Trends Driving CRM Growth in 2005

CRM, ERP, and supply chains will be increasingly integrated in 2005, helping to drive the growth of CRM systems, according to consultancy and systems integrator Unisys. Companies in retail, financial services, and other industries are finding that they need to integrate these systems to compete effectively and to get the most value out of legacy CRM and related systems, says Steve Olyha, vice president and managing partner of Unisys Global Enterprise Solutions practice. "They have no choice [but] to do this, because someone in their competitive set will do it, and the cost of falling behind is far greater than the cost of staying ahead, " Olyha says. Some of these companies have installed SFA, CRM, or similar systems that are limited due to functionality (i.e., SFA may not tie into inventory) or scope (used in one department rather than across the enterprise). But these systems have provided a framework for enterprisewide systems, Olyha says. "Successful companies will mature into CRM delivery models that use point solutions, such as those for sales force automation and forecasting, to tie together all the information associated with improvements across multiple process areas. No single solution can drive substantial results, but they can achieve significant impact when combined with a good enterprisewide CRM strategy." Companies shouldn't implement any more of these point solutions without looking at enterprisewide information sharing, Olyha says. By integrating data across the enterprise, these companies gain better customer information, which should lead to better sales and profitability. Industry leaders are already following this model, so others need to go in this direction to stay competitive, Olyha says. "Major analyst firms like Gartner and IDC have cited business intelligence as one of the fastest growing technology categories for 2005," he says. Beyond CRM, ERP, and supply chain integration, Olyha sees other drivers for CRM growth in 2005:
  • growing adoption of CRM practices by local government, particularly in 311
  • demand for statistically valid metrics on best practices
  • expansion of BI tools, including customized applications pushed to laptops and PDAs. BI will be pushed directly to the front lines to help functional managers run their businesses in real time.
  • advances in call center productivity using VoIP technology, global resources, and outsourcing models. The quality of VoIP technology will continue to improve as the technology becomes increasingly scaleable and operating costs are reduced.
  • integration of RFID into retail operations. Companies will continue to invest in RFID for security and tracking purposes and will begin integrating this technology with CRM systems. For example, pharmaceutical companies can tag inventory and integrate that data into the CRM solution. If a problem arises with a batch of drugs, these manufacturers can very quickly trace it. Local government spending will have the largest impact among these remaining drivers, according to Olyha. "The public sector very quickly wants to start providing the same level of services as the private sector," he says. Olyha likened the mayor of a city to a manager of a company. If he doesn't keep customers (voters) happy, he won't keep his job. One way of doing this is through CRM practices that can provide more efficient and reliable service. "Alliances among application developers and systems integrators are creating turnkey 311 call centers that help city and county officials better respond to, track, and measure nonemergency citizen inquiries," Olyha says. "These CRM solutions allow them to capture vital citizen data in a single database, thereby eliminating silos of information and unnecessary handoffs between government departments. The end result will enable enhanced citizen service levels and reduced costs through greater operational efficiencies." Despite his positive outlook for CRM investments in 2005, customers won't buy just any system, Olyha says: "No one does anything any more without seeing ROI for what they are spending." Related articles: CRM Delivers for FedEx Capital City Wants ''Certified Friendly'' Hospitality Workers E-Government Spending on the Rise
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