Quick, word association time – oxygen is to fire as CRM is to…the Canadian mid-market.
CRM mid-market is hot, say analysts in this space, and vendors like Microsoft Corp. and Oracle Corp., which recently entered the fray with CRM mid-market offerings, agree.
Oracle recently announced a new online CRM solution designed to automate all front-office customer transactions for companies with up to 500 employees. The announcement from NetLedger – maker of the Oracle Small Business Suite – comes on the cusp of Microsoft’s anticipated entrance into the mid-market with its CRM offering, expected to be released late this year.
CRM, in its entirety, is often defined as a philosophy, a strategy or a principle to be used to better serve the customer. Not surprisingly, this is why the majority of analysts agree it is 80 per cent people and processes and only 20 per cent technology. But what does this mean to mid-market companies? Despite the hype, they are treading lightly.
“A lot of companies get caught like deer in the headlights when they see the CRM car coming at them, and they get a little scared because they think it is this big overwhelming initiative that is technology-based,” said Al Povoledo, senior manager with the customer management practice at Deloitte & Touche Solutions in Toronto.
“I see a lot of companies that have good CRM that don’t have CRM technology, and I see a lot of the exact opposite,” Povoledo said. A company can still succeed at CRM, Povoledo continued, if it modifies its processes to meet the customer’s needs – the key to remember is that better customer relations are not based on technology.
Toronto-based E-Search Canada’s definition of CRM is “a business philosophy that leverages information to increase profitability through improvement in customer segmentation and selection, sales and marketing, customer service and customer satisfaction and customer loyalty.”
Jacob Abramowicz, E-Search Canada senior research analyst, noted the reason vendors are aggressively attacking the Canadian mid-market is that our economy is mostly a mid-market economy. “Many of these vendors have a great opportunity here because most companies don’t have much in the way of CRM implemented,” Abramowicz said. But defining what the mid-market actually is in Canada, is a different story, he adds. “Even though there is a lot of buzz surrounding the mid-market is, it hasn’t quite happened yet.”
Abramowicz said the usual vendor suspects comfortably playing in the CRM mid-market space right now include Siebel Systems Inc., Pivotal Corp., SAP, E.piphany, Inc., Salesforce.com, Onyx Software Corp., Peoplesoft, J.D. Edwards – to name a few. Larger companies such as Microsoft and Oracle are muscling in on this turf, he added.
“The entrance of Microsoft is a huge benefit for CRM in general only because it is going to gain a lot of publicity for CRM practices and tools,” Abramowicz said, adding even though Microsoft expected to move upstream to larger markets, they’ll probably impact smaller CRM vendors and, in time, will grab market share.
To avoid falling for the hype which has surrounded CRM for the past few years, companies must first figure out what they are trying to address or solve, Abramowicz said. Mid-market companies need to start with a defined goal, execute it across silos and around customers, he noted, adding that adoption with a “customer-centric” focus is critical to CRM success.
– With files from IDG News Service