Paul Greenberg
CEO and President 56 Group

"CRM is poised for a rebound, but in a form that is quite different than what has been the practice for the past four or five years."

1.You are an acknowledged CRM guru. According to you, what is the correct technical definition of CRM as it is envisoned and used today? Do you think the CRM products satisfy the requirements in what they are supposed to do? Or do you think the ROI is minimal to warrant these ciostly implementation?

There is a trick to your question. CRM is not just a technically defined business proposition. In fact, historically, it was defined as a system, not a technology, but I've taken it a considerable amount further. I would say that if you were to encompass CRM as it is actually supposed to be, which involves benchmarks, metrics, ROI, TCO and senior management involvement on the left brain and user acceptance, vendor selection, usability, dramatic cultural change and natural leaders on the right brained side, then CRM can be defined as a "philosophy and a business strategy, supported by a system and technology, designed to improve human interactions in a business environment." A far more encompassing definition than has been offered. This comes as we begin to understand more and more what CRM is about.

On the second point of CRM products satisfying the requirements, I would say that generally, yes the major vendors' products do satisfy the functionality and technical requirements that they are designed for. The product functionality in any given CRM area overlap seriously from one vendor to the next but the execution of the functionality varies from vendor to vendor. However, the cogent point is that they do satisfy the requirements, with occasional exceptions.


On the third point, Forrester Group recently released a study of 111 major enterprises who had implemented CRM at those costly levels you mention. 75% of them were satisfied with the results. As we begin to see a maturing CRM market, it is becoming increasingly clear that provided the right elements are in place, CRM can work and the ROI is substantial - far more than the cost.

2. According to you how do market leaders using PRM technology to grow sales, improve service and achieve business goals, especially in a scenario where there is a highly competitive environment as indirect channels are growing in importance? What are the benefits of using PRM solutions to tighten an enterprises communication and collaboration with selling partners?

There are huge advantages to PRM. The world is becoming increasingly customer centric and collaborative. To keep customers or to acquire them, it takes an extended sales force and increasingly rich product offerings to compete. Collaborative enterprise is becoming the 21st century watchword (if there is one). Consequently, managing your channel partners as collaborators is a huge advantage, providing an extended sales arm and with technical or service partners, an extended product or services offering in a geographical swath that would remain otherwise uncovered. However, PRM or what is now called (by me) CRM for Indirect Sales helps the brand holder identify and work profitably with the companies that are doing the superior work, rather than the partners who are that in name only and can funnel leads to where they have to go appropriately, provide secure data to the appropriate partners, automate selling opportunities and provide rewards, plus monitor progress of each partner. This is a HUGE advantage in times of economic concern with tight dollars to spend. Some vendors you might want to consider (in order) are Channelwave, Allegis, and Siebel.

3. In today's economic scenario executives make high-stakes decision when they choose a CRM vendor and understanding the critical components of customer relationship management and the impact technology decisions will have on running a profitable business in the coming decade is quite tough. What is your take on the CRM industry in the coming years? 


CRM is poised for a rebound, but in a form that is quite different than what has been the practice for the past four or five years. It is moving from a data-driven to process-focused industry with web services integration standardizing the applications so that they can talk to one another a lot easier than in the past. Additionally, there is a bit of a revival of the hosted services (e.g. ASPs, or outsourcing, or hosted applications) for CRM in the smaller spaces, where companies are considering how to reduce the incredible overhead that has been a hallmark of enterprise CRM for the last several years. Beyond that, there is an increasing recognition that user involvement and change management are critical to the success of CRM implementations and this is leading to a transformation of how CRM is conceptualized by the company that is planning it. That will mean an increased success rate as the years go on. Already, Forrester Group research found that 75% of the 111 large enterprises they interviewed were at least satisfied with the value that CRM provided after the implementation. This is the harbinger of CRM's bright future as it becomes increasingly mainstream and less a competitive edge. 

4. Do you see a vendor offering the complete range of CRM module any time soon, or is there a complete CRM solution? Do you think it is a lot cheaper for enterprises at a time, when most companies strive to be thrifty, and do not want to over-spend, to get the different modules from disparate vendors or getting a consolidated solution from one vendor?

