar outcomes. This results in poor transportability of bolt-on’s and extensions in between granting organisations and more than likely means these will necessarily require bespoke development to provide the workflow required.
• The USA Data Foundation report, "Managing Grants in a time of transformation: Purpose-built solution or CRM?" identifies significant barriers posed by widespread CRM implementations to meet the requirements of the US DATA Act. This Whole of Government initiative desires machine readability and big data analysis over NFP Grants organisations to improve control over grants spending and program performance. As each CRM implementation is inherently bespoke the data and data format therein are variable. They also note that CRM’s take significantly longer to implement than purpose-built solutions.
• Time to implement a CRM’s is also identified by Gartner as highly variable depending on the amount of consulting consumed for the bespoke development which is identified as averaging 3.5 to max. 10 times the cost of the license fees.
• Some CRM’s like Salesforce have licensing regimes where cost is hard to predict upfront and which inevitably escalate (where actual API call limits, memory limitations and the number of report templates required are more than that initially quoted). SalesForce devotes a small book to explaining their cost escalation limits.
• All things being equal, a purpose-built, configurable, solution, like OmniStar Grants, delivers significantly better TCO. This is because the increased risk and cost demanded by including the bolt-on’s to CRM’s also incur greater TCO.

Gartner document: "How to Get and an Approximate Initial Estimate of the Cost of a CRM Project _350994" states the below key challenges faced by CRMs.

Key Challenges

• CRM project implementation costs can be highly variable and, therefore, easy to get wrong. The cost of projects that went live between 2014 and 2017 ranged from less than $20,000 to more than $100 million.
• Underestimating the costs of external service providers is a common mistake. The biggest costs in CRM application deployments are often the service providers’ fees.

Depending on the scope of the project, the costs of service providers as a multiple of the costs of the software over the first three years can vary from less than 1x up to 10x.

Part 2 – CRM and OmniStar Grants

What is a CRM?

Customer relationship management (CRM) is a technology for managing all your organisation’s relationships and interactions with customers / potential customers. CRM’s help an organisation improve its relationships by supporting better and more consistent contact and communications management, and service delivery. A CRM system helps companies stay connected to customers, streamlines processes, and improves profitability. It does not natively contain functionality to manage grants.

Grants management (makers or funders)

Note: The definition below applies to Grant Making (aka Grant Funding). Grant Taking (aka Grantee) definition is excluded from this discussion. However, a system that supports both is a significant differentiator from a CRM attempting to provide equivalent functionality.

Grant management (grant making) application is a technology that facilitates design of grant making systems to produce specific Grants outcomes sought by the grant-making organisation. The objectives of the grant making organisation, e.g. fairness, transparency, accountability, compliance with finance and legislation, flexibility, adaptability and auditability, must be met. Meanwhile ensuring the cost/effort incurred by applicants to transact with the organisation is minimised and high-quality applications are received and awarded. Selecting the best organisations or individuals as recipients of a grant is critical to ensuring the desired outcomes of a giving program are achieved. Monitoring progress and dispensing funds based on achievement evidence is also essential. The inter-dependency and interactions between grant makers e.g. administrators, legislators, auditors and grant receivers e.g. citizens, organisations, medical sectors must be supported while ensuring that they are transparent and accountable.

Architecture and design principles

OmniStar Grants

Architected and designed for both grant makers (funders) and grant takers (grantees), OmniStar is a purpose-built granting platform that can be configured to address the specific variants of grants workflows that include applications, assessments, interactions, contracts, reminders, milestones, financial and project/risk management activities required to implement the intended grant outcome sought.

From the outset, OmniStar Grants is architected and designed to provide a complete solution for grant variants including the workflow and processes required for each variant. These are available via internal preconfigured features. This includes not only the application process, application selection, assessment, and award but also program deliverables manifested through milestones (both financial and non-financial). OmniStar Grants configurations cater for the myriad of options that a grants Program may require in order to deliver the outcome sought by the grant makers and takers.

OmniStar Grants provides workflows for competitive, non-competitive and closed/invited rounds. It supports multiphase application processes, has configurable assessment and eligibility processes that may utilise subjective, quantitative and qualitative assessments to determine the Order of Merit. Assessment comparisons may reveal inequalities in process and all activities, decisions and reasoning are captured, accountable and transparent.

Catering for a wide variety of workflows including: research, utility, engineering, medical, agricultural, university research, sports, scholarships, tourism, export and community (Philanthropic). Based on its huge configurability that includes no-code capability, OmniStar Grants is grants workflow agnostic, i.e. can be configured to service almost any grants Program.

