To the Future
again, CRM is hot.
Exclusive CRN/Aberdeen Group Research Reveals Something
Solution Providers Like Net@Work's Ed Solomon Have Known For A While:
CRM Is Hot Again, And You Can Use It To Gain Access To The Entire
years of bad press and slumping sales, solution providers are seeing
customer relationship management software regaining momentum, with
renewed customer interest and high satisfaction levels.
a $7 million solution provider in New York, has been
ramping up its CRM business in a big way. Every Monday, Net@Work
distributes an e-mail blast to existing and potential customers
that results in 200 to 300 weekly downloads of a booklet explaining
how to choose a CRM solution. In the past year, the company has
beefed up its 50-person staff with three new salespeople hired specifically
for their CRM backgrounds. And CRM has become Net@Work's primary
focus,extending its reach beyond accounting, warehouse management,
network infrastructure, e-commerce and custom business applications.
getting us in to a lot of customers we never met before," said
Ed Solomon, Net@Work co-founder and co-president with his brother
Alex. "This past year, CRM has become 15 [percent] to 20 percent
of our business."
new research by CRN
and the Aberdeen Group confirms what solution providers such as
Net@Work are experiencing. Twenty-eight percent of the 741 respondents
to the recent survey said they sell CRM now, and 19 percent more
said they expect to offer it within the next 18 months. Forty percent
of those that either sell CRM now or plan to within the next 12
months said they expect faster growth in CRM sales in the next six
to 12 months (see charts at bottom of page).
not surprising to Solomon. "We expect half of our revenues
will soon be associated with CRM," he said.
in mind that phrase "associated with." That's because
Net@Work doesn't sell CRM software from Accpac, Best Software and
Microsoft as an island unto itself. Instead, it uses the software
to pry open larger opportunities that span the enterprise.
>> ALMOST HALF OF CRM-FOCUSED SOLUTION PROVIDER RESPONDENTS TO A RECENT CRN/ABERDEEN GROUP SURVEY SAY THEIR CRM
SALES ARE NOW GROWING FASTER THAN THEIR SALES IN GENERAL.
while the CRN/Aberdeen
survey shows that many solution providers are now reappraising the
software, those already offering it reveal something deeper: This
isn't your father's CRM anymore. "CRM can help companies see
customer and vendor information in unexpected ways when they tie
that information back to accounting, to warehouse management and
other business applications," said Solomon. "The sky's
the limit in how you use the system and all the things you can tie
forget about sales-force automation as the raison d'%EAtre for adopting
CRM solutions, solution providers say. Instead, the power of CRM
for customers, and its strength for those that sell it, lies in
the way it can knit all relationship information across the company.
Think of it as business relationship management,the tie that can
bind the entire value chain. The key is in integrating the front-end
software with an almost unending string of back-end applications,
including accounting, workflow and supply chain management.
integration is vital. Research conducted by systems integrator Deloitte
Touche shows that, across industries, manufacturing companies that
add customer-centric information to their supply chain systems are
81 percent more profitable on average than their competitors that
it shows demand, having that customer-centric view drives better
decisions around sourcing, distribution, R&D, capacity, production,even
the kinds of options to offer customers in different parts of the
world," said Peter Koudal, director of Deloitte Research. "We
found that companies that can walk and chew gum at the same time
found a lot of benefits."
results like that, it's no small wonder that 41 percent of the CRN/Aberdeen
survey respondents rated CRM as a valuable business tool for their
customers. Another 30 percent said they thought "CRM can be
valuable but is difficult to sell and successfully install."
to Net@Work's Alex Solomon, those respondents are half right. "It's
easy to sell. But implementing CRM software is a whole different
story," he said. "You have to understand a customer's
current processes and operations, and you have to fit in CRM with
the other applications that handle those processes."
