The theories of relationship marketing and one-on-one marketing received a lot of attention in the mid 1990s. The underlying process meant you needed to become smarter about how you communicate with your customers.

Tracking your contact, how you contact them and what the results are is paramount. Initially this is a very complicated process from both a system and marketing perspective.

This change in focus means you can no longer blindly send out mail pieces to ten thousand prospects or make a week’s worth of phone solicitations without knowing who was contacted and capturing the result.

The process of managing this task in the early days of direct marketing was daunting. However, it was necessary to start tracking the results and the development of sophisticated software has certainly helped.

Contact management has given marketers new tools for evaluating the effectiveness of different campaigns and allowed them to improve the speed and accuracy of the direct marketing process.

Contact management was a necessary evolution due to the overwhelming increase in direct marketing through the early 1990s. Contact management enables marketers to manage the amount of contact to different segments.

1. The High Costs of Low Quality Data. Our Server
2. Defining Information Quality. Our Server

Business intelligence (BI) applications have come a long way over the past 10 years. More commonly known as data mining a decade ago, analysts back then predicted a boom for this software market. Only today is that boom starting to materialize.

Already, industry pundits posit that 60 percent of companies have data-mining or BI systems installed. Of those 12 percent say they use their software at least once every hour, while 36 percent say they use it at least once each day, according to Ventana Research. It may come as no surprise that those who install data-mining software weren't necessarily getting the most out of it or the data, for a variety of reasons. Alton Adams, a partner at Accenture's CRM practice, says, "Even today people are still struggling to get it right. At its foundation data mining is all about having a good understanding and a single view of the customer to effectively market and sell to that customer. But we're just not there yet. There is probably a litany of things that people are doing wrong and things that they should be doing right. There's still so much work to be done."

Similar to mining for gold, when done well data mining can extract a treasure trove. Here are 12 tips experts and users say will help you uncover the precious elements in your data.

1) Share data with caution
As Robb Eklund, Oracle vice president for CRM product marketing, says data (both from internal and external sources) is your business's gold. And data about your customers is especially valuable and sensitive. If it's leaked or lost your business image as well as bottom line will suffer, something MasterCard International found out this past May when more than 40 million customers had their account information exposed. Aside from the obvious--building security features into your database and providing users and your database with a secure connection using trusted IP addresses--you can prevent problems by creating limits and rules for each user. Know who has access to what and why.

2) Look beyond transactional data
It's a given that your CRM and analytics programs will use data collected from transactional and application systems, but there's plenty of other nontraditional data out there that can bring added insight to your employees, according to Anne Milley, director of technology product marketing for SAS. You can purchase demographic and psychographic data from outside vendors and there's data you can collect on your own, such as market research, customer surveys, and focus group results. Another data source is full-text conversations from your customer service or call center. Today, there's software available from companies like Utopy, Nexidia, and CallMiner that can turn dialogue into reliable quantitative data that can be used to predict future customer service problems, as well as help agents with cross- and upsell techniques. "You have to get out of the database mentality," Milley says. "Transactional data is fine, but as far as analytical richness, it's very limited in what it can provide."

3) Clean your data regularlyThere are many kinds of dirty
data. Some of the most basic--having multiple entries for the same customer or misspellings--can be the most labor-intensive to remove. Other cleansing issues stem from organizational problems. Your marketing department might classify data one way with one naming convention, while your sales department uses another. But it all goes back to policies: Require all users to input data the same way, and clean data often, deleting mistakes and duplicates.

Kyle Lambert, vice president of information solutions for John I. Haas, a grower and supplier for the beer industry, says sometimes, dirty data can be the impetus to get a CRM or analytics project moving. "We found that exposing dirty data to executives was much more powerful than just cleaning our data," he says. "After we cleaned the data executives would come back and say 'The IS department can't deliver any meaningful information anyway.' But if we showed them we could deliver the data but it was dirty, they started to correct the processes [that made it dirty]. Executives love to change processes. They were able to contribute to the improvement. And over time they could see the numbers were getting better."

4) Distribute data at every level
You already know that your marketing and sales staff can benefit from your CRM data, but you probably don't realize how useful it can be to other personnel and departments, says Bill Stoughton, BI group leader with database marketing services provider Merkle. "People just aren't distributing data to the end touch points," he says. "Do you have enough information going out to the call center or to your Web site for customer self-service?"

Of course, someone working in the call center isn't necessarily going to understand a detailed report or have direct access to your database. To that end, being able to distribute reports in Microsoft Excel or Word documents is key, according to Ventana Research, which found that 81 percent of users wanted the ability to export data to Excel. "We see it all the time," says Patrick Morrissey, worldwide marketing director for Business Objects. "It makes sense for the end user to see a report or analysis in Excel, Word, or PowerPoint. It helps people use the data the way that they work."

5) Fund training and relearning
You've spent millions on your CRM implementation, but do your employees know enough about it to take advantage of the technology? In all likelihood the answer is no, says Accenture's Adams. In fact, between 60 and 80 percent of companies don't have adequate training budgets. "We find this is the biggest gap. Companies are not optimizing their spend and effectively operationalizing their CRM programs. Train those who will be working directly with the software, as well as those who will be using and benefiting from reports. Many vendors offer free or online training, which will keep your capital outlay low."

6) Balance server space with strong analysis
How much data do you have in your database? Three months' worth? Six months' worth? Your goal really should be 13 months' worth, according to Merkle's Stoughton, and at least three years' worth of contact data information. Some data should always be accessible. "People tend to have too much data so they aggregate it, but when you aggregate data, you're losing data somewhere. Keep point-of-time information accessible, for example, data that marks major events in a customer's life with you--when they became your customer, when you last marketed to them."

7) Aggregate, don't delete
Dr. Judy Bayer, director of advanced analytics for software vendor Teradata, agrees that you should keep a minimum of two to three years' worth of data in archived files, but in the best case you should have all of your data available somewhere. "I've worked with customers who had thrown out data about people who aren't their customers anymore," Bayer says, "but how can you figure out why they are not your customer if you don't have their data?" A rule of thumb: Analyze data before you aggregate it--never simply throw data away.

8) Standardize whenever possible
One of the first things Toshiba America Medical Systems (TAMS)did when it installed its new software was standardize everything related to its data. All the reports coming from the CRM program have the same look and feel, thanks to a template. Everything gets a time and date stamp. "Our vice president of marketing believes in this program. By standardizing, it was a way to make sure all of the information used in analysis came from our new data reports," says Diane Werner, a customer relationship specialist at TAMS. A few years ago TAMS took this strategy even farther by using standard file and document naming conventions that employ real language to bypass numbers in favor of descriptive document names. "It's very clear what each report is. We use descriptions by month, quarter, half. We don't use technical names," Werner says.

9) Talk to your users often
How can you decide what to measure and what reports to implement if you don't know what people need? Karen Williams, vice president of BI, product marketing, at Cognos, says one of the biggest mistakes she sees her customers making is that they don't create a partnership between the users and the IT group. "There should be a partnership early on that takes into account what business people want and what IT can deliver," she says. "Make users part of the purchase and the implementation. Identify requirements--what information they need to do their jobs."

