Introducing Microsoft CRM

Microsoft saw the need for a better CRM software platform and created a solution called Microsoft Dynamics CRM ("Microsoft CRM"). They designed this software for companies of all sizes to use as their technology platform for implementing CRM strategies. Microsoft first released Microsoft CRM (version 1.0) in late 2002 and has continued to update the software over the past few years with new releases and feature packs. This book covers the latest release of the software, Microsoft Dynamics CRM 3.0. This chapter will give you a brief overview of the Microsoft CRM 3.0 software to explain how it helps companies implement CRM strategies. We'll discuss the following overview topics:

• Software design goals

• Front office vs. back office

• Editions

• Licensing

• Requirements

After we cover Microsoft CRM from a high-level perspective, the subsequent chapters will explain how you can configure, customize, and extend the software to meet your company's unique business needs.

More Info 

This book explains how to configure and customize the Microsoft CRM software, but we will not instruct you on CRM strategies because they can vary widely by industry and company size. If you're interested in learning more about the philosophies and methodologies behind CRM, we suggest that you purchase one of the many books that discuss these topics in a non-software-specific manner. We wrote this book for people who are responsible for managing and deploying Microsoft CRM.

Software Design Goals

Microsoft CRM is designed to resolve the common issues that historically caused problems during CRM implementations. Some of the issues we've already reviewed include: offsite workers needing remote access to data, multi-channel customer communications, and rigid software design. To solve these problems, Microsoft CRM targeted three software design themes:

• Works the way you do

• Works the way your business does

• Works the way Information Technology (IT) expects it to

Works the Way You Do

Earlier CRM systems forced users to track information in multiple systems because the CRM software didn't include all of the functionality, such as e-mail, calendaring, task management, and spreadsheets, needed for users to complete their jobs. People performed their work with productivity tools such as Microsoft Office Outlook, Microsoft Office Excel, and Microsoft Office Word, but then they had to copy customer data into their CRM system! This extra step caused negative user feedback because it slowed users down, created additional work, and forced them to learn an entirely new tool.

To address this problem, Microsoft CRM works directly within Office and Outlook so that users can perform their normal job functions and track data in Microsoft CRM at the same time. Microsoft CRM is a server-based product that you install and run on a Web server, and users can install the Microsoft CRM client for Outlook software to work directly within Outlook, as shown in Figure 1-1. You can see that Microsoft CRM adds a toolbar to Outlook and adds Microsoft CRM folders to the Outlook folder list.

Figure 1-1: Tracking Microsoft CRM data in Outlook

If your users know how to use Outlook, they already know how to use the key customer management tools in Microsoft CRM such as contacts, tasks, appointments, and e-mail. Figure 1-2 shows the Microsoft CRM toolbar that allows a user to compose an e-mail message in Outlook and then simply click the Track In CRM button to save a copy of the message to the Microsoft CRM database.

Figure 1-2: The Track In CRM button for saving data to Microsoft CRM

This tracking concept applies not only to e-mail messages, but also to calendar items, contacts, and tasks. By offering this native Outlook experience to users, Microsoft CRM lets users work with their normal tools and easily track and manage CRM data.

Real World 

Believe it or not, many companies still require their employees to copy information from their Outlook e-mail messages and paste it into their CRM systems. It sounds crazy, but we've seen this process implemented at many companies, both big and small. The native Outlook integration of Microsoft CRM eliminates the need for this extra work.

Even if your company doesn't use Outlook, or if you use Microsoft Office Outlook Web Access, Microsoft CRM provides you with additional user interface options:

• Microsoft Internet Explorer Web browser

• Personal Digital Assistant (PDA) using Microsoft mobile technology

Microsoft CRM also integrates directly with additional business productivity tools such as:

• Microsoft Excel

• Microsoft Word

• Microsoft Exchange Server

• Microsoft SharePoint Products and Technologies

By providing a tight integration with tools that your users already know, Microsoft CRM provides an extremely rapid learning curve to ensure maximum user adoption. More important, it's designed to work the way your users work.

More Info 

We explain the details of the integration of Microsoft CRM with these other products in later chapters.

