Too many companies in the past looked at CRM and related technologies as magic bullets that would solve their CRM challenges.
Posted Sep 24, 2004
According to META Group, organizations that haven't received the expected value from their investments in CRM technology will be looking to realign their technology processes with their business strategies in 2005, rather than simply spending more money on the technology.
Too many companies in the past looked at CRM and related technologies as magic bullets that would solve their CRM challenges, according to Elizabeth Roche, META Group vice president.
For example, a company tracking order to cash, a process that includes order entry, inventory, and receipt of customer payments, would typically have a CRM system to track the orders, an ERP system to track inventory, and an accounting system for the receipt of payments. These separate technologies needed integration--which wasn't always clean or didn't exist at all--meaning manual handoffs from system to system.
Now, however, company executives are starting to realize that the individual technologies aren't answers in themselves, and need to fit in with an end-to-end system or be end-to-end systems themselves to get their expected returns.
Roche says legacy applications nearing end-of-life will motivate organizations to upgrade to next-generation CRM architectures, some of which have end-to-end capabilities or interfaces. By 2006, according to META Group, CRM transformation will become strategic for mainstream organizations, supported by industry-specific products, service-oriented architectures, integration frameworks, and specific, defined value propositions.
"While many functional CRM domains, such as sales automation and marketing campaign management, have matured, CRM architecture and technology [are] currently in the midst of a many-year evolution to service-oriented architectures, supported by Web services," Roche says.
Leading CRM vendors demonstrate excellence in several key areas, according to Roche, who cites vision/strategy, mind share, ecosystem investment strategy, feature/function depth, and vertical coverage as some of the critical factors that potential buyers research. Vendor performance and presence are equally important for the CRM market--vendors must excel in both areas to succeed.
The most important presence criteria include:
awareness/reputation (e.g., mind share, shortlist frequency);
industry focus (e.g., vertical process expertise).
The most important performance criteria include:
technology (e.g., features/functionality, integration, architecture);
execution (e.g., customer referenceability, vendor's effectiveness in managing new product introduction);
services (e.g., hosting options, professional services).
"CRM application suites provide a broad range of technologies to support implementation of customer life-cycle patterns and CRM processes across the organization," Roche says. "End users must consider their unique process, functional, budgetary, and technological requirements, and tailor their CRM application decisions accordingly."
This process of retrenching and realigning, however, doesn't happen overnight, Roche says: "Ultimately, organizations will transform from product centricity to customer centricity and should plan for the journey to take three to seven years."
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