Some interesting news from analysts…
Big changes are coming to the CRM market this year, with significant financial, strategic and technical implications. According to analysts ROI and justifications will be a major objective for customers in 2009. William Band, analyst from Forrester Research list 6 major objectives:
- 1. Social Networking
- 2. Focus on value
- 3. Financial justifications and ROI
- 4. Risk control
- 5. Maximise value from customer data
- 6. Licence management
More than ever customers will require financial justifications for any investment.
Social networking, ROI, pricing among ‘09 CRM trends By Chris Kanaracus , IDG News Service , 01/07/2009
http://www.networkworld.com/news/2009/010709-social-networking-roi-pricing-among.html
Big changes are coming to the CRM (customer relationship management) application market this year, with significant financial, strategic and technical implications for customers, say analysts who track the space. Large vendors like SAP and Oracle are “pushing hard” for customers to upgrade their CRM applications this year, said Forrester Research analyst William Band. “This is forcing a lot of organizations to make a decision.”
Customers who do wish to proceed with an upgrade will have a tougher time getting approval than in the past, given the chill the economy has placed on all IT spending.
Therefore, customers must prepare a more stringent business case for CRM — something that didn’t necessarily happen much in the market’s earlier days, according to Band.
“In the late 90s, early 2000s, the CRM space was very buoyant. A lot of people bought into the Tom Siebel vision,” Band said, referring to the former CEO and chairman of Siebel Systems, which has since been acquired by Oracle. “They invested in more of a promise than some really good due diligence.”
Companies may also need to work on other technical fronts this year to gain the most benefit from their CRM implementation, Band wrote in a recent report.
“Due to multiple instances of software, disparate enterprise resource planning (ERP) systems, and poor data integration,” CRM applications can end up providing “a fragmented view of the customer,” he wrote. Forrester expects that this year, “CRM professionals will continue to focus intently on how enterprises collect, distribute, and use data.”
In terms of CRM product functionality, look for last year’s trend toward “social CRM” — marked by collaboration tools like wikis and blogs within the CRM experience — to morph into “cloud CRM,” wherein CRM applications connect to external social-networking sites like Facebook or LinkedIn, as well as other Web sources, according to 451 Group analyst China Martens.
CRM vendors will also try to boost customer retention by adding new features, Martens said. This need is pressing in the CRM space, where products’ core capabilities don’t vary much. Salesforce has already made this type of move, introducing a product for content management, for instance.
CRM applications will also become more modular, according to Martens.
“Oracle has started down this path already and many of its peers are looking to emulate its example,” she said, referring to last year’s release of three Oracle SaaS CRM products — Sales Prospector, Sales Campaigns and Sales Library — as well as its CRM
Martens is expecting that customers will demand more clarity on pricing from vendors, especially ones with SaaS (software as a service) products. Vendors will also experiment with unique pricing models, such as connecting the application’s cost with a customer’s profitability, and more companies may go with open-source products like SugarCRM in an effort to reduce costs, she predicted.
Price cuts could also be on order from the likes of NetSuite and Salesforce, but expect a number of skirmishes among rivals, rather than “an all-out pricing war,” she said.
Dec. 09, 2008, Six Ways to Unlock Value From CRM in a Down Economy By William Band, Forrester Research
http://www.customerthink.com/blog/six_ways_unlock_value_crm_down_economy
In light of the recent sudden and dramatic deterioration of the economic climate, what are the key trends driving customer management strategies and the adoption of CRM technologies now? Locking in customer loyalty through deeper engagement and differentiated experiences will continue as critical priorities, but six key trends will drive CRM decision-making in 2009.
Trend 1: The Emergence Of The Social Consumer
Social technology adoption has increased tremendously during the past 12 months. Three in four US online adults now use social tools to connect with each other compared with 56% in 2007. This new trend – which goes by a number of names – CRM 2.0, Social CRM, and Collaborative CRM – is forcing CRM professionals to look for innovative ways to engage with these new “social consumers.” In 2009, CRM leaders will be looking to enrich the customer experience through community-based interactions, and architecting solutions that are flexible and foster strong intra-organization and customer collaboration.
Trend 2: The Imperative That CRM Strategies Deliver Business Value
I recently conducted a survey with business and IT managers about the pitfalls that trip-up CRM projects. I examined 133 separate projects. Nearly 20% of those surveyed reported troubles with their CRM strategy. Problems cited were: poor deployment approaches (40%); difficulties in defining business requirements (23%); inability to gain organizational alignment on objectives (18%); and concerns about cost (18%). During tough economic times, CRM professionals will be retooling their strategies with a focus on spotlighting the biggest opportunities for quick wins.
Trend 3: The Requirement To Fully Cost-Justify CRM Investments
CRM professionals tell me that during this economic downturn they need bullet-proof financial arguments to get funding for their projects. In 2009, every business case must answer four critical questions: What are the business benefits? What is the impact on IT or project costs? Is future flexibility increased or decreased? How will risks be mitigated? CRM vendors will be challenged more than ever to provide clear and specific data about the business value their solution can deliver.
Trend 4: The Necessity To Reduce The Risk Of CRM Initiatives
CRM professionals cannot afford failed CRM projects, particularly in down markets when business survival may be at stake. There are plenty of risks to worry about. In the survey of CRM professionals mentioned above, over 200 individual problems were reported. Thirty-three percent of the problems related to technology, 27% to business processes, 22% to people, and 18% to CRM strategy. In 2009, “risk-proofing” CRM projects will near the top of the priority list for CRM professionals.
Trend 5: The Need To Get More Value From Customer Information
CRM professionals tell me that poor customer data management is one of the biggest barriers to getting value from their CRM programs. In a recent Forrester survey of over 1,000 North American and European decision-makers, 44% said that a master data management initiative was a critical or important priority for 2008. But, the right approach to customer data management is elusive. In 2009, I expect CRM professionals will continue to focus intently on how enterprises collect, distribute, and use customer data to create value.
Trend 6: The Battle to Redefine Vendor Pricing And Licensing Arrangements
Forrester interviewed 25 clients of leading enterprise applications providers and surveyed 215 business process and applications professionals about their software licensing and pricing experiences. According to these users, software licensing and pricing continues to be marred by complexity, soaring maintenance costs, and a lack of flexibility and alignment with business goals. With resources increasingly scarce, but key vendors pushing hard for up-grades for their products, CRM professionals will have to sharpen their negotiating skills to get more value from their vendor relationships in the coming year.
Bill Band is a vice president and principal analyst at Forrester Research, where he serves business process and applications professionals. He is a leading expert on customer relationship management topics, having helped organizations define customer-driven strategies to achieve distinction in the marketplace for his entire career.
Additional links:
- http://searchcrm.techtarget.com/news/article/0,289142,sid11_gci1343789,00.html#
- http://blogs.zdnet.com/crm/?p=104
- http://blogs.zdnet.com/crm/?p=105&tag=rbxccnbzd1
- http://blogs.zdnet.com/crm/?p=106&tag=rbxccnbzd1
- http://www.crmlandmark.com/crmlabsindustrytrends.htm