CRM Comes Calling

Though not traditionally considered a critical business solution, CRM has
grown in leaps and bounds, with IDC projecting a market size of $34 mn by 2008,
up from $15 mn in 2003, a CAGR of 17%. But CRM has not really set the Indian
market on fire, largely due to lack of product awareness, ill-defined RoI and
TCO, and disheartening failure stories. The time is ripe to set the review the
CRM picture.

The Benefits

How to effectively handle the increased volume of customer queries and
manage internal customer service costs without sacrificing the quality of
customer service is a primary question all enterprises have to address. CRM
helps a business identify its most profitable customers, optimize multi-channel
communications and anticipate customer needs by intelligently drawing
conclusions from vast databanks of disconnected customer data that the company
collects on a daily basis. The organizational interaction can take place through
self-service questionnaires, e-mail, chat, knowledge base and analysis. Rajesh
Dixit, senior systems analyst, SAS India, says, "Intelligence created this
way is used to create the ideal marketing mix or channel distribution and
execute more targeted, effective inbound and outbound campaigns. The net results
obtained from the implementation of the ideal marketing mix are then assessed
and re-fed into the CRM."

As
marketing organizations become more and more sophisticated, they realize the
need to support consumer focused marketing, which involves careful, real-time
tracking of customer behavior. Marketing automation enables marketers in
implementing timely, personalized customer communication strategies, powered by
email campaigns, personal marketing, traditional and web campaigns and customer
analysis. In a more quantitative way, CRM marketing analysis tracks response
rates, costs and return on investment on campaigns.

Perhaps the most tangible CRM offering in RoI terms is sales support
automation. CRM sales aims at supporting a customer from initial interest in the
product to final purchase by leveraging rich historical contact data to zero in
on the specific needs of potential customers, gaining their confidence and
closing sales. Ashish Kamotra, general manager, Adapt, who sees a significant
trend in this direction, observes "Though the Indian market's response to
CRM has been generally slow, they are becoming aware of the fact that CRM
applications are important for them, especially in managing their sales force
and after-sales service."

CRM Today

New models have replaced the traditional one where the onus for the success
of the CRM implementation lay on the buyer's side. This is, now, the vendor's
responsibility, as exemplified by models like the hosted model and the
integrated solutions model.

In the hosted CRM model, also called the On Demand model, CRM applications
are used over the Internet. All data servers lie on the vendor's side, and the
vendor is responsible for all data management, backup, security and disaster
recovery. Outsourcing here has become a trend with the client paying
subscription charges per person, with zero upfront costs. Shifting the risk to
the vendor means that the client has time in which to figure out whether the
solution works for him or not. According to Nishant Singh, CEO, Acidaes,
"Investing in the hosted CRM model especially makes a lot of investment
sense for SMEs, who cannot invest heavily in IT resources and do not have a
requisite task force to justify the investment."

Another framework, which has found gradual acceptability among the Indian
buyers, is that of integrated solutions. This translates into eliminating the
need for multiple databases and reduces complexities as well as costs. According
to an IDC survey, integrated solutions are expected to emerge stronger over
time. Oracle has propounded this philosophy, emphasizing further the need for
having in place the right information architecture in order to avoid the
problems of integration. Rajesh Dixit, senior CRM specialist, SAS India says,
"A definitive CRM industry move will be towards building collaborative
systems. With CRM, ERP and SCM all in place, the company's intranet now needs
to work to provide access to an increasingly mobile and "flexi"
workforce, and also ensure the suppliers, customers and employees, who are all
interlinked, are able to share requisite data."

Drivers of Change

The basic drivers for any CRM adopter today are competition, benefits in
terms of RoI and TCO, and services orientation from the industry. According to
IDC, the top spenders have been the verticals of telecom, insurance,
hospitality, retail, manufacturing and healthcare, in that order. But the ones
building up the greatest momentum are the Indian private and nationalized banks,
which are looking at CRM in a big way. Sumeet Kapur, CEO, Global Groupware says,
"CRM applications are very popular in the manufacturing verticals for all
the three modules (sales, customer service and marketing) and in the BFSI
verticals for customer service, helpdesk and analytics. Telecom industry is
another active user of CRM especially for customer interaction management."
Call centes have been using CRM applications that are more focused towards the
contact management side such as email, chat, VoIP, inbound and outbound
telephony.

Internationally, CRM software vendors have realized that the best bet is to
offer consolidated products where all the pieces fit in the CRM picture, even as
CIOs realize that it is best to go for vendors with the best after-sales
support. The Indian CRM scene promises to reflect these trends.

Jasmine Kaur in New Delhi