Technology

Spinning a New Web

Customer relationship management software meets Web 2.0.
Cesar BacaniJuly 9, 2008

Sensing that the “software-as-
a-service” pitch is losing its zing, customer
relationship management (CRM) vendors have
discovered a new angle: Web 2.0.

The major CRM vendors, including Oracle,
SAP, Salesforce.com, and Microsoft, are adding
on a host of features designed to allow sales and
marketing people to work together in new ways
and to discover better ways to sell to Internet
users. In May, Oracle embarked on an aggressive
push in Asia with the launch of Oracle
Siebel CRM On Demand Release 15. The software
focuses on social networking and other
Web 2.0 features, which figure prominently in the
industry’s latest buzzword, “social CRM.”

Not to be outdone, Salesforce.com is touting
its own additions. “We were one of the pioneers
of Web 2.0,” says Doug Farber, vice president for
operations, Asia Pacific. “Our Web 2.0 capabilities
such as mash-ups and windowing have always been
the key to our success.” Salesforce has teamed up
with Google and launched an enhancement it calls
Salesforce for Google Apps.

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It all sounds hopelessly techie, but behind the
jargon lies a set of powerful tools, say analysts. The
term “Web 2.0” has various definitions, but at heart
it means using the unique features of the Internet to
collaborate, interact socially, and aggregate information
in new ways (think of social networking sites
such as MySpace and Facebook), as opposed to the
read-only characteristics of Web 1.0.

Blogs and Wikis

In theory, the new features allow CRM users to put
their thoughts in diary entries and hold a running
conversation with others within the CRM system
(blogs), and create marketing documents that other
CRM users can enrich with their own ideas and
experiences (wikis). Users can subscribe to online
news, podcasts, and other Internet resources (RSS),
combine them (mash-ups), and publish them across
the CRM network.

Web 2.0 tools also give marketers the information
they need to manage relationships with online
consumers, whose numbers are growing
daily. William Band, a vice president and
principal analyst at Forrester Research,
argues that there’s an opportunity for
companies to spread their message to
customers through blogs and social
networks like MySpace and Facebook.
For example, with RSS feeds CRM users
can track what influential bloggers are
saying about the company and its products.
They can respond and air the company’s
side, and use the comments to
fine-tune marketing campaigns. A datamining
program can trawl the Internet
for mentions of the company, providing
aggregated feedback for marketing and
sales drives.

First Steps

Among the major CRM vendors, Band
says Oracle and its Release 15 are in the
vanguard of social CRM, at least for now.
“I’ve talked to different vendors quite a
bit lately and most are just starting to
talk about it,” he says. “Oracle CRM On
Demand is the one application where the
vendor is taking steps to add social networking
capabilities to its offering.”

Release 15 does have a new look. The
front-end has been redesigned as colorful,
content-rich web pages, with various
windows for real-time news feeds, updates
from social networking sites, and blogs,
videos, and an internal instant messaging
system. Simon Banks, general manager,
CRM on Demand, Oracle Asia Pacific,
says that the previous version, Release 14,
could pull together information streams
from various websites and layer them to
create one integrated chart, for example,
but users needed to customize these themselves.
“What we’ve done with R-15 is prebuild
applications on top of Web 2.0 standards
and tools and technologies,” he says.

Consider the pre-built Messaging Center.
This allows users to exchange instant
messages within the CRM system and
attach sticky notes and other documents.
“We know that unstructured information
about customers or prospects typically
doesn’t get captured by a CRM system,
staying instead in a sales person’s head or
getting written down somewhere and getting
lost,” says Banks. Users can attach the
information to the file they keep about the
particular company or customer, which
may also be accessed by others within the
CRM system.

The other pre-built windows allow
users to stream real-time information
into their home pages, including stock
quotes, updates from social networking
sites like LinkedIn, and videos. The
streamed data can be copied and appended
to customer profiles, disseminated to
other salespeople as needed, and stored
in a customer data warehouse. “Customers
have a comprehensive analytical
environment,” says Banks. “It’s not just
snapshot information — it’s trend information,
it’s movement and opportunities
over time that you can only get with
data-warehouse type capabilities.”

Google in the Mix

Both Salesforce.com and SAP, however,
say that all these Web 2.0 features, and
more, are already available in their respective
CRM products. They just don’t make
too much noise about them. “We now have
an opportunity with Google Apps, so you
can go into Salesforce.com and you’ll have
access to all the Google Apps capabilities,
whether email, chat, spreadsheets, Word
documents, blogs, networking sites, and all
those kinds of things that are standard on
the consumer Web,” says Salesforce.com’s
Farber. The enhancement, dubbed Salesforce
for Google Apps, was made available
to Salesforce.com subscribers in April at
no additional cost.