Works the Way Your Business Does

So you've seen how Microsoft CRM works hard to make life easier for the people who use the system on a day-to-day basis. Microsoft CRM also offers several benefits designed to accommodate the way businesses work. In particular, these benefits include:

• Web-based customization tools Because your business processes change rapidly, you can quickly and easily customize Microsoft CRM by using Web-based customization tools. In addition to customizing forms and adding fields, you can create entirely new types of data to track and manage in CRM without writing a single line of code.

• Robust security model Microsoft CRM uses a role-based security model to provide you with incredibly detailed and flexible security configuration options. You can structure the system so that users access and edit only the information they need for their jobs. Yet, the security model remains agile enough to allow users to create ad hoc teams for collaborative work on projects and customer accounts.

• Open programming interfaces Because businesses use more than one system for their operations, Microsoft CRM offers you an open programming interface that enables you to connect Microsoft CRM with almost any type of external application, such as your company Web site, a financial system, or a company intranet. The Microsoft CRM programming interface uses Web services, so you can use almost any integration technology or platform that meets your needs.

• Business process automation Microsoft CRM offers you a Workflow feature to automate business processes and repetitive tasks such as automatically creating follow-up tasks for new leads or escalating overdue customer service issues to a manager. You set up these business workflows by using a graphical user interface, so you can easily customize and revise them without programming code when your business needs to shift quickly.

• Multiple deployment options You can choose how you want to deploy the Microsoft CRM software for your business. You can purchase the software and install it onsite in your local network, or you can rent the software on a monthly basis from a Microsoft partner who will manage all of the hardware, software, network, and security issues on your behalf. You can also switch from one deployment model to another if your business needs to change over time. Regardless of the deployment option you select, you can always configure the security settings so that your remote and offsite workers can log on and access the system with no problems.

More Info 

Part II, "Customization," and Part III, "Extending Microsoft CRM," explain how you can customize Microsoft CRM to match your business process and procedures.

Works the Way IT Expects It To

If you're in the Information Technology (IT) department, we're sure you've worked with some difficult systems. Maybe the software used some proprietary database format that only three people in the world understand, or maybe the software was so fragile that you didn't want to upgrade it for fear of breaking it! Microsoft CRM is designed to work with the existing tools, applications, and infrastructure that IT professionals use every day. Some of the Microsoft CRM benefits specific to IT include:

• Industry standard technologies Microsoft CRM uses industry standard network management technologies for its foundation. It uses Microsoft Active Directory directory service and Integrated Windows authentication for user and password management. Microsoft CRM stores all of its data in Microsoft SQL Server for easy backups, restores, and failovers. It also uses the SQL Server Reporting Services platform as its main reporting engine, and it works directly with Exchange Server for sending and tracking e-mail.

• Wizard-driven deployment When you install Microsoft CRM, the software checks for all of the system prerequisites and tells you which adjustments you might need to make. Depending on your network environment, it's possible to install the Microsoft CRM software with 10 clicks or fewer!

• Failover and disaster recovery Microsoft CRM supports clustering for Web, database, and e-mail server environments, so you can feel confident about the safety of your mission-critical data.

• Zero-footprint clients Users can access Microsoft CRM by using Internet Explorer and still use the software's rich functionality. In addition, you can deploy the Microsoft CRM desktop client for Outlook so that you can use the software if your organization uses thin-client technology for your users.

• Automation support You can install Microsoft CRM from a command line or via Terminal Services.

In light of these benefits (and many more that we didn't list), you'll find that Microsoft CRM works the way IT would expect it to.

More Info 

This book focuses on configuring and customizing Microsoft CRM, but we do not cover the software installation and related troubleshooting because the Microsoft CRM 3.0 Implementation Guide provides all the information that you need on those topics. You can learn more by downloading the latest version of the Implementation Guide from http://go.microsoft.com/fwlink/?LinkId=55129.

Front Office vs. Back Office

Because CRM strategies revolve around tracking and managing customer interactions, CRM applications typically focus on customer touchpoints in departments such as sales, customer service, and marketing. Some people refer to these customer interfacing departments as the front office of a company. Consequently, you can refer to the departments that help support a business's operations but don't interact directly with customers as the back office. Typical back office departments include information technology, human resources, manufacturing, distribution, and accounting. Most people refer to software applications that help companies manage back office operations as Enterprise Resource Planning (ERP) applications. Just like CRM systems, implementing ERP applications requires a very careful and well-planned process to maximize the project's success.

