Why Is CRM Becoming More Strategic?

By Geoffrey James

To paraphrase a late, great comedian: CRM can’t get no respect.

That truly used to be the case. CRM was a technological backwater, always playing second fiddle to so-called strategic applications such as enterprise resource planning (ERP). Today, however, CRM is widely seen as a key way to align and retool business strategies, according to a recent study from META Group, a high-tech research firm.

The META study revealed that C-level executives now view CRM as a primary way to realign their business strategies for greater profitability. Because of this, many companies now are planning to upgrade their current CRM systems with next-generation CRM architectures.

There are two primary reasons why CRM has been pushed to the forefront. First, some of the earlier strategic technologies, such as ERP, have reduced operational costs but done little or nothing to increase revenues. Executives now are looking to CRM to provide the link that takes their infrastructure the last-mile to revenue generation.

The second reason CRM has become more strategic is that, unlike ERP, CRM products tend to adapt better to the requirements of different industries and corporate environments. In fact, most CRM products now include industry-specific customizations, service-oriented architectures, integration frameworks and articulated value propositions.

There’s also a widespread understanding among executives that CRM is maturing as a technology, especially in the areas of sales automation and marketing campaign management, thus ensuring that a CRM implementation will produce immediate value. At the same time, CRM architecture and technology continues to evolve, providing new functions, with all of these initiatives directly tied to revenue generation.

For the sales manager, the challenge is to take this newly found respect for CRM and use it to obtain additional CRM funding. One warning: Now that CRM is strategic, it will be more visible outside the sales group. This means the selection of a vendor that can truly deliver the goods may become a critical evaluation factor that determines your status within the corporation. To ensure you don’t get bitten by second-rate CRM software, META recommends you evaluate vendors based on a variety of qualitative metrics, including:

  • vision and strategy
  • mind share in the CRM segment
  • depth of product features and functions
  • extent of vertical and industry-specific coverage
  • reputation and shortlist frequency
  • reference customers
  • effectiveness in managing new product introduction
  • breadth of services such as hosting and consulting.

Don’t feel as if you have to rush in where angels fear to tread, however. META believes that it will take organizations three to seven years to transform their CRM implementations. Meta recommends that sales managers consider their unique sales processes functional, budgetary and technological requirements, and tailor CRM purchasing decisions accordingly.