• March 12, 2009
  • By Jessica Tsai, Assistant Editor, CRM magazine

Microsoft Focuses on Existing Customers

NEW ORLEANS — In his opening keynote for Microsoft Convergence here this week, Kirill Tatarinov, corporate vice president of Microsoft Business Solutions (MBS), conveyed a message that stressed the company's commitment to its customers -- a move many solution vendors are making during this tough economy, as they focus on supporting their existing users. With nearly 7,000 attendees gathered together in New Orleans to talk strategy and to get the most out of their technology investments, the conference is geared toward customers of all Microsoft Dynamics applications (enterprise resource planning [ERP] offerings that include, in addition to Microsoft Dynamics CRM, Dynamics AX, Dynamics GP, Dynamics NAV, and Dynamics SL). Not surprising, then, that one of the resounding themes of Tatarinov's presentation was how to create a "dynamic" business. "Nobody in the world of business has gone through what we [as businesses] are going through right now," he told the audience. "We need to position ourselves for change."

For one thing, the set up of the conference itself is reflective of Microsoft's approach to promoting change. Some examples of this initiative include: a conference pen -- 81 percent biodegradable -- manufactured with corn starch instead of petroleum; recycling bins prominently scattered around the convention center; and community-outreach projects. Paralleling this initiative in its software, the company introduced an Environmental Sustainability Dashboard for Microsoft Dynamics AX customers. The solution, according to Microsoft marketing materials, aims to "collect and assess data about [a company's] energy use and carbon footprint."

Based on discussions with industry pundits, the positions taken by Tatarinov and his colleagues seem to jibe with the general predictions that an economic recovery from the current recession will likely take place in the middle of next year. In a follow-up question-and-answer session after the keynote presentation, Tatarinov pinpointed to two significant shifts that will dramatically alter the playing field coming out of the recession:

  • deeper government regulation, leading to stricter (and increasingly technology-reliant) compliance policies; and
  • the further penetration into the workforce by Generation Y -- a generation that does not want to "learn from a manual," and, if asked to do so, will surely find another solution.

"People," Tatarinov said, "are the lifeblood of any business." To that end, Microsoft developed what the company calls RoleTailored Business Productivity, an interface that boasts ease and usability. According to Tatarinov, other Microsoft executives, and company materials, a role-based solution enhances usability by providing, for instance, a casual user a less-complex view into the system where they can enter the necessary information without having to relearn the complexities of that system on each log-in.

According to Tatarinov, 60 percent of people who use computers in their businesses run Microsoft on a daily basis -- and most of them are likely familiar with the Microsoft Office interface. "We're delivering software that's familiar to them," Tatarinov told the audience.

Rebecca Wettemann, vice president of research at consultancy Nucleus Research, says that, compared to other ERP systems, Microsoft's usability is pretty good. "Customers expect that, since it's a Microsoft application, it'll look and feel like Office," she tells CRM magazine. That expectation, however, can be a double-edged sword, she says, adding that "it's an unfair requirement to set for an ERP system." Still, some customers -- such as corporate real estate service firm Jones Lang LaSalle, a presenter here this week -- say that one of the major reasons for going with Microsoft Dynamics CRM is because employees were accustomed to that user environment and connecting to CRM only required a few clicks from existing Outlook applications.

That emphasis on process continued as a theme in Tatarinov's presentation. "Process is the backbone of an organization," he said, adding that, in this economy, organizations must be two things:

  • flexible; and
  • adaptable.

"[With] the changes we're having to react to -- slow down, accelerate, fine-tune, rebuild -- flexibility and adaptability really become key," Tatarinov told the audience. Survival, he said, will require making changes at the pace that's required. Technology provides companies with the tools to streamline business processes and reduce costs, both necessary measures especially when resources are tight.

Finally, Tatarinov emphasized the importance of operating in a well-integrated organization. The collaboration between business and technology, for instance, is a longstanding struggle that Microsoft is still tackling, he said. There are few companies today, he said, that operate completely independently -- everyone is interconnected, intensifying the value of a system that supports a robust connection to suppliers, vendors, and customers. "You can't be dynamic," Tatarinov said, "if [you] don't have a connected ecosystem."

At a question-and-answer session for media and analysts, Tatarinov said that, from an ERP perspective, Microsoft's "number-one priority is adding new customers…[to] take share and become the leader in midmarket ERP." Chris Caren, general manager of product management and marketing at Microsoft Dynamics, added that midmarket ERP is highly fragmented, with the "leader" likely only claiming 5 percent of the market.

Tatarinov acknowledged the importance of nurturing current deployments, especially given the current economic climate, and ensuring that those users are maximizing the benefits of the solution. "The goal of the company," he told the audience during the keynote, "is the well-being of our existing customers."

Microsoft claims to have approximately 200 partners that distribute its solution to end users. Wettemann says that the company's distribution model raises the question of whether Microsoft adequately comprehends all of its customers' pain points. "They're a step away from what customers want," she says. At this conference, she adds, the general assumption among customers is that they will be able to -- and perhaps are expected to -- learn from each other.

One challenge Microsoft has to be aware of, Wettemann notes, is to avoid committing what she characterizes as the mistakes made by Oracle, a company that she says spent too much time contesting on-demand CRM, and as a result, gave Salesforce.com the opportunity champion the actual use and value of CRM. Microsoft CRM Online is still in its early stages and the company reports that there remains a stronger preference for its on-premises solution. Still, as users consider both options, Wettemann says that instead of asking them, "What do you want?," Microsoft should be proclaiming, "Here's what you can do with CRM."

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

[Editor's Note: Earlier versions of this article incorrectly referred to one of Microsoft's product lines. The editors regret the error.]

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