Jury split on CRM's role in IT

A survey of Australian enterprises has revealed more than 50 per cent view CRM as merely an IT issue.

According to Gartner, Australia is "far behind" on the CRM progress chain; however, the remaining 50 per cent of survey respondents see CRM as a strategic business issue.

The survey of almost 700 enterprises with more than 250 employees in the Asia-Pacific region found IT managers are often the first in a company to understand the insights CRM can offer.

Steve Bittinger, Gartner research director, said IT managers understand the relevance of customer loyalty, but their main challenge is getting the message across to senior executives to justify their spend on this technology.

Bittinger said in some enterprises there is an "organisational lag" where new technologies come in but the benefits don't appear until business policies are changed to master the technology.

He said to achieve maximum effectiveness, CRM should be viewed as a cultural change.

Mark Wright, general manager IT for Boral, agreed. "CRM is an organisational issue, not an IT issue."

Wright said there were varying degrees of understanding in enterprises about CRM. "It doesn't just work at the grassroots level. It's a business and organisational change." He said Boral's CRM solution will be diverse, suiting all its different business divisions.

The survey also found 42 per cent of respondents prefer integration of best of breed products while 31 per cent would rather build the solution internally.

Only 19 per cent prefer a prepackaged suite and 8 per cent would use an ASP model.

Integration, Gartner said, should be a high priority and one of the keys to achieving CRM success.

Bittinger said the propensity to integrate may indicate two things. Firstly, local enterprises chose integration in order to gain a competitive edge. Early adopters will recognise a competitive advantage in bringing advanced features of best of breed products to bear more quickly and overcome limitations in functionality in current CRM suites.

Secondly, it may reflect a cultural inclination to alter what a US vendor releases and a tradition in Australia to play with technology.

"CRM is a journey; you need a direction and need to take one individualised strategic step at a time, and work collectively towards a broader set of changes. It's an endeavour, a new way of life," Bittinger said.

"CRM requires a strong strategic business vision to identify short-term, achievable goals and initiatives and build up to achieve that long term vision."

Meanwhile, in another survey, a mere 30 per cent of end users surveyed about their CRM strategy believe they can actually measure ROI or increased revenue. While more than 80 per cent of IT executives believe their CRM objectives are important, only 15 per cent are confident their organisation can actually deliver. A survey of 166 IT executives in the first half of 2001 by CRM vendor Xchange, revealed two major shortcomings of CRM in Australian business. In most cases CRM failed to deliver on its promise of increased profits, but most companies believed they "had to have" a CRM strategy. The survey findings suggest most Australian companies are not equipped to exploit the front-office potential of CRM. More than 60 per cent of participants were from the banking and insurance industries. -- Sandra Van Dijk contributed to this article

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