Integration—a panacea to CRM woes?

The Indian market may have warmed up to CRM, but the fireworks are still
missing. The belief in the philosophy of customer supremacy is stronger than
ever but teething problems with CRM adoption are far from over. According to
Gartner, "In terms of vendor license revenue, Indian CRM software market
was worth $15 mn (not including services associated with CRM deployment,
maintenance fee, hardware and custom development of CRM solutions, either
in-house or through a third party) in 2004. During the year, the market grew
approximately 11% and is expected to register a 14% CAGR between 2003-2008.
Frost & Sullivan also pegs the CAGR at a comfortable 13% over the next 5
years. But, what these comfortable figures fail to highlight is the fact that
management of customer relationships is still marred by laxities in terms of

CRM Integration-the way to go
Now that some measure of adoption has been achieved, it is time for the
enterprises to move up to the next phase of evolution. What they need right now
is a dose of a more holistic approach to CRM, which means connecting CRM to the
other applications deployed in the organization-to unleash the full potential
of the application as well as plug-in the loopholes. This need, believe
analysts, is going to shape an important trend in the coming years. Amit
Aggarwal, Research Analyst, Technology Practice Group, Frost & Sullivan,
points out towards an increasing trend to integrate CRM with the supply chain,
manufacturing and B2B marketplaces.

core issue is not technology related. It is related to the processes
and priorities of organizations. Once they are in place, technology is
usually a smaller matter” 
-Pranav Kumar, Research Director, Gartner India
“CRM is all about managing your customer information with the user at every level to provide him with easy access to information which is critical for his work” 
-Ashish Kamotra, GM, Adapt Software IAP India

Integration-driving CRM success
Integration is one of the key factors determining the success of the CRM
application. Laxities are there because the various functions within the
business and in cases of larger organizations, the various businesses, have not
been integrated. Taking an example: the credit card division of a bank has no
relation with the home loans division for the same customer. Very often the home
loan customer gets a call from the bank to take its credit cards. The bank, in
this case, has simply leveraged the database of its home loans division to sell
its credit cards without having any clue that the customer already has one from

Integration of various customer touch points needs to be tapped to overcome
this situation. According to Ashish Kamotra, General Manager, Adapt Software IAP
India, CRM is all about managing your customer information with the user at
every level to provide him with easy access to information which is critical for
his work. "Integration is a necessity for the entire system to work
properly," agrees Ravi Kathuria, Director Marketing, SSA Global India.

Apart from driving the basic day-to-day objectives of the CRM application in
an efficient manner, another critical issue today is deriving more
functionalities and analytics out of the application. It is important for the
sales representatives to have basic financial figures for their customers,
delivery status for the sales orders and inventory status, in the field or
whenever it is that they need it. 

“Integration of various customer touch points needs to be tapped. It is a necessity for the entire system to work properly” 
-Ravi Kathuria, Director Marketing, SSA Global India

These factors, says Kamotra, are very important for successful implementation
of any sales force Automation tool. Similarly, a service staff should be able to
view pending problems, spare parts availability and service revenue, as an
important factor to drive their CRM initiative. Integration becomes imperative
to meet the growing demands made on CRM owing to increasing competition. Some of
the key applications, high on the agenda of integration with CRM, include
back-send applications like ERP, SCM, accounting, billing, etc., and other
front-end applications like the Point Of Sale (POS) systems in retail where
bills are generated.

Present scenario
Lack of awareness and lower levels of maturity are some of the key factors
for the lack of enthusiasm about integrating CRM.

According to Pranab Kumar, research director, Gartner India, "Often,
companies implement CRM modules to solve a pressing problem without regard to
the big picture. So, there might not be any integration between back end and CRM,
but also between different CRM modules and different customer interaction
channels." Thomas Abraham, Director-India, Interact Commerce Corporation,
explains that the mindset of most of the companies who have already implemented
CRM is to concentrate on the stabilization of the application and ensure that
the primary day-to-day job is taken care of in the first phase, leaving
integration issues and getting more out of the application in terms of analytics
in the next phase.

Future expectations
A positive aspect of the growing awareness is the fact that many of the new
CRM implementations might go for integration right from the beginning. For those
implementing ERP, chances are that a greater number will be going for solutions
with pre-integrated CRM applications. The vendors are counting on the next 2-3
years for some significant action to start on the integration front.

Road Ahead…
  • Though bulk of the initial demand has
    come from financial services and telecom sectors, other verticals like
    professional services, automotive and even manufacturing are
    increasingly taking up CRM.
  • Marketing automation will become more
    important. Till now the focus has mostly been on customer service, and
    support and sales force automation, though some organizations have
    implemented customer analytics as well.
  • Growing demand for CRM applications
    from the SMB market.
  • Integration of CRM with other
    applications within the organization.
  • For large enterprises, the next stage
    would be to crosssell and upsell, based on large and historical
    database of customers and business transactions.
  • SOHO and SME will take up customer
    management more seriously and professionally as the next step.
  • Important factor would be to manage
    entire businesses using a single interface.
CRM software market at a glance
Size -2004
(%) (2004 over 2003)
Gartner $15
& Sullivan
mn** (estimated)
(over next 5 years)
not include services associated with CRM deployment, maintenance
fee, hardware and custom development of CRM solutions, either
in-house or through a third party.
per Frost & Sullivan, CRM software comprises four modules: Sales
Applications, Marketing Applications, Service Applications and
Business Intelligence.   

The first ones to take the plunge are the larger enterprises, whose CRM
implementations are in the process of stabilization. Following their lead will
be the SMBs, the next big opportunity in the CRM market. In terms of verticals,
the awareness relating to integration is relatively higher among the banking and
financial and the telecom segments. This will further percolate down to the
healthcare and manufacturing segments as well. According to Sanjay Agarwala,
director, ESS, "As the integration process take off in the second phase it
will lead to more efficiencies and improvements."

Drivers and Inhibitors
Drivers Inhibitors

Small and Medium Businesses

Indian organizations have been more supply-driven and less
customer-centric in nature. Their main focus is still on increasing
market share by enhancing product features, rather than focusing on
better customer care services.

Verticals like banking, finance and insurance, call centers,
export-oriented IT companies, telecommunications and direct
marketing companies.

Budgetary constraints and lack of understanding of CRM software
capabilities are also major inhibitors to demand.

The need to provide the sales force with updated databases.

Traditionally, Indian companies have lacked customer databases,
which are essential for adoption of any CRM initiative.

Basic IT infrastructure issues

Beyond the technology issue
However, at the same time, vendors and analysts offer a note of caution on
putting the blame for loopholes in the deliverance of CRM, entirely on the
technology factor. It’s all in the mindset. A basic customer orientation is a
pre-requisite for the technology to succeed. "The core issue is not
technology related. It is related to the processes and priorities of
organizations. Once they are in place, technology is usually a smaller
matter," explains Kumar. Many times, CRM deployment failures spring from
lack of process change or project management. As a result, the issue will have
to be tackled from the very core-of changing the basic orientation towards the
customers, with technology acting as the facilitator.

Team DQ

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