Customer satisfaction Bo Lykkegaard, Programme Manager for European Enterprise Applications at IDC, reveals his CRM predictions he field of Customer Relationship Management (CRM) has had a turbulent life over the past 15 years, since Tom Siebel founded Siebel and began to elevate what used to be contact managers for sales people into broader enterprise solutions for customer management. After experiencing meteoric growth rates during the 1990s, the global CRM market declined significantly during the 2002 and 2003 period as a result of the dotcom collapse and highly publicised CRM failures. Today, CRM is on the rise again. Current customer adoption is mainly driven by three key factors. Firstly, new delivery and licensing models, known as ‘software as a service’ and pioneered by Salesforce.com, shorten global implementations from years to months, reduce upfront cost and risk due to a monthly subscription model, and enable faster product development cycles because the developers control the deployment environment. A second driver is the improved user interface, emulating design principles of familiar user interfaces such as Microsoft Outlook and benefiting from dotcom innovations such as task-based and procedure-driven user interaction, similar to when making a book purchase at Amazon.com. A third driver is built-in integration between CRM and industry-specific applications, for example customer service, billing, and service provisioning for telecommunications companies or sales and marketing tied into trade promotions management for consumer packaged good vendors. Such integration supports extensive business process automation and improves decision-making capabilities. Where will CRM go from here? IDC certainly believes the three factors mentioned above will continue to drive CRM adoption. However, four additional factors will boost CRM demand further over the next three years: Social CRM – Social CRM is the expression of the Web 2.0 innovations such as
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blogs, wikis, and user ratings into an enterprise CRM context. Consider the sales representative querying his/her CRM application to scan social networking sites to assemble a personal profile of a new, customer decision maker prior to a critical meeting. Or imagine a customer portal where customers can post
Bo Lykkegaard new ideas or requests and promote/demote the ideas of other customers. Or a self-organising sales/marketing intranet where all collateral is displayed in order of usage, ratings, and age. At a time in which lack of end-user adoption remains the number one threat to CRM success, social CRM represents a very valuable way to increase employee productivity and CRM usage at the same time. Upgradeable customisation – Some say the days of custom-built CRM systems are over. IDC tends to agree with that when it comes to core components such as pipeline management, contact management, campaign management, and so on. However, a large proportion of companies have CRM
needs that are unique and critical to their organisation. New CRM applications will offer customisation extensions, built-in development frameworks, and standardised web services interfaces that will greatly simplify the addition of industry-specific extensions to support the needs of, say, the subscriber management of a publishing house or an auto-service membership association. Since the customisation is carried out within the CRM application framework, the customisations are easily upgradeable. Mobile CRM – The idea of employees accessing their CRM application from a mobile device has been around for a while. However, recent innovations in mobile computing such as mobile broadband, RIM Blackberry, and the Apple iPhone, will turn the dormant vision of mobile CRM into reality. Service technicians, travelling sales representatives, and consumers are examples of key CRM users that are typically not carrying a laptop or PC. Virtual suites and ecosystems – Customers do not want to tie best-of-breed CRM applications together with back offi ce applications and industry-specifi c applications. This means that best-of-breed CRM applications will increasingly be consumed as part of larger, pre-integrated offerings. The ‘virtual suite’ is one way to create such larger solutions, in which SOA technologies are used to integrate what used to be stand-alone CRM applications with other enterprise applications. Oracle, Infor, CDC, and Sage are following this approach. Other vendors are relying on ecosystems in which vendors pre-integrate complimentary solutions, such as Salesforce’s AppExchange and SAP’s Business Process Platform. Bo Lykkegaard is Programme Manager at IDC for the European Enterprise Applications research, market analysis, and related consulting. He focuses on the composition and developments of the Western European applications software market, in particular ERP, CRM, HR, and payroll applications.
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