How to tame CRM is a challenge for businesses, reports Angus Kidman

Published in AustralianIT, June 24 2003

KEEPING track of how your company relates to existing and potential customers would seem like a business fundamental.

However, bad experiences with customer relationship management systems have left many potential users of such software very wary.

"In the current business environment, CRM is being treated with a high level of cynicism, and the market will move modestly," says Bharati Poorabia, IDC Australia enterprise applications senior analyst.

"There is certainly a serious lack of customer trust," RightNow Technologies Asia-Pacific managing director Andrew Templer says.

"Many business customers have spent large amounts of money on CRM projects that didn't deliver what they promised."

Why has CRM so often performed so badly?

"Most CRM systems have failed because most customer data cannot be integrated properly to create a single view of a customer," says Steve Hitchman, managing director of information consultancy MIP. "This is a hidden gotcha with all CRM systems."

"There is certainly a stigma attached to the label CRM, and this can be linked to many botched high-profile projects," Oracle Australia service industries director Brett Kennedy says.

"However, a more compelling reason for the label being tarnished is the failure of many CRM projects to deliver a return on investment."

Some blame the media for highlighting problems with early-stage CRM.

"Generally it is the high-profile failures that get the most notice," says John Thompson, managing director of e-CRM provider Point Australia.

A lack of management involvement is also a key factor. "In the past, CRM has sometimes been tackled as a lesser IT project than a full-blown ERP project, and may not have been given the full support of the organisation," PeopleSoft industry and product marketing director Ray Kloss says.

However, there have been some benefits from botched projects.

"If companies now take a more holistic view of the way they communicate with customers, that process will have been a good learning experience," BT Asia-Pacific CRM contact centre solutions director Peter Elsey says.

The market remains interested. A survey of 50 Australian senior executives by Teradata earlier this year found that CRM ranked first in technology investment priorities, with half planning further spending.

"CRM software is a credible business investment and is being budgeted for," ACCPAC Australia senior vice-president Daithi Holden says.

"Most companies still have CRM on their radar as they know it will bring benefits, but the unknown cost of implementation is still daunting to many," chief executive of CRM integrator Integ Ian Poole says.

"A single view of customers, with management of interactions and activities, will remain a desirable ideal," says Jon Piercey, customer manager for business intelligence specialist Information Builders.

"The fact that CRM projects have had such complications does not detract from this desirability."

What has changed is the way CRM is approached.

"The market now understands that CRM software is only a piece of the solution rather than the single fix for all customer relationship management issues," Genesys Laboratories Australia managing director James Brooks says.

"It is now not uncommon for the chief executive to drive the CRM strategy, whereas before it was mostly the domain of the IT department," says PeopleSoft's Kloss.

That in itself requires changes in the attitude of CRM software developers.

"As CRM spending has been pushed away from the central control of IT towards business units, there is less patience for software project complications," says RightNow's Templer.

Many businesses are avoiding the CRM label altogether.

"In 2003, we don't call it CRM, becomes the new refrain for project managers tired of defending past industry exuberance," analyst META Group noted in a recent commentary on the market.

Solutions are also becoming more industry-specific.

"There will be a move away from broad CRM solutions to those tailored more specifically to vertical industry requirements," says Greg Mills, chief operations officer for CRM software developer Cincom.

Many CRM users are shifting their attention from technology to process issues.

"CRM cannot be successful if it is viewed solely as technology," SAP Australia-New Zealand CRM head Laurence Buchanan says. "It is undoubtedly an elephant that must be eaten in bite-sized chunks."