CEOs prodded to embrace online trade, CRM

Despite current market conditions, the future for business to business (B2B) and CRM software is bright – as long as company CEOs keep their heads out of the sand, say industry observers.

Several IT market analysts spoke last fall at the eCustomer World 2001 Conference in Toronto about what is necessary for a successful future for Canadian businesses.

Jordan Kendall, analyst at Forrester Research Canada, said Internet-based collaboration is completely inevitable. “Every business is going to be impacted in some way by online trade,” he said.

A Forrester research study found that while only 36 per cent of executives from 50 of the largest Canadian companies think that online trade is critical in 2001, 80 per cent think that is true for 2002.

Alistar Sutherland, director of service and software at IDC Canada, added that continuing to use conventional methods to get and keep customers won’t work any more.

“Customers, being people, are fickle,” he said, adding that IDC research shows that 60 per cent to 80 per cent of customers who defect from a company were actually satisfied or very satisfied with the product or service they were with.

Sutherland said only 42 per cent of surveyed Canadian companies, including three levels of government, financial institutions, telecom and retail, have a CRM strategy.

“It’s a very under-served market,” he said. Cost and return on investment, reluctance to dedicating internal resources and a resistance to change were the top inhibitors for developing the strategy, Sutherland said. More than 10 per cent of respondents say executive awareness is the key inhibitor in getting a strategy in place, he added.

“Our research shows that almost 70 per cent of senior decision makers, mostly CEOs, have no direct accountability for CRM results,” he said. “How much incentive do they have to drive it through?”

Most companies dedicated a low, six-figure dollar amount to a CRM strategy, Sutherland said.

The exception to that is telecom, where 30 per cent of companies maintain a seven-figure budget.

Jacob Abramowicz, senior research analyst at E-Search Canada, said if companies hope to be successful with CRM strategies and become “customer-centric” they first have to look inward and become “employee-centric.”

“The value proposition is really simple; not only are you able to know more about your customer, and better able to serve and service them, you are also able to improve internal efficiencies when you become employee-centric,” he said.

E-Search Canada research shows that integration of ERP and CRM systems, with PeopleSoft, SAP and Oracle’s products including CRM capability as a key selling point of their ERP systems, the mid-market’s role in CRM as well as what role the ASP model will play with CRM

“We know that there are other solutions in the marketplace, we still think that CRM supply chain management and e-procurement are at the forefront of innovation,” Abramowicz said. “But in Canada, we still see a lacking of understanding of what CRM means, let alone what it means to the model.”