Most Global 2000 companies’ current customer relationship management initiatives are in serious risk of failure according to a study of 50 of the largest end-users in the CRM market by analyst firm the Meta Group. The study, which was sponsored by some of the leading CRM vendors including Siebel, Vantive, Oracle and E.piphany, was based on interviews with large corporations including Sprint, Nortel, PNC Bank and Eastman Kodak. It found that most enterprises do not have adequate CRM business plans in place and of those that do, they will need to spend as much as $250m over the next two to three years to achieve tangible returns on their CRM investments.
Of the 50 companies questioned, more than 80% of respondents have at least one operational (field sales or field marketing for example) CRM application in place, but only a third have invested in analytical applications and only half have launched customer collaboration initiatives. Without these, organizations won’t be able to make the best use of their customer data, which defeats the purpose of using CRM applications in the first place, the study says.
While leading practitioners cheer their short-term success in CRM technology, the immaturity of their long-term programs poses a serious risk of business failure, said Liz Shahnam, co-author of the study. The analyst said that most companies questioned failed to see the value of customer information; purchased disparate CRM products and services and focused too heavily on the electronic channel, failing to employ any meaningful measurement techniques. She warned that end-users must take dramatic action to optimize their systems around the customer, or their customer relationship investments will not pay off.
Stephen Diorio, co-author of the study, said long-term CRM investments should include plans to integrate applications, analysis and customer collaboration if the CRM is to bring about competitive advantage. While end-users are well along in developing operational applications, the survey shows they still need to make major investments in analytical applications and do a better job of integrating customer collaboration technologies.
Interesting, while rival analyst rival Gartner Group agrees with Meta about concentrating less on applications and more on analysis of the data, it says there are still very few vendors out there that offer those types of applications. Speaking at the group’s user conference in Florida last month, Gartner said that currently there wasn’t one vendor to offer a complete CRM suite and it pointed to the areas of planning, analysis and collaboration as being some of the key missing functionalities.