There are several vendors who offer nearly complete CRM solutions (such as they are) now. The obvious ones are PeopleSoft, Oracle, SAP, Siebel and to some extent SalesLogix and Clarify. Others like E.piphany, Onyx, Pivotal, Chordiant, offer nearly complete packages. However, what constitutes "complete" is an issue. For example, how well does the package integrate specific business processes is one of the newer measures of "completeness." What is complete for the insurance industry might be a mismatched incomplete package for banking services, even though both are often lumped under financial services. Ad nauseam, ad infinitum. 

On the issue of what strategy - single vendor total package vs. best of breed - the only answer I can give is, that depends. Best of breed works for some customers, single package for others. Issues like integration with third party or legacy systems can be critical, as can other architectural issues (web architecture, client/server). Other factors involving corporate strategy, IT strategy, existing back office functionality, tactical need vs. strategic outlook and a myriad of other considerations all come into play. The best strategy is the one that is best for you. Unfortunately, without knowing what the details of client needs are, its impossible to define which strategy works best. Only that the strategies exist.

5. Who are the main CRM vendors and what kind of competition will they face from small and mid sized vendors offering specific modules and packages? Do you think mergers and acquisition will be the order of the day among CRM vendors given the current economic conditions?

The primary CRM vendors, with one exception, are also the major enterprise applications vendors. They are SAP, Oracle, and PeopleSoft. The one exception is Siebel, which doesn't have back office applications like finance and human resources. However, there are other significant players in the medium to large marketplace, the foremost buzz belonging to Microsoft which recently released its first version of their MSCRM - a solid, though resource heavy, application that is designed to service the smaller companies (between 10-100 users). Other successful (relatively) players are E.piphany, Onyx, and Pivotal with Chordiant being an important multi-application provider also. However, in the small and medium business (SMB) market, the vendors who truly understand it are SalesLogix, a long timer with a parent who has deep pockets, and most likely, Microsoft. They don't really compete with the major enterprise vendors because their market places are different. The major vendors try as they might to provide the very hot SMB market with the right applications and pricing, simply don't get it. Of the four mentioned, only SAP might get it, launching at some time soon a midmarket product that is not just simply a dumbed down version of their own enterprise offering. Oracle small business has a chance to compete also. I hold less hope out for PeopleSoft and Siebel in this marketplace, because neither of them has a program willing to bend to the true needs of the SMBs.

Mergers and acquisitions are a fact of business life, not just CRM life. I think that in the next several years, a large number of companies in CRM will fold. I think that the vendors will be buying smaller companies that fill niche needs (for example, PeopleSoft needs to improve its offering with a PRM application - they can build it or buy it, but they need it). Same with SAP and Oracle on that subject. 

Because of the precarious financial position of many vendors, even companies like Siebel, which is having its own set of financial difficulties becomes a candidate for acquisition by someone. 

6. In today's business climate, every penny spent on CRM is assiduously scrutinized. But Gartner has predicted that, come this year - 2003 is going to be different in that, companies will actually start getting over the failures and disillusionment of past CRM initiatives. One is further expected to see companies, noticing significant benefits as they leverage their CRM investments better and learn from their or others' past mistakes. How yould you rate your opinion on this finding?

As I stated above, CRM is due for a cleansing. The recent positive Forrester data is a significant finding because it is the first crack in the "CRM failure" armor that has been pervasive for the last two years. The existence of the website CRM Advocate which has hundreds of case studies of CRM success and the continued data indicating a renewed interest in CRM as a mainstream business necessity, plus the maturation of the market and the weeding out of the less than solid CRM vendors and integrators has improved the quality of CRM offering over the last year or so. That means that what you pay for is what you actually get in most cases. I think, too, that the understanding of the root causes of past CRM failure has been a good thing, because, while history often does repeat itself, at least now there is a chance not to repeat past CRM mistakes, because they are so well documented - among them the lack of user involvement and acceptance, the failure to develop a full blown strategy, the lack of support by senior management and last and nearly first, the failure to put a change management process in place.

7. Your Company, The Group 56, seems to be making waves in another category altogether. You are propagating a whole new business environment, that meets the theory "new times demand new solutions". how do you propose to utilize thesse new fangled strategies and make it work among the youth of this genre? Has it been accepted yet? How exactly do you foresee it becoming a major market force during 2003.

