KM Seen as Key to CRM Success

Gartner: Enterprises must integrate knowledge management practices into customer relationship management programs

Stamford, CT — May 7, 2003 — While more than two-thirds of successful customer relationship management (CRM) programs will have integrated advanced knowledge management (KM) practices into their CRM processes by 2005, confusion persists about what KM is and what it can do for CRM, according to a new report from technology consultancy Gartner.

Gartner analysts said that KM has been slow to develop in CRM processes. Currently, most CRM products that claim to support KM include mostly knowledge-base (k-base) management. While these k-bases do improve internal productivity and even provide customer value in self-service environments, they rarely offer competitive process design or distinguished service capabilities, according to Gartner.

"CRM requires far more sophisticated forms of KM, such as collaboration, active knowledge sharing among CRM professionals, engaging customers in communities and using e-learning as a customer value-added service," said Kathy Harris, research vice president for Gartner. "Ultimately, CRM needs KM to enable innovation and collaboration among and between customers, employees and business partners."

The analysts asserted that substantial progress toward KM has been made in sales and marketing. In marketing, for example, they point to sophisticated business intelligence and other knowledge-intensive processes that are fundamental requirements in campaign creation and support. Collaborative processes for knowledge dissemination are rapidly emerging in sales and support, and e-learning is becoming an essential part of sales team support, Gartner said.

"CRM uses many emerging e-learning techniques," said James Lundy, research vice president for Gartner. "Sales is a hotbed for major account sales simulations, and customer service and support employs simulations to develop customer service techniques. Marketing uses e-learning processes to educate the customer in business skills, in products and services, and to enable the customer to select the best product by modeling their requirements against product specifications."

Over time, CRM should integrate sophisticated KM across all the CRM domains, including marketing, sales and service, Gartner believes. These knowledge-intensive investments can return both tangible and intangible business value, the analysts said. "In marketing, KM will enable more effective reuse of internal knowledge, around and within high-value marketing resource management (MRM) processes, and is key to driving broad marketing user adoption and ongoing utilization," said Claudio Marcus, research vice president for Gartner.

Dale Hagemeyer, principal analyst for Gartner, added, "In field sales, good indicators of the need for KM include frequently having to get back to a customer with critical information, having to start from scratch when configuring a product, proposal or history for a client or prospect, and not knowing who can help in solving any of these business problems."

The Gartner analysts reported on KM in customer relationship management in a recent "research spotlight" entitled "The Case for Knowledge Management in CRM," which featured reports examining the shifting landscape in CRM as enterprises look at knowledge management and issues such as engaging customers in interactive learning, collaborative selling and peer problem resolution through communities.