March 2009 | Volume 27 / Number 10
CRM, BPO & Teleservices
CRM: Complex Needs, Challenging Responses
By Brendan Read,
These trends are prompting shifts in customer relationship management (CRM) participants, strategy, deployment, and technology. Fading are the days when CRM meant cutting sales, contact center, or help desk costs and buying a does-everything package and painstakingly integrating each complicated module, some of which may not get used, over many months or years and waiting for ROI.
Dimension Data’s Global Contact Centre Benchmarking Report says the biggest driver behind CRM is the need to have it available across the enterprise, and for it to generate ROI. CRM is no longer for sales or marketing or the contact center.
“Organizations have been disappointed in the past at the lack of clear ROI from CRM, mainly because it has been siloed to sales or marketing,” explains Paul Scott, Solutions Director Merchants Group, a Dimension Data Company. “Nowadays CRM is about sharing data across departmental boundaries and realizing significant savings and revenue growth opportunities. If someone in marketing can spot an upsell trend in data they get back from the contact center, they can formulate a campaign and execute this with sales seamlessly, provided everyone is using the same core CRM system.”
Isher Kaila, an analyst covering global CRM strategy and implementations with Gartner, is seeing more companies use a phased approach to buying and implementing CRM solutions. They purchase separate applications or module to meet specific needs, such as contact center agent software, IVR or a help desk management system. Most projects average between four to nine months per major phase. In contrast CRM projects can take up to 12-18 months to go live with.
“Enterprises are under increasing pressure to provide tangible ROI within the first 120 days of a CRM solution being available,” explains Kaila. “The phased approach enables firms reap the benefits of CRM far quicker than if they bought suites and didn’t use much of the functionality of those products.”
CRM Supplier Responsiveness
Enterprise-scaled CRM solutions suppliers are adapting to help their customers meet these needs. CRM is becoming more flexible and truly multichannel: an a la carte or day menu rather than a huge, complete, and sometimes indigestible meal. The tools are now being designed to interface with e-mail, chat, and SMS, and to tap into social networks as well as connecting into inbound and outbound voice transactions, and to be accessed over mobile devices.
More products are now being delivered off-premises or ‘on demand’ as software as a service (SaaS), multi-tenancy, private hosting, and hosting of traditional on-premise solutions. These methods offer lower up-front costs, greater flexibility, and shorter go-live times compared with premises delivery (this topic will be covered in-depth in the August issue). Yet they face some challenges in being widely applied for contact center customer service, sales, and support functionality at the enterprise level.
Bernard Drost, Chief Technology Officer at Innoveer Solutions explains that it takes longer to launch an on-demand application when there are inbound and outbound contact center applications involved as compared with sales force automation or help desk applications. That is because there is greater complexity with them and more is integration needed, such as with routing and home-based agents.
Also there are more potential security issues with SaaS. While the data is encrypted, their multitenant environments make it challenging to use virtual private networks, which is a popular tool to enable more secure data access through corporate firewalls. Yet such matters are gradually being addressed as suppliers, consultants, and their clients examine, create, test, modify and deploy solutions.
“We are still in the beginning of the SaaS technology,” explains Drost. “It has had a great ride but phishing scams and even penetrations into the SaaS applications will become more frequent, and news of credit card name and address breaches will become known. When other applications, like a PBX or knowledge bases are involved, additional connections to applications need to be built and secured.”
Meanwhile proprietary solutions are now more easily integrated with those of other vendors, aided by movements towards open source software, and service-oriented-architecture. Vendors are also including new tools that allow users to configure and change processes and workflows without involving the IT department or outside system integrators. That saves time, money, and gives them more control.
"The very old concept was ‘make the business process fit to the technology’," explains Kaila. "Now it is not so much that as ‘here is our end-to-end customer business process, what opportunities do we have to streamline and optimize this before we think of anything else and what are the right solutions for it’."
The changing CRM marketplace
The larger CRM vendors are now consolidating their gains, refining market focuses, and rolling out new and best of breed solutions following a series of mergers and acquisitions over the past few years. The moves also set up them for future purchases down the road.
Campus Management, which acquired Talisma CRM from nGenera last fall, plans to grow Talisma’s presence in its present banking, technology, travel and other key sectors in the Asian and European markets. It is also seeking new customers in the education, healthcare, nonprofit, pharmaceuticals, and retail fields.
Consona, which bought KNOVA and Onyx, has developed its offerings into a series of bundles including Consona Customer Management, Consona Knowledge Management, Consona Knowledge Driven Support, Consona Sales Force, and Consona OneServe Citizen Management. The firm says the new branding also leaves room for the company to continue its aggressive acquisition strategy within the CRM software space.
“Many companies are implementing their CRM solutions in pieces in order to alleviate specific departmental pains,” explains Consona CRM general manager Tom Millay. “We want to provide a flexible product offering to accommodate a more phased approach to managing the customer experience, while still providing the benefits of enterprise-wide integration as functionality or departments are added.”
Pushing this trend along is that more demanding customers amidst a weak economy are putting increased financial pressure on suppliers. The net result may be more deals that will lead to a constellation of a few big companies surrounded by many niche players too small to be drawn into their maw.
“CRM software vendors are coming under increased pressure by their customers to innovate, such as in hot areas like social networking to provide a compelling reason for their buyers to invest in their products,” explains Kaila. “Yet many especially the small/midsized companies do not have the resources. Mergers may be the only way out for them.”
