Custom CRM Development: Benefits And Challenges Explained

As a business grows, the number of its customers can increase significantly, which complicates customer relationship management. This is why more and more companies adopt dedicated CRM software to streamline these operations and gain valuable insights from customer and sales data. 

However, when planning to implement a CRM solution, decision-makers inevitably face the choice to get out-of-the-box CRM software or build a custom CRM software solution from scratch. Although custom CRM development is a more challenging option, it can also prove more rewarding in many cases.

This article highlights the most notable advantages and challenges of custom CRM development to help companies make the right choice.

Benefits of custom CRM development

Perfect business fit

Unlike platform CRM software that can’t cover all of a company’s specific needs and thus requires time and money for additional customizations, a custom CRM solution is initially built around a company’s business requirements. All its elements, including functionality, business logic, and UX/UI are tailored to help a company address its particular needs and drive its unique CRM strategy, so the owners don’t have to extensively modify a custom CRM solution to implement it.

While some modifications can still be required after some time, since as a business grows and its needs and goals also evolve, a company can customize its bespoke CRM without any limitations and modify its functionality, UX/UI, or any other element.

Higher user adoption

Since CRM is one of the most popular business software types intended for internal use, a company will not be able to maximize custom CRM development ROI without ensuring high user adoption among employees. A great way to ensure it with custom CRM is by hiring an expert design and development team to create an intuitive, easy-to-navigate CRM user interface, which can help lower the learning curve for employees.

Moreover, designers can follow the principles of emotional design, which implies focusing on the emotions users feel when working with the software. To be more specific, designers can run empathy-driven user research and take into account user emotional associations during design creation to provide a more engaging and enjoyable UX for employees.

Enhanced cybersecurity

The primary purpose of any CRM is to consolidate customer data from across disparate sources and store it centrally. However, due to this, they become common targets of cybercriminals looking to steal and sell confidential information.

In the fall of 2023, cybersecurity researcher Jeremiah Fowler reported the discovery of a leaked database containing more than 3 million records, including files, messages, and invoice data. After further investigation, the expert determined that the compromised data belonged to the customers of Really Simple Systems — a CRM platform used by IBM, the Red Cross, England’s National Health Service, and many other organizations.

Most of the compromised data included tax documents, medical records, social security numbers, taxpayer identification numbers, and other user information that could be considered highly sensitive. By using information from the non-protected database, malefactors could run targeted attacks on companies’ customers to gain access to their internal business systems and steal even more of their corporate data, which could potentially affect thousands of businesses. Implementing robust email security measures is critical to preventing such breaches and protecting sensitive information from unauthorized access.

This and other examples of CRM data leakage show that even a single data breach can be devastating for both vendors and users, so cybersecurity should be a top priority when implementing both platform-based CRM systems or custom solutions. In light of such a precarious security landscape, developing a CRM system from scratch can be a more secure option than an off-the-shelf CRM for multiple reasons.

First of all, hackers can exploit known vulnerabilities in off-the-shelf CRM systems, while custom software doesn’t have known vulnerabilities by default. Hackers targeting custom CRM will have to pave their own way, which makes successful attacks much more difficult.

Another reason is that a custom CRM solution can better comply with a company’s security requirements, as developers consider them during development. The company can also task developers with implementing any security mechanisms into its CRM, be it digital signature, geo-location verification, or AI-powered threat and malware detection, which also helps ensure superior data safety.

Tailored technical support

A company resorting to custom CRM development services can hire the same developer team to provide continuous and personalized support for its solution. If any technical issues occur, a team can support users and swiftly make any necessary updates or modifications to the software. Such tailored technical support is typically not available for companies in cases of platform CRM, where most updates are provided only at the vendor’s discretion.

Enhanced data accuracy 

Companies can lose on average 20% of their annual revenues due to poor data quality, as highlighted by the report CRM Data Management in 2024 from Validity, while a whopping 25% of surveyed CRM admins say only less than half of their data is complete and accurate.

