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Analyzing the CRM analytics race

"Analytics" is the hot word in CRM these days. And it's not just the business intelligence vendors who are throwing it around.

New analytics capabilities may not be huge money makers for CRM vendors, but their customers certainly want them.

According to many industry analysts, analytics is one of the best opportunities for the enterprise CRM vendors to separate themselves from the competition and help businesses cross-sell, up-sell and cope with new regulations like "do not call" lists. Helping companies better understand existing and potential customers can obviously lead to revenue.

"A lot of [vendors] are already in the [analytics] pool, and some are getting in in a bigger way," said Robert Blumstein, research director of CRM analytics and marketing applications with Framingham, Mass.-based International Data Corp.

The overall worldwide analytics market will grow to $4.8 billion by 2007, Blumstein predicted in a recent report. That leaves plenty of opportunity for the CRM vendors, and each of the major enterprise providers has made moves in the space of late.

SAP AG jumped into the proverbial analytics pool recently with the announcement of several analytical tools available in the newly released mySAP CRM 4.0. The Walldorf, Germany, company added real-time analytics, marketing optimization, planning functions and out-of-the-box analytics scenarios.

Its entry into the analytics area is a bit late, yet right on target, according to Steve Bonadio, senior program director at Meta Group, in Stamford, Conn. "This new CRM analytics offering is a step in this direction, applying analytics to business processes and expanding to predictive capabilities," Bonadio said.

SAP touts its analytical capabilities as easily integrated with its back-office software. According to Chris Eldredge, product director of global marketing, SAP's analytics are grouped under six different topic areas. The first three are cross-channel analytics: customer analytics, providing an overall view of the customer; product analytics, identifying cross-selling opportunities and the best products; and channel analysis, including Internet sales, as well as service and partner analysis. The second three are more divisional analytics broken down into sales, marketing and service, Eldredge said.

PeopleSoft Inc. is also allocating resources to provide customers with new analytics capabilities.

"It's one of hottest waves in vendor investment, as well as customer investment," said Brad Wilson, vice president of CRM marketing. "It's where you can really change your business for the better."

The Pleasanton, Calif., company offers analytics embedded into its applications, with reporting functions targeted at vertical markets, Wilson said.

PeopleSoft introduced a new analytics package over the summer, promising ease of use and analytics tied more closely to operational CRM. PeopleSoft leaves the deeper, more complex models to the BI vendors, Wilson said. It partners with Business Objects SA, Brio Software Inc. and Cognos Inc. to offer operational reporting and classic business intelligence.

For Siebel Systems Inc., analytics are the company's third-largest and fastest growing product line. Siebel breaks down analytics into three strategic areas, according to Dan Lackner, vice president for marketing and analytics. First is in vertical industry applications, where "right out of the box, the user has a rich experience of problems facing their specific industry," Lackner said.

Additionally, the San Mateo, Calif., company focuses on expanding analytics access beyond the classic user communities of small groups within a company, such as sales analysts. It also extends analytics across multiple applications, such as operational and legacy software.

"These are not just tools, but applications," Lackner said. "When customers are given a tool, they usually get an ad hoc query tool and are pointed at a database. We provide users with a prebuilt relationship warehouse."

Earlier this month, Siebel unveiled five new modules aimed at improving cross-sell and up-sell opportunities in contact centers through views of relevant key performance indicators. Based largely on Siebel's investment into its ERM applications, the tools also provide insight into employee churn to help prevent and counteract turnover.

According to IDC's Blumstein, Siebel has gained the early edge selling its analytical offerings, chiefly by repackaging nQuire applications to its current customers. Siebel acquired nQuire Software Inc. in the fall of 2001.

Not surprisingly, at the intersection of the database and CRM is where Oracle Corp., Redwood Shores, Calif., pitches analytics.

According to Robb Eklund, vice president for CRM marketing and applications, companies are moving toward enterprise data warehousing initiatives that require a larger mapping area. Analytical technology is embedded within Oracle's 9i database, specifically extract, transform and load (ETL) tools, as well as data mining tools, Eklund said.

"If a customer has the E-Business Suite on a 9i database, they have advantages available to them, but the huge difference when you look at our competitors is you have managed analytics from one instance and one unified arch," Eklund said. "It's not a separate warehouse. We're able to support analytics from the same instance."

For Oracle customers without the full suite, analytical components are available, depending on the application.

In June, Oracle released a new version of its marketing automation software that extends analytics to everyday users. For instance, non-IT workers can now work with Oracle's customer modeling capabilities, allowing them to predict which customers will respond most positively to marketing campaigns.

Across the board, executives said that when it comes to analytics their customers were asking for intuitive interfaces, usable by both the higher-level executive as well as the number cruncher.

"They are catching onto the fact that they need to be agile and at some level need to provide simple analytics," Blumstein said.

Despite a new energy toward analytics from the enterprise vendors, Blumstein said, the market remains bright for pure-play business intelligence providers like SAS, Cary, N.C., too.

"It's still is a mixed marketplace," he said. "I wouldn't bet on any one corner of it."


Read about:

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