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CRM's ROI answer

Companies seeking to get the "360-degree view" of their customers and achieve some ROI out of their CRM investment may have to spend a little more on customer data integration.

Companies wondering what happened to the ROI on their CRM investment may be able to find it with a little more investment of time and money, according to one analyst.

The answer, said David Newman, vice president of technology services for Stamford, Conn.-based Meta Group, lies in customer data integration (CDI).

"This has been the issue for a lot of organizations," Newman said. "They have not been able to achieve the ROI. Why have some of these implementations failed? I submit that CRM is like any other large integration initiative. Often, organizations overlook aspects of data management and data architecture."

Over the next three years companies will adopt CDI technologies to resolve data conflicts and accuracy issues, Newman predicts in a recent report. CDI tools from business application vendors and niche players will proliferate and by 2008, investments in those technologies will result in real-time synchronized data to mine customer behavior patterns and provide analysis across the enterprise.

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"It's really an infrastructure," Newman said. "It helps you develop a consolidated view of the customer."

With one system of record, for example, a catalog retailer can access past purchases and a call center agent can use that information to recommend new items.

Existing application vendors have already begun tapping into this market. Siebel Systems Inc. offers its Universal Customer Master, Oracle Corp. has the Customer Data Hub and SAP AG offers Master Data Management. These infrastructure platform packages are one category within the CDI technology market, according to Newman. Companies also have the option of pure-play vendors that aren't tied to a specific technology, such as Siperian, DWL and Initiate Systems. Alternatively, there are service bureaus and data brokers such as Acxiom, Experian, Fair Isaac and Harte-Hanks.

CDI technology provides tools that create data models, rules for data quality, cleansing and integration, and ways to track certain events. For example, when customers call into the contact center to change their address, CDI can trigger follow-ups in other departments.

The good news is CDI projects cost only a fraction of what companies spend on CRM. The projects are not necessarily easy, however. The marketing department has a different view of the customer than the finance department. Technology alone does not solve that problem. A CDI implementation team should include a group with an enterprise architecture focus and cross-functional groups, Newman said.

"The reasons why organizations are being challenged by CRM is it's been driven by one or two groups," Newman said. "The more senior management sees this as critical not only to CRM but also ERP, this architecture can be extended not just to meet CRM's ROI objectives, but also meeting enterprise standardization objectives."

This is still the early adopter stage of CDI, Newman said. CDI complements data warehousing, which looks at historical data and provides a retrospective analysis, by offering real-time information and predictive analysis.

"This is an infrastructure that will accelerate the acceptance of data mining, predictive analytics and transactional BI," Newman said. "What will emerge is the rise of the analytic network."

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