Cannady couldn't agree more. As president and CEO of Spinnaker Network
Solutions, Irvine, Calif., Cannady
wanted to find new ways to boost sales. Already a provider of Best
Software's CRM product, SalesLogix, Spinnaker could have added staff
skilled in a variety of back-end systems, but that would have entailed
a fairly hefty expense. Cannady's solution: He's formed a tight
relationship with Blytheco, a Lake
Forest, Calif., provider
of Best Software's accounting and ERP applications.
you get into integration, it's important to know the nuances of
every application that's involved," said Cannady. "Instead
of learning about accounting or ERP, we decided to partner with
a company where we could leverage each other's knowledge. Customers
see us as one entity."
the past year, the two solution providers have worked jointly on
integration projects that insert front-end information into back-end
systems. When Spinnaker finds an opportunity for Blytheco's expertise,
Spinnaker manages the opportunity. If a Blytheco customer wants
to add CRM capabilities, then someone from Blytheco oversees the
also going back to existing customers and offering solutions in
accounting that we couldn't do before," said Cannady. "Today,
25 [percent] to 35 percent of my business comes from this relationship."
fact, Accpac, Best Software and Microsoft have all been encouraging
this kind of matchmaking among their solution providers. The results,
say those who have found their match, have been encouraging. "The
deals are larger than they otherwise would have been," said
Wesley Snow, president and CEO of Ascendix Technologies, a Dallas-based
solution provider that sells SalesLogix and has formed an alliance
with Best Software partner Enterprise Resource Group, also of Dallas. "We have more than $1 million
in the pipeline as a result of this alliance."
few software categories have fired up the midmarket channel like
CRM. The reason is the emergence of products sophisticated enough
to handle the needs of companies with up to $250 million in revenue,
according to solution providers.
solution providers say, they can offer their midsize customers a
choice among products that are more capable than Act, from Best
Software, and less complex to implement than even Siebel Systems'
lower-end Siebel 7 MidMarket Edition. Solution providers consistently
cite newer CRM offerings from such companies as Accpac, Best Software,even
SAP,as a new generation that meets the needs of midsize companies.
CRM specialists aren't the only vendors trying to benefit from this
excitement in the midmarket. Vendors long-known for their business
application suites, notably PeopleSoft, Oracle and SAP, also provide
software that feeds customer- and supplier-centric information to
their back-office ERP, manufacturing and supply chain applications.
These vendors aim to compel customers to stick with their application
suites as they extend their front-facing capabilities.
is also among the first software categories to finally gain customer
traction with software delivered as a service, thanks in large part
to the success of NetSuite and Sales-force.com. But many credit
Siebel, with its recent introduction of Siebel CRM OnDemand and
its acquisition of ASP pioneer Upshot, for truly legitimizing this
disparaged hosted model.
important boost to CRM this year was the release in January of Microsoft
CRM, solution providers note, even though they rarely mention Microsoft
CRM in the list of products that meet the needs of their midsize
companies. The reason, everyone agrees, is that this first version
of Microsoft's first CRM product released last January is a tad,
well, shallow. Yet despite the universally acknowledged shortcomings
of Microsoft CRM, VARs and resellers responding to the CRN/Aberdeen
survey gave Microsoft top honors for its "ability to generate
revenue from the sale and support of CRM." Why rate Microsoft
so highly, given its software's limitations? "Contrary to prevailing
wisdom, technology is not as important as marketing, vendor presence
and viability, and a well-executed channel strategy," Aberdeen wrote about the survey results.
CRM's second act is proving to be a hit, said Manny Buigas, vice
president of sales and marketing at NextLevel Information Solutions,
truth is, this is the second attempt at CRM," Buigas said.
"Before, it was limited to sales-force applications. Now, we're
seeing it used to manage all of the relationships that are important
to a business. That's why people are finding more value in it than
they ever could, and why we're finding bigger opportunities with
[it]. You can use CRM for so much more than just the obvious."
once again, CRM is hot. That heat has fired up the channel, too.
» Read the article at CRN.com