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CRM experts, analysts predict 2006

Think you've got the future of the CRM market all figured out? So do some of CRM's most respected experts. Find out if your predictions match theirs.

It's getting harder every year to predict what will happen in the wild world of CRM. Without a doubt, the past two years have brought more change and disruption than any other period in the history of this market -- from hosted IPOs to the evolution of open source CRM to Oracle's buying sprees… and the end of the Siebel era. So can we assume that the events of 2005 will catalyze even more change for the year ahead? There's still a lot of dust settling, but some of our best and brightest experts were willing to share their predictions. At least one common thread is the potential for open source CRM to make some headway in the next year. Only time will tell …


CRM wises up

By John Ragsdale

  • Oracle and SAP will discover that business users actually have a vote in software purchases and, for the first time ever, will articulate business value for NetWeaver and Fusion. IT directors, tired of attempting to explain to vice presidents of service, sales and marketing why they should care about infrastructure, will breathe a sigh of relief.
  • SugarCRM becomes the new darling of companies wanting low cost, quick to implement CRM, with viral marketing campaigns in the same vein as
  • North American B2C companies with a large under 25 demographic, will discover text messaging is a preferred customer channel and will begin offering self-service and agent-assisted service via text … years behind European counterparts.
  • Companies will stop sending out 100+ page RFPs of endless functional checklists (which all vendors can say "yes" to anyway) in favor of process-specific software evaluations. Decision makers will challenge vendors in a different way: "We plan to automate and optimize the following business processes. Provide examples of how you have helped other companies in our industry automate and optimize the same processes."

John Ragsdale is research director of the enterprise applications group at Cambridge, Mass.-based Forrester Research Inc.


Say goodbye to CRM as we once knew it

By Paul Greenberg

  • The customer experience with products, services and the company providing them will be the foundation for CRM going forward and will be increasingly a consideration for corporate strategies. Metrics will be developed to measure the success of the customer experience, and the idea that value resides with the customer will be critical in 2006 and beyond. CRM, as we knew it, will disappear by the end of the 2008.
  • "CRM On Demand" will become preeminent and though on-premise vendors will continue to survive, most companies considering IT investments and system investments will choose on-demand products for the enterprise and as a platform. However, the on-demand functionality will still not be as complete as on-premise by year's end, though that won't matter.
  • The open source movement and companies like SugarCRM will become a credible competition to the on-demand market. Open source CRM will establish itself as a solid alternative in 2006.
  • CRM will increasingly be integrated with strategies for social networking and at the application level, with social networking tools like podcasting, blogs and wikis, in addition to the harder core social networking applications such as LinkedIn.

Paul Greenberg is president of The 56 Group, a consultancy based in New York City, and author of CRM at the Speed of Light.


Time for open source CRM to shine

By Bernard Golden

Next year will be a strong growth year for open source CRM. Early adopters of open source CRM have been primarily small businesses focused on cost-effective, immediate products. Larger user organizations have been tracking the developments in open source CRM and will begin to deploy both pilot and production systems next year.

Awareness about open source CRM will also continue to grow with more coverage in the press. In particular, stories about open source CRM will become common in the mainstream technology press and even general business publications. Many of these stories will compare open source CRM with Software as a Service CRM and conclude that many organizations may be better served with an open source product.

The primary impediment to open source CRM adoption will, ironically enough, be tied to the increased awareness about it. As more mainstream organizations consider using open source CRM, they will call for more business-oriented analysis of how the products can improve their financial results and customer satisfaction. In addition, there will be more customer requirements for integration of these new open source CRM systems with existing technology infrastructure, which will force vendors to up their game to satisfy these customers.

Bernard Golden is CEO of Navica, an open source consultancy based in San Carlos, Calif. He is the author of Succeeding with Open Source, and the forthcoming Open Source Best Practices.


CDI/MDM market white hot

By Aaron Zornes

  • During 2005-2006, CDI software from vendors such as I2, IBM/DWL, Oracle/Siebel and SAP will monopolize the majority market share. Concurrently, a niche market will arise for hosted CDI/MDM products led by early-to-market vendors Alliance Consulting and Unisys.
  • While mega IT vendors IBM, Oracle and SAP will dominate in the CDI/MDM hub market, niche or best-of-breed vendors (like I2, Initiate Systems, Kalido, Siperian) will thrive in specific industries and horizontal or corporate applications.
  • During 2007-2008, CDI/MDM skill shortages will greatly inflame project costs as demand for data stewards, enterprise data architects and other individuals with strong affinity for data governance will outstrip the market for individuals with actual experience. Concurrently, systems integrators will fill the void in their classic style by baiting and switching senior veterans for junior rookies.

Aaron Zornes is founder and chief research officer at The CDI Institute in Burlingame, Calif.


VoIP in the contact center?

By Lori Bocklund

This year might just finally, really, well -- maybe -- be the year of VoIP and speech in the contact center. Analysts and vendors have been ahead of the customers in both these areas, but more centers seem poised for technology upgrades and replacements that could trigger the change to VoIP and speech applications. The knowledge and experience on how to do both speech and VoIP correctly has grown to the point where companies can enter into these projects with greater confidence, lower costs, and more realistic schedules.


  • Another area that will grow is performance tools. It's time to turn the mountains of data in the contact center into useful information, and more and better analysis tools and processes will be on many call center radars in 2006.
  • Other things to keep an eye on are the use of text chat and multimedia queues. We may not yet be at the "tipping point" for customer expectations on text chat, but I believe it is coming soon. Centers will need to be ready.

Lori Bocklund is the president of Strategic Contact Inc., a Beaverton, Ore.-based consultancy and the author of Call Center Technology Demystified.

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