Preview 2003--What's in Store for CRM? (PART 1)

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A wish list of the headlines for the coming year:

CRM No Longer Stands for Come Rescue Me
--Barton Goldenberg, president and founder, ISM Inc.

CRM Goes Beyond 'Have a Nice Day'
--Dror Pockard, president, Amdocs/Clarify CRM

After Years of Learning, Companies Are Finally Doing CRM Right
--Brent Frei, CEO, Onyx Software Corp.

The Future Is the Customer-Focused Enterprise
--Ad Nederlof, CEO, Genesys Telecommunications
Laboratories Inc.

PeopleSoft Buys Siebel
--Marc Benioff, chairman and CEO, Salesforce.com

CRM Customer Satisfaction Rated at
100 Percent
-- Keith Raffel, chairman and founder, UpShot Corp.

CRM Market Bounces Back
--Scott Nelson, vice president and research area director, Gartner Inc.

Organizations Get Immediate and Dramatic Payback From Their CRM Investments
--Bo Manning, president and CEO, Pivotal Corp.

CRM Proven to Increase Top-Line Revenues
--Pat Sullivan, vice chairman, CRM division, Best Software Inc.

What Customers Want

What do you want most from your CRM vendor and your CRM application? ROI perhaps? Meaningful benefits from your CRM systems? Think about it, then read on to see if our industry leaders really know what you expect this year. CRM magazine asked, What is the number one thing CRM customers will look for in 2003? Market-makers say:

Customers Want: Real Return
"Customers are looking for meaningful benefits and meaningful returns on their CRM investments."
--Roger Siboni, president and CEO, E.piphany Inc.

"Return on investment. They're saying things like 'Show me how in six months this will increase service levels, reduce the cost of providing services, increase win rates, and improve marketing.'"
--John Wookey, senior vice president of applications development, Oracle Corp.

"Fast ROI. Today decisions are made by CEOs, CFOs, and CIOs. No project gets approved for a new initiative unless there's a proven ROI message."
--Chris Heidelberger, president and CEO, ChannelWave Software Inc.

"It's pretty simple. Customers are going to say, 'Does this application, this solution, this CRM initiative generate value for my company?' That ROI theme is going to be the major customer preoccupation for 2003." --Patrick Bultema, president and CEO, FrontRange Solutions Inc.

"[Companies] will want to create a return on investment equally focused on sales, marketing, and the call center to create a healthy balance. They want to know, How do I harvest the investment I made; how do I not make the same mistakes as competitors?" --Mark Whitmore, CRM practice leader for Canada, East Americas, Braxton

"Users have put in lot of money and are still struggling with user adoption and buy-in from management. They're looking for good solutions." --Ginger Cooper, founder, CRMA

Customers Want: The Right Fit
"Industry verticals. Companies are tired of taking a horizontal application and making it fit for their organization. If vendors can provide easy, configurable tools with more out-of-the-box verticalization at a consumable price point, it would make it more appropriate, useable, and less expensive for customers." --Sheryl Kingstone, director of CRM strategies, Yankee Group

"They are looking for relatively low-cost add-on capabilities. They need to leverage what they've already invested in--that is where the multichannel experience comes in."
--Patricia Seybold, founder and CEO Patricia Seybold Group

"Buyers will be focusing on fit to their purpose, not on who has the longest list of product features."
--Richard Brock, president and CEO, Firstwave Technologies Inc.

Customers Want: Enterprise Access
"They want sanity. They want to create a company with a consistent strategy across the enterprise."
--Stephen Kelly, president and CEO, Chordiant Software Inc.

"There's a tremendous amount of information in the back office that would be useful to sales and support who are using front-office applications, but few companies have successfully integrated. Companies are looking for out-of-the box implementation of front and back office."
--Pat Sullivan, vice chairman, CRM division, Best Software

"They'll be looking for how well the system works across the entire organization." --Evan Goldberg, CEO, NetLedger Inc.

