Customer centric software

Customer relationship management software is in favour once again as it promises to improve relationships and boost bottom lines. However, rather than implementing a tier one solution from the large enterprise resource planning vendors, an increasing number of local companies are looking for cut down solutions that better suit their needs.

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By  Maddy Reddy Published  April 11, 2004

|~|mounir_peppersandrogers11.jpg|~|Mounir Ariss, Middle East managing director for CRM consulting firm Peppers & Rogers Group.|~|Customer relationship management software is in favour once again as it promises to improve relationships and boost bottom lines. However, rather than implementing a tier one solution from the large enterprise resource planning vendors, an increasing number of local companies are looking for cut down solutions that better suit their needs. Confidence in customer relationship management (CRM) applications is on the up as tales of disappointing implementations and poor return on investment (ROI) are replaced by positive feedback and real business benefits. The latest statistics from IDC support this view, as the firm’s recent CRM ROI study reveals that successful implementations can yield returns ranging from 16% to more than 1000%. The analyst house also found that technology-related savings account for only 7% of the average return, while benefits accrued from increased productivity and business process enhancements account for 51% and 42% of the return. “Cost savings and productivity enhancements can be evidenced in saving a sales person twenty minutes per week in writing activity reports or answering four times the volume of web-based service requests in the same amount of time,” explains Mary Wardley, vice president for IDC’s CRM applications research. Other key findings from the IDC study included 58% of participants experiencing payback in one year or less and 35% achieving payback between one and three years. In addition, proponents of CRM worldwide argue that it brings a company closer to its customer, betters their understanding of a client’s needs and ultimately improves their bottom line. “CRM is an essential tool for building lasting and more profitable relationships with customers. When management has a single view of customers across all touch points and channels, they can make more informed decisions. The trend in the Arab world is for business to become much more customer centric, which is what CRM is all about,” says Marc Van der Ven, general manager of ACCPAC Middle East. While Aberdeen Research predicts that global CRM spending will hit US$17.7 billion by 2006, local market figures are also looking good. For instance, Madar Research Group estimates that the CRM market in the UAE alone will grow to US$90 million by 2008 due to a compound annual growth rate of 20%. Such positive feedback and market potential is the very reason the tier one CRM vendors are pushing their solutions so heavily in the Middle East market and picking up a growing number of customers. For example, in the past few weeks both Ali & Sons Group and National Bank of Dubai have signed up for CRM implementations, while Arab African International Bank (AAIB) has gone live with Oracle’s CRM module. “In view of the shifting regulatory requirements and the competitive nature of the Middle East’s financial services, banks here can’t derive enough value from standard business applications — we need solutions with inherent industry intelligence to help manage risk and profitability while enabling us to look after customers properly,” says Hassan Abdalla, vice chairman & managing director, AAIB. However, while the likes of AAIB and other larger enterprises in the Middle East are implementing tier one CRM solutions from the market leaders such as Siebel, Oracle, PeopleSoft and SAP, others in the region have taken a more specific approach to customer centric software. Rather than signing up for yet another module from their existing ERP provider they have, instead, focused on their specific need and scoured the market for a best-of-breed solution that best fits their requirements or opted for a cheaper solution from a tier two vendor. “There is no one-size-fits-all approach. Each company needs to have a unique approach in terms of requirements and integration,” says Mounir Ariss, Middle East managing director for CRM consulting firm Peppers & Rogers Group. This trend for taking smaller CRM solutions that boast less functionality but can get the job done is one that is sweeping the Middle East. ||**|||~|Asteco_inside.jpg|~|Ajith Mathew, IT administrator at Asteco property management. |~|This is partly because of the region’s corporate demographic in which small-to-medium sized businesses (SMBs) dominate, and partly because many organisations are simply unwilling to roll out expensive, large scale CRM applications following the technology’s patchy history in terms of successful implementations and rapid ROI. In an attempt to address this shift to smaller solutions, many ERP vendors are examining their CRM offerings and making them more attractive to the midmarket. For example, Scala has recently unveiled iScala CRM, which is powered by Microsoft CRM 1.2. In addition to touting its end-to-end functionality, the firm is talking up the product’s tight integration with Microsoft Office, which it hopes will convince the largely Windows-centric SMB community to buy its solution. Microsoft is also attacking this midmarket CRM space with its Microsoft Business Solutions (MBS) application. Built using Microsoft’s .Net platform, the vendor’s pricing for CRM 1.2 ranges from US$400 to US$1300 per user, depending on functionality, the number of modules deployed, licensing and customisation. “We are not SAP or Oracle in terms of functionality, but we provide whatever the customer requires, as more customers just need or use 30% of CRM functionality. We offer that 30%,” says Hussain Al Shaikh, solutions manager for MBS in Saudi Arabia. Another tactic being employed by a number of vendors to tempt smaller businesses to deploy CRM apps is online delivery. As such, a number of vendors either have, or are in the process of, developing such offerings. For example, ACCPAC introduced its online