Microsoft CRM for Charities: Where Are We Now?

18 months ago, I discussed how I thought Microsoft CRM Dynamics was about to cause a stir in the charity sector. So was I right? Well, yes and no - it has certainly started to be used within the NFP sector and adopted by some sector software suppliers as well, but maybe not as quickly as I had expected it to. But now with the recent announcement from Microsoft that they are launching a specific version for charities, and that this will be released in the UK later this year, does that mean that now is the time that it will truly expand into the sector? Here's a few new thoughts on that:

So far, MS CRM has proved mainly beneficial for small to medium size UK NFP organisations and primarily for one of two scenarios: either where there is a specialist need and where CRM is a heart of that need (e.g. outcome and performance management, registration requirements), or where it could be implemented across the whole organisation for multiple needs but where sophisticated fundraising functionality is not a requirement or the central need (e.g. contact management, events, volunteer management). Similarly, in a few instances I know of, it is being implemented at larger organisations for all their contact management except fundraising. All this is being done in-house at some charities but often it is with the assistance of specialist MS CRM suppliers, some of which are carving a niche with their NFP sector experience.

This is mainly because fundraising - and membership in many instances too - has specific requirements which either take time and money to implement or which can simply be better served (at the moment) by a dedicated fundraising/membership software package.

This is not to say that MS CRM cannot achieve the same functionality or benefits, it is just that to get to that point takes time, resources, knowledge and money. In particular, requirements such as Gift Aid management (not over-complex these days but still a niche requirement), direct debit processing, some income processing requirements, membership management, payroll giving support and so on are needed for most fundraising/membership charities with a high enough income or advanced requirements, and many organisations still see the traditional fundraising/membership software packages as providing better solutions for these needs. Microsoft's original press release announced "support for online payment solutions" but I don’t know yet whether this initial implementation will be suitable for UK organisations at this time. And, of course, there could be all sorts of other issues which need addressing for UK charities for it to be truly suited to them.

That said, an alternative approach is emerging, with CRM resellers now creating 'templates' for MS CRM with built-in fundraising and membership functionality. Organisations such as Touchstone Systems, Pythagoras and IMMIX all now offer such solutions, and this may well create a new market for the product. And in some ways, these sort of offerings are an excellent concept: a good, solid system which will continue to grow and be enhanced over the years to come, with fundamental support for charities' requirements, but with the ability to customise it to an organisation's specific needs as well. It's a nice approach.

So is MS CRM really appropriate for UK NFP organisations yet? I personally believe that MS CRM (and similar offerings such as SalesForce) are still mostly suited to small to medium size charities who can and want to implement a single database for all their supporters and contacts. If they have a larger fundraising/membership constituency then it won't have the advanced fundraising oriented functions of the traditional fundraising packages (e.g. Blackbaud, IRIS, ESIT etc), but if an organisation wants to manage all their contacts in a single database with a wide breadth of functionality then Dynamics CRM is definitely an option. Maybe just not yet if there is a need for specialist fundraising and income support (unless they use one of the companies listed above) but I believe that will come, either from Microsoft or their partners/resellers and when that happens, that will put the cat amongst the pigeons for the traditional software package suppliers to the sector.

Finally a word on cost: MS CRM software license is very cheap - whether it is the price in the Microsoft Press Release or through the UK Microsoft resellers such as CTX or through a special offer such as Caltex provide, but organisations need to be aware that the major costs in implementing it will be in configuration, customisation, implementation et al - whether they use an external company or internally. And that can add up. Interestingly, Microsoft's Press Release actually says "Customizations for nonprofits and NGOs are offered free of charge". That’s some statement! I wonder what sort of flexibility and limitations that has?

Microsoft CRM: A New Old Kid on the Block

So the start of a new year seems the right time to make my predictions as to what will be happening with the sector database market for fundraising and membership systems. One un-surprising prediction is that I expect there to be even more consolidation/acquisitions amongst the database package suppliers. Even in the last few months, IRIS have bought Donor Strategy and ASI have acquired Fisk Brett. But who will be next and what will that mean to users and charities? Well, that's something I'll address in my next blog...

My main prediction is that this year will see the emergence of Microsoft CRM as a real competitor to the traditional fundraising/membership systems. This is because of several new benefits realised by the most recent release (v4):

• Flexibility. There has been an increasing awareness over the last few years amongst the medium to larger charities that package solutions are not always flexible enough for many of their extended wishes and requirements, and/or users want to customise systems more themselves. The more savvy package suppliers have already realised this constraint and the next generation of their packages are already being designed with this in mind, so that although a solution may still be based on a core package, they will offer far more scope for bespoke development or in-depth customisation around the package but still with future-proofed upgrades.
  
  And this is where Microsoft CRM looks good. Adding fields and forms, changing field and entity names, and even workflow, all this can be done without any programming knowledge. And if you want more then customisation using dot net is fully integrated.
• User Interface. CRM's user interface is built-in to Outlook or a web browser. This is a signficant thing. If a user can click on their InBox and Calendar then CRM is just another click further down. The basics really are that easy.
• Improved data query tools. This is a key area of functionality and Microsoft has significantly improved their querying, reporting and data extraction tools in v4. Reporting uses Microsoft Reporting Services with the ability to drill-down directly into records and although ad-hoc querying may still not be quite as good as some of the leading fundraising packages, a more experienced user can do reasonably sophisticated queries and segmentation.
• Cost. Purely in terms of licenses, CRM is inexpensive. This is of course only one part of any implementation cost - a signficant CRM implementation will still not be cheap - but at least the software itself is good value.
• Beyond fundraising... By definition of CRM's background, it is not limited to fundraising or membership. If you want to incorporate your volunteers, suppliers, other contacts etc, then you can do this. Of course, many fundraising/membership packages can also do this so it is not unique, but it has a very good base to start from.

Of course, this last point also highlights the fundamental downside of Microsoft CRM which is that it does not come with any standard fundraising or membership screens or functionality. Users or suppliers will need to build that. The key area which will need development is probably going to be income: donation structures, gift aid, direct debit management and claims, pledges and so on.

But it's an interesting time for database technology in the sector - watch this space to see if I am right about how it develops!