By getting the business solution out of the box with predictable licence fees, OmniStar’s TCO is transparent and readily understood. One of the most significant TCO aspect is to develop a grants management solution on a CRM. This requires considerable investment in business process analysis and then development effort to get the CRM solution to what is needed to do what is already available in OmniStar Grants. More generally, a CRM solution requires modification (medium to significant effort) to do what needs to be done in the grants domain.

CRM

CRM’s are built for a different domain requirement; for industry sectors such as Sales, Services and Marketing to manage customer relationships.

Government’s mostly deploy CRM’s to satisfy contact relationship management for information dissemination / awareness (marketing like activities) and service provision. As CRM’s are designed for firms selling products and services, they help vendors to get closer to their customers and understand their behaviour. CRM’s are well suited to these use cases.

Designed for improving customer relationship management, a CRM is a pre-built platform catering for sales related activities including interactions, contacts, behaviour tracking and similar.

They can also be extended via an application development process. These extensions are constrained by the inherent data model and extensions are akin to "bolt-ons". Extensions increase costs both upfront and over the life of the system. The grants program round design i.e. competitive, always open or by invitation, the application form design including eligibility and budgeting (finance), identifying and assigning assessors, supporting range of assessment types, meetings/panels, contract, award (including financial delegation workflow) and post-award phases all are supported in OmniStar Grants. These require design and development in a CRM solution. Furthermore, these changes would require rework when a new version of the CRM becomes available i.e. forward compatibility is expected to be maintained by the client or the CRM service provider who will be charging fee for service.

Note: Gartner has closely reviewed all market CRM offerings available and identified 232 distinct and different use cases and not one of these natively contains Grants Management functionality. This functionality must be added by bespoke extensions (CRM Application Functionality Starfish).

"Bolt-on" and "extension" refer to specific bespoke functionality customised for a new purpose.

Product positioning

CRM use cases and workflows

Some organisations believe they can simplify architecture and keep enterprise applications costs down by re-using the same solution many times over. This principle is true in the case of built-for-purpose grants e.g. OmniStar Grants as it caters from a large range of grants scenarios. However, a CRM is not the best fit for this principle because, each grants scenario is bespoke development and all the costs and risks associated with bespoke development apply to the CRM environment.

Most CRM systems are dedicated to support and serve only one or more internal functions. These functions include marketing, sales, customer service, or others, such as digital commerce or field service resources. It is crucial to define and prioritise objectives of the CRM application. Is it about choosing the best technical solution or the best business solution, or enhancing the customer experience to gain a competitive advantage? These objectives don’t often align. (Source: "Select the Best-Suited CRM Solution with Gartner’s Evaluation Model"). In other words, CRM out of the box is designed to serve a narrow range of functions around customer/citizen contact and service management.

CRM’s represent massive market for Software vendors and Software Integrators (S.I.’s) / Consulting companies. The worldwide market for CRM solutions is many orders of magnitude larger than the market for Grants software.

CRM’s have extended into many peripheral areas, because the SI’s who partner CRM vendors generate more revenue by extending products into those new peripheral areas. This is a phenomenon that is not only impacting Grants but many other industry sectors as well e.g. utilities and pharmaceutical sales. The extension into these industry sectors have mixed reviews; mostly negative as they do not perform as well as a built-for-purpose solution performs. A relevant example is SalesForce adapted for the pharmaceutical sale sector. This resulted in many clients reverting to specialist built-for-purpose solutions as the SalesForce adaptation was unable to satisfy all their requirements.

New functionality is acquired by a client either by building the specific extensions on top of their CRM installation or by buying a bespoke CRM bolt-on (app) that usually stretches the data model or architecture to address the client requirements. This extension is usually non-core to the function of the CRM.

Grants implementations based on a CRM require specific extensions to the CRM pertinent to the type of grants workflow and outcomes required. Thus, third party developers and SI’s create extensions for each grant workflow scenario.

The question: When is a given extension cost justified? How far can the Data Model be stretched, and the resulting solution still remain economic compared to other ways to acquire an equivalent solution?

Gartner recommends that application leaders add design experts to their teams. That is because CRM application vendors often design their functionalities and architectures based on the producer’s perspective of the required content and knowledge structure. They often ignore the expectations and needs of customers. (Source: "Select the Best-Suited CRM Solution with Gartner’s Evaluation Model")

Points to consider:

