The 2012 CRM Market Leaders
Current estimates put the waste associated with poor data quality—blamed for duplicate mailings, lost contacts, and missed sales opportunities—at about one sixth of the company budget at many organizations. That unacceptable loss has prompted an uptick in the data quality market. Analyst firm The Information Difference valued the data quality market at about $948 million in 2011, showing 7 percent growth over 2010.
While the industry's main focus has been on customer contact information, a new area of attention has been product and marketing data, which is far more complex to maintain and update. As such, data quality continues to be recognized as an inherent issue for larger master data management projects, an area Gartner says will grow to $1.9 billion this year, up 21 percent from last year, and to $3.2 billion by 2015. And while a few large vendors dominate, more than half of the revenue industrywide will come from smaller, more specialized vendors, according to Gartner.
DataFlux, a part of SAS Institute, maintains its leadership position mostly on the strength of its customer satisfaction, for which it received an industry-leading score of 4.4. The company also scored an impressive 4.3 in depth of functionality. Leslie Ament, senior analyst and vice president at Hypatia Research Group, calls its flexibility an asset. "DataFlux enables its brand-name retail apparel clients that sell direct via multiple channels…to consolidate customer records via multiple channels," she says. Moreover, its data management platform supports any domain, any data source type, in any time frame—real, batch, or virtual."
IBM was kept out of the top spot in data quality this year by its score on cost (2.9), the lowest in the industry, but don't count Big Blue out just yet. IBM, already a long-time staple in the data quality field, stirred the pot this year with several key acquisitions that strengthen its position in data quality and analytics, the most recent being DemandTec, Vivisimo, and Tealeaf Technologies. If they pay dividends for the company, it could see its 4.5 score in depth of functionality climb even higher next year.
Pitney Bowes joined the data quality ranks in 2004 when it acquired Group 1 Software, but has been slow to capture market share. A One to Watch in both 2008 and 2009 after placing on the leaderboard in 2007, it's back among the leaders on the strength of its scores for cost and value. The company's 3.9 score in cost was second only to Talend, which failed to place this year.
Trillium Software, a division of Harte-Hanks, sits proudly among the industry elite for the ninth straight year. Its depth of functionality score of 4.3 was among the highest in the industry, but it also attracted attention for making its solutions cloud-ready (with support for the Amazon and Microsoft Azure clouds), and offering on-premises and hosted offerings. Its partnership with Microsoft, which positions it as the first and only choice for data quality profiling and cleansing within the Microsoft Dynamics CRM environment, will only expand its reach. Beyond that, "Trillium has amassed an impressive quantity of clients," Ament says, noting that the company "is now engaging directly with customers by offering ROI value propositions that attract both upstream and downstream decision-makers."
Informatica ran away with the top spot in the industry for the third year in a row after capturing top scores in functionality (4.5) and company direction (4.4) and a second-place finish in customer satisfaction (4.1). In May, it released version 9.5 of its Informatica Platform, which it says will not only make corporate big data more valuable, relevant, actionable, timely, and secure, but will lower operational costs and time to implementation too. Ray Wang, principal analyst and CEO of Constellation Research, says, "From data quality to master management to integration, Informatica has all the pieces needed to master big data and provide high-fidelity stream as we make the shift from data to decisions."
One to Watch
Oracle last year was projected to advance to the leaderboard following several key acquisitions in the data management area. Well, the acquisitions continued this year, but they weren't enough to propel the company beyond being a One to Watch again in 2012. As with many acquisitions, integration is often a struggle, and that was certainly the case at Oracle, which scored at the bottom of the field in company direction with a 3.1. Nonetheless, its customers were among some of the happiest, according to Andy Hayler, president and CEO of The Information Difference.
Open-source CRM solutions haven't exactly hit the mainstream just yet, but they have a lot going for them. They're often far less expensive and easier to modify than their proprietary counterparts, and if modifications are needed after deployment, programmers are usually easy to find. And while the past year has seen a continuation of the shift to a "freemium" model, the real momentum shift has centered around the hosted model. "The way vendors have packaged their solutions on a premium and pay-as-you-go basis has been a model for success," says Jeff Kaplan, founder and managing director of ThinkStrategies.
ADempiere, a spin-off of Compiere, draws its strength from its developer and user community. It had been absent from our rankings since 2008, when it appeared as a One to Watch. This year, it climbs onto the leaderboard, mostly on the strength of its offering in terms of cost. The company scored an industry-leading 4.1 in that criteria, but the fact that it is mostly known for its ERP products kept it from rising higher in the other judging criterion.
Concursive, a staple on the leaderboard, led the industry this year with a score of 4.0 in customer satisfaction, but analysts also favored the company's very strong presence and robust set of offerings in the social CRM space, and the fact that its products are deployable individually or as a full suite in either software-as-a-service or on-premises versions. Also true to the open-source creed, Concursive boasts a developer and user community of more than 17,000 registered members, most of them operating in the Java/J2EE environment. Still, the company struggles with direction; like so many others in this category, it is trying to expand its reach beyond CRM to other business applications.