Mark Lack, planning and financial analysis manager at manufacturing firm Mueller, constantly polls his users, asking what they need. This process also ferrets out which reports and analyses are unnecessary, saving you time and energy in the long run, according to Lack.

10) Get executive buy-in
Business change comes from above. One of the best places to start is your board, John I. Haas's Lambert says. "Interview your executives and find out what info they are looking at on a daily basis. I recently went to our board of directors and asked how they wanted to measure the company--what growth expectations were. Then I went to our executive management and said, 'This is what the board wants to see, how are you going to deliver that?' They told me their strategy. I asked, 'How do you measure your success against your strategy?'" Those fundamental questions start the ball rolling."

11) Create a continuity plan for your data
Barbara McMullen, director of the Institute for Data Center Professionals (IDCP) and project manager at Marist College's Center for Collaborative and On-Demand Computing, is in the process of implementing such a plan right now. The reason? The IDCP has been around for more than three years. In the beginning, it stored data using MySQL. Soon after, IDCP hired a new employee who didn't have experience using the database format and converted everything to Excel. Unfortunately, only some of the data was ported, and soon after the truncated database became the default database. All the data that wasn't converted was lost forever. "We lost information about potential customers," McMullen says. "We had a policy in place, but the person responsible for enforcing that policy left. Now, when I see some of those databases that used to be more robust, it really bothers me."

McMullen suggests having more than one main contact person for your data, and having a clear line of command. Your policy should also have strict guidelines about how it will be stored, deleted, and analyzed, she says. And everything--including where your data is stored--should be in writing. "You can't ask someone on their last day of work if everything was turned over."

12) Treat your partners like employees
Mueller's Lack says his implementation succeeded in part thanks to his software vendor, Cognos, and his consultant, the CD Group. "We had never done anything like this before. There was a lot of trust that had to go back and forth between [Cognos and CD Group] and our company. A good relationship with the folks you're working with is key. You never want to get into an adversarial relationship."

Lack says he assessed companies the way he would a friend. "Did the consultants have the same ethics and values that we do? We found that there was a certain genuineness to our project leads. It definitely came down to gut feelings in some cases."

Uncovering the treasure trove
Customers in the retail world who buy pretty floral Capri pants may not shop for delicate, fringed ponchos, but unless you have a strong CRM and analytics program, you wouldn't know that. Catalog retailer Newport News knows this firsthand. A decade ago the company had rudimentary information about its customer base--what it bought, what catalogs customers purchased from, and where customers lived. But with millions of customers who could be sliced into more than 800 segments--not counting a creditworthiness category--they needed a little more data.

The major problem was, analysts spent 90 percent of their time extracting data and only 10 percent actually analyzing it. As a result, Newport News wasn't getting the most out of its data. Customers weren't segmented as deeply as they could be, which detracted from sales, says Van Rhodes, Newport News' manager of marketing decision-support systems. And the analysis that was completed was often out of date. Even worse, the company, which like other catalog retailers buys mailing lists, never knew which lists were most beneficial. The company simply wasn't getting the most out of its advertising dollars. "In the catalog business we are forever buying each other's lists," Rhodes says. "We might buy a list from Chadwick's or Victoria's Secret. We're interested in how those lists are performing, but we just didn't know because we couldn't do the analysis."

In an effort to boost its analytics, Newport News contracted in 2002 with SAS, creating a full-blown data warehouse and installing SAS's analytical tools. Almost immediately the company saw big results. Although Rhodes doesn't have specific ROI metrics, he says his new system along with the best practices that he's implemented have paid for themselves already, especially a statistical modeling feature, which helps his company find and market to its strongest customers. "The number one benefit so far is the speed of getting [our users] the answers they need and the ability to give them data that they couldn't see before."

Today, Newport News employees can identify buying patterns as they are emerging, which lets them send out catalogs that are tailored to customer needs. "With statistical modeling you can slice the customer database so you can rank the entire database best customer to worst customer," Rhodes says. "And now you can slice the customer so much finer that you know, for example, why customer A is better than customer B."

Newport News also knows which products each customer is more likely to buy, which helps it mail out the right catalogs. It has helped with the company's email marketing programs, something that didn't exist only a few years ago. --K.B.

Karen Bannan is a New York-based freelance journalist.

All That Data

Smart CIOs are experimenting with new Web-based technologies to integrate their customer data applications without having to rip out their legacy systems. But before they plunge into the implementation, they need to craft a data management strategy.

BY THOMAS WAILGUM

The multiple mergers that formed insurer UnumProvident in the late '90s aggregated billions in revenue, assembled thousands of employees—and created a quagmire of customer data systems that couldn't talk to each other. In all, between Provident, Colonial, Paul Revere and Unum there were 34 disconnected policy and claims back-office systems, all loaded with critical customer data. As a result, "it was very difficult to get your hands around the information," understates Bob Dolmovich, UnumProvident's VP of business integration and data architecture. One UnumProvident customer's account, for instance, might exist in multiple places within the newly combined company, leading, of course, to a great deal of waste.

For the first couple of years after the mergers, UnumProvident used a homegrown data-store solution as a Band-Aid. But by 2004 the $10 billion disability insurer felt compelled to embark on a new master data management strategy aimed at uniting the company's disparate pockets of customer data, including account activity, premiums and payments. Core to UnumProvident's strategy would be a customer data integration (CDI) hub, built on service-oriented architecture (SOA), using a standard set of protocols for connecting applications via the Web (in effect, Web services). The project, begun in early 2005, has already improved data quality, soothed the multiple customer records headaches and created the possibility for a companywide, in-depth customer analysis. But as Dolmovich acknowledges, there's still a long way to go. Of those original 34 systems, he has been able to get rid of only four to date. But he's still optimistic.

"The desired end state is a CDI hub that has information about all customers across all products," he says.

The Quest for the CRM Holy Grail

Despite the long, slow slog, Dolmovich is hoping that the new CDI approach will ultimately give his company the 360-degree view of the customer that has been promised by vendors since the dawn of CRM. In the late '90s, enterprise software vendors like Oracle, PeopleSoft and Siebel sold the single-customer view as CRM's holy grail. But implementation flameouts and legacy integration nightmares soured many CIOs on these expensive enterprisewide rollouts. More recently, on-demand CRM has generated a lot of buzz, but it too has run into scaling and integration problems, particularly at large companies. (See "The Truth About On-Demand CRM.")

A CDI hub differs from a traditional CRM solution in that a CDI hub allows a company to automatically integrate all of its customer data into one database, while ensuring the quality and accuracy of the data before it is sent to the hub's central store for safekeeping. A standalone CRM system can't do that because it can't be integrated with the billing, marketing, ERP and supply chain systems that house customer data, and it has no way to address inconsistent data across platforms.

What is also missing in many of these earlier CRM implementations, experts say, is a management strategy that identifies important customer data and lays out a disciplined governance process to ensure its quality and its integration with critical systems. "Unless companies have a broad strategy about how [to manage their data], no matter how good transactional systems are, they're not going to be able to deliver," says Ronda Krier, Oracle's senior director of product strategy.

An increasing number of CIOs are now realizing the importance of such a data management strategy and are experimenting with Web services technology to unite legacy systems with new applications without having to rip and replace everything. Many of these CIOs are building a service-oriented architecture that can integrate their divergent applications into a CDI hub via the Web.