• Functionality acquired for an extension might also be called a "bolt-on" to the base CRM. Clients may be surprised to discover that these are not necessarily supported by the CRM vendor or by the third-party extension creator. Generally, they remain the maintenance liability of the client or become fee for service to maintain by the extension developer. As the CRM vendor subsequently makes new releases of their core CRM product, the responsibility is to keep the bolt-on functionality in sync vests with the client. Thus, long term cost of ownership is higher for CRM solutions using bolt-on’s. Long term costs are even higher the further from the core CRM application that bolt-on’s are made to extend. (i.e. the more objects that are added to the data model).
• Bespoke new development in the guise of Rapid Application Development brings with it all the usual Design, Build & Test sprint cycles and attendant quality, time and cost consideration; both for development and ongoing support.
• Grant outcomes, unique organisational capabilities, available expertise, culture and mission when taken into consideration strongly favour a built-for-purpose grants solution as distinct from an adapted solution with bolt-on functionality. Thus, equivalent granting organisations performing canonical outcomes often design and manage grant programs that have different workflows yet achieve similar outcomes. This results in poor transportability of bolt-on’s and extensions in between granting organisations and more than likely means these will necessarily require bespoke development to provide the workflow required.
• The USA Data Foundation report, "Managing Grants in a time of transformation: Purpose-built solution or CRM?" identifies significant barriers posed by widespread CRM implementations to meet the requirements of the US DATA Act. This Whole of Government initiative desires machine readability and big data analysis over NFP Grants organisations to improve control over grants spending and program performance. As each CRM implementation is inherently bespoke the data and data format therein are variable. They also note that CRM’s take significantly longer to implement than purpose-built solutions.
• Time to implement a CRM’s is also identified by Gartner as highly variable depending on the amount of consulting consumed for the bespoke development which is identified as averaging 3.5 to max. 10 times the cost of the license fees.
• Some CRM’s like Salesforce have licensing regimes where cost is hard to predict upfront and which inevitably escalate (where actual API call limits, memory limitations and the number of report templates required are more than that initially quoted). SalesForce devote a small book to explaining their cost escalation limits.
• All things being equal, a purpose built, configurable, solution, like OmniStar Grants, delivers significantly better TCO. This is because the increased risk and cost demanded by including the bolt-on’s to CRM’s also incur greater TCO.

Gartner document: "How to Get and an Approximate Initial Estimate of the Cost of a CRM Project _350994" states the below key challenges faced by CRMs.

Key Challenges

• CRM project implementation costs can be highly variable and, therefore, easy to get wrong. The cost of projects that went live between 2014 and 2017 ranged from less than $20,000 to more than $100 million.
• Underestimating the costs of external service providers is a common mistake. The biggest costs in CRM application deployments are often the service providers’ fees.
• Depending on the scope of the project, the costs of service providers as a multiple of the costs of the software over the first three years can vary from less than 1x up to 10x.

OmniStar use cases and workflows

Since OmniStar is a purpose-built grants management platform equipped with rapid configuration features, it is capable of supporting a wide range of grant workflows.

OmniStar Grants provides workflows for competitive, non-competitive and closed/invited rounds. It supports multiphase and multistage application processes, has Conflict of Interest function, configurable assessment and eligibility processes that may utilise subjective, quantitative and qualitative assessments to determine the Order of Merit. Assessment comparisons may reveal inequalities in process and all activities, decisions and reasoning are captured, accountable and transparent.

OmniStar supports extensive APIs to facilitate secure data exchange. It caters for a wide variety of workflows including general research, utility, engineering, medical research, agricultural, university research, sports, scholarships, tourism, export and community (Philanthropic). Based on its huge configurability that includes no-code capability OmniStar Grants is grants workflow agnostic and can be configured to service almost any grants Program.

Conclusion

When selecting a grants solution, especially an enterprise-grade, a built-for-purpose SaaS Grants Management Solution platform like OmniStar Grants is a fundamentally better choice than extending a SaaS CRM like SalesForce or Microsoft Dynamics CRM, because (not an exhaustive list):

• It more closely matches the grant workflow of the organisation out of the box, hence reduces services effort (and cost)
• It can accommodate organisation specific needs by using OmniStar’s configuration tools which have been specifically designed for this purpose (some CRM vendors e.g. SalesForce use "Rapid Application Delivery" which is not the same as RAD implies bespoke development)
• It has predictable and transparent TCO because of high degree of automation removing the reliance on expensive consultants as well as analysis, design and development effort to implement grants functions to the CRM data model that is optimised by customer relationship management and not grants management
• Customer’s configuration modifications are maintained by F1 Solutions hence assuring forward compatibility removing costs associated when upgrading to new versions of the solution.

References

1. Data Foundation, https://www.datfoundation.org/ https://static1.squarespace.com/static/56534df0e4b0c2babdb6644d/t/592deaa1bebafba290a14cde/1496181413181/Grants+Report.pdf
2. "How to Get and an approximate Initial Estimate of the Cost of a CRM Project _350994"
3. SalesForce common limits and allocations, https://developer.salesforce.com/docs/atlas.en-us.salesforce_app_limits_cheatsheet.meta/salesforce_app_limits_cheatsheet/salesforce_app_limits_overview.htm