Surveying and Building Your CRM Future:

Surveying and Building Your CRM Future: Achieving High Performance with a New CRM Software Decision-Making Model

3 Surveying and building your CRM future

Surveying and Building Your CRM Future: Achieving High Performance with a New CRM Software Decision-Making Model Overview now includes, in addition to traditional high performance, we can help choose best-of-breed options, enterprise the model—or models—best-suited to There was a time, not long ago, platform vendors, numerous niche business and technology requirements. when choosing customer relationship vendors and software-as-a-service Our approach will help establish or management (CRM) software (SaaS) offerings. This technology refresh a CRM solution architecture was, if not simple, then at least landscape is more complex, subject to and development plan, and build a straightforward: one company, Siebel rapid change and harder to predict. strong, lasting foundation for high Systems, dominated the market with Service-oriented architectures (SOAs), in performance—what we call the CRM its comprehensive “best-of-breed” particular, are bringing the organizations Software Cornerstone. solution. Even after alternative trying to exploit this technology for solutions appeared, organizations CRM into uncharted territory. This paper describes Accenture’s could still simply issue a request for approach to CRM software selection proposal specifying their functional Accenture research has shown that and the key issues that organizations requirements, score different software one of the chief characteristics of should consider when evaluating providers according to how well their organizations that have mastered their software options. Subsequent products satisfied these requirements, customer relationship management papers will describe how organizations and then make their selection. is their ability to harness technology can build a high-performance CRM effectively. We can help organizations capability based on the strategic Today, organizations trying to build or explore the expanded range of foundation they put in place using our refresh their CRM capabilities using software options now available, approach. this classic approach to software and understand the business and selection have made a disturbing technology implications of each option. discovery: the decision-making model Using the expertise acquired through that worked in yesterday’s simpler two decades of helping hundreds of technology landscape is unequal to the organizations select and implement demands of today’s CRM market, which CRM software solutions that enable Surveying and Building Your CRM Future 4

Organizations that have already invested in CRM may be on the wrong path. CRM Software Today: A compensation management; and exacerbated by the software vendors, all Vendavo for pricing management. competing for share of voice and each Complex and Changing loudly proclaiming that its own solution Landscape Many organizations use a combination will set the trend going forward. Under of these solutions. The challenge faced these circumstances, the safest move The CRM software landscape has by the CIO of one large electronics may appear to be making no move at all. changed dramatically in recent years. company is becoming more common: his Once dominated by Siebel Systems— company is implementing a leading SaaS Yet simply waiting for these issues to the company that defined CRM best- solution on the front end while working resolve themselves entails enormous of-breed solutions—the CRM market with an enterprise solution on the back risk. Organizations must have a now offers many more choices. (See end. Both parts of the organization strategy that takes into account Figure 1, “Milestones in the evolution are supporting legacy systems and current trends and the potential impact of the CRM ecosystem.”) These include developing custom capabilities, while of these trends on the longevity of enterprise-platform vendors such exploring the need to move toward their end-state CRM solutions and as SAP, Microsoft and Oracle, which service-oriented architectures. CIOs like the total cost of ownership for these recently acquired Siebel Systems and this one can be forgiven for not sleeping solutions. Organizations that have PeopleSoft. In addition, SaaS solutions very well at night. already invested heavily in CRM may in such as Salesforce.com and Siebel fact be on the wrong path. OnDemand are increasingly seen as Together, these developments have sent enterprise-worthy, not simply solutions tremors through the CRM industry and Current business pressures also demand for small and medium companies. users are genuinely perplexed by what to a long-term strategy for dealing with the Filling the gaps in this landscape: a do next. Are SaaS solutions viable long- changing CRM landscape. Particularly in growing number of vendors offering term solutions or merely a temporary industries such as telecommunications, specialized, niche solutions—for stop-gap? Given ongoing vendor where commoditization is accelerating example, Unica, offering marketing consolidation, which enterprise platform and competitors multiplying, automation; Callidus, offering incentive is the right choice? This uncertainty is companies are compelled to focus 5 Surveying and Building Your CRM Future

