CRM Apps to Re-emerge as "Must Have"

META predicts customer relationship management suites will provide "near-total" solutions by 2005

Stamford, CT — April 10, 2003 — Customer relationship management applications will evolve to provide a "near-total" solution by 2005, just as CRM re-emerges as must-have software, a new report from technology consultancy META Group concludes.

In its latest "METAspectrum" evaluation of the CRM application suite market, released this week, META analyzes the operational, analytical and collaborative applications that help organizations manage and optimize their customer relationships.

CRM suites enable users to manage customer-related information and data; automate front-office business processes across sales, marketing and service; optimize customer transactions and interactions; and understand customer behavior patterns.

"CRM application suites provide a valid and compelling means of jump-starting a broad range of CRM technology initiatives," said Steve Bonadio, senior program director with META Group's Enterprise Application Strategies. "Organizations must rationalize the expanding importance of CRM suites within their CRM portfolios and to the extended enterprise at large, while gaining a clear understanding of market dynamics, economic impact and the tumultuous vendor landscape."

This year, continued economic pressure will force organizations to refocus CRM programs on "tactical" strategy, which entails smaller, incremental investments with accelerated time-to-value, META believes. Concurrently, technical and budgetary challenges will impede CRM upgrades and efforts to consolidate disparate CRM applications and information.

However, META asserts that within the next couple of years CRM will re-emerge as a "non-discretionary initiative," focused on business transformation and revenue attainment, while CRM application suites will evolve to provide 90 percent of required "ecosystem capabilities."

META's evaluation looked at 10 vendors: Amdocs, Chordiant, E.piphany, Kana, Onyx, Oracle, PeopleSoft, Pivotal, SAP and Siebel. The analysis revealed that vendors must excel equally in presence and performance to succeed. Key presence criteria include awareness and reputation, vision and strategy, industry focus and business drivers, whereas key performance criteria include technology and products, financials, pricing and execution.

In the current environment, the analysts found, CRM purchase influencers are spread throughout the organization, risk tolerance is low, process and technology integration requirements are significant, and adjacent vendors can enter — though not necessarily succeed in — the market.

Despite a challenging 2002 for the CRM sector, CRM excellence continues to require close consideration of people, process, information and technology, META said. CRM application suites provide a broad range of technologies to support implementation of customer life-cycle patterns and CRM processes across the organization. However, organizations must understand their unique requirements relative to the customer life cycle and tailor the CRM technology decision accordingly.

Value to the organization continues to be the currency by which CRM success must be judged, META concludes.

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