CRM, the sequel

You don’t have to mix Mike’s Hard Lemonade with anything to enjoy one of the Mark Anthony Group‘s most famous products, but the cocktail of applications Robert Eckley has to deal with is a lot more complicated.

As CIO of the Vancouver-based manufacturer and distributor of wines and alcoholic beverages, Eckley implemented Microsoft CRM 2.0 about 18 months ago across its organization. Mark Anthony Group (MAG) chose Microsoft’s CRM platform because of its ability to integrate with existing office applications such as Outlook and Office — programs its 200 member sales force are very familiar with, Eckley said.

“When you have so many disparate sources of data such as liquor board data and supply chain data, the problem is each of those is viewed in its own repository,” said Eckley. “We’re using CRM as the common interface to tie all the different repositories of data.”

This is one of the main benefits MAG expects to see when it upgrades to the latest version of Microsoft’s CRM product, called Dynamics CRM 3.0, which is scheduled to launch Tuesday.

Eckley said integration with MAG’s existing reporting tools such as Crystal Reports and Cognos and building customer reports will be much easier with 3.0. MAG, which is currently experimenting with a beta version of Office 12 — scheduled for full release next year — will be looking very closely to see how 3.0 integrates with the office productivity suite.

MAG’s use of CRM is an example of how CRM functionality has evolved to the point where it is blending in with other sales and marketing tools such as enterprise resource planning (ERP) and business intelligence. A November report by AMR Research Inc. showed that IT professionals and business executives are implementing software and technology that is blurring the lines between traditional applications.

Robert Bois, who authored the report, titled, “Coloring Outside the Lines of Old-School CRM,” said a lot of the boundaries between CRM and enterprise resource planning software are not only being broken down by multi-billion dollar acquisitions like Oracle’s most recent purchase of Siebel Systems for nearly US$6 billion, but also because of what people are implementing.

“The processes that people are trying to automate or enable is traditionally bounded by CRM as an application category,” said Bois, AMR research director. “Rather than people just doing sales force automation like Salesforce.com or Siebel would do, it’s going through all the way to order capture, order fulfillment and financial settlement. On the back end, these processes even tie in through the supply chain.”

MAG, for example, is integrating CRM over its customer contact chain to track issues such as missing product and delayed orders.

Analytics and business intelligence are also being applied to CRM to help customers deliver better customer service and increase revenue through sales tactics such as cross-selling, said Paul Rodwick, vice-president of Siebel business analytics.

“All CRM systems are capturing very important data about companies’ customers and their business,” said Rodwick. “In order to get maximum value out of CRM, you need to be able to take collected information and marry that with other information within your business in order to understand how to be more effective.”

The expanded role of CRM functionality is also contributing to a resurgence in the software itself. While CRM has suffered from a poor reputation in the past due to its failure to produce a solid return on investment, AMR Research numbers show customer management application spending is increasing and failure rates are declining. Recent AMR Research surveys revealed that only 14 per cent of customer management IT projects are considered failures, compared to 28 per cent in its 2004 survey.

“CRM isn’t necessarily going away,” said Bois. “We still see a lot of spending happening around customer management processes in terms of applications and technology that can support various processes that address customer management.”

Bois added CRM implementations failed in the past because implementations were difficult and traditional CRM ended at the point of capture of customer data.

“Obviously that’s not where a customer experience ends,” said Bois. “The customer has to go through an order fulfillment process.”

As enterprises demand savvier applications and easier and faster implementations, traditional CRM vendors like Siebel have lost out to other vendors like SAP, Bois added. While traditional CRM suites offered by vendors like Siebel have often been criticized for being expensive and complicated, software at the other end of the CRM market from vendors like Salesforce.com has been labeled as restrictive and simplistic.

Eckley said MAG looked at Salesforce.com as an option but decided not to go with it because there wasn’t enough ability to control and manipulate its data within the software. MAG also looked at solutions from Siebel but said most of its employees would only use between 10 to 20 per cent of the features.

“You’ve got a Cadillac of a system but no one wanted it to begin with,” said Eckley of CRM products like Siebel’s, adding high costs and time to implement also influenced his company’s decision.

Given the uncertainty around the Oracle-Siebel merger, however, Bois said Salesforce.com is in an enviable position in the market right now.

“While SAP tries to ramp up on the large enterprise side, Salesforce.com is really facing very little competition in the SMB market,” he said.

With its upcoming release, Microsoft is positioning itself to customers as somewhere between the Siebels and Salesforce.coms of the market.

“We’re not going for the highly complex, expensive implementation or on the other end the easy quick-fix to a solution just to get something up and running,” said Krista Kuehnbaum, CRM product manager, Microsoft Canada. “The 3.0 product gives just enough CRM functionality to the user so they get the benefits of it but it doesn’t become a huge burden for them.”

The Oracle-Siebel situation also creates an opportunity for Microsoft to get a piece of the SMB market, which might explain why it is releasing 3.0 — originally slated for release in early 2006 — a couple of months ahead of schedule.

“Microsoft made considerations in the architecture to be able to handle multi-tenancy posted deployment that they would then sell through partners, which would really compete directly with Salesforce.com,” said Bois.

Kuehnbaum said CRM will continue to be an emerging solution, especially in the mid-market and small business segments. Recent numbers from Evans Research and AMR indicate that 41 per cent of Canadian SMB software developers are expecting to work on CRM projects over the next year.

“They’re really trying to leverage and harness the power of a CRM application,” she said. “They have the same needs of those larger organizations.”

Comment: info@itbusiness.ca

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