"Companies want the consolidation of customer information. [Businesses] have customer information scattered all over their organizations, and it's difficult to operate a business that is customer-
intimate with all of that information spread out. The banking industry is a prime example of an industry that has to start consolidating, and has tried but failed. Most banks have five to 20 mean product lines--and there's no real difference between competitors. So the difference is the experience a customer has. People are struggling with how to consolidate. Banks, along with some other industries, have helped give CRM a very
bad name." --Brent Frei, CEO, Onyx

Customers Want: Results
"I don't think they'll be looking to be CRM customers! They'll be looking to make their companies profitable on any spending they undertake on any strategic, people, operational, or technology initiative they do. They're going to be customers who are looking to create enterprise profitability by maximizing their relationships with their high-value customers."
--Laura Pollard, founder and president, CRMA Canada; president, Accelerate Growth Management

"Ease of implementation. The horror stories of how hard it's been in many organizations [to implement CRM] leaves managers wanting a greater sense of assurance that this isn't going to be a bet-your-career decision for them. We're going to see a big push from business users for help in implementation."
--Scott Nelson, vice president and research area director, Gartner

"CIOs want smaller projects that can get up and running and deliver ROI before they take the next step. They're demanding, Give me that positive ROI." --Joe Davis, vice president and general manager, PeopleSoft CRM

"It's the 'Where is the value?' question. In the past there was more of a willingness to suspend disbelief of when they'll see the value. Now there's a healthy skepticism of, 'When will we get the value?'" --John Freeland, managing partner, CRM practice, Accenture

"Value. They say ROI, but no one knows really what that means. And everyone calculates it so differently. What people really want to do is to create a value proposition. That's what it's really all about."
--Tom Buckley, CEO, StayinFront Inc.

"People are looking for investment without risk. They are willing to spend the money, but don't want to be taken to the cleaners. It's not about traditional ROI, but about the risk of ROI." --Marc Benioff, chairman and CEO, Salesforce.com

Business worries keeping you up at night? You're not alone. Although one quarter of the CRM magazine reader survey respondents say that creating and maintaining customer satisfaction was the number one concern that keep them from a good night's sleep, overall it ranked third in importance. Nearly three quarters of the respondents admit proving a return on their investment as the issue that disturbs their sleep: 56 percent say that maintaining user buy-in and enthusiasm is their main concern; half cite customer satisfaction; and half say cementing customer loyalty is what vexes them.

What is the number one concern that keeps you up at night?

Number one concern:
Creating and maintaining customer satisfaction 27%
Proving a return on investment 27%
Maintaining user buy-in and enthusiasm 16%
Cementing customer loyalty 15%
Finding the right CRM tool 6%
Keeping up with CRM innovation 4%
Respondents who sleep soundly 5%

Overall rank when totaling the top three concerns:
Creating and maintaining customer satisfaction 52%
Proving a return on investment 69%
Maintaining user buy-in and enthusiasm 56%
Cementing customer loyalty 47%
Finding the right CRM tool 25%
Keeping up with CRM innovation 18%
Respondents who sleep soundly NA

Making a Splash

Every industry has its influencers. CRM is no exception. In 2003 we will see individuals, organizations, and even countries affect the industry in profound ways. What will the influencers be in 2003?

The Mid-Market
"The mid-market will have the biggest impact. It's shaping up to change the face of the business."
--David Thacher, general manager of CRM, Microsoft Business Solutions, Microsoft Corp.

"Every player in the CRM space is going to be targeting the mid-market, if they haven't done so already. In the past several months we've seen big names--IBM, Microsoft, PeopleSoft, SAP, to name a few--unveil their strategies for capturing more of the small- to midsize-business market, which some analysts estimate is a $40 billion segment. We'll see more such announcements in 2003."
--Greg Colley, CEO, Clear Technologies Inc.

Emerging Markets
"The Asia-Pacific market in general is going to be very influential over the next few years. The emerging markets coming out of the Asia-Pacific are going to help reenergize the CRM market in general." --Rob Saultz, director of strategy and business development of CRM solutions, IBM Corp.
"India. The reason is, the possibilities in terms of product development and customer support outsourced to India has become a reality and delivers tremendous value and allows companies to have larger R&D and services than otherwise possible."
--Bo Manning, president and CEO, Pivotal

"Alan Greenspan. He said we could have long-term economic growth, because we're starting to reap the benefits of technology and improve productivity. That's what this is all about. It's only been in the past ten years that we've been able to do that." --Evan Goldberg, CEO, NetLedger