The Microsoft CRM functionality focuses mostly on front office features, so it doesn't really include any back office functionality as part of its default installation. Of course, you could customize the Microsoft CRM software to include your own back office functionality, but developing ERP functionality can prove extremely complex and expensive. Fortunately, Microsoft offers several ERP applications from the same division that created Microsoft CRM.

Important 

In addition to Microsoft CRM, the Microsoft Dynamics division—formerly known as Microsoft Business Solutions—offers several ERP software products in its lineup.

Some of the current Microsoft Dynamics ERP products include:

• Microsoft Dynamics GP (formerly known as Microsoft Business Solutions-Great Plains)

• Microsoft Dynamics SL (formerly known as Microsoft Business Solutions—Solomon)

• Microsoft Dynamics NAV (formerly known as Microsoft Business Solutions—Navision)

• Microsoft Dynamics AX (formerly known as Microsoft Business Solutions—Axapta)

Each of these products provides rich functionality, and choosing the right ERP product for your business requires careful consideration well beyond the scope of this book.

The reason we mention these ERP products is to let you know that Microsoft already offers software for these back office departments if you're interested in automating that part of your business. In addition, Microsoft offers software integration between Microsoft CRM and Microsoft Dynamics GP, so that you can synchronize customer records, orders, and invoices between your front office and back office systems, as Figure 1-3 illustrates.

Figure 1-3: Microsoft CRM synchronization and integration with Microsoft Dynamics GP

More Info 

Microsoft CRM includes software to integrate with Microsoft Dynamics GP so that you can synchronize front office and back office data. This integration software includes its own software development kit (SDK) so that you can customize the synchronization. The official name, pricing, and functionality of this integration software wasn't released at the time that this book was written. However, Microsoft CRM 1.2 included the Microsoft CRM 1.2 Integration for Great Plains 8.0 software for no charge if you purchased the Professional edition of the software.

Editions

You can obtain Microsoft CRM 3.0 in one of two editions:

• Microsoft Dynamics CRM 3.0 Small Business Edition

• Microsoft Dynamics CRM 3.0 Professional

As the names of the editions imply, the Small Business Edition targets smaller companies, and Professional is more appropriate for medium and large companies.

Some of the key differences between the two editions include:

• You must deploy the Small Business Edition on a Microsoft Windows Small Business Server, but you can install Professional on various Microsoft Windows Server operating systems.

• You can accommodate a maximum of 75 users in the Small Business Edition, but Professional allows you to deploy as many users as necessary. After you factor in performance considerations, a recommended maximum number of users for the Small Business Edition might range from 40 to 50 users, depending on their usage and the system hardware.

• The Small Business Edition includes all of the functionality that Professional includes, in addition to features unique to Small Business Edition such as CRM integration with the Small Business Server Shared Fax Service.

• The Small Business Edition provides less flexibility in regard to custom third-party system integration and external user access because you cannot purchase and deploy an External Connector license with this edition. We explain the External Connector license in the next section of this chapter.

Note 

Small Business Server is a specialized operating system version that bundles Windows Server 2003, Exchange Server 2003 technology, and Microsoft Windows SharePoint Services so they can be deployed on a single piece of hardware. Small Business Server 2003 Premium Edition also includes Microsoft SQL Server 2000 and ISA Server 2004 in the bundled software. You must deploy Microsoft CRM with Small Business Server 2003 Premium Edition, because Microsoft CRM requires a SQL Server database.

Although deploying Microsoft CRM with Small Business Server includes several great benefits, it does include some notable restrictions:

• Small Business Server 2003 supports only two physical CPUs and up to four virtual CPUs.

• Each domain can contain only one installation of Small Business Server 2003.

• Small Business Server 2003 does not support trusts between domains, and you must install the server at the root of the Active Directory forest.

• A Small Business Server 2003 domain cannot have any child domains.

