1.
A Changing CRM Landscape
a) Differing CRM technologies are competing for clients, and that
competition should provide for
i) Differences in product pricing
ii) Improved system feature functionality
iii) Different CRM applications that support sales and marketing programs
i) On-demand CRM seeks to expand its penetration in small to mid-size companies to effectively serve large enterprise customers
ii) Enterprise software companies like Oracle and SAP focus on the on-demand product model
(1) In February 2006, SAP introduced SAP CRM on-demand solution(2) But old habits die hard, as SAP has hedged its bet by introducing their product as a hybrid, offering the product as both software and an on-demand service(3) Oracle/Siebel and Microsoft offer the same hybrid form
2.
Which System is Right?
a) The question of which technological approach is better is moot.
i)
There are particular
companies that will be perfectly suited for each CRM technology platform
ii)
The real question is what
technology will be most appropriate for the majority of customers
iii)
There are millions of
dollars at stake in this market share war
b) The market is
beginning to resolve this issue already, with the adoption of the “software as
a service,” or on-demand mentality, being adopted by market leaders Oracle and
SAP.
c) Consider how other industries are resolving the software as a service
issue.
i)
Consumer Research - previously entirely software based, has now embraced an on-demand model
(1)
ACNielsen’s new Category
Business Planner system is an on-demand tool sold as a subscription service
(2)
Spectra Marketing’s new
InfiNet is an on-demand customer segmentation tool
ii)
Corporate Web Sites – Once developed exclusively with software and as proprietary programs
are now evolving to a web portal environment
(1)
iCentera is a prime example
of this trend
iii)
The Appexchange is home to
400 different software as application to services
3.
On-Demand CRM Solutions
a) The benefits of on-demand solutions are
i)
Little or no IT involvement
ii)
No software upgrades to
purchase
iii)
System user-focused program
costs
iv)
CRM access anywhere you have
access to the Internet
b) On-demand solutions host a company’s database; their customers utilize
the system to manage their data and business remotely
c) The on-demand
CRM system requires virtually no support and is immediately usable once data is
uploaded.
i)
Except for initial on-line training for sales users
ii)
Week-long system administrator training
d) The system is
upgraded automatically as new generation software becomes available.
e) While there can
be system downtime when upgrades occur, there are usually no noticeable
differences in service levels.
f) The pricing for on-demand services is dependent upon the number of
“seats” utilized, or individual users, and can vary from $100 to $150 per
month.
i)
The benefit of this pricing
model is that it can be turned off and on as needed
g) The service is hosted off-site and accessed by the Internet.
i)
The system is available
anywhere a connection to the Web is possible
ii)
On-demand systems also offer
customers the ability to have continuous access to on-demand systems through
Blackberrys or other PDAs
4.
Server-Based CRM Systems
a) One important benefit of server-based CRM applications today is the
ability to customize the program for their users.
i)
Server-based systems have
been the historical leaders in CRM
(1)
User of these systems are:
IBM, Ford, Boeing, Honeywell, MasterCard, Caesar’s Palace
ii)
Future server-based systems
will offer more robust functionality, superior analytics, and graphics
iii)
Server-based systems are
also sold as highly customized tools for a particular industry and integrated
into the ERP or the operational systems of the company
b) These software
applications are expensive.
c) The software
expense is just the tip of the iceberg when considering the cost of the entire
implementation project.
i)
The total cost of a server-based system can easily
reach $4-$8 million
d) The major benefit of server-based CRM applications is their robust
functionality
i)
The systems are customized
to their particular industry and then to the user. The customization provides
real benefit to all users, as well as customers
5.
Data Security Comparison
a) Neither on-demand nor server-based systems have a distinct advantage in
security.
i)
Server-based systems
(1)
Server-based systems rely on
system design, but more importantly on their IT department
(2)
There is a real difference
in the degree of vigilance that companies take in protecting their data
b) Neither on-demand, nor server-based systems have a distinct advantage in
security.
i)
On-Demand systems
(1)
CRM security of customer
data is arguably the most important concern for software as a service
(2)
Not all of the hosting
companies will take the same security precautions, and like server-based
applications there will be variability in performance company to company
(3)
However, without providing a
secure environment, this business will fail
c) We think that in the matter of data security, companies should certainly
make decisions based on
i)
A systems security design
ii)
The dedication and expertise
of the IT group supporting CRM
iii)
The dedication to customer
service of the on-demand solution
6.
Future Applications of CRM
a) Companies will manage customer relationships more carefully and with a
different combination of resources because
i)
There will be fewer people
to cover accounts and for those that do the process will have to be different
ii)
Companies will invest more
heavily in technologies and sales support services, changing sales coverage
approaches and marketing communications
b) In the future, we need to use technology to improve employee
productivity.
c) CRM will be expected to offer us the foundation for these anticipated
activities.
d) System usage should increase because
i)
Technology provides us more
user friendly systems
ii)
The people using the system
are typically younger and more accepting of technology
e) In the future, independent organizations will develop more of the
on-demand content for CRM systems.
i)
These new applications will
supply companies with more functionality
ii)
These products will be
integrated with the CRM engine so that results will be automatically added to
their customer databases
(1)
This process is already at
work. Salesforce.com has already developed a site called the Appexchange
7.
The Near Future
a) In order to predict the near future of CRM technology, let us review how
corporate leaders are investing.
i)
Over the past two years, we
have seen a significant industry consolidation
ii)
Acquisitions have
established Oracle, SAP, and SAS as the current titans
iii)
Where have these giants been
focusing their attention?
b) In order to predict the near future of CRM technology, let us review how
corporate leaders are investing.
i)
Over the past two years, we
have seen a significant industry consolidation
ii)
Acquisitions have
established Oracle, SAP, and SAS as the current titans
iii)
Where have these giants been
focusing their attention?
8.
A Look at Users
a) If we believe what companies publish on their web sites then:
i)
Oracle claims 3,700,000
customers
ii)
SAP claims 3,000,000
customers
iii)
In just five years,
salesforce.com claims 500,000 customers
b) The market that salesforce.com has cultivated is with small to
medium-sized businesses, and according to experts in its infancy
i)
That market has attracted
the giants
c) According to an
article by Kate DuBose Tomassi, “The market is ready to embrace the
easier-to-use on-demand model.”
i)
That means that as on-demand providers continue to
build their business with small and medium-size customers, they may also
consider expanding with enterprise applications
d) Additionally, the largest corporations are already customers of
enterprise CRM solution.
i)
These complex solutions have
created the usage rate problems confronting CRM today
ii)
Oracle and SAP look to
the on-demand market as representing the
future for significant growth in CRM
iii)
Does on-demand have the
potential long term to impact their share of the enterprise market negatively?
e) Time will tell
It’s the best time to make some plans for the future and it is time to be happy. I’ve read this post and if I could I want to suggest you few interesting things or suggestions.
ReplyDeleteCRM Software In India
CRM Software In Chennai