CRM Mega-trend: Companies Looking for Clear Business Value

Ann All

I can't stand Tom Cruise. Largely because of this, I was barely able to make it through "Jerry Maguire." So it pains me to use a reference from that movie. Still, if I had to sum up the overriding theme of IT spending for the foreseeable future, it's "show me the value."

With the economy showing no signs of emerging from its deep slump, IT executives are looking for a strong business case for their investments. So it's not surprising that items with obvious bottom-line benefits, such as server virtualization, data center consolidation and application integration. are at the tops of many CIOs' spending lists.

CRM is an area with a less clear-cut ROI. Yet companies that scale back too much on CRM spending risk experiencing a loss in customers, a fate suffered by some following the dot-com bust at the beginning of this decade, according to AMR Research director Eobert Bois. Earlier this year, Bois predicted that the memory of those customer losses would keep CRM high on companies' budget radar.

That may well be true, but they'll expect to gain clear business benefit. This is clear from a list of six key CRM trends for the coming year, offered by Forrester Research's Bil Brand on CIOZone.

That's been a problem in the near past. Brand mentions that 20 percent of the CRM projects he evaluated recently suffered from strategy issues. Problems included poor deployment approaches, mentioned by 40 percent of survey respondents; difficulties in defining business requirements (23 percent); inability to gain organizational alignment on objectives (18 percent); and concerns about cost (18 percent).

Is it any wonder, then, that all six of Brand's trends involve deriving more value from CRM investments? The trends:

  • The emergence of the social consumer. Brand seems to agree with other experts that companies can leverage Web 2.0 to foster closer relationships with their customers.
  • The imperative that CRM strategies deliver business value. Not sure if Brand ranked these in order, but I think this is the list's biggest takeaway, one that's essentially repeated in slightly different ways throughout the rest of the list.
  • The requirement to fully cost-justify CRM investments. See above.
  • The necessity to reduce the risk of CRM initiatives. There are clearly risks, as evidenced by the survey Brand cites in which 20 percent of CRM projects suffered from strategy issues.
  • The need to get more value from customer information. There's the "v" word again.
  • The battle to redress vendor pricing and licensing arrangements. CRM customers remain largely dissatisfied with overly complex licensing schemes, increasing maintenance costs and a lack of flexibility. With companies sitting across the negotiating table from vendors pushing for product upgrades, there will likely be some interesting discussions this year.


Add Comment      Leave a comment on this blog post
Dec 27, 2008 7:45 AM Sunita Sunita  says:
Hey,It looks like the same case as to spend more or less at a time of recession, obviousy he latter helps, and I think a integrated view shold be taken of the ROI and not functionwise.Sunitahttp://cat-mat-percentile.co.in Reply
Dec 27, 2008 7:52 AM Sunita Sunita  says:
Sorry I mean its better to Increase spending at time of recession. Reply

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