Approach CRM with caution

As IT managers consider which technologies to invest in this year, they should exercise caution with customer relationship management (CRM) projects but expect high returns on investments in business intelligence software.

That’s the upshot of a report issued by Wellesley, Mass.-based Nucleus Research Inc. on the best and worst technologies for ROI this year. The report was based on a mix of user case studies and product road maps set by technology vendors, the firm said. CRM software in particular was cited as a potential source of ROI danger, as it was in an earlier report that the market research firm released in September.

The chances for companies to overspend “are greater with CRM” than with many other types of IT projects, said Ian Campbell, president and CEO at Nucleus.

To avoid that scenario, Nucleus analyst Rebecca Wettemann suggested two rules of thumb when planning CRM projects: never spend more than twice what you paid for the software on consulting, and be sure to set project milestones that can be achieved within six months.

Wettemann also said there’s strong ROI potential with business intelligence tools, especially as pressure mounts on data-analysis software vendors to improve the usability of their products in anticipation of Microsoft Corp. making a bigger splash in that market.