CRM Solutions

This section of our technical library presents information and documentation relating to CRM Solutions and Customer relationship management software and products. Providing customer service is vital to maintaining successful business relationships. Accurate and timely information provided in a professional manner is the key to any business and service operation. Our CRM software application TELEMATION, was developed with this in mind. But the ability to change is just as important in this ever changing business environment. Telemation call center software was designed from the very beginning for this environment. Many call center managers, with unique and changing requirements, have chosen and continue to use our CRM software as their solution of choice. Our contact center CRM solution is ideally suited for call center service bureaus.

By Ted Manakas, Senior Vice President and General Manager, Americas FrontRange Solutions

The CRM marketplace has become a grieving poster child for the past excesses of the so-called "New Economy." Companies driven by "Dot.Com" hysteria made huge and speculative investments in unproven business models coupled with large, complex enterprise CRM software suites. The reason? CRM was viewed as a necessary tool to accelerate the drive to first mover status, to establish a brand online, and gain market share at any cost.

Distorted investment is a characteristic of all marketplace bubbles. In the bestseller "Dot Con, The Greatest Story Ever Sold," (HarperCollins, Copyright 2002) financial reporter John Cassidy quotes lessons from history when he says (page 159): "It is a property of speculative booms, from tulip mania to the Japanese stock market and real estate bubbles of the 1980s, that they don't remain contained in one sector. Eventually they go to such extremes that they distort behavior throughout the economy."

The CRM binge of the Dot.Com years has a familiar ring. Proven, time-honored processes for managing risk and measuring the return on investment were tossed out the window for risky CRM acquisitions. Accountability became the first casualty. In a report on research conducted in June 2002 industry analysts Nucleus Research, Inc., Wellesley, Mass, surveyed 23 CRM customers all selected by Siebel Systems, Inc. This sample of hand picked customers universally reported problems with CRM implementations costing more than budgeted, and taking far too long.

Nucleus reported that 61% of the surveyed CRM customers said they had yet to achieve anything close to an acceptable return on investment after two years with Siebel applications, which cost an average of about $6.6 million over a three-year period. Further, 65% of Siebel's surveyed customers had customization and performance problems. Fully 78% said the product suffered from a "lack of user-friendliness," making effective use more difficult, if not impossible. Another 57% said it took longer than planned to deploy, and 55% reported that the CRM implementation ran over budget by a significant amount.

Not surprisingly, Siebel disputes these findings while producing some customer success stories of its own. Denials aside, Siebel posted $92 million in losses for the third quarter of 2002, and is shifting strategies. They are moving to simplify the user experience and make their large and complex CRM suite easier to integrate, thus shortening the path to an economic payback. Siebel would have one believe this is a mere coincidence explained by an anticipated IT spending recovery lead by small and medium-sized business. This new kinder, gentler direction was widely announced with much fanfare at the Siebel Worldwide User Week 2002 expo in October 2002.

These negative CRM investment reports are in fact an old industry story, and Siebel is not alone in overselling CRM capabilities. Industry pundit Gartner Group, Stamford, CN, reported in 2001 that large-scale CRM deployments, those costing more than $50 million and taking more than one year to implement, failed to reach project objectives fully 70% of the time. CRM failures joined software security bugs as the recurring industry theme of the new millennium. Startups could launch an IPO more quickly than they could make their CRM system productive.

Despite current economic realities, analysts still are predicting a healthy growth rate for CRM spending. The Aberdeen Group, Boston, Mass., predicts that CRM growth will be at nearly 10% through 2005. While paling in comparison to the torrid triple digit annual growth recorded during bubble years, this is thankfully sustainable. We should see growth sufficient to support continued CRM marketplace innovation.

All this CRM marketplace turmoil is occurring in a market segment that Erin Kinikin, an analyst at Cambridge, Mass.-based Giga Information Group, said in September 2002 "is still in its infancy." Better analytical tools, integration and more flexible embedded business processes in the (CRM) software will help companies improve success rates next year and beyond, she reported.

This heralds the beginning of the post-bubble era of reduced, and more realistic, expectations. The business realities inherent in an emerging CRM market finally are enforcing their own discipline, with renewed emphasis on business fundamentals and risk management that were usually ignored in boom times. The old IT industry boogeyman of "Fear, Uncertainty, and Doubt" (FUD) is alive and well, with an ever-present ROI yardstick to measure CRM investments.

A May 2002 CIO magazine survey detailed the practical aspects of accountability in the new and realistic post-bubble CRM marketplace. Hewing to a ROI discipline, fully 49% of CRM projects are now targeted for completion in less than 12 months, 70% within 18 months. Those that fail to learn the lessons of history are bound to repeat its mistakes. In another encouraging sign of the renewed emphasis on risk management, 64% of the CIO survey respondents said they are implementing CRM incrementally.

Incremental, reduced risk CRM means using the proven and time-honored project management and ROI technique of digestible chunks. This means smaller pilot projects in lieu of the big and risky enterprise software implementation favored in the software suites approach. Companies are going back to basics, starting with smaller, more focused CRM packages targeting a specific function or group of users. Now we're solving specific business problems and processes in call centers, help desks, and sales order entry. It hews to the successful model used by manufacturers who proved the economics of manufacturing automation by focusing first on streamlining processes before adding any automation. While not sexy, it creates the pleasant buzz of steadily increasing profits.

Ted Manakas, Senior Vice President and General Manager, Americas FrontRange Solutions

Ted Manakas is senior vice president and general manager of FrontRange Solutions, Inc., which produces the Goldmine and Heat CRM products.

FrontRange Solutions Inc., founded in 1989, develops software and solutions that allow organizations to deliver extraordinary Customer Management using world-class Service and Support, Sales and Marketing, Contact Management technology. more info about FrontRange Solutions