However, much like the CRM implementations that preceded it, this new approach is neither cheap nor fast. Ray Wang, Forrester Research's principal analyst of enterprise applications, says that average CDI installations cost nearly $5 million for licenses and implementation services. And they can take much longer than expected. (UnumProvident's CDI implementation, still unfinished, has taken a year so far.) But that's still cheaper and quicker than ripping out all of a company's old systems and installing proprietary enterprise CRM.

A CDI strategy is especially relevant to mid-market CIOs who may not have the budget to buy proprietary CRM solutions or the time to invest in the typically arduous CRM implementation process which, according to Gartner's guideline for enterprise CRM rollouts, can cost more than $20 million over a three-year period. (Some CRM failures have run up to $100 million in overall costs. See "AT&T Wireless Self-Destructs" for one disastrous example.)

The beauty of [the CDI hub approach] is that most organizations already have most of the pieces in place," Wang says. "They just need to find a way to pull it all together."

The Problem's Not the Software; It's You

In the late '90s, CRM vendors promised that their software could give companies the ability to leverage customer data to boost sales. That software cost millions and took years to install, and yet at the end of those marathons many companies were left with tools and systems they couldn't or didn't want to use. Integration often was incomplete, data frequently dirty, and all too often companies had no guidelines for who would own the data or how it would be input and reconciled among systems. Eventually, business and technology executives became disillusioned with the enterprise approach. Many companies, large and small, turned to on-demand CRM, only to find out it also had problems with costly customizations and real-time integration challenges.

In a 2005 Forrester survey of 22 Fortune 1000 companies in North America, Europe and Asia, business and IT leaders voiced widespread disillusionment with their CRM implementations. Just 14 percent strongly agreed that their CRM applications had improved end user productivity, and only 10 percent strongly agreed that they had achieved the business results they were expecting. CRM implementations "always seemed to overpromise and underdeliver," says Dolmovich. In fact, for many years UnumProvident's CIO forbid his IT staffers from using the CRM word to describe their customer data management plans because of the negative connotations attached to the acronym.

In the Forrester survey, executives acknowledged they were partly to blame for CRM's bad reputation. They confessed that they had not spent sufficient time on defining data requirements and managing data quality. In another survey by Cutter Consortium, 64 percent of corporations admitted that they lacked a formal strategy for using the customer data they had spent millions to collect.

When the company doesn't have rules and policies [for data], the data has been largely corrupt," says Anthony Lye, Oracle's group VP of CRM products.

The Importance of Business Ownership

The first step toward creating an integrated customer data system is to sit down with key business executives and ask them what they want. Do they want to focus on keeping the customers they have or on attracting new ones? Are they concerned more with decreasing lead generation costs or shortening the sales cycle? Once IT knows what the business side wants to achieve, IT can help the business identify which data sources are important and which are not.

Next, the business and IT need to agree on an information management policy: Who has access to what customer information and what can they do with it? How will they access that data? How will they make changes to it?

For CIOs, the key to success is making sure the business takes ownership of customer data. At AmerisourceBergen Specialty Group (ABSG), a $7 billion pharmaceutical supplier, the mantra that "the business owns the customer data" has been critical to the company's CRM success, says CIO Dale Danilewitz. In 1999, when ABSG broke away from its parent company's systems, executives articulated what they wanted: more granular, reliable customer information accessible in one repository and accessible in real-time. It was Danilewitz's job to make that happen. And although Danilewitz initially believed that an off-the-shelf CRM system might do the trick, he found that his business users' needs didn't align with what was on the shelf at the time. So IT cobbled together a mixture of applications and systems to form a homegrown CRM system, essentially a conglomerate of custom-built applications and vendor platforms and databases. In the center, tying everything together, is a data warehouse that provides real-time and historic customer data, and is integrated with other data stored in ABSG's e-commerce applications, financial systems and customer data applications.

Today, Danilewitz says ABSG's system satisfies users from the sales, call center and marketing sides. And because these business units understand the data's worth, Danilewitz says, they take pains to ensure that they don't add data that will "adulterate" their own systems. "The business users check the data, run reports on the data to make sure it's accurate, and run technical applications to check quality," Danilewitz says.

Data stewards from the business, as well as gatekeepers from IT, compose a CRM team charged with driving new data management solutions. But the business users are always in front.

Describe, Define, Govern

Similarly, when Scott Sullivan joined Pitt Ohio Express, a $238 million mid-market transportation company, as its VP of IT and services, one of the first things he did was sit down with his business users and help them define what exactly the term customer meant to them. Sullivan helped the business narrow its list of customers from 450,000 to 10,000 active consumers of its services. Sullivan also pulled the plug on an ERP system rollout because he thought it wasn't going to satisfy the company's needs and was going to take longer than had been originally projected. (The project was greenlighted before Sullivan joined Pitt Ohio in 2001.) Since then, Sullivan has integrated an assortment of existing applications to form a customer management system for the sales and marketing group and the operations department. (For more on the integration challenges confronting mid-market CIOs, see "Stuck in the Middle Without an SOA")

Sullivan also spent time ensuring that Pitt Ohio Express's customer data was clean. Dirty data is hardly a new problem, but the fact that CIOs are still complaining about it, analysts are still noting its prevalence, and vendors are still selling solutions to address it indicates that it hasn't gone away. Dirty data problems are amplified by the number of systems and users that touch customer data, especially if there are no established governance processes or technology safeguards. For example, Sullivan points to the disconnect in address requirements between the sales and marketing department and the operations division. The sales and marketing group needs exact addresses, whereas drivers can get by with more inexact data. "If the address is ‘the back gate at the Kmart plaza,'" he says, "that's OK for the driver, but not so great for sales and marketing." And if no one takes ownership of making sure the data is consistent, "there can be up to 10 to 15 different versions of your customers [within your company]," says Tom Reilly, IBM's VP of master data solutions.

Once your management team has formulated a data management strategy—say it wants to improve the ways in which the company targets and contacts prospects—it's time to consider the technology options available to integrate all the customer data so that sales and marketing will be going after the most appropriate customers. You can go the enterprise vendor route, or have your CRM systems hosted by an on-demand vendor like Salesforce.com. Or you can integrate existing customer-data systems by building a service- oriented architecture or structure using the Web to knit together all the customer information contained within a company's business applications. UnumProvident's Dolmovich decided to go the Web services route. He chose IBM's WebSphere Customer Center product to pull together the pockets of customer data on account activity, payments and premiums.

Dolmovich says the first data loaded into the CDI hub in late 2005 came from business customers (companies or employers that bought or sponsored UnumProvident's disability products) and brokers (the independent businesspeople who sell them). With the new system, Dolmovich says, "We are now able to assimilate and display a broker's entire block of business and create some statistics and a profile of our relationship with that broker." UnumProvident is now working to create individual profiles of employer customers so that every time a new customer account is created or accessed—perhaps to change an address or add new customer information—all employees of the insurance company, regardless of what system they are using, will see that change at the same time.