• You cannot run Terminal Services in Application Server mode on Small Business Server 2003.

Microsoft CRM Small Business Edition software licenses cost less than Microsoft CRM Professional licenses, but you can see that some constraints exist in regard to configuration of the underlying network.

Licensing

Microsoft CRM requires two types of software licenses for each deployment: server licenses and user licenses. Every deployment must include at least one server license, and you must have a user license for every active user in the system. User licenses are also referred to as Client Access Licenses. When you add a user to Microsoft CRM, you specify his or her Active Directory account, so you must also create an Active Directory account for every Microsoft CRM user.

Important 

The number of user licenses that you need depends on the number of named users in your system. Every active user in Microsoft CRM will consume a license, regardless of how often he or she accesses the system or how many users log on at the same time. Named user licensing is different from other software programs that base their licensing on the number of concurrent users. A system administrator can easily transfer user licenses from one user to another when necessary.

If your company deploys a Web farm with multiple Microsoft CRM Web servers, you must have a server license for every Web server running Microsoft CRM.

If you want to share Microsoft CRM data with external users such as your customers or partners, you can purchase an External Connector license that allows you to share Microsoft CRM data with an unlimited number of third-party users and systems. By using the External Connector License, you do not need to purchase a user license (create an Active Directory account) for each external user. For example, you can create an extranet Web site that lets customers log on and retrieve Microsoft CRM data in real time. You could also create a special Web site for your partners to enter and update Microsoft CRM data. You need an External Connector license for every server required to support external access.

In summary, Microsoft CRM offers the following software licenses:

• Small Business Edition server license

• Small Business Edition user license

• Professional edition server license

• Professional edition user license

• External Connector license (compatible with Professional only)

As you might guess, you cannot mix and match Small Business Edition licenses with Professional licenses in a single deployment. Of course, you can purchase these licenses through various Microsoft licensing programs such as Open Business, Open Value, Select, Enterprise Agreement, and Full-Package Product. We won't go into the details of these programs, but the key point is that you can purchase the software using whatever licensing program makes the most sense for your business.

Important 

When you purchase Microsoft CRM licenses, you will receive software updates and new version rights at no charge for a period of time after your initial purchase. The length of time that you receive software updates depends on the licensing program that you used to purchase the licenses, but it ranges from one to three years. You can continue to receive software updates by purchasing Software Assurance for additional years. If you choose not to renew updates, you will still own the Microsoft CRM software licenses in perpetuity.

As we mentioned earlier, Microsoft CRM 3.0 also includes the option for you to rent your software licenses and hosting through Microsoft partners. You must contact the hosting partners to understand the terms of their pricing, support levels, licensing, and so on.

Requirements

Microsoft CRM uses industry standard technologies such as Windows Server, Active Directory, and SQL Server for its platform. You have great flexibility in designing and configuring your Microsoft CRM environment, and your final system design will depend on several variables such as:

• Number of servers available and server hardware specifications

• Number of Microsoft CRM users and their expected system usage

• Hardware specifications of your servers and your local area network performance

• Your network structure and security configurations, including firewalls and virtual private network (VPN) connections

• Amount of disaster recovery and failover systems needed in your deployment

The Microsoft CRM 3.0 Implementation Guide lists some recommended deployment configurations based on these variables. However, as a general rule of thumb, the Microsoft CRM server environment requires the following components:

• Windows Server (2000 or 2003) or Small Business Server 2003 Premium Edition

• SQL Server (2000 or 2005) with SQL Server Reporting Services

• Exchange Server (if you want to integrate e-mail with Microsoft CRM)

Of course, users accessing Microsoft CRM must also meet certain minimum hardware and software requirements on their computers. These requirements range from minimal for Web interface users (Windows 98 or later with Internet Explorer 6.0 with Service Pack 1, for example) to more restrictive for Microsoft CRM client for Outlook users (Windows 2000 Professional with Service Pack 4 and Office 2003 with Service Pack 1, for example).

More Info 

We don't include the exact hardware and software specifications in this book because they vary over time as Microsoft releases new versions of its software. Please consult the Microsoft CRM Web site at http://www.microsoft.com/crm for the latest hardware and software requirements.