The State of CRM: Strong and Healthy

Since its emergence the CRM industry has been no stranger to fiscal highs and implementation lows, but in recent years the space has returned to impressive growth. By many accounts the industry is in its third consecutive growth year, and that uptake is showing no signs of slowing down: Between 2005 and 2010 the industry will realize annual growth of 8 to 10 percent, according to Barton Goldenberg, founder and president of consultancy ISM and conference chair of destinationCRM 2006. The conference is being held in San Jose, September 17-19. Goldenberg noted on Monday, during his opening keynote address, "The State of the CRM Union," that "CRM is no longer a questionable item.

"We've got lots of very good success stories that would suggest this is a proven impact." He targets the main growth driver as Web self-service, and said that "increasingly" it "will be available not just on PCs, but on cell phones, on televisions, on a variety of different mobile devices that allows for Web self-service to address this always-on, always-connected emerging customer."

The proven impact of CRM, according to Goldenberg, is primarily based on three reasons:
Better understanding of CRM. A clearer definition of CRM is a business approach that applies sales, marketing, customer service, e-business, and business analytics tools and techniques in support of an organization's business strategy. "People understand that the tighter we can link CRM tools and techniques to business direction the greater impact we'll have." Several elements of CRM are functionally rich, including time management, sales/sales management, telemarketing/telesales, customer contact center, marketing, e-business, field service support, business analytics, supply chain management, multimodal access, and data sharing tools.

Better understanding of blending people, process, and technology. "During the mid- to late-90s the vendors in this industry overpromised and underdelivered," Goldenberg said. But "what the vendors have [now] understood is it's just no longer a technology game. It's 80 percent about people [50 percent] and processes [30 percent] and if you over emphasize technology," your CRM initiatives will fail. The key success factor is understanding this mix and understanding that it is not the same mix throughout the entire implementation. "There are times when technology is more important than 20 percent, there are times when it is less important. But the message that the executives are understanding is this is not a technology game."

Solid value proposition. Goldenberg highlighted several generic factors that he likes to see in a CRM business case: enhanced productivity, lower costs, superior employee morale, better customer knowledge, higher customer satisfaction, and improved customer loyalty/retention.

As the industry continues to evolve, Goldenberg expects real-time CRM will push the industry to further expansion. "The new great options, whether it is the SFA move to real time, whether it is cost down and benefit up, whether it is the new technologies [like the ASP model, Web services, and wireless networks and capabilities], they're all happening in respect of this emerging and important people, process, technology paradigm." The industry got that paradigm "wrong in the past, [but] we're getting it increasingly right in the future."

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