A flurry of reports on the current state of customer relationship management (CRM) products and services is creating a confused picture for potential buyers that could spell long term disaster.
Although the frenetic pace of change combined with a dangerous lack of discussion on data integration should ring warning bells for users, at this stage vendors are simply eulogising the CRM message regardless of whether there is a demonstrable return on investment (ROI) or not.
But while on the one hand, Oracle and Siebel are warning customers that they cannot do without CRM systems, analysts such as AMR and Gartner Group proclaim that the market is highly fragmented.
The Cranfield School of Management says that in the financial services market, for example, proof of payback with CRM systems is at best dubious and at worst non existent.
But elsewhere, brokerage houses are falling over themselves with praise of how well certain vendors are undertaking sales execution.
So what is the real picture?
AMR took a look at market leaders, Siebel, Clarify and Vantive, but concluded that it would be difficult to gain mindshare in a market, "when you're hurdling technology advances in a race to 58 per cent compound annual growth rates."
Siebel, it explains, is trying to win organisations over by stealth, providing free copies of its core sales module, which is available from its Web site.
"This Johnny Appleseed strategy plants Siebel products with sales reps everywhere, letting them use and come to rely upon the products," AMR says.
Clarify and Vantive, on the other hand, are offering different products to solve the same problem. Clarify is due to ship its efrontoffice suite in April, which merges ecommerce with front office applications to consolidate customer interactions into a single routing system.
From the customer perspective, a personalised self service, self sales portal can display targeted banner messages. It can also internally workflow information on direct customer interactions to the right person or the appropriate automated response within the organisation, nomatter where the customer first made contact.
Vantive?s eCustomer applications also attempt to maximise the entire customer relationship regardless of contact point. While some modules are shipping now, others are expected later in the year.
So from a product buyer?s perspective, AMR?s message is clear. There is no single solution to the CRM problem because each of these vendors, together with many other smaller players such as Silknet, Chordiant and royalblue, provide different products to solve different problems, but position them all under the CRM umbrella.
"Clarify and Vantive are hearing the underlying message of users besieged by customers clamouring for attention from every channel, and demanding immediate attention before users click to search for another vendor," AMR attests.
"Siebel's roots in sales force automation (SFA) give it a head start over Vantive, Clarify, and Erp vendors in deals where sales automation is the predominant concern," it adds.
And Gartner Group agrees. In a recent research note, author C Lusher says: "With vendors having products in a variety of markets, these vendors are being placed on multiple Magic Quadrants in different areas of Gartner Group research."
The report continues that the field service and distribution market is especially fragmented, with numerous vendors offering products running not only on many platforms, but also targeted at specific industries.
While Gartner attempts to provide a measure of coherence to the overall market, it sidelines the traditional packaged enterprise resource planning (Erp) application vendors such as SAP, Oracle, Baan, PeopleSoft and JD Edwards as niche players.
With the exception of Oracle, which is clearly targeting its strategy at Siebel and Baan?s SFA acquisition, Aurum, none of the others have demonstrable, internally developed products.
SAP, for example, has made it clear that it was unlikely to have any tangible products in the CRM space before 2000, while Peoplesoft is bumbling along with an old version of Vantive that sources say cannot provide a reliable geographical split of Peoplesoft sales.
But to look at the larger problem, in a market where the lines between product types are blurred but overshadowed by relentless marketing spend, it is all too easy to get sucked into messages that fail to address real user issues.
For example, a recent Nationsbanc Montgomery brokerage report on Siebel talks about the company taking market share away from Clarify and Vantive and offering an "integrated, diversified product set."
In deals where the buyer may be used to thinking about market leaders, this kind of reading is very reassuring.
However, Nationsbanc?s views do not sit comfortably with AMR?s findings that: "Siebel?s front office applications extend to the Web, but do not yet integrate contact from all points with the full functionality of the suite."
It continues: "In the race to define best practices for managing customer relationships through contact channels, Clarify is ahead of Vantive by a nose."
But neither AMR nor Gartner Group elucidate on the not inconsiderable issue that none of the point solution vendors is thinking strategically about long term data integration.
While the vendors claim they have integration touch points to ERP systems, to date, much of what has been sold to CRM customers has been predicated on the potential for quick ROI.
And although Oracle is pitching itself at the integration space, it has little to show despite its fanfare announcements.
But the issues go even deeper.
According to research conducted by the Cranfield School of Management, most customers that were interviewed in large financial services organisations were in the early stages of developing CRM strategies, but "when asked about payback on CRM, they said it was too early to judge the results."
And the point is worth noting because the research identifies complementary technologies as key to long term success.
Linda Saul, CRM product manager at the SAS Institute says: "CRM is a lot more than campaign management or sales force automation. If one is taking data feeds from a variety of sources, there are numerous data management problems to address."
As for transaction processing systems, Saul adds: "These are only one source," and in both SAS?s and Cranfield?s view, information delivery through data warehouse technologies is a crucial part of the equation.
So the issue would appear to be one of data quality rather than quantity.
But even if these considerations are overriden, Cranfield concludes that: "If the main successes of CRM were more accurate targeting and measurement of campaigns, and people in the organisation starting to focus on customer relationships, one of the main failures of CRM was the lack of assessment of the payback."
Cranfield?s research clearly shows that organisations are finding it difficult to work out which way to jump.
The headline vendors offer an alluring message and have been extraordinarily successful in establishing a market that some analysts believe will grow to $2.5 billion by 2005.
But despite acceptance that today?s software packages are useful tools, the signs are that buyers need to think strategically and probe the packaged application vendors about their ability to work with multiple data sources and data warehouse type information.
The risk is that the perceived requirement to gain competitive edge may push users into making unwise, short term decisions.
But if they do not take data quality into account, they could be faced with skyrocketing project costs or poorly integrated solutions ? a factor that sparked severe criticism in the early days of Erp applications.
Analysts agree that the market is developing apace.
It will therefore be interesting to see whether convergence between the packaged application vendors, Erp players and data management specialists will deliver on the CRM vision of a single view from contact to cash, or whether specific vendors will dominate and define the market in the same way that SAP did with Erp.
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