Homepage Rankings and Research Companies Channelcast Marketing Matters CRNtv Events WOTC Jobs Cisco Partner Summit Digital 2020 Lenovo Tech World Newsroom Dell Technologies World Digital Experience 2020 HPE Zone Masergy Zenith Partner Program Newsroom Intel Partner Connect Digital Newsroom Dell Technologies Newsroom Fortinet Secure Network Hub IBM Newsroom Juniper Newsroom The IoT Integrator Lenovo Channel-First NetApp Data Fabric Intel Tech Provider Zone

CRM Shake-Up

When Siebel Systems, the almighty CRM-software market leader, can't give analysts and shareholders anything resembling a sales pipeline, you can't blame people for beginning to doubt the merits of CRM. After all, the San Mateo, Calif.-based company uses its own technology. If it isn't helping them, how can it help other companies?

After a string of poor quarters for the majority of CRM players, including Siebel, and increasing reports of poor customer-satisfaction rates for enterprise projects, CRM is now under a cloud.

"Eighteen months ago, [CRM was the hottest area of IT," notes Gartner Dataquest analyst Scott Nelson in a recent report. "A year-and-a-half later, enterprises are grappling with high failure rates and increasing vendor consolidation."

Addressing Complaints

It's easy to understand the motivation for CRM vendors to improve their wares: Gartner reports a scant 2 to 3 percent of small businesses in North America have implemented CRM solutions. In addition, The Yankee Group predicts CRM marketing and analytics will jump from a $500 million market this year to $1.1 billion in 2004.

One of the most frequent complaints from businesses is that enterprise CRM systems offer more than they need. While the functionality is superb, the size and complexity of many enterprise systems only add to their headaches. Plus, the software is expensive and can take more than a year to deploy. Thus, some customers have been moving away from mammoth enterprise-software projects and migrating to midmarket vendors offering smaller, more focused deployments. Following this year's second quarter, AMR Research predicted that the CRM market had "hit rock bottom" and would start to improve in the second half of 2002 behind midmarket players with deal sizes in the $100,000 to $300,000 range. E.piphany, Kana, Pegasystems and Pivotal are just a few midmarket CRM vendors that have seen relative success this year in a challenging environment.

Another issue is speeding up deployment time. That's where the Internet is key. Several CRM vendors, including Siebel and PeopleSoft, have moved to Web-based software architectures. Last year, ATG replaced its flagship application-server product line with new online CRM solutions, which have proved successful. Leveraging the Internet dramatically reduces deployment time from 12- to 18-month cycles to three to six months, says Fumi Matsumoto, vice president of ATG. "Customers just aren't happy with a lot of these million-dollar enterprise deployments and can't justify ROI two years down the road," he says. "Our Web-based solutions are easy to justify."

A third problem is complexity. "Software vendors have gotten caught up adding too many features," says Howard Highsmith, president of Sales Methods, an Asheville, N.C.-based consultancy. To remedy that situation, an increasing number of vendors and solution providers are focused now on simplifying solutions around core business processes. Oracle, for example, revamped its CRM offering within its Oracle 11i E-Business Suite and simply offers sales and marketing solutions, taking a broader, business-process-focused approach.

"CRM isn't just sales force-automation software," says Andrew Kass, vice president of CRM development. "We spent a lot of time figuring out what people want,which is integrated business processes,and we've stopped concentrating on all the different modules and components of typical CRM suites."

Back to Top



trending stories

sponsored resources