My company, The 56 Group, LLC, (not the executive coaching company The Group 56) is a CRM strategic consulting firm. However, I do have a "newfangled strategy" aimed at the CRM marketplace that I think can be important. It involves, oddly enough, "humanizing" CRM. I've been developing a "whole brained CRM strategy" that is gaining some credence in the industry as I push it. Traditionally, CRM has been seen as a very much metaphorically "left brained" activity - one that concerned itself with benchmarks, metrics, TCO, ROI and senior management stakeholders only, strategies imposed by the company on the users etc. What has been either ignored or underplayed has been the "right brained" pieces - anticipation and planning of the massive cultural change that will occur inevitably, involvement of the users from the get go, starting with the customer/natural leaders as stakeholders, and ongoing iterative learning rather than simple knowledge dumps with the recognition that CRM entails continuous change not just the placement of a new "system" to do the work for you. Additionally, the definition of the customer has changed in the new business customer ecosystem. Historically, a customer has been someone or a group that paid you for good and services. Now, it is anyone that you exchange value with which means not just paying clients, but partners, vendors/suppliers and employees. Anyone who resides along the value chain, so to speak (the value chain is the demand and supply chain stitched into a single unit). That means that the customer is involved in all business processes internal or external. The customer is also demanding response in real time so that companies are forced to respond to the customer immediately at the risk of losing them in a mouse click. However, the market for this is not the "youth of the genre" because they are just that - youth. The market is more the business leaders that are focused on providing the necessary satisfying experiences for their newfangled types of customers. The recognition of this new approach to CRM is becoming increasingly clear. I am lucky enough to represent the forefront of this approach (though by no means am I alone in it) and have had significant customers looking to me to help figure out how to deal with this new era of CRM as an onramp to the customer ecosystem.

8. Within this multi - company format, what is your core area of focus and who are your target customers? How do you relate its functioning with your prime area of expertise - CRM?


My target customers fit two profiles. First, the vendors and the integrators who are struggling to find their niche in the CRM market or their strategy for attacking that market or who have a desire to enter the market. The second group are the customers who are wrestling with vendor selection/cultural alignment and issues of cultural change within their marketplace. For the first group, defining a strategy for marketplace entry or maintenance is foremost with visibility into that marketplace being the second most important matter. For the second group, understanding the nature of the change that will occur without fail in their company in combination with putting a change management process in place is the foremost issue that they face. These are what I do best and they are strictly focused in the enterprise applications marketplace - which is my expertise and history.

9. What do you think about Microsoft's strategy of putting CRM on desktop applications? Is it going to be a threat to existing CRM?

To rephrase it a bit, it is a threat to existing CRM companies because it's competitive, functionally solid (even with version 1) for the small business market they are going after and because they have so much money and credibility behind it. Microsoft is not going to stop at the small business market either. Their installed base dwarfs everyone's and the comfort level with Microsoft products is so high and the permeation of the market so pervasive that there is a built in guarantee of success. Microsoft even weathers failures like Windows ME and simply creates things like the highly lauded and successful XP Professional to take care of the problem. This will be the way that they do CRM too. There are some early issues such as integration capability which is very weak and the heavy server requirements, but they, too, will be addressed and overcome in time. They will also develop scalable versions so that they can go after the larger markets eventually. By 2005 or 2006, they will be one of the big four - Oracle, PeopleSoft, SAP and Microsoft.


About Paul Greenberg
Paul is President of The 56 Group, LLC an enterprise applications consulting services firm, focused on CRM strategic services including go-to-market strategies for vendors and integrators, implementation strategies and vendor selection. Before that, Paul was vice president of marketing for Atlantic Duncans International (now Optimos) where he was responsible for developing and securing strategic relationships with critical vendors and partners. In addition, Paul was the director of strategic relations for Nexgen Solutions, Inc., where he was directly responsible for generating business development working with Fortune 500 clientele. Paul has years of experience with both CRM and Enterprise Relationship Planning (ERP). He has built SAP and People Soft practices and, has extremely deep ties into the CRM and enterprise applications communities. In addition to being the author of the best-selling book which has appeared in six languages: CRM at the Speed of Light: Capturing and Keeping Customers in Internet Real Time.,(McGraw-Hill, 2001, 2nd Edition, 2002) Paul also writes a regular national column for CRM Magazine called "eality Check."He has been published in multiple business and information technology magazines and is a frequent speaker at conferences and seminars across the United States


CRM + ERP = Enterprise Applications and Then Some

Excerpts from the book
CRM AT THE SPEED OF LIGHT: CAPTURING AND KEEPING CUSTOMERS IN INTERNET REAL TIME, by Paul Greenberg

(Publisher McGraw-Hill/Osborne Media)

 

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