Is Hosted CRM Foreshadowing Next Business Wave?

Headline presenters at DCI's Customer Relationship Management Conference & Exposition in New York this week said that the online delivery of CRM technology is more than simply a method to attempt to realize faster ROI in business process change. It may actually represent one of the early battlegrounds of technology evolution for the years ahead. "Hosting, and hosted CRM, represents a disruptive innovation in enterprise software, and the effects of disruption are still being felt," said Denis Pombriant, managing principal of Beagle Research. He invoked the image of the fall of minicomputer vendors at the birth of the PC two decades ago: "They could not adjust, even though they had plenty of time and ample warning." According to Pombriant, the real-time collaboration that fully Web-enabled business processes can support will help companies break out of being "stuck in the early-20th century" and make more customer-driven decisions. "Today's consumer is smart, relatively well off, and time-starved, and we need [new] applications to deal with that uniqueness." Another DCI keynote speaker, David Thacher, general manager of Microsoft's Microsoft Business Solutions unit, said that conventional on-premise CRM solutions still represent the best overall value to adopters, but he spoke also of the technology changes introduced by greater online integration of business processes. "What will change business radically in the long run is [Internet] interoperability. Email has changed almost every business, and [interoperability] is what transforms CRM in the next five years." Instead of focusing on hosted CRM, Thacher believes the broader integration opportunities afforded by evolving Web-services standards will change the way businesses interface in the supply and demand chain. "You will see more connections that go beyond your brick walls, because processes don't end at those arbitrary limits." Thacher envisions that the future of software development will be driven heavily by technology partnerships, where independent subject matter experts use a common technology platform to build industry-specific functionality atop a core CRM suite. Pombriant predicts a more fundamental reordering of business software enterprise. The traditionally integrated processes of development and marketing would be farmed out to different firms, as stand-alone publishers provide certified integration between various enterprise technology modules. Not all enterprises are ready to welcome online delivery or integration of business processes, even with the potential of these distributed models. Concerns about offline functionality, third-party support and integration, and offsite data storage are still prevalent. In fact, the latest Beagle Research survey on hosted CRM found that a nearly equal number of respondents opposed and embraced the concept of hosted CRM.