"IBM--its eBusiness On Demand initiative is going to have a large impact on the industry. It's a compelling alternative for businesses, because it will provide a combination of hosted and in-house-deployed technology."
--Brent Frei, CEO, Onyx

"Salesforce.com has the right strategy, and I expect a lot from them in 2003. It has an Internet-based solution that you can use through the Internet, and you only pay for the use. There's no commitment and it's easy to implement. You'll see more people moving to these types of solutions. For small and medium-size enterprises it's a very attractive product. I'm impressed by the speed of the company's growth. [Salesforce.com CEO] Marc Benioff is bringing something new to the CRM arena." --Ad Nederlof, CEO, Genesys Telecommunications Laboratories

"The formal relationship between Siebel and Microsoft will be a very formidable thing in the industry. That's certainly going to be something to watch."
--Ginger Cooper, founder, CRMA

"The merger of PwC and IBM. PwC's implementation expertise and IBM's reach could have a huge impact. The challenge will be that I'm not sure they know how it will turn out. It could really have a big impact, but if they screw it up, they may not have any impact."
--Joe Davis, vice president and general manager, PeopleSoft CRM

"Siebel, but not the type of impact it wants to make. Siebel helped define the market and consolidate a fragmented industry. Now a lot of dissatisfaction with Siebel is surfacing. We may see more failures among its users. This will allow smaller players to gain market share. I think the bad press is just starting." --Tom Buckley, CEO, StayinFront

"BMW. [Its] customer application is helping them with relationships with their dealers, and helping enhance relationships, through dealers, with the end-user customers. It's absolutely innovative. They do their business in an organic way with their own dealer network." --Patrick Bultema, president and CEO, FrontRange

"Corporations like AmEx and Procter & Gamble. They're companies that have already understood the importance of customer information and treating it as business intelligence. The companies that will have the biggest impact will be global multinational companies that start to effectively use business intelligence to help them manage their customers across the globe in a customized way." --Paula Kruger, president, CRM Service Line, EDS Corp.

"The catalogers are the ones to watch. They've integrated all their channels around a certain type of customer."
--Laura Pollard, founder and president, CRMA Canada; president, Accelerate Growth Management

"Microsoft's entry into the marketplace is the obvious choice, but more notable is that the U.S. government intelligence agencies will become one of the biggest users of CRM in 2003, to pass information effectively in defense of this nation." --Barton Goldenberg, president and founder, ISM

High-Tech's 800-pound Gorilla Stomps Onto the CRM Scene
Microsoft CRM will leave a footprint on the industry, but how big and how deep?

"One way or another, good or bad, Microsoft will make an impact. If it ships a credible product, it will make an impact. If it ships an immature product, it may have yet another negative impact on the market. If Microsoft markets the heck out of it and disappoints the marketplace, it will have an impact--and it will likely ship an immature product."
--Pat Sullivan, vice chairman, CRM division, Best Software

"People will be looking to see what Microsoft has to say. It will raise the visibility of CRM. Microsoft entering the CRM world is going to make a difference, and if anything will validate it further."
-- Keith Raffel, chairman and founder, UpShot

"The single biggest trend will be Microsoft's increasing presence in the industry, with MS CRM. [The company's] continued focus on SMBs, its recruitment of the VARs and distributors that are providing support, and its focus on .NET, which allows applications to communicate with each other regardless of device type and provides easier access. .Net is rapidly becoming the de facto standard for CRM applications at the enterprise level and for CRM's [move to] Web-based services."
--Christopher Fletcher, vice president and research director, Aberdeen Group Inc.

"With its MS CRM product, Microsoft will redefine the out-of-the-box CRM category. The current VAR partners of the vendors who have to date served the small-company, out-of-the-box market will shift to this new, hot product. Those companies offering ASP solutions to this market will be challenged to keep their customers when Microsoft is offering a low-cost solution that tightly integrates with the pervasive Outlook product. Microsoft is spending large sums of marketing dollars evangelizing .NET and its benefits to the world of CRM. The plug-and-play of components that .NET/Web services capabilities provide will allow companies to do a far better job of providing a meaningful customer experience than they can do with pre--.NET technologies. --Richard Brock, president and CEO, Firstwave

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