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The CRM Evolution

By Brendan B. Read,
Senior Contributing Editor

Customer relationship management (CRM) has been undergoing an evolution. The rationale for this method has expanded from reducing costs via targeting sales and retention resources on the most valuable customers to growing revenue by enhancing the customer experience. To accomplish this firms increasingly want flexible solutions that can generate results quickly but which have robust enhanced functionality to support mobile and multichannel users, including those on social networking sites.

“Although business is getting tight, our clients recognize the importance of customer relationships,” says Peter Grambs, vice president of customer solutions practice at Cognizant. “The last thing they can afford is to lose any of their current customers, and they’ve found investments in CRM paying off quite well in terms of customer retention, prospecting and acquiring new customers. They are turning to newer solutions, especially in the on-demand area. They’re looking at smaller budgets, but they are not lowering their expectations around functionality and the type of support services they expect.”

Not that cost control is out of the picture. Adam Sarner, a research director at Gartner sees organizations employing methods such as activity-based costing (ABC). ABC, according to Wikipedia assigns the cost of each activity to all products and services according to the actual consumption to focus resources. In this fashion companies can refine which channels are best to serve specific functions. For example with ABC retailers may find that they do not need to expand CRM capabilities to cover calls if they are a minor part of sales and service interactions.

“Organizations are finding a balance in CRM between strict cost-based approaches that has driven away some customers in the past and between providing all channels to all buyers which delivers the best customer experience overall but not optimal returns,” says Sarner.

A La Carte Not Table D’Hote

One of the most important moves CRM buyers and suppliers are making is toward more modular deployments and solutions (a la carte as opposed to table d’hôte), spread out over time on an as-needed basis instead of purchasing and only offering large packages.

Organizations can obtain specific sales force automation (SFA) solutions, support tools, or business process management applications such as for field service, complaint management and returns handling. They can also access them via the cloud either on-demand from suppliers (see sidebar) or from third parties (more about hosted contact centers in the April 2010 issue).

With this approach enterprises can buy only what they need. This helps them manage their budgets, spreading expenses out while seeing results and returns quickly: a few months instead of many months from install to go-live.

“Rather than go for another round of similar larger CRM projects what we are seeing is our clients taking a more cautious, wiser approach to implementations,” says Grambs. “They’re taking it a piece at a time, chunking it off, going and testing proof of concept, taking bite-size pieces to meet specific needs, and trialing cloud or hosted versions.

They’ve grown up and matured with the software. They’ve learned that “big bang” enterprise-wide implementations are just fraught with risk, like any other big software implementations.”

Not that older legacy solutions need to be ripped and replaced just because of their age. For the companies that have kept their applications up-to-date and on the current releases, they are fine for the time being.

“However, for those companies who are either on an older version, or are looking at some major business expansion, this is an opportunity to see what else is out there,” says Grambs.

To those ends SAP has gone modular and more enterprise-customer-friendly with its SAP Business Suite 7. It delivers more than 150 innovations via enhancement packages and synchronized releases for all applications: SAP CRM, SAP ERP, SAP Supplier Relationship Management, SAP Supply Chain Management and SAP Product Lifecycle Management plus industry-specific tools. These offerings have been designed to allow firms to select and deploy only the functionality they need without upgrading their core solutions.

SAP Business Suite 7 customers can also drive down their solutions’ ownership costs by leveraging harmonized user interfaces that present similar views across the applications. This feature delivers a coherent user experience that helps reduce user training effort and cost.

There are new tools that make installing and configuring CRM systems easier and less costly. LoopFuse’s CRM Integration Wizard, designed for SFA applications is a simple four-step process that walks users through in usually five minutes or less: with no need for IT staff or consultant assistance. The wizard validates each step of the way; users can initiate advanced settings with the interface or get additional support and information from contextual articles or readily available community-driven knowledgebase links.

Oracle has been making its CRM solutions more user-amenable while reducing fixed and operating costs. The Oracle VM Templates for Siebel CRM 8.1.1 deliver a quick start – in less than three hours – for a virtualized Siebel CRM, Oracle Database and Oracle Enterprise Linux environment. It also cuts the minimum server requirements from four to just one resulting in lower IT and energy costs plus reduced environmental impacts.

The VM Templates accomplish this by eliminating the need to separately install and set up the operating system, database and Siebel CRM applications. With this come new instances of application modules, application servers and Web servers can also be provisioned within minutes.

The one downside with modularity is the risk of poor integration between functions that can require costly system work. To avoid that Consona has in Consona Knowledge Driven Support Version 1.0 cemented its Onyx CRM, KNOVA KM and SupportSoft eService suites. The solution provides multichannel access and consistent knowledge from all sources delivered in a unified automatic workflow.

Consona Knowledge Driven Support saves hundreds of thousands of dollars compared with fully integrating two or more standalone tools,” says Tom Millay, general manager of Consona’s CRM products. “But unlike the knowledgebase ‘modules’ that are sold with CRM tools, which provides only a few database tables and keyword search, Consona Knowledge Driven Support provides a robust, fully functional knowledge management application that scales to the complexity of any business.”

Heftier Sales Tools

There is a growing focus within firms and solutions on improving sales productivity. To help increasingly untethered sales staff, who are relying more on their smart phones the Mobile Studio Editor in SugarCRM’s Sugar 5.5 increases SugarCRM optimization for wireless devices. It has pre-built layouts and views for modules designated for mobile use. Users can select which ones to view in the wireless client and tailor the layouts and fields for the wireless client from within the Sugar Studio application.

Sugar 5.5 also has a new dynamic team capability that enables users to collaborate across individuals and teams on complex projects resulting in quicker, more attractive deals and more attractive service. For example, a user could assign an executive sponsor, professional services team and customer advocate to a given account, rather than assigning the account to an individual sales representative or sales team.

