Quocirca's Straight Talking: Is CRM still dead?

One of the more hyped technologies in recent years, CRM is going through some changes. Quocirca's Clive Longbottom describes his idea of a CRM system that would be a real help to the business - but it won't replace sorting out your corporate ethos.

A few years ago, I wrote an article saying the CRM application should die before being born - that CRM should be a corporate ethos and that a decision to throw money at a monolithic application in the hope of 'doing' CRM was a guaranteed loser.

To my mind, the approach to CRM had to be based around process flows, and providing an integrated set of services that could facilitate these flows. At the time, there were plenty of relatively successful CRM vendors around - Navision, Saleslogix, Siebel and Vantive spring to mind.

No amount of playing with technology will turn a poor CRM ethos into a good one. If you upset 100 customers per day with bad technology, good technology will only give you the efficiency gains to help you to upset 1,000 per day instead.

With Siebel finally biting the dust last week, and the rest having done so over the last few years, it does look like CRM has failed to live up to the hype generated by the vendor community. Indeed, when you look at how some companies (e.g. Vantive) have moved from company to company via successive acquisitions, it begins to look like being a CRM vendor provides a kiss of death to those companies that subsequently get involved.

So what is the situation now? Well, there are still a few independent CRM application vendors around - Onyx and Pivotal are still around, having reinvented themselves to try and gain financial stability. Guaranteed success for these vendors is by no means a given - both companies are still not exactly safe, although the deep pockets of CDC behind Pivotal and the move of Onyx into a process-focused model should help. FrontRange and Maximizer continue to produce solutions aimed at the SME/mid-market, and have pulled themselves out of being seen as just multi-user personal information management systems.

Alongside this activity, a new breed of hosted solutions have started to show promise - from open source solutions such as SugarCRM, to solutions that started life being sales force automation focused like Saleforce.com, to full-function solutions such as RightNow. Not having to go through a major implementation process means smaller organisations can take advantage of these solutions with minimum fuss, upfront cost and the need for in-house support - and can gain faster time to capability, in many cases this being measured in minutes, rather than months.

Activity in the market shows that CRM itself is not dead but the need is changing as the customers grow up. The big players are now gearing up to fight for the market again but with service-based architecture solutions, rather than monoliths. These solutions are far easier to adapt to various business processes - and to the changing relationship with customers.

To this end, Oracle and SAP are facing up to each other for the hearts and minds of the very large organisations, while Microsoft Dynamics (the new name for Microsoft Business Solutions) faces off against the remaining CRM vendors in the small and mid-sized businesses market and the hosted solution service providers.

However, all of these still only provide part of the required solution. On top of all this, businesses needs tools to help with multi-channel customers - those who insist on dealing with a business via the web, the phone, email and in person.

Solutions are changing to include best-of-breed offerings from those who can provide us with integrated communications such as telephony (increasingly via VoIP), email response systems, instant messaging logging and auditing tools and web session sharing solutions. Examples in this space include eGain and Kana - both companies started with email management tools but have expanded their offerings to cover multi-channel issues.

The overriding need as we go forward is to be flexible and inclusive. The monolithic approach of Siebel rapidly became constraining rather than facilitating, and this must not be allowed to happen again. The emergence of realistic approaches to service-based architectures (SOAs) should help in this area - but will require changes from both the vendor and user communities.

Vendors need to not only change the way applications are written but must ensure standards are driven forwards to meet customers' ongoing needs - around such areas as the registry for services. Users need to start to move towards a SOA-capable environment, looking towards service reuse, loose coupling of services and service virtualisation.

Then, we can move towards a CRM solution that is supportive of the business. We need a solution where if, for instance, a customer gets in touch via the web, the service that is responsible for that contact mechanism deals with it but acts against the same data as any other contact method - whether this be the IM service, the telephony service, or even the electronic point of sales service.

For those who go down this route, process-driven CRM may at last meet the expectations unfulfilled from the 1990s. For those who stick with existing monolithic approaches, the constraints may make them slow to respond to market needs and open to compliance problems due to multiple data stores.

For the hosted solutions, it will become more important that they offer their solutions as services - then the larger end of the mid-market and the customer-facing departments of large companies may well see that this extra level of flexibility provides a means of pulling away from the competition.

But - and it's a big but - CRM will still remain a corporate ethos, and no amount of playing with technology will turn a poor CRM ethos into a good one. If you upset 100 customers per day with bad technology, good technology will only give you the efficiency gains to help you to upset 1,000 per day instead.

Get the ethos sorted out - let this define your base business processes. Then decompose these and map them onto technical functions - and plug the holes where required with new functional solutions. Just please don't rely on buying a CRM application alone.