A review of new software products that can make a big difference to your business

Third annual CRM survey

By Michael Burns

Welcome to our third annual roundup of customer relationship management systems. This year, we have 17 systems, including ACT!, Epicor, Epiphany, Exact e-Synergy, GoldMine, Microsoft Dynamics CRM, NetSuite, Oracle, SageCRM.com, SalesLogix, Salesforce and SAP Business One. We are fortunate that many of the leading CRM vendors are participating in our survey this year. We also interviewed Microsoft, Sage and Salesforce.com for their views on trends and what they think makes them different.

The big CRM trends this year are hosting, integration and open source. Salesforce.com and NetSuite paved the way for application service providers to become a respected method for deploying this type of software. ASPs host applications on their Internet sites, which are typically equipped with state-of-the-art technology and security. This allows organizations to avoid the costs associated with managing the computer and database that goes with it. In 2006, both Microsoft and SAP jumped on the ASP bandwagon.

Integration continues to be a huge issue for CRM. An article in ComputerWorld (July 24, 2006) noted that Salesforce.com has “rolled out the latest version of its hosted software with added features that include a built-in link to SAP AG's ERP applications. The move is part of an effort by the customer relationship management vendor to address integration shortcomings cited by current and former users.”

 Another indication of the importance of integration was Made2Manage’s purchase of Onyx Software this year in a cash transaction valued at $92 million. A few years ago Onyx was one of the leading CRM vendors. Today many ERP vendors are including CRM, and it has become a big challenge for CRM vendors to compete with systems that are already integrated.

Open source refers to any program whose source code is made available for use or modification by users or other developers. Historically, software developers have not made source code available. But open source software is usually developed as a public collaboration – which is why there is no price tag attached. Still, the “free” applies only to the software, not to support or services. Most mid-sized and larger companies are risk averse and put their trust in systems developed and maintained the traditional way. That said, open source has other attributes, including the ability to change source code if necessary. This gives companies with the appropriate skills the potential to create customized applications without having to recreate more generic functions. It also allows for tighter integration with existing applications.

We try to improve our survey each year, and this year we have added questions about service management – ability to forward/reassign support calls, reason codes for analysis of problems, linking emails to a ticket/call, escalations based on rules, and the ability to close out multiple incidents at the same time if they all relate to the same problem. Our questions don’t include all requirements for service management, but they will give you an idea which vendors are worth examining in more detail.

Salesforce.com
Tien Tzuo, salesforce.com's chief strategist, says his company has 50% of the on-demand CRM market with about 25,000 customers and 500,000 individual users. But he doesn’t know what percentage on demand represents in the total CRM market. My research shows it to be about 10% but growing quickly, especially as other vendors such as SAP and Microsoft follow salesforce’s lead.

According to Tzuo, salesforce’s main selling points are its ease of use, ease of integration and customization. Ease of integration is partly achieved by providing a full set of application programming interfaces (APIs) that allow a third party program to update the database using salesforce’s business rules but without requiring access to source code. Because of the extent of integration required, however, the task can be daunting. Tzuo says salesforce has written integration for SAP as well as other systems, and is working on integration with more of them.

Tzuo says Saleforce has “popped the top off” its system to allow developers to use salesforce tools to build applications complementing salesforce. Apparently, third-party developers have written about 350 salesforce applications, which are available on Salesforce’s AppExchange. The exchange allows you to find and install new on-demand applications, many of which are free and all of which are pre-integrated with salesforce.

Microsoft CRM, Microsoft’s approach, according to Frank Falcone, CRM product manager at Microsoft Canada, is to offer customers lots of choices. You have your choice of user interface (Microsoft Outlook or Internet Explorer) and of payment method (lump sum or subscription). Soon, you will be able to choose whether it’s on the premises or hosted. Microsoft announced hosting through its partners in March 2006. This past summer, it also announced a new offering called Dynamics CRM Live (www.crmlive.com), which will be initially targeted at small and mid-sized businesses. Microsoft will operate and manage the service within its own datacentres but its partners will look after setup, training and customization. Dynamics CRM Live should be more appropriate for organizations looking for fast implementation and requiring little customization. Hosting through Microsoft partners is meant for organizations that have special requirements because of their industry.

This leads to the question: is CRM a commodity or is it more like an ERP system that can differ widely depending on the industry? For small companies that don’t need any integration with their back-office ERP systems, CRM is more of a commodity. But for larger companies, things get complicated partly because of integration. Microsoft CRM is integrated out of the box with Microsoft GP (formerly Great Plains). The company has “connector tools” for its other products and any other ERP system. Nevertheless, Microsoft CRM is still not integrated with Microsoft NAV (formerly Navision), AX (formerly Axapta) and SL (formerly Solomon), even though Microsoft CRM was first released in January 2003.

Sage Software
Dave Batt, senior vice president and general manager of global CRM for Sage Software, thinks Sage’s three CRM systems -- ACT!, SageCRM.com (formerly AccPac CRM) and SalesLogix – give buyers freedom of choice. ACT! is for small and mid-sized companies primarily interested in contact management. SageCRM and SalesLogix both cater to mid-sized companies looking for more CRM functionality, including sales force automation, marketing automation and service management. SageCRM provides “out-of-the-box” functionality and can be implemented quickly as either an on-premises solution or with SageCRM.com as a hosted deployment. SalesLogix is for organizations whose business requirements make CRM customization a necessity.

Sage recently conducted extensive research on its customer needs and found end-to-end business processes were critical. This means there must be tight integration between the front office (usually CRM) and the back office (usually accounting or ERP systems). But integration is not enough. Sage has begun providing integrated business process processeses so workflow components in CRM are linked to accounting transactions. For example, you could embed a contact management follow-up in one of Sage’s CRM systems and link it to a customer invoice in one of the accounting and ERP systems with which they are integrated to improve processes from sales orders right through to cash collection.

Batt also thinks mobile CRM solutions are a huge opportunity. Sage recently acquired Corum Mobile Division of Corum Corporation, a privately held software consulting and development company based in Concord, Ontario that specializes in mobile CRM technology. The Corum Mobile Platform supports BlackBerry, Microsoft Windows Mobile and Palm hand-held devices that provide CRM access wherever you are.

Those are the main trends for this year. Please send us your suggestions to make next year’s roundup even better. And if any CRM vendors not included in our charts try to sell you their systems, please tell them they need to be included in CAmagazine first.

Michael Burns, MBA, CA, is president of 180 Systems ( http://www.180systems.com/), which provides independent consulting service, including business process review, business case development and system selection. contact: mburns@180systems.com.