Making Smart CRM Choices for 2009

This year, companies seeking to invest further — or for the first time — in a CRM software system will find not only a wide array of vendors, but also a large selection of computing platforms to support the application. These can range from Software as a Service offerings typified by the standard-bearer to newer cloud platforms such as Google Apps.

Buyers can find the range of choices difficult to navigate, Jeff Kaplan, principal with ThinkStrategies, told CRM Buyer. “Companies are having a hard time choosing from among the various players — there is no question that the growth of the marketplace and proliferation of players does add a level of complexity to the selection process.”

Now, the state of the economy adds an additional factor for companies already confused about their options, he said. “I am seeing firms select a vendor not necessarily because it has the best solution, but because it is best positioned to survive these times. In other words, companies are trying to make strategic long-term decisions based on vendor viability, as well as based on solution functionality.”

Development and Delivery

Kaplan offers companies an assist with this process, divvying up the top players according to their core functionality.

For instance, “platforms enable these vendors to convert their internal technologies into development and delivery mechanisms which can be resold to third-parties,” he notes.

“In’s case,” Kaplan continues, “this means reselling the development code which underlies its core customer relationship management (CRM) and salesforce automation (SFA) application, along with the service delivery infrastructure which supports it. It also means that it can recast its business to include web hosting and customer service. In the case of Amazon, it is repackaging and repositioning its vast data centers and eCommerce capabilities into on-demand development and storage facilities, as well as a distribution mechanism.”

IBM, Oracle and Progress Software, by contrast, are promoting a combination of database systems and middleware capabilities to position themselves as platform players, he points out.

Kaplan offers a quick list of the essential factors a platform player has to have in place in order to win a meaningful share of the market:

  • Easy to use, ‘standards’ oriented development code
  • Reliable and secure development environment
  • Automated and flexible procurement capabilities
  • Name recognition and brand equity
  • Customer base and channels to market
  • Developer/Partner network

Ignore the Hard Sell

William Band, a principal analyst with Forrester Research, also addresses the dilemmas facing CRM buyers today.

Major CRM applications vendors will be making a big push this year to persuade customers to move onto the latest release of their applications, he says. “Vendors have invested heavily during the past 18 months to improve their UIs, and have re-architected their solutions to make it easier to migrate to new versions. In the coming year, they will be pressing hard for a payback on this investment. Expect that you will get a lot of calls from software [salesmen] during the next six months.”

Ignore the hard sell, Band advises. Instead, concentrate on the following points to see whether the benefits that may accrue from upgrading are worth the investment: revenue improvements; process improvements; productivity increases; reduction of ongoing CRM app customizations; extension of vendor technical support; and avoidance of increased support fees.

In Brief

While not busy with his duties at SugarCRM, Director of Product Marketing Martin Schneider has been contributing to the new CRM Outsiders blog. In a post on social networking, he considers what the next generation of B2B (business-to-business) social networking and online communities could look like.

“I think that as unified communications (UC), social networks, and CRM all converge, there will be a new kind of virtual sales model. Imagine — you are a customer, and you’re looking through a product catalog and have a question. Instantly, your rep pings you through a next generation social network (supported internally via a CRM system) and you enter into a virtual session where you can see and hear that rep paging through a catalog, pointing out product configurations, citing discount promotions, etc. as if she was right in the room with you. In this economy, it gives the high touch needed to provide a great sales experience, but without all the costs (and energy consumption) of actual travel.”

Guido Oswald, a senior solution engineer at Progress Software recently noticed a new group on Facebook called “I hate SIEBEL” — a gathering of people who are frustrated with the Siebel CRM Platform.

With 320 comments on the Wall and counting, the group could do serious damage to the Siebel and Oracle brand — and unfairly, he wrote.

“My understanding is that the group was created as a platform to shout out the frustration at Telstra when they moved to the new CRM front end … As I was involved in the efforts at Telstra to re-vamp their complete IT, I have a rough understanding how things work there — or [are] supposed to work I must say. And although I was competing against Siebel and Oracle in my previous job at Amdocs and do not know what exactly is causing the trouble at Telstra, I doubt that Siebel and the CRM Front end is the only root-cause for this,” says Oswald.

“Interesting enough how thing have evolved, though, he continues. “Siebel gets hammered (being the visible part to the agents) for all the issues with Telstras NextGen BSS/OSS System. This seems to be a very good example of the dynamics in the Web 2.0 and the possible harm that users can do to a brand. It shows the importance of a CRM 2.0 strategy and the (currently) missing awareness in some companies.”

Microsoft’s customers are wondering how they’ll be affected when the company’s workforce becomes 5,000 less strong. It appears that a lot of the cuts will be in administrative areas, according to CEO Steve Ballmer’s memo on the subject, posted online by WSJ tech columnist Kara Swisher. Still, R&D is being targeted, which could prove to be short-sighted.

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