The New, New Hype

Whenever a new CRM solution emerges, it's inevitably followed by hype, complexity and confusion. CDI is no different, says Colin White, founder of consultancy BI Research. One challenge for companies embarking on a master data management strategy is getting all parties to agree on common definitions and labels for categorizing customer data. Starwood Hotels & Resorts Worldwide is currently in the process of sunsetting its legacy mainframe system in order to move to an SOA environment. The aim, says Song Park, Starwood's director of pricing and availability technologies, is to allow for more real-time and online reservation capabilities and transactions for its 900 hotels in 80 countries. But a major pain point for the groups working on the SOA migration has been hammering out the data labels and definitions for the Web services that will be consistent across the SOA implementation. How, for example, one group defines a specific hotel's property identification label can vary from PID, to pID, to property ID, to name just a few of the possibilities, Park says. "How do you synchronize [those labels]? Who owns that data? Who's mapping those things?" Park asks.

Park says he's pushing for a data dictionary of preestablished services so that the developers working on the project can employ a common set of labels. "And the developers need to talk to each other," Park adds.

Starwood has multiple systems containing customer data, including individual hotel systems, Starwood's inventory and central reservation systems, a system that determines rates and another to coordinate all of the communication, says Park. Since these systems don't communicate as well as they should, hotel managers have blind spots. They can't understand, for instance, why some customer interactions are successful (a customer asks for a specific room and it's available) and others are not (the customer asks for a room and doesn't get it). "Today, we can do that [success and reject] analysis to a degree," says Park. But the business users can't see the trends behind success or rejection on a broader scale.

Starwood believes that after its move to an SOA environment all these systems will be able to connect and automatically reconcile all reservations systems data with rate and availability data to ensure that accommodations are available at the right price, place and time. There's so much data flowing through Starwood's systems (upwards of a billion distinct pieces of data) that ironing out the meta-data plan from the get-go is paramount. And the pressure is on, especially from the business side. "It's not a nice-to-have system; it's an absolute necessity to survive," Park says of the SOA migration.

As is the case with all CRM-type implementations, the move to SOA and a customer data management solution won't come cheaply. Forrester's Wang says that an average CDI installation costs around $1 million for licenses and requires implementation services in the $3.5 million to $4 million range. In addition, rolling out a CDI hub often can take longer than what the vendors promise, which is what happened at UnumProvident. Dolmovich notes that while IT is adding customer data to the CDI hub, it still has to maintain some synchronization of data with the old system until it can be replaced. "It's rare that the initial implementation of a CDI hub actually replaces its predecessor customer files," he says. "There are often many reasons to sustain both, but you do need to begin a migration whereby the CDI hub becomes the system of record, and changes to customer data are propagated as necessary back to legacy files."

The big enterprise vendors have taken note of the rising interest in SOA and CDI, and Forrester's Wang says that both Oracle and SAP have announced that their next-generation applications will offer similar solutions that they claim will play nicely with each other. But CIOs will have to wait for these new products: SAP's SOA will not debut until 2007, Oracle's in 2008.

In the meantime, CIOs need to figure out alternative ways to fix their CRM disconnects. To Wang, the move is a simple yet crucial one. "They need to take a step back and make a plan," he says.

The Top 10

Consumer data integration and master data management products in alphabetical order.

1. Customer Data Hub

Oracle
www.oracle.com
Synchronizes information in a central location from all systems throughout the enterprise to provide a single view of company data.

2. Identity Hub

Initiate Systems
www.initiatesystems.com
Provides a system of record for each customer, household or company you do business with by identifying relevant duplicate and fragmented records wherever they may be and linking them across data sources.

3. Integration Server

SAS-DataFlux
www.dataflux.com
Integrates all relevant business rules throughout the IT environment.

4. Master Data Management

I2/Teradata
wwww.i2.com
Creates a single enterprise thesaurus to ensure data is consistently described, used and stored within an organization.

5. MRM

Siperian
www.siperian.com
Creates and delivers accurate and unified customers views to drive business actions across multiple channels.

6. NetWeaver MDM

SAP
www.sap.com
Unifies integration technologies on a single platform and is preintegrated with business apps.

7. One Data

Data Foundations
www.datafoundations.com
Centrally manages master data across multiple subject areas to improve accuracy.

8. System 9 MDM

Hyperion Solutions
www.hyperion.com
Synchronizes master meta-data—such as business dimensions, reporting structures, hierarchies, attributes and business rules—across distributed data warehouses, data marts, analytic applications and transaction systems.

9. Universal Customer Master

Oracle-Siebel
www.siebel.com
Unifies customer data across business units and disparate systems to provide a single source of customer information.

10. WebSphere Customer Center

IBM
www.ibm.com
Provides real-time, transactional customer data integration.

SOURCE: CDI Institute MarketPulse Survey, May 2006

The Truth About On-Demand CRM

Hosted, on-demand CRM is sometimes cheaper and easier to roll out than the software that lives on your own machines. But if you think on-demand means that all you have to do is flip a switch, you’re dead wrong.

BY STEPHANIE OVERBY

When Alex Marxer began looking at customer relationship management software, on-demand CRM wasn't even on his radar screen. As vice president of financial services for ResortCom International, a $15 million business-process outsourcing company for vacation property developers and managers, Marxer was looking for an enterprise CRM system for sales, marketing, customer support, self-service and analytics. He needed software that was flexible enough to accommodate the changing needs of his sales and marketing staff yet would integrate well with the company's homegrown back-office applications containing all its customer contracts, invoices and financial transactions. So he had his sights set on traditional offerings from vendors like Siebel, Kana and Pivotal.

But then Marxer came across a hosted—or on-demand—CRM offering from RightNow Technologies that seemed to provide most of the functionality his business would need coupled with a particularly user-friendly interface. He was impressed with the price tag—just $125 per user per month compared with the $300,000 ResortCom would have to shell out for an onsite solution (not including implementation, infrastructure and support costs). So he signed a three-year contract with RightNow. "When we did the ROI calculations, it was an unbeatable value proposition," Marxer says.

Once the implementation began, however, Marxer ran into some problems. He wanted users to be able to launch RightNow applications as tabs within his back-office system. But that was impossible using RightNow's application programming interface (API) tools out of the box. RightNow sent a team to Marxer's San Diego office to work through a solution, which extended the implementation from the promised one month to three. Since ResortCom was entering its busy season (November through March), Marxer had to delay deployment until April. Since then, he has found that upgrading the RightNow software causes the integration with the back-office application to break. So he's had to hold off on upgrading to any new versions of the software—and forgo the valuable new functionality those upgrades would bring.

Marxer is one of thousands of executives who've made the decision to take a chance on the on-demand CRM model. It's a booming market—revenue from hosted CRM applications grew 105 percent last year, according to AMR Research. Small and midsize businesses and departments within larger companies have been drawn to these software-as-a-service solutions (payable on a monthly basis) because they're much cheaper than licensed on-premise software, which can cost anywhere from several hundred thousand dollars to several million up front. Salesforce.com, which created a successful model for hosted CRM in 1999 and developed a strong foothold in the mid-market, is now offering functionality beyond sales-force automation and trying to sell its product to much larger customers. And traditional CRM players like Siebel (now owned by Oracle) have been forced by Salesforce.com's success to create hosted CRM solutions. Microsoft also recently announced plans to roll out an on-demand CRM product soon.