Bernard Drost, chief technology officer, Innoveer Solutions has seen demand increases for SFA and for automated retention programs that use predictive analytics software. The need is more for the former because it looks toward the future while the latter is focused on the current situation i.e. lapsing customers.

“Sales in terms of companies getting ready for when the economy picks up,” says Drost. “With the slowdown companies also need to keep more of customers’ wallet share by retaining and cross-selling/upselling-them. Contact centers benefit when their systems indicate that a customer might lapse such as pulling money out from a bank account and they proactively call the customer to sign them up again. Such detection has become more affordable with CRM applications like Salesforce and SugarCRM that have predictive analytics that can be implemented now because their cost does not break the budget.”

The Social Channel

Social media is emerging as a new channel that CRM applications are beginning to address. These solutions are tapping into conversations that are taking place on Facebook, LinkedIn, and Twitter, inside customer communities and portals, and on product and service sites like TripAdvisor, listening and responding to customers and putting forward offers to them.

Salesforce.com has come out with Salesforce for Twitter where contact center agents can feed in tweets relevant to their firms back into their organizations, which then generate and tweet back their responses. This follows up on Salesforce for Facebook (News - Alert) released in 2008. Twitter is proving out to be a more interactive channel, says Salesforce, whereas Facebook is having the most success as a marketing tool.

Salesforce has also rolled out “Chatter,” which is an internal collaboration tool and a development platform for building social applications. Companies can bring Facebook and Twitter feeds and comment and tweet inside Chatter within context of different groups, such as one team on customer service and another on business development. Chatter also has APIs that tap into other web applications where there are conversations happening such as Expedia (News - Alert), TripAdvisor that can be fed in, monitored and responded to.

“People are already talking about you and your company,” Al Falcione, Salesforce.com (News - Alert)’s senior director of product marketing points out. “Therefore you need to tap into, respond, and join in that conversation.”

Knowing more your customers and following what is happening to them is key to CRM and is obtainable via social networking. InsideView and NetSuite (News - Alert) have partnered to offer InsideView for NetSuite which allows NetSuite CRM users to have instant access to targeted intelligence harvested from sources such as Twitter, LinkedIn, Facebook, Jigsaw and NetProspex. It also provides access to editorial including Thomson (News - Alert) Reuters and Capital IQ directly within NetSuite.

At the same time InsideView for Netsuite helps firms monitor customers’ and partners’ financial health to assess payment risk and improve collections processes. It also leverages social media buzz to gauge suppliers’ brand reputation, customer satisfaction, and service levels and assess supply chain risk.

There are CRM solutions that integrate social media with the other channels, and offered both on demand as well as via on-premise licenses. To illustrate Oracle (News - Alert) has integrated inQuira’s iConnect knowledge management product with its Oracle CRM on Demand solution; it was first offered with Oracle’s Siebel on-premise application. With this, customers can move seamlessly from self-service to live agent-assisted service. Agents receive overall view of customers’ issues and actions taken regardless of channel Web, voice, and social networking channels. They can then assist them via having access to knowledge available across the enterprise.

“The other channels will not go away, even if we want them too, not in this decade anyway,” explains Gartner (News - Alert)’s Sarner. “What happens is we learn which channels work best in which situation to facilitate company customer needs.”

There is still a learning curve with social media though. Among the issues is the amount of monitoring and support required and by whom. Grambs points out that there is with the social channel, unlike with others, no centralized monitoring; the masses have taken over. That makes many companies uncomfortable: they are used to controlling the discussion and the channels – and they are often unprepared for negative feedback that is rare but which does appear.

Cognizant has put together a “Sentiment Analyzer” for clients that they can program for corporate information and activities for both their firm and their competitors. The tool taps into various social media such as Facebook, and Twitter and monitors the discussions, allowing organizations to dig down and see what people are saying about their companies and their products, good, bad and the ugly to get a sense of the crowd.

“A year ago, if you asked a CIO what they were doing in the social CRM space, for the most part they said, ‘I don’t even know what that is,’” says Grambs. “Now you are seeing a lot of interest, and many initial forays into various aspects of social CRM. Now is the time to figure out where the opportunities are and how to gain value.”

Moving To The Cloud?

More CRM solutions are expanding, moving to or are being seeded to the cloud. Sage CRM Solutions is one of the latest suppliers to “fly.” It has been piloting a cloud computing edition of the Sage SalesLogix CRM suite for commercial availability this year.

The taking off for the cloud has been propelled by customer demand. The chief benefits are greater flexibility, quick implementation and results, and lower up-front outlays.

Cloud-based CRM solutions have been especially popular with small- and midsized-businesses for those reasons. This method empowers them with sales and service capabilities that enable them to compete effectively with larger firms as well as with each other. It is also ideal for short-term project testing and for discrete functionality such as sales force automation.

The challenge with cloud delivery lies with deploying it on a widespread basis for enterprises. Both suppliers and clients have to manage more integration between CRM solutions and the customers’ applications. There are large volumes of data that must be handled, including cleansing. Together they can make on-demand CRM as complicated as the on-premise applications.

“The on-demand applications can work fine for the large enterprises, and they may be somewhat quicker to implement, but for large companies, they are still a major undertaking and it will not happen overnight,” explains Peter Grambs, vice president of customer solutions practice, Cognizant.

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The following companies participated in the preparation of this article:

Cognizant
www.cognizant.com

Consona
www.consona.com

Innoveer (News - Alert) Solutions
www.innoveer.com

Netsuite
www.netsuite.com

Oracle
www.oracle.com

Salesforce.com
www.salesforce.com

SAP (News - Alert)
www.sap.com

SugarCRM
www.sugarcrm.com

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