But unlike the Oracle Siebel CRM
product, which is automatically upgraded
to the latest release for all subscribers,
Salesforce.com users have to sign up for
Salesforce for Google Apps, and not everyone
is doing so. This approach gives clients
the flexibility to adopt Web 2.0 technologies
for CRM systems at their own pace,
and to decide whether they need to adopt
social CRM at all. On the other hand, clients
that could potentially gain a lot from
Google Apps may not switch over out of
inertia, ignorance, or for other reasons.

The Google partnership is consistent
with Salesforce’s business model, which
is to let third parties develop applications
to extend the capabilities of its products.
Such applications are typically available
for subscription — at additional cost —
on AppExchange, Salesforce’s virtual
market that currently offers more than
800 business applications. Among them:
Web data mining, real-time sales dashboards,
and analytics, including Cognos
8 Business Intelligence.

Applications outside of AppExchange
can be integrated into Salesforce.com, too.
One example is SAS Customer Intelligence,
a set of sales and marketing analytics modules
sold by specialist SAS Institute. “We
can also sit on top of other CRM systems
by major vendors such as Oracle and SAP,”
says Luke Soon, principal, customer intelligence,
Asia Pacific. SAS focuses on predictive
analytics and does not have an endto-
end CRM offering like the three CRM
vendors. Some SAS clients, says Soon, are
choosing to use the SAS customer intelligence
modules, which include Web analytics,
digital marketing, and marketing
performance management, to supplement
or even replace the analytics engines inside
the CRM system they have deployed.

Affordable Experiment

Unlike Salesforce.com, SAP puts together
all parts of the CRM environment for
the user from products it has developed
on its own or acquired, an approach
similar to Oracle’s. This gives the vendors
more control over the quality of the
user experience. Salesforce.com does
some screening of the applications sold
on AppExchange, but subscribers sign
up for third-party products, including
Google Apps, at their own risk.

SAP, which is better known as an
enterprise resource planning (ERP) vendor,
launched a CRM On Demand Solution
in 2006. “Both our on-demand and
on-premise CRM are fully supported by
Web 2.0 technology,” says Rob Delnoij,
regional CRM solution principal, SAP
Asia Pacific, including Japan. The focus,
however, appears to be on integration.
Last year, SAP launched Business by
Design, which puts together CRM and
ERP functionalities for delivery as software-
as-a-service.

So where does all this leave the Asian
enterprise? Fortunately for CFOs, experimenting
with software-as-a-service
CRM is not too costly. Subscriptions
start at US$65 per user per month for
the top-of-the-line enterprise edition.
Salesforce.com’s Group Edition, which
has narrower capabilities, can be priced
as low as US$9 per user (minimum five
users) on special promotion terms.

Beyond the cost factor, there are
other considerations, such as the vendor’s
capability to extend Asian language
support, set up Asia-based servers to
ensure rapid loading times, and deploy
robust security systems. The major vendors
are making progress in these areas.
Salesforce.com, for example, is building a
data center in Singapore that will go live
at the end of the year. Oracle and SAP
have extensive customer-service experience
and in-house and outsourced staff
across Asia, which they are leveraging for
their CRM on-demand services.

Is it too early for companies in Asia to
move to social CRM, given that just 14 percent
of the region’s 4.1 billion people are
online? For those targeting middle-class
and affluent households, the time may be
right. Internet use in some of Asia’s richest
markets is already quite high — 71 percent
in Korea, for example, 70 percent in Hong
Kong, 69 percent in Japan, 67 percent in
Taiwan, 60 percent in Malaysia, and 53
percent in Singapore. Some 210 million
people in China are online, too.

The new tools may be useful inside of
companies, too. “The impact of Web 2.0
within the company is as big as or bigger
than that outside the company,” Oracle’s
Banks argues. “You can’t collaborate on
email or in a traditional CRM application
because it’s hierarchical — you report to
someone who reports to someone else.
At the top you can see everything, but you
have trouble seeing things across.” In traditional
CRM, he adds, salespeople must
be forced to input data — and even then,
some keep information about their best
contacts and prospects to themselves.

“With some of the social CRM applications
you’ll start to see from us,” Banks
promises, “salespeople will be able to correct
their own sales campaigns and then
publish those campaigns to their peers. It’s
almost like a YouTube within the enterprise,
where people in the company can
start to collaborate properly.” The theory
is that salespeople will input even their best
contacts because they will see how having
complete information helps them and the
entire company. And if they don’t, some
social CRM applications in the pipeline can
automatically mine emails and other company
systems for leads and prospects. Independent
vendors like Visible Path already
offer this service.

“The assumption has been that companies
know what the customer wants and
how best to deliver it,” says Steven Davidson,
Asia Pacific leader at IBM’s Global
Business Services unit. “That is beginning
to change as companies realize that the
customer is someone they have a two-way
communication with.” The earlier companies
integrate Web 2.0 technologies
into their CRM systems, the faster they
can get that conversation going.

Cesar Bacani is a contributing editor for CFO Asia.

Click here to see a list of CRM software-as-a-service offerings by major vendors.