But despite the hype, the truth is that hosted solutions aren't going to take over the CRM world anytime soon. As Marxer found, implementing on-demand CRM software is not always as simple as vendors would have you believe. Customization can be problematic. Hosted CRM vendors' API tools cannot provide the degree of integration that is possible with onsite applications. Getting a hosted CRM system working shouldn't take as long as a traditional software package, but larger and more complex rollouts can still take a year or more. And while the hosted option reduces the need for in-house technical support, upgrades can still sometimes be technically tricky, and ongoing business support of the software is critical. In addition, some companies with particularly sensitive customer data, such as those in financial services and health care, do not want to relinquish control of their data to a hosted third party for security reasons. As a result, AMR Research predicts that by 2009, hosted CRM applications will account for only 12 percent of the total U.S. CRM market.

"There's an expectation gap in the market," says Rob Bois, senior research analyst for AMR. Companies, he says, believe that "the on-demand model eliminates the up-front cost and effort required in implementing a CRM system; that it's just like turning on a switch. But the integration and customization requirements are not that dramatically different from traditional software when you get into more complex implementations. There's still a lot of work involved."

There are, of course, many situations in which the on-demand option will be the best choice: It should work well for companies that want to implement standard CRM processes, are able to use out-of-the-box data structures, have little or no IT support, or don't require complex or real-time integration with back-office systems. But as on-demand CRM extends further throughout the enterprise, it faces the same challenges as traditional CRM: ensuring widespread user adoption and integrating the system with other applications, says Rebecca Wetteman, vice president of Nucleus Research.

Some of the CIOs interviewed for this article chose an on-demand package, while others went with on-premise. They are candid about the pitfalls of either approach, but all agreed on one point: First you have to figure out exactly what your company wants from the CRM initiative and proceed from there. Price, they say, should be the last thing you consider.

"You have to have a strategic plan for what you want from your CRM initiative," agrees Paul Greenberg, president of The 56 Group and author of CRM at the Speed of Light. "Define your processes, figure out what your requirements are, decide who will execute on it. Then you can go through the costs of each model that actually meets your requirements and make a decision."

When On-Demand Is Worth Considering

Hosted software is nothing new. In the 1990s, hundreds of ASPs sprang up to offer customers enterprise software hosted over the Internet. But when the Internet bubble burst, many ASPs went belly-up, leaving customers in the lurch. But Salesforce.com focused on the niche need for sales-force automation, refined its technology and began racking up sales among small and midsize businesses that needed the functionality they could offer but couldn't afford the multimillion-dollar price tag that accompanied full-fledged CRM implementations. And as the number of expensive failures in the traditional on-premise CRM space grew, so did interest in expanding the hosted model beyond simple sales-force automation—to a full-fledged system that could give enterprises a holistic view of their customers and allow them to better target their marketing, sales and customer-service efforts.

Traditional enterprise software vendors soon struck back, attacking on-demand on the grounds that it wasn't scalable to more than 1,000 users. But as it turns out, size is not what really matters in determining whether a hosted CRM implementation will be a success—it's complexity. And complexity makes it harder to implement a viable CRM package, regardless of whether it's hosted or on-premise. "It isn't a scalability issue," says AMR's Bois. "Typically when you're talking about an organization that will have more than a thousand CRM users, you're talking about a broad implementation that will touch more areas of the company and will involve more business processes."

Companies seeking to adopt established, standard practices on a particular function like sales-force automation are more likely to benefit from a hosted solution, while those seeking to implement highly customized customer-management processes would more likely value a flexible onsite option.

Take SunGard Data Systems, for example. For Bettina Slusar, SunGard's senior VP of global accounts management, opting for an on-demand solution in 2002 was a relatively easy decision to make. Although she had a user base of more than 1,000 to consider, her plans to drive standard processes in the global sales function of her $3.5 billion data-center company led her straight to Salesforce.com. Having grown through more than 100 acquisitions, SunGard's scattered and independently operating sales force hampered the company's ability to get an accurate and timely enterprise view of the sales pipeline. In addition, SunGard was looking only for certain aspects of CRM—sales-force automation and some marketing and campaign tracking. So Salesforce.com was a good fit.

But Slusar admits it's not for everyone. "If you want one big system that's going to connect all the dots together—from talking to the customer to signing the deals to connecting to the accounting system—[Salesforce] is not the answer," she says.

IT support was also a factor in Slusar's decision. SunGard's business is built on running data centers for other companies, but there is no centralized IT function for internal support. "We never really seriously considered an in-house solution for this. Our sales force spans the globe, and administratively it would have been a big headache to maintain the application and keep servers up and running with people coming online in Hong Kong and Chicago," Slusar says. In addition, she says, there was "no comparison in terms of pricing." Traditional software would have cost $18,000 per user over the course of a two-year license, and though Slusar will not reveal how much SunGard pays for the Salesforce.com systems each month, she says the cost is "magnitudes" lower, ranging between $1,560 to $3,000 per user over the same period (not including training and customization).

When On-Premise Is a Better Fit

At Qosina, a medical-components distributor, the basic business need was the same as SunGard's: creating an enterprisewide snapshot of the sales pipeline. Yet this much smaller company—$25 million in revenue—chose an on-premise offering in large part because of the complexity of its business processes, according to Chief Operating Officer Gerry Quinn.

The company had been using an old flat-file, DOS-based contact manager called Telemagic for years and, in 2003, was ready to replace it with a more modern, robust CRM package. Qosina, which markets its products (such as tubing, clamps and valves) through trade shows, catalogs and websites, has an inordinately long sales cycle as the components it sells are eventually incorporated into products developed in the medical and cosmetics industry. To encourage the purchase of its products, Qosina sends out samples of its 5,000 products (some costing less than a penny a piece) at an average rate of 300 to 500 a day and up to 1,000 a day after a successful trade show. For example, Qosina may provide samples during a customer's R&D process, and only when the customer's product is approved for production will Qosina make its big sale. Quinn wanted a dynamic tool to support the company's atypical marketing and sales process. "Our processes, while not totally unique, weren't anything that could be supported with an out-of-the-box package," he says.

Quinn looked into customizing a hosted solution to accommodate the company's elongated sales cycle, but ultimately rejected the idea because the company already had the technology infrastructure in-house to support an on-premise system (Qosina has hosted its own website for 10 years). Quinn also wanted to retain power over the application and the data in it.

Security concerns often can be a sticking point for CRM customers. "Will my information be secure in a hosted environment? Will I have access to it? Who will own it? Will competitors be able to view my customers? These are important questions," says Wayne Latterell, president and founder of CRM consultancy Portico Solutions. "Imagine—would you put your company's financial data on the same server as that of your competitors?" Some customers will be satisfied with the hosted vendor's security measures, while others may not want to risk it.

"We wanted more control," Quinn says. "We didn't want to put our sales pipeline out there in a hosted environment with someone else controlling the servers." He had heard horror stories about ASPs in the dotcom era, such as some closing their doors without giving notice to clients, leaving them with no system and no way to re-create one, and others selling the customer data they hosted. While he knows that most hosted CRM providers today are much more reliable, Quinn says, "putting our proprietary information outside our firewall, spam filter, intrusion detection and virus-scanning software would be putting a great deal of faith in the hosting company. We may not have the same global resources as larger hosting companies, but at least internally we can hold someone accountable."