Consona again takes a place among the industry elite, bolstered by its 2010 acquisition of Compiere, a staple on CRM's leaderboard before the acquisition. The company, which has a strong presence in the cloud-based ERP space, was helped along by the second-highest score (4.2) in depth of functionality; in fact, analysts have warned that in some cases, much of the enterprise-class application's power is likely to go unused. The company also pulled in a better-than-average score (4.0) in cost, with a community edition that is free and three other editions that range in price from $300 to less than $1,000 a year.
vTiger makes the top ranks of companies in the open-source CRM space simply by virtue of its industry-leading score (4.3) in cost, an essential requirement for such solutions. It also scored 3.8 in three of the other judging criteria—depth of functionality, company direction, and customer satisfaction—but perhaps is most known for its ease of use. Though it has a strong following among small and midsized firms, it is an enterprise system with a lot of capability and some of the strongest tie-ins to other systems and databases, according to industry analysts. The company has found its warmest welcome in developing markets, but its recent push in the cloud could take it farther.
As it has done since the category was launched in 2008, SugarCRM emerged as the standard bearer for open-source CRM solutions, with a total score of 4.4, more than four-tenths of a point above its nearest competitor. As the most significant open-source CRM solution vendor by a wide margin at this time, its 4.7 score in depth of functionality, 4.6 in company direction, and 4.5 in customer satisfaction more than compensated for its below-average score in cost. The company was also bolstered again this year by a number of key partnerships, which are at the core of the open-source movement in the first place. "It has very solid core offerings, which are enriched by its many partnerships with other developers," says Jim Dickie, managing partner at CSO Insights.
One to Watch
xTuple, the One to Watch for the past two years, continues in that role this year after better-than-average scores in each of the judging criteria and a particularly strong finish in cost, where it tallied a score of 3.9. With business management software geared especially toward growing companies starting from scratch, analysts were particularly impressed with the way that xTuple integrates all critical functional areas in one system; its multiplatform support for Mac, Windows, Linux, and mobile operating systems; and flexible licensing and pricing options. Nonetheless, it is still known as an ERP vendor with limited product offerings in CRM, according to analysts.
As the CRM market grows with additional solutions, so, too, does its complexity, which is fueling impressive growth in the CRM consulting industry as well.
While the largest consulting houses continue to dominate the market, a crop of new players has been emerging to help clients assess where, when, and how to take advantage of new cloud-based alternatives. Another crop specializes in social media monitoring.
In addition to specializations, many consulting firms have expanded beyond very basic services this year to include implementation strategies, training, release management, customizations, product upgrades and migrations, system testing, business intelligence and analytics, data integration, and product support and maintenance. Some have even aligned themselves with specific solutions vendors to ensure a steady stream of business.
All four of this year's leaders have been around for a while, and while some of them have changed their focus slightly, most have stayed true to what has placed them at or near the top in the category since CRM magazine began presenting its Market Leader Awards more than 10 years ago.
Accenture, for example, ably produces in its ability to execute, earning a score of 3.9. And while Jim Dickie, managing partner at CSO Insights, says the company continues to offer "the broadest practice for dealing with sales, marketing, and support issues," Leslie Ament, vice president and senior analyst at Hypatia Research Group, says the company's accomplishments will go far beyond. "Accenture has certainly made inroads into the customer management arena with its digital marketing offerings," she says. But that comes with a caveat: "Customers should carefully evaluate whether they require the full portfolio of resources that a management consulting firm brings to the table or whether a digital marketing agency or marketing services provider would serve as well," Ament says.
French company Capgemini's differentiator this year was customer satisfaction, where it racked up an industry-leading 4.0, roughly a quarter-point higher than its nearest competitor. Its largely European and multinational clientele is very happy with the level of services it provides, as the company rang up an above-average score of 3.8 in both its ability to execute and its company direction. Both should position Capgemini to continue atop the field for years to come.
Deloitte continues to demonstrate its ability to execute, where it scored a 3.9. And while the company's main focus has been on compensation management, it has "been busy developing intellectual property around social risk and reputation management," Ament says. "Coupled with its comprehensive portfolio of risk intelligence services, Deloitte is well-differentiated from its competition."
IBM, a powerhouse in the areas of analytics and compensation management, according to Dickie, this year also flexed its muscle in company direction, where it garnered a respectable score of 4.0, and its ability to execute (3.9). Ament attributes its leadership position to a much broader reason. "While navigating global services is often challenging, IBM's portfolio of CRM-related consulting and software offerings is unmatched," she says.
Cognizant, a newcomer to the leaderboard, shared the top mark in ability to execute, with a 3.9, but where it really impressed analysts was its company direction (4.3) and cost (4.0). And while its offerings might not be as broad as some of its competitors, "what they do, they do very well," Dickie says. Ament is just as enthusiastic. "Cognizant's rapid growth in the B2C sector after carving out impressive wins in the manufacturing sector and supply chain operations make this consultancy one to watch in the customer management service line," she says.
One to Watch
Hitachi Consulting, which hasn’t appeared on the leaderboard since 2009, was lifted up by a second-place score (3.8) in customer satisfaction and a 3.7 score in its ability to execute. And though still largely a niche player focusing on solutions in corporate management, customer and channel, strategic technology, and supply chain, Hitachi has a rather impressive customer base and strategic alliances with industry powerhouses like Microsoft, Oracle, SAP, Lawson, and Hyperion.