CRM: Dream or nightmare?
Published: 16 Apr 2002 16:56 BST
Peruse any recent survey of chief information officers and you could conclude that the letters "CRM" are the Holy Grail for corporations, promising to smooth customer relations and improve the bottom line. If only it were always true.
Studies released in the last few weeks show that a large number of such projects fail to deliver on stated goals, and dissatisfaction with completed customer relationship management software projects runs high within executive ranks.
Analysts said it would be easy to blame the software providers such as Siebel Systems, Oracle and PeopleSoft for the failure rates, but there's plenty of blame to go around. Companies are spending money on CRM software without thinking about their own business strategy or processes, analysts said. To have any chance of success, companies need to organize their internal data so it's easier to find, and to set measurable goals.
Moreover, analysts and CRM customers say companies need to remember that CRM isn't just software: it's a complex process that's useful only if companies know which problems they're trying to solve.
"The problem is that the targets that are set often aren't quantified by numbers," said Michael Maoz, an analyst at Gartner. "Things like sales efficiency and customer service are...often hard to measure."
CRM has become the must-have enterprise software for many large companies in the past few years. The software is intended to streamline customer service, give sales staff the customer information they need to close deals faster, simplify marketing and sales efforts, and help companies find new customers and generate more revenue from existing customers.
Using software applications to record customer interaction with sales and customer service personnel, CRM applications can provide an elusive "360-degree view" of a business 24 hours a day, which can boost revenue and keep customers happy.
A credit card company can use CRM to track customer spending and payment habits to help tailor marketing plans. Or a bank might use CRM to help identify that a customer has a large checking account balance, a mortgage and two car loans, and therefore probably deserves better-than-average customer service.
That promise is driving sales. Surveys from industry research firms and Wall Street brokerages show that installing CRM software remains a top priority for big companies. A Morgan Stanley survey of 225 CIOs released last week showed that 80 percent of them planned to start new applications projects in 2002, and many cited CRM as a priority.
In addition, a recent research report from ABN AMRO concluded that the CRM market is expected to reach $3.36 billion next year, up 25.8 percent from 2002.
Such projections have attracted software giant Microsoft, which plans to launch a CRM package in the fourth quarter, initially focused on small businesses.
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