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CRM: Where we're going, where we've been

This year has been filled with economic upheaval and uncertainty in all sectors of IT, and CRM was no different.

2001 has been a year of economic upheaval and uncertainty in all sectors of IT, and CRM was no different. Vendors that had previously been concentrating on technical elegance and rapid implementation were forced to provide proof of return on investment to clients who were unwilling to part with any portion of their budgets for speculative CRM and business intelligence initiatives. SearchCRM asked its resident experts to weigh in on the paradigm shift of 2001, and make their predictions on what will be hot in CRM in 2002.

Arie Goldshlager

Arie Goldshlager, eCRM practice leader,, predicted: "Companies will be religious about CRM ROI and demand that CRM initiatives be supported by fact-based business case and value propositions."

Michael Lowenstein, managing director, Customer Retention Associates, attributed the high failure rate seen in many CRM implementations this year to the tendency of companies to invest in technology at the expense of management mindset and company culture. "Much of the customer loyalty/CRM hype in 2001 centered around rapid execution tactics, i.e. ideas like worldwide CRM implementation in 90 days, frequently yielding disastrous results," he said.

Michael Lowenstein

Lowenstein said companies will need to focus more on the entire customer life cycle in the coming year, from acquisition to retention and advocacy, through loss and recovery. He also called for a radical change in thinking. "Companies will find that they succeed only when the entire culture is built around customer commitment," he said.

Companies have certainly changed their thinking when it comes to business intelligence.

When the year began, William McKnight, president of McKnight Associates Inc., was predicting a movement toward the "incorporation of external data, clickstream analysis, packaged solutions, data quality solutions, analytical calculations, CRM support and financial payback." If this had been accomplished, McKnight said, it could have rendered traditional data warehousing a thing of the past.

William McKnight

"What was hot in 2001 was the financial payback aspect of BI," McKnight said. "No longer were shops given dollars to speculate on BI with. Executives demanded payback."

Going forward, McKnight predicted that these same considerations will make the packaged approach to BI the hottest trend of 2002. "It is the hottest submarket within BI today," McKnight said. "(It) provides numerous benefits over custom data warehouse approaches, including overcoming the business distrust that IT can deliver, fewer vendors to deal with, lowered staff requirements, bounded ROI and the number one benefit -- time to market."

Bryant Downey, co-founder and CTO, Cintech Solutions, expects strong growth in customer interaction centers (or CICs) over the next 18 months, especially in the areas of e-mail and voice over Internet Protocol (VoIP). "The volume of e-mail continues to grow," said Downey. "This is the single-largest opportunity for CICs."

Bryant Downey

He also said despite a great deal of hype over the last several years, VoIP will finally come of age. "I believe that we are finally getting the hype behind us and companies that have been trialing and testing VoIP will begin to perform actual implementations."

Downey said one reason VoIP didn't make it this year was the slow adoption of broadband technologies during the past year. "Without broadband capability, a consumer is limited on the types of Web and data-based communication services that they can utilize," Downey said.

Front Line Solutions President Bob Thompson predicted a big year for partner relationship management (PRM) in 2002. "PRM crossed a chasm (in 2001)," Thompson said. "It's no longer some futurist thing."

Bob Thompson

Thompson sees PRM increasing in popularity as a facet what he terms the "collaborative e-business trend." Companies will attempt to create Internet-based business ecosystems in which vendors, partners and customers are linked, and PRM, CRM and legacy systems talk to each other with greater ease. This will solve some of the problems companies have been experienced with business process integration issues across the enterprise.

Despite the slowed economy, Thompson has seen the adoption of hundreds of PRM projects over the past year, and expects the trend to continue. "Clearly, the economy derailed growth and caused companies to focus more on efficiency, cost reductions and clear ROI ... (but) problems in distribution channels are so pervasive that ROI on PRM projects can be very compelling."

For expanded forecasts from searchCRM's experts:

Business intelligence in 2002 -- William McKnight

PRM in 2002 -- Bob Thompson

CRM strategy in 2002 -- Arie Goldshlager

Customer interaction centers in 2002 -- Bryant Downey

Customer loyalty in 2002 -- Michael Lowenstein

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