Enterprise CRM: Change Is Inevitable

The new year will not be a quiet time for enterprise CRM development. Vendors are looking to capitalize on some of the confidence rebuilt in recent years through on-demand and tactical deployments, while they fend off competitive challenges from software industry rivals. Client companies, meanwhile, will have to rationalize some of the point solutions they have adopted to rebuild their CRM efforts. "There are still line-of-business and functional silos out there," says Charles Born, vice president of global marketing for Amdocs. Because many CRM efforts have classically focused on changing internal processes with the hope of creating external benefits for the customer relationship, the changes presented to customers can sometimes be disjointed or incidental. "What customers are telling us is that they are looking for integrated customer management, where the focus is on delivering an intentional customer experience, not a by-product." Seizing the opportunity to break down functional silos during a CRM project is hardly a new concept--practitioners have been preaching the evils of stovepipes for years. The restricted budgets that accompanied the depressed economy drove many companies to seek individual functional solutions, and revenue-strapped vendors and integrators did not put up much of a fight. "For the past two or three years the big question was return on investment," says Bruce Cleveland, senior vice president and general manager of Siebel's SMB and on-demand division. That thirst for quick, tangible results pushed big-picture projects to the back burner. Enterprise CRM vendors themselves are enduring business transformation. Pressure from Salesforce.com, which despite an average implementation size of about 20 seats has captured some prominent large-scale enterprise clients, has forced the big players to take the on-demand model seriously. Oracle's unrelenting perseverance eventually won over a majority of PeopleSoft's shareholders and its recalcitrant board of directors. Oracle's fight to succeed with the purchase has just begun, however, because of the many issues PeopleSoft was still struggling with. "[PeopleSoft] hadn't wrapped up its own integration, or the technology transfer, to pull the best features" from Vantive, J.D. Edwards, and YouCentric into PeopleSoft, says Ian Jacobs, CRM principal analyst at Current Analysis. That discoordination seems sure to provide an immediate opportunity for 2004's enterprise CRM darling, SAP. "SAP certainly wins in the short term here, and that includes in the CRM space," Jacobs says. Rivals have decried SAP's claims of vast CRM-related revenue over the past two years, but the company and its customers have made it clear that CRM technologies are being adopted as part of larger, enterprisewide initiatives, as well as on their own. Asked about potential new acquisitions, including Siebel, Oracle President Charles Phillips confirmed that more purchases could be in the cards, but that the PeopleSoft integration, already under way, would be top priority in the near future. He cagily added that after "a couple of quarters of producing the accretion to earnings we've promised investors," it might be possible to make substantial financial moves once more. CRM strategists at user companies will have to consider what to do with their customer relationship tools and will have to keep an eye on whom they do business with. It may be a constantly moving target.