Vendors will fail to deliver full CRM solutions until 2002

New-fashioned customer relationship management (CRM) vendors are coming out of the woodwork, but in most cases, it's a situation of "buyer beware", warns Neil McMurchy, senior analyst at Gartner Group.

"Gartner is predicting that until 2002, no single vendor will deliver more than 40 per cent of a fully integrated CRM solution," McMurchy said.

IT managers need to help business managers understand CRM as a business strategy, not as a piece of technology, he said, adding: "CRM as a culture, not a technology, is arguably the only means of differentiation."

But the urgency for businesses to implement CRM technology to remain competitive may justify going for best-of-breed solutions rather than waiting for an integrated suite as "often these products aren't integrated to the granularity required", McMurchy said.

McMurchy added IT managers should first decide the level of integration needed then drill down into the products on offer.

And integration is where most projects blow out on budget, according to McMurchy.

"This is the reason consulting companies are gearing up for CRM as they did for ERP," he said.

As IT now pervades all parts of a business, IT managers tend to have a better bird's eye view of business processes than functional managers, McMurchy said.

However, with vendor marketing pitches targeting business managers, IT professionals are under increasing pressure to deploy technology about which they have reservations.

McMurchy said IT managers are also wary of quick-fix CRM solutions following their experiences with ERP products that promised the world but didn't quite deliver.

"We saw previously with ERP that business would start an all-encompassing project, but when the going got rough it was tossed in the laps of IT managers," he said.

Checklist for CRM success

There are many pitfalls to CRM, as evidenced by poor returns on the investment in ERP implementations of yesteryear. Neil McMurchy, senior analyst at Gartner Group, advises organisations follow a clear set of rules before implementing a CRM solution to avoid similar misjudgements.

* Check CRM vendor references thoroughly.

* Start now, invest short, learn as you go.

* Plan on the basis that your only competitive advantage is how you engage with your customers.

* Focus on revenue and market share gains, not cost reduction.

* Position CRM in the context of overall e-business threats and opportunities.

* Attention to people, processes, measurement and compensation is critical.

* Focus on short, high-impact projects within an overall program.

* Remember that effective CRM is more about culture than computing.

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