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BR>Just the Facts: Business Benefits of CRM ................................................... 21
Why CRM? The Business Case for Customer Relationship Management Page 2
Why CRM? The Business Case for
Customer Relationship Management
EXECUTIVE OVERVIEW
In virtually every industry and every global region, forward-looking organizations
are investing in customer relationship management (CRM) technology to support
the adoption of more customer-centric strategies. Examples of leading, global
companies with major CRM initiatives underway are shown below:
Table 1: Global companies are investing in CRM technology to support the adoption of
more customer-centric strategies.
Organizations are adopting CRM and related technologies because they understand
that having the technology to execute a customer-centric strategy is a business
imperative.
Just as back-office automation became critical for competitive success in the last
half of the twentieth century, the application of technology to front-office
processes—sales, Marketing, customer service, and partner and employee
relationship management—is now an imperative for success in the new century.
Organizations that understand the strategic value of CRM technology to achieve
dramatic increases in revenue, productivity, and customer satisfaction will have a
significant lead on their competitors who lag in the adoption of this technology.
Why CRM? The Business Case for Customer Relationship Management Page 3
A BRIEF HISTORY OF CRM TECHNOLOGY
In little more than a decade, CRM technology has undergone a rapid
transformation. When first generation applications were introduced in the early
1990s, they were better known as sales force automation (SFA) applications
because they were geared exclusively toward automating the activities associated
with field sales, including contact management, opportunity management, and
revenue forecasting. SFA technology was functionally trivial, and the hardware it
ran on was not user-friendly. “Automated” salespeople had to rely on bulky,
portable computers, barely legible visual displays, and capricious modem
connections to use the software. In addition, software vendors of the time rarely
consulted end users when developing applications. As a result, end user acceptance
of the solutions was often poor. Many salespeople viewed SFA software as an
“electronic leash” or, even worse, as a surveillance tool.
In this early period, IT solutions were sold as discrete, departmental packages, each
one serving no more than 100 users. In a fragmented market, companies bought
separate solutions for the field force and the call center, and the applications did
not communicate with one another. SFA applications both exacerbated and were
victimized by the notorious “silo effect”—different departments operating in
isolation and maintaining separate information stores.
By the mid-1990s, leading CRM software vendors began to offer their customers
integrated information systems. Applications for sales and service converged, the
software became far more scalable, and applications for marketing were introduced.
And as CRM software vendors sought more input from end users, the applications
became far more user-friendly, leading to much higher rates of user acceptance.
Around 1998, CRM technologies took another quantum leap in response to the rise
of global