The CRM Phenomenon
The CRM Phenomenon
The CRM Phenomenon
Tomorrow
omorrows
s SolutionsSoftware
TodayEnterprises
IntegratingMagic
Tomorrows SolutionsSoftware
TodayEnterprises
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Table of Contents
Executive Summary ...............................................................................1
1.
2.
3.
4.
5.
6.
Conclusion ............................................................................................10
The CRM
Phenomenon
Executive Summary
Relationship Management
C ustomer
(CRM) is an important concept
currently being discussed in major
enterprises around the world. CRM is about
automating and enhancing customer-centric
business processes. The staggering growth of this
marketplace, the diversity of the players, and
the extent of merger and acquisition activity
warrant attention. Analysts predict that CRM
will become the largest application area of all
time, and therefore must not be ignored. IDC
predict a market growth from $4 billion in 2000
to $11 billion by 2003.
CRM is not a product. It is not even a suite of
products. CRM is a business philosophy that
touches upon many independent parts of the
organization. CRM is a concept that requires a
new customer-centric business model, which
must be supported by a set of applications
integrating the front and back office processes.
These coordinated applications ensure a more
satisfactory customer experience, which has a
direct link to a more profitable organization.
1.1 Definition
CRM, being the trend du jour, has been the
catalyst for numerous articles, papers, books,
and seminars by an assortment of industry gurus,
vendors, and consultants. CRM is defined slightly
differently by each, frequently stressing alternate
components, often depending on the writers
intentions and beliefs.
This paper gives a working definition and
explanation of CRM that is appropriate for the
Magic community, enabling Magic partners to
take advantage of the sophisticated technology
being put forth by Magic Software Enterprises
to address the CRM phenomenon.
CRM is about automating and enhancing the
customer-centric business processes of Sales,
Marketing, and Service. Customer Relationship
Management not only deals with automating
these processes, but also focuses on ensuring that
the front-office applications improve customer
satisfaction, resulting in added customer loyalty
that directly affects the organizations bottom
line.
It is important to emphasize that managing the
front office alone independent of the back-office
is insufficient. It is the integration of customercentric applications with the internal back-end
systems that provides the customer experience
that will in turn give the desired ROI for the
entire enterprise operation.
The CRM
Phenomenon
CRM is, therefore, actually a concept that
requires a new customer-centric business model
that must be supported by a set of applications
integrating the front and back office processes.
These coordinated applications ensure a more
satisfactory customer experience, which is
believed to have a direct link to a more profitable
organization.
Service
The area of service is probably the most crucial
when it comes to customer relationship
management. The customer service that an
enterprise provides is key to its ability to maintain
satisfied loyal customers. The service that is
expected today goes beyond traditional telephone
call centers. Todays call centers are evolving
into contact centers handling an assortment of
communication media. Telephone interaction
must be coordinated with email, fax, web, and
any other communication media that the
customer prefers to use. Self-service is a fast
growing requirement, as more customers are
making their way to the web and want to look
up their order status or make queries via their
browser.
Sales
Marketing
Figure 1
Service, Sales and, Marketing:
The primary areas of CRM
Sales
Marketing
Service
The CRM
Phenomenon
2.2 Consistent shared customer
repository
It is insufficient for a CRM offering to
independently include Sales, Marketing, and
Service. Figure 2 portrays the shared customer
repository as the entity that ties these efforts
together. These three major areas as discussed
above are the primary contact points of the
enterprise to its community. However, the lack
of a unified approach, combining and integrating
these functions, leads to less than optimal results.
Integrating customer interactions across the entire
enterprise shifts organizations from
departmentalized silos of customer contact to
an environment where all customer interactions
are coordinated and consistent.
Gartner Group calls the integrated approach of
Sales, Marketing, and Service applications
Technology Enabled Relationship Management
(TERM). This approach modifies the way the
organization interacts with its customers.
Figure 2
Shared Customer Repository:
The center of the CRM solution
Customer
Repository
Sales
Marketing
Service
Figure 3
Analysis Capabilities:
An essential dimension of CRM
Sales
Analysis
Customer
Repository
Marketing
Service
The CRM
Phenomenon
Responding to the need to combine e-commerce
and CRM initiatives, many of the traditional
CRM vendors are currently working on
expanding their CRM offering to the web. CRM
has been around in one form or another for a
long time. It is the emphasis that is being put on
an integrated CRM business strategy that
encompasses all customer touch points and
particularly the web, that is requiring significant
modifications to the old time CRM offerings.
Many of the traditional CRM players are
currently playing catch-up as the rules of the
game have changed.
Figure 4
An Integrated CRM Solution
Back-office
Systems
Sales
Analysis
Customer
Repository
Marketing
Service
c
e r
E - C o m m
Customer data
Customer data including financial and
demographic information must be kept upto-date. The information should be easily
available to anyone within the enterprise
who might have customer contact. It is
important that relevant outstanding issues
with the customer also be clearly flagged.
A customer shouldnt have to repeat a story
or supply an answer previously given to
another representative.
b.
Business rules
Business rules are often dispersed within
the organization causing inconsistent,
uncoordinated business decisions.
Traditionally, business rule engines are
attached to each of the CRM components
such as the Sales Automation or Call Center
systems. They frequently function correctly
but unfortunately independently of the
larger enterprise picture.
c.
The CRM
Phenomenon
Analysts claim that integration costs are anywhere
from 2 to 10 times the software cost, which is
keeping SIs very busy.
In addition, software companies that have a
software package that even remotely can be
considered a component of a CRM suite are
renaming their product CRM and are positioning
their business as such. Old call centers and
customer service applications are being revived
and repositioned to also jump on the CRM
bandwagon. Last, but not least, even the giants
such as Microsoft and Compaq are declaring
their CRM strategy and tying it into their other
lines of business.
Looking at the number of mergers and
acquisitions and at who the players are, indicates
the opportunity and desire of so many in this
area to have part of the promising and lucrative
CRM pie. It is interesting to note the crossing
of traditional business boundaries in so many of
the recent mergers and acquisitions.
Figure 5
CRM Growth Forecast,
IDC (99)
Billions
$12
$10
$8
$6
$4
$2
$0
1998
2000
2003
Year
6. Conclusion
popularity of CRM is fed by the fact that
The
better customer relationship management
10
The CRM
Phenomenon
11
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