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Gartner: Enterprise CRM returns

At the Gartner CRM Summit, analysts explain why enterprises are once again taking on large CRM projects and why it's more about processes than technology.

CHICAGO -- Once skittish about the large-scale and widely publicized failures of CRM, companies are once again returning to the idea of enterprise-wide, long-term deployments, according to analysts here at the Gartner CRM Summit.

"CRM is in a watershed year right now," said conference keynote speaker Scott Nelson, vice president and distinguished analyst with the Stamford, Conn.-based research firm. "In the last five or six years, CRM has focused on small, departmental initiatives. What we're seeing is a return to large-scale initiatives with a return to the enterprise view."

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According to Gartner research, spending on projects that provide a single view of the customer, no matter what channel they contact a company through, will double this year. A recent report from Boston-based AMR Research had similar findings, predicting a return to Count Grupo Posadas, one of the largest hotel chains in Mexico, is among those once again thinking big about CRM.

"We want to be totally customer centric," said Reuben Fuentes, deputy application development director and an attendee at the conference. "We're starting a large CRM project. We would like to enhance the experience of our guests and we're trying to set up the building blocks."

The renewed interest in large-scale CRM does not necessarily mean a boon for CRM suite vendors and packaged applications, however. Gartner predicts an uptick in companies building their own applications.

"Service-oriented architecture is becoming a big deal to the vendors," Nelson said. "The problem is, they're devoting so much time to architectures, they're not developing new CRM functionality."

In addition to build-your-own, Nelson said, niche vendors, particularly with vertical expertise, will help fill the functional gap.

CRM practitioners have learned the lesson that a successful project is more than just installing technology.

"A lot of people are finding out CRM is a lot harder than they thought," Nelson said. "If you have a decent IT department, you can install CRM. The problem becomes fundamentally changing your philosophy of the customer and becoming customer centric. IT and business professionals, regardless of industry or what geography [they're] in, are going to face fundamental changes."

Many of the problems that doomed CRM implementations had to do with a lack of focus on processes, one of the difficulties of CRM projects, particularly because sales, marketing and customer service are not process-driven departments, Nelson said. For example, one Gartner client, an insurance firm, implemented a CRM system that allowed it to speed up the claims that adjusters could file. The employees on the back end couldn't handle the increased volume, however, resulting in a backup of claims, which in turn resulted in adjusters calling into the back office asking what was happening and management following up. That in turn led to more delays.

"CRM developed a bad reputation because IT evaluated a system, installed it, rolled it out and found it made everything worse," Nelson said. "They didn't think of the big picture."

There are eight core building blocks to CRM, according to Gartner, any one of which can doom a project to failure. They are: vision, how an organization will change by becoming customer centric; strategy; a valued customer experience, determining what the customer expects; organizational collaboration, how a company alters communication to accommodate change; customer information, focusing on the core customer data; technology itself; metrics that can be tracked; and customer processes.

"Many firms skip [customer processes] altogether," Nelson said. "They take a flawed system and add automation. CRM means you can more quickly, more effectively tick the customer off."

In addition, marketing resource management, self-service tools, analytics and open source are -- according to Nelson -- emerging technologies that will help promote CRM investment.

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