Quinn looked at several CRM systems including Siebel, Saleslogix and Goldmine, but ultimately chose Microsoft CRM so that he could more easily integrate it with the Great Plains ERP package Qosina had put in place the year before.

Dialing Into the Back Office

The level of integration required between a front-office CRM system and back-office systems is another factor to consider when choosing between hosted and on-premise CRM. On-demand CRM vendors are offering ever-more robust integration tools. But, says AMR's Bois, "integration is always going to be an issue with software-as-a-service because you don't own the application or have access to the source code." And more sophisticated real-time integration with back-office transactional systems isn't possible with on-demand CRM software—at least today. "There's movement in that direction, but they can only import flat files asynchronously in batches," says Bois. "Companies that need to do that kind of [real-time] integration are more likely to stick with licensed software."

"It's not that on-demand software can't integrate," says Greenberg of The 56 Group. "It's just that the integration tools in traditional on-premise software are better. The more complex the integration requirements, the better off you'll be with onsite software."

ResortCom's Marxer says the integration of the RightNow on-demand software with his back-office system is satisfactory, but not what he would call ideal. "RightNow delivered on all the integration points we needed and the performance was reasonable," he says. But to open up a customer incident report, which an employee does only when an incident cannot be resolved on the first contact, takes 10 seconds because of the back and forth on the back end. That's just fine for ResortCom's needs at the moment, but "there's some room for improvement," he says.

Mike Davis, CIO of Stewart Information Services, agrees. Like Slusar at SunGard, Davis had to think about the needs of the far-flung sales and customer-service organization supporting the $2.2 billion title-insurance company he works for. With a requirement that the software eventually support at least 4,000 and as many as 8,000 users, Davis had the option of becoming one of Salesforce.com's largest customers to date (in fact, small pockets of people within the company had already started using Salesforce.com on their own). But unlike Slusar, Davis ultimately purchased a license for Onyx's on-premise CRM product.

Davis wanted to tie the CRM to all of Stewart's "day-in and day-out" systems. "We needed the most flexibility we could get in integrating it," says Davis. "And [Onyx] seemed to have much easier ways [than Salesforce] to integrate our system with theirs and theirs with ours—three different levels of embedding and exposing the information. There were modules of code available to use within our systems to make it easier."

Salesforce.com also has ways to get data in and out of Stewart's applications, in an import-export fashion, Davis says. But it would have required users to manually initiate the imports and exports in a less-seamless fashion than he would have liked. "We might have been able to make it work," says Davis. "But it wouldn't be very efficient. And it wouldn't have made for a very good user experience."

Easy for You, Difficult for Me

One of the major selling points for on-demand CRM is its relative ease of implementation, particularly in contrast to the expensive and lengthy rollouts that have plagued the traditional CRM customer.

Indeed, at Qosina, the Microsoft on-premise implementation took more than a year. And the biggest cost was consulting fees, which, at $280,000, made up half of the implementation expenses. Davis of Stewart Information Services is just finishing his Onyx pilot (for six sales-force units), which also required the added expense of two full-time and two part-time consultants. It took seven months longer than expected because midway through the process, Davis discovered some additional functionality that would be needed for the regional sales offices.

"It's taken longer than I thought," he acknowledges. "The biggest hold-up just has to do with change in general," including getting users to adopt the systems and change the way they work. The integration that drove the decision to go with an on-premise product won't even happen until the next phase of the rollout. "It's a long road," Davis adds.

For companies that can adjust to an on-demand CRM system out of the box, implementation takes less time. But it would be a mistake to assume that all hosted CRM implementations are quick and easy. In fact, most take time to roll out enterprisewide and many require bringing in consultants to help out. "Some customers have the expectation that you flip a switch and you're done," says Bois. "But there are setup costs and training costs and ramp-up costs. There's getting the system customized to match the business context and then getting people to use the system. CRM implementations are still complex, even if they're delivered in an on-demand fashion."

At SunGard, a smaller and more narrowly defined rollout of Salesforce.com took a full year. "We had to do a fair amount of work lining up what we wanted to accomplish with what [Salesforce.com] could provide," Slusar explains. SunGard also had to bring in consultants to assist with the rollout and accompanying change-management issues. Some of that effort was devoted to standardizing data definitions in order to preserve data integrity. Because the company had so customized the software's template to meet the needs of its global sales force, there was no way Salesforce.com's online training would work. Slusar rolled out the system in phases until 90 percent of her user base was on it by the spring of 2004. "We still could do more to drive standardized behavior and usage that we haven't," Slusar says.

Looking forward, Slusar has created a team to oversee the Salesforce.com product over the long term. They will work to increase user adoption and also keep track of new offerings from the vendor as well as from "the mushrooming number of partners that have popped up all over claiming they have something that works well with Salesforce.com," says Slusar. (Applications offered by companies partnering with Salesforce range from Web-based HR recruiting and screening tools to call-center scripting and software that helps doctors take notes on wireless handhelds.)

"The good news is there are a lot of things you can do with this system," Slusar says. "The bad news is you need people to do it. And I already have a full-time job."

Different Delivery Model, Same Risks

Marxer is sticking with the hosted solution, even though RightNow had a clause in its contract that ResortCom could buy a license and take the software onsite if Marxer wasn't pleased with the results. Although he's had to hold off on upgrades to date, he's hoping they won't pose a problem when RightNow adapts a true Web-services integration platform.

In the meantime, the on-demand system has yielded some solid ROI. The self-service function has reduced customer e-mails by 40 percent, and workflow has improved between back-office and front-office functions, resulting in a 40 percent improvement in productivity. And ResortCom has been able to introduce some automated marketing functionality that Marxer predicts will boost its bottom line this year.

Marxer credits the progress he's made with his on-demand CRM solution not to the technology itself, but to the two years he spent preparing the organization for the changes that would be required—preparation that would have been the same regardless of which delivery model he chose. "Back then, we didn't have the money or maturity to do a full-blown implementation. [As a result], I was able to do all the prep work necessary on a cultural level way before we even put out the RFP," Marxer says.

It remains to be seen whether more complex on-demand CRM implementations ultimately succeed or suffer the same fate as many large-scale on-premise CRM projects have. "Because most of these are monthly investments and in the past were smaller deployments, we haven't heard about the big disasters yet," says Bois. "The larger implementations will be the ones to watch," he says.

"On-demand CRM may be a less-expensive risk, but it's just as big a risk," says Greenberg from The 56 Group. "If you haven't planned everything out, customers will get lost. People will get fired. You will fail."

The Major CRM Players

On-Demand CRM Only

Entellium: Includes functionality for sales-force automation, marketing automation, and service and support.

iRadeon: Focused on sales-force automation.

NetSuite: Includes functionality for sales-force automation, marketing automation, and service and support. Also offers integrated functionality for financial management, e-commerce and other enterprise operations.

Salesforce.com: Includes functionality for sales-force automation, marketing automation, and service and support. Also partners with other companies to provide more specialized functionality for HR, finance, health care and e-commerce.

SalesNet: Focused on sales-force automation.

On-Demand and On-Premise CRM

Kana: Focused on customer service and service-resolution management.

