A gauge of how little customer relationship management (CRM) systems seem to have changed can be seen by visiting http://insight.ly. It's a Gmail plug-in that manages customer relationships and bears a striking resemblance to early Windows-based contact managers.
But the resemblance is superficial. Browser-based access to CRM with back-ends hosted in the cloud is game-changing indeed.
According to David Cosgrave, business unit manager of Acctech CRM, the days of desktop-based CRM solutions are numbered.
"We deal primarily in Web-based CRM software and that is the future," he says. "The days of downloadable products are over. It's so much easier to make it browser-based."
Cobus van Graan, CEO of Tracer, says that may be true, but the desktop won't entirely disappear.
"I agree with the cloud trend but there are certain areas where you have to integrate into desktop applications. Maybe a hybrid - for instance if a CRM system has to integrate into Outlook - is appropriate."
"Our most successful implementations are where the customer realised that it wasn't about the technology."
Cobus van Graan, CEO, Tracer
Ian Lottering, CRM practice manager at Consology, says given what's happening in the cloud, he can't see desktop-based software surviving for longer than five years.
"There are variables you have to contend with on the desktop that you don't have to contend with in the cloud. There is much more risk in the cloud but there are ways to get creative to mitigate it. On the desktop, we were a bit lax in the way we handled security because there are less issues."
Johan van Zijl, director of Consnet, says that Web-based cloud solutions are the future for standalone systems.
"But there will be scenarios, especially in large enterprise systems, where you will need integration into existing back-ends: things like deliveries, account information and so on, which will be difficult to have in the cloud. But for standalone systems, cloud- and Web-based is the way to go."
Heath Turner, CRM director at IS Partners, says it will depend on the customers and the industry.
"For us to make the assumption that everyone in five years will be using software plus services is a pretty broad statement," claims Turner.
"It's my view that organisations are in different maturity cycles and have different strategies. If you look at applications themselves, whether they're deployed or hosted, the fact that they are Web-based already means that it's fairly customisable and that users have accepted it. But the adoption comes down to how the organisation wants to run them. We've had massive blue-chip banking and financial service customers to whom the Patriot Act in the US is very important and even they are considering the hosting model because they don't have rack space.
“From a provider's point of view, it's about choice and customers deciding whether they want hosted or a subscription-based service. But by the same token, there will always be some customer data that they want within their environment."
Graham Mansfield, industry lead for communications, media, utilities and transport applications at Oracle, says the move to Web-based applications will be driven by more than just a general trend to Web application across the software development industry.
"We have to have Web-based systems moving forward," he says. "If you look at the statistics around mobile computing versus desktop Internet access, the number of mobile users is set to overtake desktop users within the next two to three years. These are the people who will be using CRM systems in the future, so if you don't have Web-based systems, you won't reach them.
“The second thing is to make CRM systems more effective and more useful and to do that, they have to integrate with other systems such as social networks. Yes, they must integrate with ERP, but social media is the future."
Adoption aggravation
Putting in CRM systems, whether desktop or Web-based, is one thing: getting salespeople to use them is another. Consnet's Van Zijl says the measure is simple.
"Adoption is not just about whether your CRM system is Web-based or not. If it doesn't help a salesperson sell, then obviously you won't have user adoption. A lot of the implementations that fail are where the sales rep has been forced to use it."
Tracer's Van Graan says users can be surprisingly resistant.
"Because of that, there are two main things we work on in CRM. The first is simplicity. You're not working with people who are used to sitting in front of a computer all day. These are people who deal with people and love to be out the whole time.
“The second thing is user preferences: how does the rep want to work? The Web gives you a lot of options: work from a laptop, work from home or your cellphone. We can't even dictate the brand of cellphone. Our research shows that 75% of salespeople will turn a phone down just because they didn't choose it themselves."
If it doesn't help a salesperson sell, then obviously you won't have user adoption."
Johan van Zijl, director Consnet
For some, CRM has a natural fit because of the nature of the business. Siva Pather, GM of customer interactive solutions at Dimension Data, says adoption is strong in call centres but by no means guaranteed.
"Having come from the contact industry, the role of the CRM system there is to aggregate multiple screens. It goes back to what your primary reasons are for introducing CRM. Is it to drive efficiencies? Drive contact resolution? Once the agents are part of that process, then adoption drives itself.
“Only one in four contact centres actually have a system in place. When you phone in and they explain that the 'system is slow', there is no system. When those customers get a proper system that integrates process properly, then things like the cost of churn are no longer so difficult to measure."
Social climber
Perhaps the most exciting opportunity for CRM systems is integration with social media. Gavin Moffat, MD of Puruma Business Communications, says he's watched one of his clients reinvent itself with a social media-based CRM system.
"We have a client using a system, both internally and externally, and the way in which that has improved goals, alignment with strategy and communications is fantastic. It's improved relationships with their customers and made them more positive about doing business with them and increased their market share.
“Anecdotally, the reason for this is probably higher touch points. Businesses today aren't particularly agile but are becoming more so. Social CRM is one of those things that immediately persuades a business to be agile and that they're getting a positive disruptive effect."
Moffat says the improvement in the basics seems to be the reason for its success.
"Just becoming demand-driven instead of supply-driven and promoting your brand is a big outcome. Having customers linked directly into you as part of the social media platform means you can respond immediately. And the strategy can be easy: one of our customers has a strategy that says they want to turn their customers into fans. It's that simple. Everything is just a tool or a tactic to get to that end goal. That's why I find the on-site, off-site, cloud or not discussions irrelevant."
Tracer's Van Graan agrees.
"Our most successful implementations are where the customer realised that it wasn't about the technology but the strategy. In those cases we have examples of 30% growth, even during last year."
"There will always be some data customers want to keep within their environment."
Heath Turner, CRM directot, IS Partners
Then there is the challenge of installed base.
"Some of our clients have recognised that their current CRM strategy is restricting the markets they can address," says James Mclaren, social media and CRM expert at Accenture.
"A number of our clients have approached us to re-architect the way CRM is provided. Yes, all the requirements to serve customers are maintained, but they want to reduce the internal costs of the model. They've started to recognise that the amalgam of people, processes and technology will have to change."
Not every success story involves social media, though. HP SA's Ashton Styen, CTO and alliance executive for enterprise services, says HP is working on a design for a customer to move to a cloud model.
"What the IT organisation is trying to do for them is provide an end user-centric environment based on CRM. It's very interesting to see the development of the self-service portal because it looks very much like a shopping mall. Another area we've been looking at is cloud integration gateways, so that if you move your Exchange into the cloud, you can exchange data between systems hosted in the cloud and hosted on premise."
IS Partner's Turner says the single view of the customer through CRM has been the big achievement so far for one of his customers.
"It's early days yet, but we have a customer in the insurance sector with whom we've embarked on a technology modernisation. Their business hasn't invested much in technology over the last 10 years, but they've acquired a lot of businesses so they've landed up with multiple systems. We've implemented CRM as a first point of call simply to give them that single view of the customer.
“It's taken for granted that CRM will provide it although we've had to do a lot of work around data management. Clients say they want a single view of the customer, but what's often neglected is the data management that goes with it. The end result has been a CRM system providing contact management that isn't a holy grail but still a good first step on the journey. Their internal staff now have a single view rather than going to three different systems."
Which just goes to show: sometimes we get too hung up on whether a particular technology is moving to the cloud in the next five years. A good CRM system helps companies get closer to their customers. And that's always good for business.
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