A company can enhance the accuracy of data stored in CRM by using various automated data cleansing techniques. However, platform CRM solutions typically provide only limited automated data cleansing functionality. In contrast, a custom CRM can be equipped with any powerful data cleansing features and tools, which is why it can be more impactful for data quality improvement.

For example, developers can equip a custom CRM system with automated data deduplication mechanisms to identify and merge duplicate contact records based on predefined rules. In addition, developers can implement automated data enrichment functionality in CRM to fill in missing lead and contact data from various external sources, such as LinkedIn, LimeLeads, or RocketReach.

Exclusive code ownership

From the legal perspective, a company that purchases a platform CRM does not become its rightful owner but a user, while exclusive code rights belong to a platform vendor. On the contrary, a company that develops custom CRM can get exclusive rights to the CRM solution and its source code.

This in turn means that a company can utilize custom CRM in any way. For instance, a company can not only apply custom CRM for internal use but distribute and sell it to other businesses, turning it into a reliable source of income. Additionally, a company can repurpose a CRM solution’s code in other corporate development projects, thus accelerating software delivery and reducing development risks.

Key custom CRM development challenges and how to overcome them

Here are the most common challenges companies face during custom CRM development projects:

1.   High development costs

A custom CRM project encompasses business analysis, prototyping, design, coding, and other software steps, which makes it more expensive compared to the adoption of turnkey CRM. If the CRM solution is feature-rich and its architecture is complex, the cost can additionally increase.

Solution:

There are ways for companies to optimize custom CRM development costs and thus make such a project more affordable. Developing a minimum viable product (MVP) for the CRM solution is one such way.

An MVP is a solution that includes a minimal set of features but can nevertheless be utilized by users efficiently. The key idea of ​​this concept is to build a working solution quickly, get feedback from real users, and gradually refine and equip CRM with new functionalities.

Since an MVP includes only limited CRM functionality, developing such a solution requires less initial investment compared to feature-rich CRM. Although an MVP is not yet a full-fledged product, employees can still use it to attract customers and generate sales. The company can then invest profits generated from these activities for further development of an MVP, thereby saving the corporate budget.

2.   Long timeline

Developing a bespoke CRM from scratch is not only expensive but also time-consuming. Depending on its complexity, a custom CRM project can last several months and up to a year. Even an MVP takes time to build, unlike out-of-the-box software, which can be implemented and integrated into a company’s IT ecosystem in just a couple of weeks.

Solution:

Comprehensive development process automation is one of the best ways to speed the project up and get a working CRM solution faster. In particular, developers can implement DevOps practices and tools to automate testing, integration, and deployment, minimize manual labor, and mitigate the risk of delays in software delivery.

For example, a development team can use automated testing tools to speed up testing and quality assurance, two highly time-consuming and labor-intensive tasks. These tools can execute tests, process test results, and report these results to the development and testing team, helping to detect bugs and errors faster and more accurately.

Deployment automation tools, in turn, can integrate code stored in version control into a central code repository, compile and package code for deployment, and quickly deploy it to staging, pre-production, or production environments.

3.   Scope сreep

Scope creep represents an uncontrollable extension of the solution with features or capabilities going beyond the pre-agreed project scope. It can occur in any custom development project, and CRM development is no exception. Since scope creep can cause software delivery delays and budget overruns, companies should make efforts to avoid it.

Solution:

Unrealistic or unclear project requirements are among the key reasons behind scope creep, according to PIM, Asana, and other project management experts. By following these recommendations, a company can estimate CRM project requirements more precisely:

●     Involving stakeholders early on

When gathering and defining CRM requirements, it is critical to consider the needs of all stakeholders right from the start. Otherwise, there is a risk that the software does not cover all stakeholder expectations. In such a case, new and unforeseen requirements may be added in the thick of the development process, impacting the project scope.

There are numerous ways to engage stakeholders in the CRM requirements definition process, and running joint requirements workshops is one of them. The main goal of a requirements workshop is to identify the core requirements of all stakeholders before development starts.

