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Setting the Record Straight
Five reasons the future is bright for CRM.
Posted Apr 1, 2003
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As I enter my 19th year in the CRM industry, I can safely say that I've gotten some perspective on what is real and what is fluff. This perspective has confirmed for me that for five key reasons, the CRM industry is indeed headed in a very healthy direction. 1] Most companies that purchase and apply CRM have understood that an effective mix of people (50 percent), process (30 percent), and technology (20 percent) is the key driver behind successful CRM implementations. These companies achieve success by getting their customer-facing processes in order, then by enticing personnel (internal, partners, customers) to buy in to these enhanced processes, and finally, by applying CRM technology in support of their enhanced processes. 2] Almost all companies that have undertaken a CRM initiative now write a solid CRM business case in support of their initiative, inclusive of a sound value proposition based on enhanced productivity, lower costs, superior employee morale, better customer knowledge, improved customer loyalty and retention, or some combination of these. By setting baseline metrics (where they are today) and objective metrics (where they intend to be tomorrow as a result of CRM), and then measuring these goals on a quarterly basis, companies are finally driving their own CRM success. 3] New technologies are helping to drive down costs and rectify yesterday's aggravating CRM implementation problems. For example, software based on Microsoft's new .NET platform offers a cost-effective way to integrate CRM applications with other relevant internal (e.g., ERP, legacy) or external (e.g., supply chain management, third party information) applications. New mobile technologies mean cost-effective access to needed information from any device, any time. New e-learning platforms mean cost-effective, life-long training at all levels. New e-customer self-service applications help drive down the cost of servicing the growing number of e-customers. 4] The price of implementations has come down by as much as 50 percent. Increasingly CRM software vendors are doing their own implementations (Who can risk failure today?). Moreover, driven by a tough market and intense competition, external implementers are doing a better job of delivering projects on time and on budget. The good news is that all indications suggest implementation costs will continue on their downward slide as user-friendly application development tools kits based on open standards become the norm.
5] Success is driving success. In fact, despite many analysts' (false) cries of doom and gloom, the industry is realizing more CRM success stories than ever before. Be sure to read CRMGuru.com's latest study, "The Blueprint For CRM Success," which shows that 55 percent to 60 percent of CRM implementations are generating positive ROI within a reasonable time frame, and notes how predictable and preventable failures are. By following a proven CRM strategy and implementation road map methodology, companies are steering their own CRM success. So where, then, do I see the industry heading? First, there will be some vendor consolidation in 2003, along with an increase in vertical market offerings. The CRM industry will achieve a healthy 10 to 15 percent annual revenue growth. CRM buyers will have an increasingly rich and varied selection of outstanding CRM software vendor alternatives. There will be many more successful CRM implementations. And CRM will take the leadership role in driving the next big technology wave, namely, the real-time enterprise. Now that's perspective. Barton Goldenberg is president and founder of ISM Inc., a CRM and real-time enterprise consulting firm based in Bethesda, MD. He is the author of CRM Automation (Prentice Hall, 2002), and publisher of The Guide to CRM Automation (11th edition). Contact him at bgoldenberg@ismguide.com
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