Microsoft: Provides sales-force automation, marketing automation, and service and support functionality predominantly for small and mid-market companies. Currently offers on-demand solutions only through its partners.

RightNow: Provides functionality for customer service, sales-force automation and marketing automation.

Siebel CRM (now owned by Oracle): Provides a suite of solutions for marketing automation, sales-force automation, call center and service, self-service and e-billing, customer-order management and partner management. Siebel’s on-demand solution provides functionality for contact center, sales-force automation, marketing automation, and service and support.

On-Premise CRM Only

mySAP CRM: Includes functionality for marketing, sales, service, e-commerce, contact center, and channel management.

Onyx: Provides marketing automation, sales-force automation, service and support, contact center, partner-relationship management and customer-performance management.

Oracle: Has basic functionality for sales-force automation, marketing automation, and service and support.

PeopleSoft: Offers functionality for sales, service and marketing, as well as analytics and vertical-specific solutions.

SalesLogix: Includes functionality for sales, marketing, customer service and support for small to midsize businesses.

Source: Nucleus Research

Stuck in the Middle Without an SOA

Can CIOs at midsize companies just say no to service-oriented architecture? It ain't easy.

BY THOMAS WAILGUM

According to a 2006 Forrester report by VP Randy Heffner, fewer midsize companies have enterprisewide plans for service-oriented architecture (SOA) than larger ones. The reason most often given, Heffner says, is that IT departments at midsize companies are too small to deploy formal enterprise architecture teams. But, paradoxically, an earlier 2005 Forrester survey reported that 44 percent of small and midsize companies said that implementing an SOA was a high or critical priority.

It seems that many small and midsize enterprises are too small to embark on an SOA implementation but too large to move the enterprise in a common direction without one.

Scott Sullivan, VP of IT and services at mid-market transportation company Pitt Ohio Express, is, like many of his colleagues, stuck in the middle. Sullivan doesn't have a formal architecture team and has no immediate plans for moving to an SOA environment "since we're running software that has been built over the years and don't have the need at this time to look at a different architecture," he says. But, he continues, "It is something we will consider as we move forward depending on the nature of the work and how the approach will fit into our overall environment."

Which qualifies as a definite maybe.

Can Self-Service Deliver Better Service?

The top 10 mistakes companies make in introducing self-service—and how to avoid them.

Jun 27, 2006

By Allen Bonde

Self-service applications remain a hot topic as the potential to lower costs by enabling employees or customers to help themselves proves extremely compelling to senior management—and increasingly to end users. However, while self-service can clearly enable greater efficiency (a trip to the airport, local bank branch or supermarket provides a real-life example), can it also deliver better service? This is a fundamental question whose answer determines the success of new consumer and business-oriented self-service models, and ultimately whether the current wave of self-service applications and tools will continue to be viewed as worthy IT priorities or simply the last “next big thing.”

Taking a more user-centric approach by adopting CRM v.2 models (see Is CRM Dead?) can be an important step in plotting your self-service road map. So can evaluating the latest in knowledge management, collaboration and even new tools such as user forums, blogs and wikis to add to your service and employee productivity “stack.” Better customer satisfaction, lower cost of sales and service, and greater knowledge sharing are ultimately the goals.

But in practice, as our consultants often see in the field, how to deploy and optimize self-service remains an inexact science for many organizations. In many cases we see IT, business units and support organizations making some of the same mistakes when it comes to planning, developing and deploying new self-service applications.

The Top 10 Self-Service Mistakes—and How to Avoid Them
In the spirit of late-night top-10 lists, some of my colleagues at eVergance and I have compiled a list of the foremost self-service mistakes as a way to highlight what works—and doesn’t work—when fielding and supporting self-service applications.

10. Thinking “if we build it, they will come”
Almost all large organizations have a corporate website, support portal and online content. A number have tools for online account management or e-commerce. Yet if employees or customers are comfortable with their current (non-self-service) options, what is going to cause them to change? Self-service options must offer at least as good an experience, if not a better one than alternatives, and offer a payoff for both initial and continued use.

9. Viewing cost savings as the only goal
Early self-service applications like vending machines or Web portals were about both reach and efficiency. They provided convenience and lowered the cost of a transaction or interaction. However, along the way, too many organizations started viewing self-service as only a lower-cost channel. Cost savings is typically a key benefit of self-service, but must be coupled with other goals like creating a better user experience, improving satisfaction or gaining greater insight into customer needs.

8. Not marketing benefits
Self-service drives and requires change. Changing behavior takes time—or lots of marketing dollars. Self-service is no exception. Beyond choosing a technology foundation and picking the right performance metrics, driving adoption remains a key challenge in many cases. Promotional campaigns and specific incentives—for both end-user adoption and to drive experts to contribute content or authored solutions—is a key starting point.

7. Underestimating time for content cleanup
Self-service can provide your customers and employees with a direct link to your systems, applications and content. However, much of this is often not ready for public consumption. Content may be in multiple formats or systems, may be inconsistent, and may support only a subset of the locations or languages you wish to offer. When estimating the time you should budget for content cleanup and creating new authoring processes, you should probably double or even triple the time estimate.

6. Believing your CRM or ERP platform has all the tools
Many of the large packaged software vendors like Oracle or SAP have extensive functionality for self-service within their portal, e-commerce and CRM solutions. But in many cases, these tools are not best-of-breed and address some but not all requirements, especially in terms of functionality like advanced knowledge management or intelligent search. That’s why specialized KM, BI and search vendors have had success extending existing platforms and tailoring solutions for specific industries.

5. Proceeding without an escalation strategy
Even when self-service works exceedingly well, not all customers will want to use it—or will be able to complete all of their tasks online. And for almost all businesses, each new online interaction channel is an addition to the mix rather than a substitute. For example, the Web has not replaced the phone, and chat is increasingly a “bridge” between the phone, e-mail and even self-service. With this in mind, self-service must be viewed as part of an overall multi-channel strategy, with specific roles, relationships and set workflow defined for each interaction channel.

4. Not segmenting customers
Everyone is unique. Yet online, many users are treated the same whether they are a customer or prospect, are from around the corner or around the globe, or have specific preferences. True personalization has long been the goal. But before you can tailor the experience, you need to understand who your users are by defining categories or segments, mapping entitlements (what they are allowed to do or see), and ideally considering their preferred channel for specific tasks.

3. Not tapping into communities
One of the more interesting recent trends has been explosion of social networks and review sites like Epinions.com. As we have observed at companies like Novell and eBay, user forums have significant potential to augment self-service support. Everyone is an expert at some level. Some of these experts are a terrific resource that can and should be harnessed.

2. Making it too complicated for first-time users
Web applications must be intuitive to the point that users of any skill level can easily navigate, find information and perform basic tasks. In fact, Forrester has found that “improving usability” is the most effective way to shift customers to self-service channels. Offering unique features (e.g., special offers for online users, exclusive content, faster service, etc.) and focusing on a design that is both simple and adaptable are the best ways to keep users from abandoning the online experience.

1. Making it too hard to reach live help
Even in the best situations, users will need special assistance at some point. Despite advances in question-answering technology and the potential of next-generation artificial intelligence and knowledge management approaches, this means providing live help via chat or a call-me button, or simply making contact information easy to find.