A requirements workshop represents a brainstorming session, during which stakeholders discuss problems they want to solve and goals they want to achieve with software development. Typically, business analysts also participate in these sessions. They ask questions to stakeholders and study their answers and arguments to formulate software requirements that would cover the majority of stakeholders’ needs.

Stakeholders can also be involved in wireframing and user story mapping, two critical activities in CRM software development. Collaborative wireframing in Figma, Adobe XD, or any other tool enables stakeholders to visualize and share their ideas with each other and the development team, which helps ensure alignment between the intended product and stakeholder expectations. In turn, collaborative user story mapping propels a shared understanding among stakeholders and developers of how a CRM product should work and helps prioritize the expected CRM functionality more efficiently.

●     Documenting software requirements in a convenient format

Software requirement specification documentation must serve as a single and reliable source of information throughout the development for all involved parties and cast light upon the progress of the CRM project, so clarity and accessibility of documentation are critical. A company can entrust a developer team to improve software documentation by using various requirements visualization techniques.

For example, a development team can highlight some of the CRM’s features via activity charts, data flow diagrams, storyboards, or other visual means. Stakeholders and developers can view these visual materials anytime to understand how the solution would operate and its capabilities without having to read a wall of technical text. This convenient visual representation of software specification can be especially useful in complex CRM projects implying communication and collaboration between hundreds or even thousands of stakeholders.

●     Implementing an efficient change control policy 

Even if the initial requirements for CRM software are defined as clearly as possible, they can still change over time. For example, stakeholders’ expectations can evolve under the influence of objective external factors, such as market shifts, which will most likely lead to changes in their requirements.

To prevent scope creep, which can occur if requirements change uncontrollably, the company should implement a change control policy, as it helps make any changes more manageable. In other words, instead of allowing stakeholders to make any changes without limitations, a company can implement a set of rules and restrictions that would govern the implementation of any changes to the project. 

A change control policy should define the process for stakeholders to submit change requests and the specific steps involved, the process for reviewing these requests by other stakeholders including CRM software owners, and the algorithm for evaluating these requests to determine whether they should be accepted or rejected. A detailed and well-designed policy should help the company maintain control over the scope of its CRM project without reducing its flexibility in making necessary software changes.

4.   Lack of knowledge and skills

Developing a system as complex as CRM requires broad expertise and skills in various areas, including business analysis, project management, design, and testing. The company will also need developers with a deep understanding of CRM technology and common programming languages ​​(Java, Python, PHP, etc.), as well as software architects who can design a reliable CRM solution and its data model.

Solution:

Instead of spending months hiring and training the required talent, companies can turn to companies providing CRM development services. Depending on its needs, a company can choose between the following engagement models:

●     Staff augmentation

If a company intends to develop a CRM in-house but needs more talent, it can easily augment its developer team with a needed number of third-party specialists. The significant reduction in overhead costs associated with IT workforce management is one of the critical benefits of staff augmentation. After all, the company does not need to pay a full-time salary or cover benefits to an outsourced workforce, as these are the responsibilities of an IT staff augmentation provider.

●     CRM development outsourcing

If a company needs to fill in different project roles and augmentation cannot cover all its needs, it can delegate its CRM project to a third-party team to execute it end-to-end. For example, a company can hire a dedicated team to work exclusively on its CRM project. Since a dedicated team devotes all its efforts and attention to one particular CRM, it can help a company ensure superb product quality and faster time-to-market.

Final thoughts

Implementing a CRM system is not easy, especially when you’re building it from scratch. Although custom systems provide numerous advantages, such as higher user adoption and better cybersecurity, building such a system is very expensive and time-consuming. In addition, such a project requires development skills that may not be available in the company.

Fortunately, companies can make CRM development more affordable by developing an MVP and accelerate it by implementing automated development tools. If a company faces a skill gap, it can also turn to third-party CRM experts to augment its internal resources or delegate its CRM project to avoid administrative staffing hurdles completely.