Goldenberg: CRM industry in recovery

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Barton Goldenberg says customer relationship management is on the mend. He should know. As president of ISM Inc., a CRM consultancy and research firm in Bethesda, Md., and as author of "CRM Automation," he has a bird’s-eye-view of CRM through work for b-to-b clients such as ExxonMobil Corp., McGraw-Hill Cos. and IBM Corp.

Goldenberg, who founded and co-chairs the DCI CRM Conference, discussed industry trends with BtoB after DCI’s New York show in August.

BtoB: What was the big topic of discussion at the New York DCI show this year?

Goldenberg: The CRM industry is in a recovery mode. It’s back on track. This is the first time in two years I’ve gotten up there [to deliver opening remarks at the show] and said: "We’re on track."

More successful CRM implementations are one factor. You’re now reading about 70% success rates from, rather than 70% failure rates from Gartner. We’re seeing companies getting the process first, then the people, then technology. That’s the right order.

Another indicator of recovery is stock prices. We’ve created a CRM stock index. In February, the S&P index was down 23% from a 12-month high, and [our] CRM index was down 68%. Last week, during the show, the S&P was up 3% and CRM was up 20%. In other words, our CRM index has gone from minus 68% to plus 20% growth over the past six months. This means that CRM is growing faster than the S&P. This is another indicator that CRM is back on track.

BtoB: What are the current trends in CRM?

Goldenberg: Executives and top management teams are "getting it." They understand it’s not a technology game. You have to incorporate structure and measurement. They’re demanding business cases that deliver strong metrics.

There are also three application trends. One is vertical markets. Once the Microsoft "hoof" came down earlier this year, CRM midmarket companies ran for cover by developing specialties in particular niches like manufacturing. That’s a good piece of news for the end user. The second trend is in the area of business analytics. There are better business analytical tools available, and end users are using them more effectively. The third technical application trend is in increased e-customer applications, particularly in the area of self-service. Most companies find CRM self-service applications more efficient to offer, and they’re finding customers prefer it.

There are three technology trends, as well. One is the wireless explosion. Web services is the second trend; that’s the new generation of CRM applications that use XML and offer services [online]. Then there’s "real-time enterprise." I made the argument in my opening comments that there’s an inefficiency in CRM in that it currently brings together the front office (like sales, marketing, customer service) and back office (like finance and HR). It fits together, but not ideally. It’s kind of hobbled together. It’s "proprietary hobbling." It’s not open or standardized.

[Real-time enterprise] is a process whereby companies connect all the internal Internet applications so that all information can be shared in real time. Everyone’s putting huge sums of money into it. Siebel has come out with a very impressive offering, and [Tom Siebel is] betting Siebel’s future on that. PeopleSoft is building its whole future on it. There’s just tremendous push on this. Bill Gates calls it "the agile business," but it’s the same thing. He’s betting his whole CRM division on it.

BtoB: Do trends differ depending on the industry?

Goldenberg: Every vertical needs good analysis. On e-customer and self-service, you could argue financial and high technology [companies] might be more ready to use self-service than others. On wireless, industries that have [people] in the field might be quicker to adopt the wireless trend, but we’ll all be wireless really soon. Web services will be adopted first by leading companies. Time-sensitive industries may be the first to adopt real-time enterprise, like utility companies, stockbrokers and air-traffic controllers.

BtoB: What are vendors offering right now to keep CRM top-of-mind among customers and prospects?

Goldenberg: They’re offering their own implementation. They’re also offering great prices. They’re also being realistic in expectations.

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