CRM rollout at Cisco stalled

What once looked to be a marquee deployment of hosted CRM software at Cisco Systems Inc. is now the subject of a damning report from a research firm that says the project has stalled.

In a note published on June 22, analysts from JMP Securities LLC suggested that a deployment of CRM software from San Francisco-based Inc. had been temporarily delayed. signed a deal with Cisco during the second half of 2004 that called for an initial rollout of up to 2,000 seats and a later installation of as many as 10,000 seats by June 2005, according to the JMP Securities report.

But end user resistance and integration challenges forced the deal to be renegotiated so that the rollout is staggered. Completion is now set for March 2006.

So far, according to JMP, only 1,000 live seats are in place and Cisco is due to review the deployment.

The JMP analysts said their “due diligence” suggests Cisco’s end users have been slow to embrace the system because it doesn’t support desirable sales tools such as territory management, advanced account hierarchies and forecasting. IT staff at Cisco are also struggling to link the software with those tools and are questioning the wisdom of relying so heavily on a customized hosted application.

The company is also coping with more issues than expected regarding change management and training, requiring Cisco to throw more resources at the effort. As a result, sales personnel are reverting to using existing nonhosted CRM software, which is still accessible.

“Last,” said the note, “we believe that executive support for the service may be waning due to some changes in the business operations leadership as well as a sense among the sales leadership that it’s not worth rocking the sales operations for a new software vendor.”

Cisco was mum about the note, stating only: “As a general policy, Cisco doesn’t comment on our relationships with vendors.”

For its part, declined to comment on any of the particulars of the report, but offered the following statement: “ has consistently been ranked at the top of the class as at it relates to customer satisfaction, and we’ll continue to work hard with Cisco and all of our other customers to ensure that remains the case.”

Another analyst raised questions about’s ability to support deployments of 2,000 seats or more, even if the vendor was successful at delivering rapid rollouts and return on investment at small and midsize companies. “There’s nothing wrong with the platform, but it’s not proven that it’s a CRM solution that scales,” said Rebecca Wettemann., analyst at Nucleus Research Inc. in Wellesley, Mass. Her opinion was based on a survey of 29 customers.

A report last month based on that survey indicated that the larger companies using the software typically do so on a divisional level with deployments that don’t exceed 1,000 seats., however, claims it has had a number of successful large deployments at major companies, such as the one at Corporate Express Inc., a Broomfield, Colo.-based provider of office and computer products and services. The company relies on a customized version of to support sales and collaboration efforts.

“We have had no issues with scalability in our environment, as evidenced by the rapid rollout of our first 2,500 users over the last year,” Mark Newhall, vice president for customer care and quality systems at Corporate Express, said in an e-mail message.

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