Despite investment in, and deployment of customer relationship management applications in close to 75% of large organizations, it seems that many enterprises are struggling to clarify, or even define, a distinct and lucid customer relationship strategy.
According to the recently published Forrester Wave: CRM Suites for Large Organizations for Q3 2012 (available after registration on the Pega website) by William Band, the result of this confusion is that IT departments are finding it increasingly difficult to re-engineer customer facing business processes, or acquire and deploy appropriate technologies.
We have over the years seen similar problems in the enterprise content management space, which has resulted it the misuse, or even non-use, of content and information in enterprises in a market where information and company value are intrinsically linked.
With customer relationship management (CRM), the failure to develop an effective strategy is equally problematic in that the real differentiator in business now is how effectively enterprises look after their clients.
Customer loyalty cannot be depended on any more, and if a company cannot provide the services customers are looking for, then those customers will quickly move to a company that does look after them.
At a technology level, CRM software is designed to give companies a cutting edge; to provide companies with the tools needed to hang on to customers. However, it’s not as simple as that.
There are literally dozens of different solutions and — increasingly — many different specialist solutions for specific verticals, or with specific functions within the CRM space. The question now is what solution suits your company best. This current Forrester Wave aims to give enterprises the information needed to begin their search, and it’s important to be clear about this — Forrester does not suggest that this report will answer all your questions, or even cover all the solutions.
All it is a guide, and like Gartner’s Magic Quadrants, Forrester recommends that prospective customers look at all the vendors and solutions mentioned in this report, even if they don’t fall into the Leaders section. It may be, Forrester points out, that a particular functionality that a company is looking for may be provided by a niche player, or by a company that is only beginning to develop its products.
To get a better idea of what is happening in the CRM space and to see what vendors are providing what products, in the first part of this examination we will look at established and emerging trends in the market.
In the second part later in the week, we will take a look at the vendors that made it into the Leaders category: Oracle Siebel CRM, SAP CRM, Microsoft Dynamics, Salesforce, Oracle CRM on Demand, RightNow, and Pegasystems.
The findings are based on surveys and interviews with 556 large North American and European organizations who were evaluated on 414 different criteria. Of those 556 organizations, 50% have already implemented CRM solutions and many are currently in the process of upgrading their tool set. A further 25% have plans to adopt CRM solutions within the next 12 to 24 months.
The first thing Forrester looks at is why companies are turning to CRM in the first place. According to the report the main and obvious reason is to better manage customers and to better connect with them. To attract large enterprises, the CRM market itself is changing too. The bigger vendors are slowly but surely snapping up the smaller vendors and competitors, or buying new customer functionality that they think will give them an edge.
We have entered what Forrester is describing as the “age of the customer”. In the past, while companies have always described themselves as customer-centric; this, however, is different.
Competitive advantage through the traditional differentiators like brand, manufacturing, distribution is no longer a given. The only differentiator that matters any more is the customer experience.
Although the report focuses on large companies, CRM is not exclusive to large companies. As the number of cloud applications increases, mid-size and even small companies are also avid consumers of this kind of technology, Forrester adds.