VideoBy now, it's become a veritable pledge of allegiance for Corporate America: The customer is always right; the customer comes first; customer service is key; we exist for our customers. If there's a mission statement out there that doesn't exalt a company's commitment to its customers, it would probably fetch a good price on eBay. And this explosion in customer-centricity goes beyond mere lip service. In 1999, customer relationship management (CRM) software vendors took in some $12 billion in revenues, a figure expected to rise 40 percent annually, according to technology advisory firm Gartner Group Inc., in Stamford, Connecticut.
Software is not the entire story, of course. Companies are also adding staff in customer-facing positions. For instance, E-Trade made headlines in May when it announced it would augment its online financial advice with actual financial advisers; they even make house calls.
Still, as companies intensify their focus on the customer, most of their activity centers on trying to decide which software products to buy and how best to use them. Applications vendor Siebel Systems Inc., formed in 1993, is widely credited with galvanizing the growth of the CRM market, along with such rivals as Vantive Corp., Clarify Inc., and Trilogy Software Inc. Today, hundreds of vendors sell CRM products, including enterprise resource planning (ERP) makers Oracle, SAP, Baan, and Epicor. Companies can choose from hundreds of applications that address every facet of customer interaction (or "touch point"), from sales leads to E-commerce to call-center support, and everything in between.
But success requires more than simply writing a check for a piece of software. Choosing from among the expanding array of products may not be easy, but the true difficulty lies in balancing short-term data needs against long-term strategic goals. One school of thought holds that companies should focus on a critical "pain point" and buy whatever software product meets that immediate need. Proponents of this approach say it provides immediate ROI and leaves a company free to develop a broader CRM strategy down the road, when the technology has matured and the current spate of vendor acquisitions and alliances has quieted down.
The Case for Integration
Others maintain that the fundamental aim of CRM — to achieve a single or unified view of the customer — requires a range of software that is tightly integrated, both within the realm of CRM applications and with back-office technology. They warn that companies that follow the pain-point strategy risk being stuck with a grab bag of incompatible systems, leading to inferior customer service, or worse.
Lisa Harris is firmly in the integration camp. Senior vice president and CIO of Staff Leasing Inc., a Bradenton, Florida-based, $2.7 billion provider of human resources, payroll, benefits, and related services to small businesses, Harris says that 18 years of experience has shown her that "systems integration is the most difficult task an IT department has to take on. So when you can avoid it by buying a suite of integrated products, that's the way to go."
Staff Leasing opted for a full suite of Oracle CRM software, even though Harris readily admits that "in certain categories, there were better products out there." Since the company already used an Oracle database and various back-office applications, tapping the vendor for its CRM suite was a natural move. The company was able to get up and running in 100 days with software that handled everything from telephony to business analytics, reports Harris. " [Oracle] sold us on the dream of a seamless, Web-based family of products," she says. "And so far, we're happy."
Most of Staff Leasing's customer contact is via telephone. Clients call in for any number of reasons, from the simple (adding or removing an employee) to the complex (tax matters, legal questions about discrimination, or other hiring issues). The newest component of Oracle's CRM product suite allows Staff Leasing to script responses to these questions, ensuring that accurate information is dispensed quickly. In the past, phone reps often had to track down the information and get back to clients. If the client had a follow-up question, the process was repeated.
But Staff Leasing wants its CRM software to do more than provide automated responses. "By analyzing all these calls," Harris explains, "we can segment our business and provide better service — for example, by allocating resources more efficiently." Beyond that, the company can get a handle on just which parts of its business are most profitable. "We serve companies that have between 5 and 200 employees," Harris says. "That's a huge market, with only 2 percent penetration by HR outsourcers, so the opportunity is enormous, and CRM will help us understand just how to pursue it." An integrated set of CRM products that can capture customer concerns, respond to them, then analyze them for hidden sales potential ("up-sell" and "cross-sell" are the hottest bywords in CRM sales literature) was paramount for Staff Leasing.
There is evidence that big investments in integrated CRM suites can result in almost immediate payback. Harris says her company's multimillion-dollar Oracle installation should pay for itself in about 12 months, maybe less. On the other hand, analysts say no single vendor can provide everything a customer might need. Vastly different requirements from one company to another make that almost impossible. "CRM poses a huge integration challenge," says Bob Chatham, an analyst at Forrester Research Inc., in Cambridge, Massachusetts, "because unlike ERP, which is fairly standardized, each CRM implementation will reflect the personality of the corporation."
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