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CRM projects learn from mistakes of the past
More pragmatic choices following "sensational" failures

By Steve Ranger

Published: Wednesday 30 August 2006

Customer relationship management projects are enjoying a come-back, despite the failure of over-ambitious attempts in the past.

But users have learned their lessons from the mistakes and are adopting a more pragmatic approach, according to the research from Pierre Audoin Consultants (PAC).

Customers now look for more realistic contract terms, including the smaller scope of contracts, fewer functional requirements, and clear ROI calculations, as the result of "sensational failures" of previous CRM projects.

CRM on-demand is also proving attractive, particularly for small and medium-sized companies that want simple and user-friendly packages that are easy to maintain compared to comprehensive CRM systems.

Smaller businesses tend to have relatively standard business practices and so on-demand components meet their needs better, as does the lower total cost of ownership. PAC said the mid-market potential is particularly high in the UK in the short term, but the German market offers the highest potential in the longer term.

The CRM software supplier market in Western Europe is quite consolidated, and another consolidation wave is on the way, which will affect SMB software suppliers as well, the analysts predict. PAC said SAP and Siebel/Oracle are leading the market in the UK for large businesses, with Sage holding a strong position in the small and medium sized business market.

PAC said that in the long run the market will be made up of a few large companies on the one hand and very specialized niche players on the other - and that smaller companies will have to cooperate with systems integrators in the future to remain competitive.

Across Europe according to PAC, Oracle (including Siebel) was the biggest supplier by revenue at €514m, followed by SAP (€424m) then SAS (€260m) and Business Objects (€110m).