Other changes continue to roil the vendor landscape. William Band, who is Vice President and Principal Analyst with Forrester Research reports that midmarket-focused firms such as RightNow Technologies and Salesforce.com are moving into the enterprise space via their SaaS offerings. At the same time Microsoft is trying to exploit what he calls ‘its desktop applications hegemony advantage’ in large enterprises and promote its now-more-robust business applications to this sector.
Growing interest by customers in SaaS delivery and competition from pure-play vendors have led traditional CRM vendors have responded with their own offerings. Band cites Oracle On Demand and Microsoft Dynamics CRM Online solutions. Also Sage Software offers SageCRM as both an on-premise and SaaS solution; SugarCRM now offers a SaaS version of its open-source solution development model.
Meanwhile CRM vendors are moving aggressively to promote mobile sales solutions as extensions of their applications. Cross-market solution providers like Microsoft, Oracle, salesforce.com, and SAP offer solutions that can be used on handhelds as part of their CRM offerings. Yet Band says sales and IT leaders still are still perplexed by the complexities of the vastly different mobile sales options and architectures.
“CRM professionals will be particularly challenged to make the right CRM solution investment and/or application up-grade decisions during a period when every budget dollar will be closely scrutinized,” explains Band. “They will have to plot a course through a thicket of solutions that has become more difficult to navigate.”
More Versatility and Features
CRM solutions vendors are responding to changing enterprise needs by making their products more versatile and efficient. Some of their offerings are also targeted to specific markets.
Oracle’s Siebel CRM 8.1.1 provides industry-specific customer self-service for communications and for the public sector, as well as enhanced use of multi-channel applications with Siebel Chat and deeper, more comprehensive search capability. It also supports the entire customer loyalty program lifecycle by providing membership enrollment and management including loyalty points program accrual and redemption, member services, partner management and promotion management.
Sword Ciboodle’s platform has been optimized to enable faster deployment and customization, greater ease of use, and reduced bandwidth requirements. It also has new multi-language localization capabilities to permit greater outreach to worldwide and domestic multicultural markets.
Netsuite’s NetsuiteCRM has improved workflows for marketing and customer service. A two-step assisted workflow for group creation allows marketers to easily segment and slice their target audience for focused campaign execution.
A keyword search workflow is built directly into the user interface for case management to optimize the speed with which contact center agents can search for and find relevant content from the knowledge store to respond to a customer service inquiry. Agents can now add content for inclusion in the central knowledge store with one click from information already entered on the case for the response to customers, which greatly increases the efficiency of case handling and helps to build the wealth of knowledge for re-use.
CRM solutions configurability is becoming easier. KANA is developing a next-generation customer service solution with IBM, called Service Experience Management (SEM) that enables companies to configure KANA’s CRM solutions without involving web designers and IT staff. SEM is built on top of a SOA (service-oriented architecture) framework and SOA orchestration.
Customers are relying more on decisioning tools in their business planning, such as of what happens when they change pricepoints or availability on product/service demand, and on contact center volumes and costs. This enables them to help automate how best to respond to or resolve customer issues, most notably during contact center interactions. Based on historical customer interactions and other data points, a decisioning engine can provide the next-best action recommendation for contact center agents to take with customers.
Chordiant Software has developed a powerful new tool, the Chordiant Cx Visual Business Director (CxVBD) that enables enterprises to model and test customer interaction strategies while minimizing the risks, and costs, in live implementation. Utilizing a highly intuitive 3D interface, the CxVBD can test the impact of customer experience strategies on the bottom line enterprise-wide or in any part of the business. With this information firms can assess, modify, or take back to the drawing boards even the most complex multi-channel, multi-issue, inbound and outbound programs.
CRM solutions can help fully utilize the Internet as a marketing tool. Microsoft Dynamics CRM Online permits firms to create and manage search engine campaigns, research and bid on key words using search engine optimization, and capture sales leads from the Web. The solution can unify search engine intelligence with CRM analytics to optimize campaign performance. It can provide insight into marketing return on investment according to click-through and conversion rates. Salesforce.com’s latest edition allows customers to extend Salesforce CRM applications through the creation of interactive Web-to-lead forms, which will enable site visitors to signal interest in products and services via a Web site. Force.com sites will also enable the quick and easy creation of campaign landing pages integrated directly with Salesforce CRM.
One of the newest needs is how to tap into social networks to learn more about their customers so that they can more accurately predict their buying behavior and refine their lifetime values. Some CRM vendors are looking at ways of integrating to Facebook and LinkedIn to leverage customer insight and provide sales opportunity management functionality. SugarCRM has been rolling out ‘Cloud Connectors’ that enable business information services and networking sites to connect into the firm’s commercial open source CRM solution. There are at presstime Cloud Connectors for CrunchBase, Hoover’s, Jigsaw, and LinkedIn. SugarCRM Cloud Connectors connect via Web Services to leading third-party data service providers so that users can obtain the most up-to-date account and lead information directly within SugarCRM. “For example, an existing client may change jobs or roles, which potentially affects their buying authority and needs but the enterprise CRM system may not capture for weeks if not months," explains Kaila. "Yet this information may be available on LinkedIn or other third-party social networking websites and would provide salespeople with crucial information to follow-up with their customer.”
The following companies participated in the preparation of this article