solution to the Middle East late last year. “It is for new customers, for whom CRM is a new concept and who do not want to lock in huge investments, but want to start small on a trial basis and then scale up. It will also appeal to businesses that are not comfortable with being locked into a particular technology or platform,” explains Van der Ven. Others within the local market also believe online CRM could find a niche within the Middle East. For example, ICICI Infotech is currently working on an online version of its Orion ERP package because it feels the complexity of many applications turns local users off. “[Online delivery] is where it will go in the long term,” says Hari Padmanabhan, president EMEA, ICICI Infotech. “Models like online CRM make a lot of sense, especially for SMBs,” he adds. Although ACCPAC is one of the first vendors to tout online CRM delivery in the Middle East, it is not alone in espousing the web as a simpler way of accessing the software. A number of companies, based primarily out of the US, have been offering applications in this fashion for some time. For instance, Salesforce.com, Salesnet.com and Upshot.com all offer similar hosted ERP/CRM services and Siebel recently launched CRMondemand.com with IBM. One San Francisco-based software start-up has even started offering free CRM software through its FreeCRM.com site. Furthermore, because the internet supposedly knows no boundaries, there is little reason why Middle East-based organisations cannot opt for a provider based outside of the region. While Riyadh-based trading company Inara is already looking at MBS’ CRM solution, other companies in the region have already opted for lower function applications from other vendors. For example, Asteco Property Management was loathe to migrate from its inhouse solution, which relied on e-mail, a customer database and spreadsheets, until Soffront pitched its CRM 8.0 product to the company last year. Implemented in three weeks at a cost of US$30,000, including consulting, software, training and concurrent licensing for up to 45 employees, the solution has already proved to be effective. “We had an inhouse developed application which couldn’t scale up to our growing requirements. Asteco was looking for a CRM solution that could provide detailed information on a minute-by-minute basis with transparency,” says Ajith Mathew, IT administrator at Asteco property management. ||**|||~|kalpheshdesai_icici_orion11.jpg|~|Kalpesh Desai, executive vice president, ICICI Infotech.|~|“Our initial ROI was targeted to be in eight months, but within three months more than 20% of the sales leads which couldn’t come through fell in place, post-CRM implementation. This delivered the ROI in just three months,” he explains. Asteco is currently working on plans to upgrade its web-based CRM solution with IP telephony, as well as building a mobile version of CRM for its 50 plus sales staff that handle more than 150 properties. Another company looking at mobile CRM is application vendor ADB, which is currently targeting end users in retail in conjunction with Jeddah-based Haseelah, a customer loyalty programme vendor. More than 1000 commercial outlets in Jeddah will be able to use the solution, which allows cashiers to convert purchases into loyalty points. Customers can view their accumulated points online, as well as at centrally located kiosk points by inserting their smart card. “Our Java-based mobile CRM solution integrates with any existing ERP implementation across any platform, since it essentially provides an interface between the wireless handheld and the backend,” explains Simon Cator, sales manager, ADB. Integration is essential, whether end users opt for a smaller CRM application or deploy solutions from the tier one vendors. If customer centric software is not tied in with other apps, such as financials and sales solutions, then it will not house all the necessary data and service agents will be unable to deal with customers to the best of their ability. “Companies have to amalgamate traditional CRM, demand and supply chain, e-business and integrate with ERP and legacy systems not just for employees but for partners, customers and suppliers,” says Kalpesh Desai, executive vice president, ICICI Infotech. “Regardless of [whether] the back end is different from the front end, the important thing is to link them seamlessly,” adds Peppers & Rogers Group’s Ariss. Another key factor is the human aspect. Again, this is the same for users of big CRM packages or one that has been cut down to address their specific needs. All companies have to do more than roll out the application and those that think this is enough will soon fail. Only those that invest in the necessary processes re-engineering and training will succeed. “By training their concerned employees on CRM, companies will be able to improve communication, the standard of service they provide, customer relations and customer service with all their individual and corporate clients,” says Nadeem Younis, HumanSoft/New Horizons’ general country manager. Management buy in is also essential, as it will not only sign off on the training required to successfully use customer centric solutions but it can also contribute to creating a CRM culture within a company. For example, Muammar Al Jaafari, deputy general manager at Golden Mobile, believes the success the Nokia distributor has enjoyed with its ACCPAC CRM solution can, primarily, be attributed to its top management. “The key to the success of our CRM was the intensive involvement of the management team during the implementation. There was a clear commitment, with management dedicating time to this project to make sure it worked the first time, answered specific customer and business requirements and was implemented rapidly,” says Al Jaafari. Both Gartner and Peppers & Rogers Group advocate this top-level involvement and suggest it is essential if a project is to succeed. Gartner even goes as far as predicting that 80% of companies lacking a CRM strategy are in such a state because top management involvement is absent. As Ariss says: “Technology is only an enabler, it is not the beginning or end of CRM. CRM is not a just a technology, it is a way of doing businesses.” ||**||

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