Of course, there are many more tips and suggestions that didn’t fit in this list. But this should provide a good checklist for assessing your own portal, online support or e-commerce initiatives, and helping make self-service a form of better service, at least in the eyes of your users.

Allen Bonde is the senior vice president of strategy and marketing at eVergance, a management consulting and systems integration company focused on CRM optimization and Web self-service. Prior to that, he was the founder of strategic advisory firm ABG, a practice expert at McKinsey, director of management consulting at Extraprise, and an analyst at the Yankee Group.

The 2005 CRM Elite

The 2005 CRM Elite, Part 2
It is impressive when CRM vendors promise business performance improvements never before possible, but it is more impressive when their products actually deliver on those promises. The CRM Elite awards showcase six companies that have achieved significant returns on their technology investments that have either met or surpassed their expectations.

The 2005 CRM Market Leaders, Part 1
The CRM industry over the course of the year grappled with well-publicized mergers and acquisitions, executive turnover, and product line restructuring. Still, the industry's impact--especially in the small and medium business markets--is growing more pervasive across industries and within organizations. With an eye on ROI, companies are benefiting from lower startup costs, shorter implementation times, ease of use, and more robust analytics, from both the on-demand (hosted) delivery model and on-premise solutions. Spearheading these developments are the 2005 CRM Market Leaders--read on to see how they are driving the market and how they stack up against the competition.

CLICK HERE to view complete Market Leaders chart.

Click here to read Part 2.

The Major CRM Players

On-Demand CRM Only

Entellium: Includes functionality for sales-force automation, marketing automation, and service and support.

iRadeon: Focused on sales-force automation.

SalesNet: Focused on sales-force automation.

On-Demand and On-Premise CRM

Kana: Focused on customer service and service-resolution management.

RightNow: Provides functionality for customer service, sales-force automation and marketing automation.

On-Premise CRM Only

mySAP CRM: Includes functionality for marketing, sales, service, e-commerce, contact center, and channel management.

Onyx: Provides marketing automation, sales-force automation, service and support, contact center, partner-relationship management and customer-performance management.

Oracle: Has basic functionality for sales-force automation, marketing automation, and service and support.

PeopleSoft: Offers functionality for sales, service and marketing, as well as analytics and vertical-specific solutions.

SalesLogix: Includes functionality for sales, marketing, customer service and support for small to midsize businesses.

Source: Nucleus Research

CRM Without Tradeoffs

CRM Without Tradeoffs

Article published in DM Direct Newsletter
September 1, 2006 Issue

By Amy Bethke

Trade-offs are an inevitable part of life. At lunch, we trade quality for convenience when we opt for fast food instead of healthier fare. At other times, we decide the trade-off is unacceptable. Faced with higher gas prices, an 80-mpg motor scooter might look attractive, but it wouldn't be a viable transportation solution for a family of six.

When it comes to complex technology decisions, we're even more likely to assume there will be trade-offs. Take customer relationship management (CRM) solutions, for example. Until recently, companies seeking to implement CRM had essentially two choices - hosted solutions or traditional packaged solutions - both of which require some trade-offs.

Hosted CRM has the advantage of fast, nondisruptive implementation. Because a third party handles operation and maintenance, hosted CRM puts no new demands on internal IT staff and resources. There are no infrastructure requirements or up-front costs for new capital equipment, and software upgrades happen transparently. However, hosted CRM solutions lack the depth of functionality and ability to customize that many organizations require to meet their unique needs and obtain optimum results. Hosted CRM's lack of integration with core systems prevents the full mining of corporate data to identify new ways to attract, retain and better serve customers. And because hosted solutions lack extensibility, customers are at the mercy of software vendors to implement changes that will support their business objectives.

Traditional CRM packages also have their own pros and cons. They can include many prepackaged functions; however, those "canned" functions are often generic and therefore not in sync with an organization's unique needs. Customizing is an option, but can take considerable time and effort - as will the inevitable future modifications necessitated by changing business conditions.

In short, prospective CRM customers could either choose the simplicity of a hosted CRM solution knowing it will not provide the benefits of customized functionality, or opt for a traditional CRM package that may require significant time and money to implement and customize.

For many companies, neither trade-off is acceptable. Instead these companies have sought and found a better alternative, and they have the fast implementations and measurable business benefits to show for it.

For example, a leading financial institution was looking for a way to increase customer satisfaction without driving up operational costs. After evaluating several options, they implemented a CRM solution that resulted in a 50 percent increase in first-call resolution to customer issues while increasing productivity by more than 30 percent.

Similarly, a Medicare program system provider wanted a CRM solution that could integrate with core legacy systems and be deployed rapidly in order to support a new government program. They were able to implement a solution that met their unique needs in record time. Development was completed in six weeks, and the solution went "live" just a few weeks later.

Both of these organizations were able to achieve these results by opting for a CRM solution built on business process management (BPM) software.

A BPM-based CRM solution recognizes that customer service efforts can only deliver optimum results if they are customer-centric and aligned with an organization's business processes. With that alignment, an organization has the framework to pursue promising new CRM initiatives, as well as the means - via BPM software - to quickly implement those initiatives, measure their effectiveness and, if necessary, further refine them.

Unlike hosted or packaged solutions, BPM-based CRM solutions recognize that process improvement - such as more effective call handling or faster approval of new accounts - is at the core of achieving CRM goals for growth and productivity. BPM-based CRM solutions are designed to integrate business applications, essential data and human tasks into efficient, streamlined processes. They allow entire business processes - not just discrete tasks - to be defined, modeled, executed and monitored. In doing so, they give organizations the power to see which CRM initiatives work, which do not, and the means to change them accordingly. The trade-offs that bedevil hosted and packaged CRM solutions - legacy integration, customization and extensibility - are not issues.

Like hosted and packaged CRM solutions, BPM-based CRM solutions include a rich assortment of prepackaged functions for sales, service and marketing, but with two key differences: these components are designed to be extended to suit unique needs, and they can be implemented individually and incrementally.

Integration with legacy systems and across multiple databases gives BPM-based CRM customers the ability to deploy customer-centric processes that bridge organizational stovepipes. That helps eliminate the "hand-off chasm" and resulting customer frustration that can occur when a customer request gets routed from one department to another with no oversight.

But perhaps the biggest advantages of BPM-based CRM solutions are their ability to handle complex processes and foster continuous improvement, especially when a business rules engine is unified with the BPM software. This type of "smart" BPM system allows organizations to establish and enforce complex sets of rules that govern application behavior and drive decision-making. That can make even complicated CRM tasks - such as new account opening, dispute resolution or managing multichannel interactions - easy to coordinate, track and analyze. New rules can be easily added to achieve incremental improvements, or to respond to changing business needs.

This agility means prospective CRM buyers no longer need to choose either convenience or quality. Rather, buyers of BPM-based CRM can have fast implementation and depth of functionality, with the additional benefit of ongoing improvement to meet changing business and customer needed.

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For more information on related topics visit the following related portals...
Business Process Management (BPM) and CRM. Need Registration
Amy Bethke is director of Product Management for Pegasystems, Inc., where she is responsible for the company's customer service product offerings Amy has held engineering, product management, product marketing, customer support, and business analysis positions in the software industry since 1987. She may be reached at amy.bethke@pega.com.

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