CIO Wish List for 2003

At first glance, the dynamics operating today in the CRM industry — flat sales, tight budgets, vendors cannibalizing each other’s market share — seem to create a CIO’s dream scenario. Never before have sellers been so sensitive to buyers’ demands and needs for product development.

Whether that responsiveness is a byproduct of a faltering economy or simply a sign of maturation in a software niche that has come into its own is hard to say.

But many do not see the supposed silver lining in the economic clouds. If they had their way, CRM software and the process of buying and implementing it — with all its attendant headaches — would be vastly different from what is currently available.

While a major transformation of the industry is unlikely in the near term, it is always nice to dream about the ideal CRM landscape. In that spirit, CRM Buyer Magazine has put together a CIO’s wish list for buying CRM software in 2003.

1. Make It Easier To Use

CRM software is notoriously cumbersome, hence the difficulty in coaxing end users to adopt it. The usability issue has been a key ingredient in the failure of many CRM projects.

Some common offenders, according to a report from Forrester: In one CRM application, users must select “execute” from the menu options to view an item. In another, a pull-down list control does not open a list – it pops up a window. In yet another, “apply” and “submit” are used interchangeably to denote the same action.

Little thought is given to how these tasks fit together in a larger context or how they would be executed in someone’s real-world job. Indeed, vendors know their shoddy user interfaces are a major problem. “But only a handful are brave enough to take steps to address it,” Forrester research analyst Harley Manning told CRM Buyer.

To be sure, some vendors have been responding to user complaints. On Monday, to cite one example, Salesnet announced several upgrades to its online CRM product, including new usability and reporting functions. One feature allows users “to save their sales data and later run comparison reports to see changes/trends over time in the sales pipeline/forecast,” the company said. “This resonates with any sales manager who has, at one point in time or another, had to sit down and — line item by line item — try to distinguish the difference between this and last week’s, month’s, et cetera, reports.”

However, as the concept of CRM changes, it may prove difficult for vendors to keep up in this area. Simply put, the concept of CRM as a stand-alone application is fading. Now the focus is on business processes, which naturally cross application lines.

2. Hold the Hype, Please

For all the publicity surrounding early CRM project failures, the hype still lives on. “I think the biggest item on any CRM buyer’s wish list would be stable software that really offers the functionality that the vendors say it has during the sell cycle,” Gartner research director Beth Eisenfeld told CRM Buyer. “There is still some hype and overselling of capabilities.”

At this point, buyers should be well aware of this propensity, Eisenfeld said, but oftentimes, they are not. The vendors are highly skilled at playing the sales presentation game — creating an environment that encourages users to home in on the feature they really want and disregard potential warning signs about where the application might fall short.

3. Better Integration. Period.

Though integration has become a mantra for enterprise software users, this is an area that really is getter better all the time. Still, it can be such a problem for companies that it bears mentioning. “Many C-level executives today are trying to get a clean, easy answer on this issue … and there still isn’t one,” AMR Research senior analyst Louis Columbus told CRM Buyer. Seamless integration is still largely a mythical ideal, he said. The reality usually involves trade-offs and patchwork solutions.

The good news is that “we are starting to see some vendors, such as Siebel, build integration solutions into business processes and applications,” Eisenfeld said.

Other vendors, such as SAP, PeopleSoft and Oracle, also have begun offering application-platform suites that include a middleware platform, an integration broker, an application server, a portal product and perhaps other features, Gartner research analyst Yefim Natis told CRM Buyer. Also, independent integration vendors, such as Tibco and webMethods, have been beefing up their functionality as well. However, many of the latest generation of products are still in the infant stages of development.

4. Clear Pricing Methodologies

Buyers may have more room to negotiate, but savvy vendors still are getting the upper hand. They view pricing based on such traditional measures as concurrent users or named users as child’s play.

Nowadays pricing is based on “revenue, order lines, payroll records, cost of goods sold, total cost of goods sold, number of servers, value of transactions … the list just goes on,” Lenny Riley, director of business services in AMR Research’s contract negotiating practice, told CRM Buyer.

Vendors also have made it a practice to bundle certain applications together, which makes it difficult — if not impossible — for buyers to make apple-to-apple comparisons.

Basing pricing on revenue is particularly insidious — a common practice of the ERP (enterprise resource planning) vendors that market CRM suites, Eisenfeld warned. “It’s fine when you are growing by leaps and bounds, but what happens when your company starts to downsize? You think the vendor will give [you] a break? Guess again!”

5. Better Understanding of the SI

Actually, the heavy focus on CRM vendors is misplaced. “Most people spend 80 percent of their time choosing a software, and 20 percent choosing the systems integrator (SI),” Eisenfeld noted. “In reality, those figures should be reversed.” It is easy to see why: A poorly chosen CRM application could put a hex on a successful project. A poorly constructed SI relationship absolutely guarantees a project will not succeed.

Pricing also can prove to be problematic with SIs, AMR’s Riley added. “On the implementation side, the breadth of complexities you have to consider is tenfold,” he said.

Despite the horror stories one hears about adversarial relationships between SIs and their clients, most customers are fairly pleased with their services, Eisenfeld said.When problems erupt, the cause is generally at the fundamental level — inadequate skills for the job.

Eisenfeld is co-author of a report that outlines the shifting nature of SI capabilities, especially as they develop new skills and merge with other providers.”By understanding the segmentation of the CRM services providers on their core competencies, enterprises can ensure that the best providers are chosen for the task,” the report says.

“Many enterprises automatically think of the traditional systems integrators and consultants when they think of CRM service providers,” it adds. “However, they are not always the best choice for the project or program at hand.”

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