CRM settles in for the long haul

After a post-Y2K hiatus CRM is back. But this time around the focus is on simplicity.

Gone are the days of massively over-engineered CRM projects that were all about technology instead of business strategy.

Today's CRM deployments are short and tactical with customers squarely at the centre of the value proposition.

While most enterprises today are running multiple CRM systems, Australia's mid-market is courting CRM for the first time.

And incredibly, in this sector of the market, more than 50 percent are still greenfield sites. It is this untapped opportunity that has CRM service providers salivating and explains why Microsoft made its foray into the local market, in February of this year.

In terms of market opportunities, Microsoft's CRM product manager Ross Dembecki is even more optimistic.

He says the figure is as high as 80 percent, adding it is one segment of the market that is under-served referring specifically to companies with fewer than 1000 employees.

This is why the software giant isn't particularly interested in the tier-one market although Dembecki admits some of its larger clients do already have Siebel in place.

"But because they are already using Microsoft it is easy for them to deploy our CRM offering for tactical campaigns; it can even be an add-on to Outlook," he said.

"Our existing customer base is a natural fit because they are already on Exchange or Windows."

While the CRM focus for larger organizations is analytics and really drilling down on their CRM initiatives, the mid-market players want to keep it simple.

"CRM in the past had too many bells and whistles and had to be customized to meet a company's needs; it was also hard to use," Dembecki said. "The mid-market isn't going to spend lavishly on big rollouts. It can be as simple as a plain vanilla, out-of-the-box, three-day install.

"But for those companies that have a fairly detailed understanding of their work processes, it could involve weeks of configuration, and deployment will take a few months."

However, Dembecki said CRM shouldn't be a long-winded project.

"Get it in, get some runs on the board and review it in six months," he said.

One of Microsoft's early adopters, the Kalassay Group, is using CRM for the first time.

The group's business development manager Noel English admits the move was a "big leap of faith for management". English has integrated customer data with pricing to produce invoices that are linked to its database.

He said there are about 600 accounts on the database with about half active at any one time.

English said the project integrates well with Outlook and Excel; and now all of the information generated from sales and marketing has a home, he added.

"We now have a single source of information across the organization instead of pieces of paper," English said. "This provides real consistency for customers and their questions don't get lost. In the next few months I really want to beef up our business intelligence capabilities with the system."

Medical insurance group, MDA National has similar plans and wants to introduce some BI tools next year.

The insurer had been using a DOS-based membership database for years with low reporting and analysis capabilities.

Since implementing Pivotal's CRM solution, MDA's information systems manager Julie-Anne Shields, said there have been huge time savings. MDA has 12,000-plus members and annual renewals use to take more than two months to process.

Shields said now it takes only six weeks and MDA has integrated its CRM with its Great Plains financial solution.

She said the CRM system supports 30 users and runs on Microsoft SQL server.

The author of CRM at the Speed of Light, Paul Greenburg believes the evolution of CRM will be the same as e-business.

Remember when e-business was all the rage and it was e-everything. Then it just became good old-fashioned business.

"That's what will happen with CRM, it will become a moot point because customers will be at the centre of all business strategies," Greenburg said adding that customer value is no longer limited to CRM.

"There is increasing recognition that everything is a customer issue.

"The supply chain was once a back-office function involving inventory management and automation; it isn't any more."

If a courier is sending a package to you on a Monday morning and it doesn't arrive on time, the recipient is more likely to be sour with the company who arranged the delivery rather than the courier.

"This is an example of supply chain transparency and customer satisfaction," he said.

Greenburg said CRM failures of the past were partially the fault of vendors pushing technology and not placing customers at the core of a company's business strategy.

"Everyone knows a successful company is one with happy customers," he said.

But with the advent of the Internet in the late 1990s customer empowerment went through the roof.

"However, I really don't believe customer loyalty exists. You can have loyalty to your family, or your country, but not to a company," he said. "Customer's just assess a value proposition - they're not loyal."

Greenburg believes CRM was dead a few years ago, because so many equated it with ERP - it was big, expensive and only for the enterprise. "But they are very different. CRM is a strategy and ERP is based around increased efficiency," he said.

Greenburg is adamant IT managers should not be leading CRM initiatives; however, they should be a part of it. "It is critical that IT is a stakeholder, but it is the business unit that should be leading the charge," he said.

"Also, if you are reviewing CRM vendors, look for SOA or strongly focused Web services architectures; this will be significant in the near future."

Greenburg said all customer data should be centralized and to get smart about analytics.

"Garbage in is still garbage out; have strong criteria," he said.

"BI is a critical component of a customer's personal experience so IT should work closely with line managers to get it right."

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