CRM Milestones 1990 • Application service providers such as • Salesforce.com goes public. Oracle introduces a CRM solution UpShot, NetSuite and SalesNet begin • SugarCRM debuts, offering an open for the small-and medium-business to affect the CRM market. source CRM product. marketplace. • Siebel Systems and Microsoft announce a $250 million joint 2005 1993 development and marketing investment. • Microsoft releases Microsoft CRM 3.0. Siebel Systems founded. • Salesforce.com signs Merrill Lynch 2003 as a new customer, with more than 1999 • Siebel Systems launches CRM 5,000 users. Salesforce.com founded. OnDemand. • Microsoft releases Microsoft CRM. 2006 2001 • NetSuite debuts v. 9.0 of its hosted • Oracle acquires Siebel Systems. • SAP enters CRM marketplace. platform and expands to CRM • SAP releases its CRM On-Demand • Siebel Systems revenues reach applications. solution. $2.1 billion. • Microsoft CRM Dynamics becomes a 2004 service. 2002 • SAP overtakes Siebel Systems as the • Salesforce.com reaches 500,000 • Oracle releases its “Global CRM in 90 CRM sales leader. subscribers. Days” package. • Oracle acquires PeopleSoft. • SAP America introduces mySAP, a • Siebel Systems records its 3 millionth “middleware” hub that links employees, live user and announces vertical process and technologies. offerings for its hosted software. Figure 1: Milestones in the evolution of the CRM ecosystem on their front-office functionality. Founding a New Future: strategy for the back office interlocked To protect the customer franchise (or not) with that of our front office?" and accelerate growth, they must Decision Factors That “How do we intend to achieve our revitalize sales, marketing and customer Really Matter business objectives for customer service capabilities and re-establish growth and retention?” “What business what differentiates them. For these In the new CRM landscape, the capabilities will we need in the future?” organizations, there is no time to waste. traditional approach to selecting software is no longer adequate, and a In parallel, a company sets its CRM Accenture research has shown that new decision-making model must take technology strategy: “What new IT high-performance organizations have its place. The function-and-feature development skills and competencies mastered a range of factors in multiple comparison that long formed the major should we develop in-house, and which disciplines—strategic, analytic and part of traditional software assessment will we source elsewhere?” “Can we operational—in addition to technology. is now a decision factor far lower down leverage secure and reliable external They use this combined mastery to the list of priorities. Relative parity hosted environments?” deliver a more consistently satisfying now exists among vendors across many customer experience that creates of the core requirements for marketing, The business and IT strategies can then loyalty and, in turn, supports profitable sales and customer service capabilities. be used to establish a CRM end-state growth and high performance. Where gaps do exist, organizations architecture vision and roadmap. Accenture believes, therefore, that can fill them very quickly—possibly, by Companies will ask themselves organizations will build a stronger using SaaS or SOA options. questions, such as: “How broad and foundation for success by making holistic does our end state need to technology decisions that take into So what, then, is important in making be?” “Does the end state need to account their overall business strategy the CRM software decisions that lead cover marketing, sales and customer and performance objectives, and the to improved business performance? service all at once, or can the end- marketing, sales and service capabilities to-end architecture be developed they need to achieve these goals. Upfront, the CRM business strategy incrementally?” needs to be defined: “How is our Surveying and Building Your CRM Future 6

Accenture helps The people side of the equation is also vitally important and needs to the heart of Accenture’s approach are two key questions, to be considered organizations create be a decision factor: “How does our organization view new capabilities?” for each area of sales, marketing and customer service: the cornerstone “Do we strive for perfection or do we 1. What level of company-specific adopt a ‘good enough’ perspective?” flexibility and uniqueness is desirable for a lasting CRM “What is the ability of our organization in the business process? to accept transformational change: at 2. What level of enterprise data density software strategy. pace or at speed?” is needed? Yet, even once these issues are The first question considers the degree addressed, CIOs may still be in a of company-specific tailoring needed quandary. Having considered both the to differentiate business processes business and IT strategy, they may from the competition, versus the feel no closer to making an effective degree of standardization (industry- decision regarding their CRM software. specific or cross-industry) that is We recommend analyzing their desirable for businesses processes. situation from a fresh perspective. For example, chemicals companies are Accenture analytic and diagnostic shifting their recent focus on back- tools can help organizations create the office and supply-chain operations cornerstone for their long-term CRM to the front office: sales, marketing software strategy with confidence and customer service. They see highly that their decisions are the right fit standardized business processes as the for them—now and into the future. At key to help them make this transition Surveying and Building Your CRM Future

with minimal disruption. By contrast, To understand data density, consider proprietary Accenture CRM business companies in the telecommunications two contrasting examples. In a typical process maps and solution architecture and financial services industries, business-to-consumer environment, models. The results are then plotted on which are becoming increasingly sales agents need prescriptive, real-time a matrix to identify what we call the commoditized, benefit from having insights, derived from enterprise data, CRM Software Cornerstone. (See Figure unique marketing, sales and service which help them identify appropriate 2, “The CRM Software Cornerstone processes that differentiate their opportunities to cross-sell or up-sell matrix.”) business. during a customer interaction. This kind of enterprise has high data density. In a Calculating Data Density The second factor, enterprise data business-to-business environment, on density, considers the specific the other hand, giving sales people this enterprise-level data required to support kind of prescriptive insight is typically Expressed as a conceptual decision-making in customer-facing not an option, because the products are mathematical relationship, business processes. Data density is a more complex and customer needs are enterprise data density factor of: more difficult to analyze in real-time is the product of these • The types of enterprise-level data using an automated capability. required (e.g., invoice data, pricing variables: information, order history, etc.). Accenture’s approach gives organizations Types of Data • How much and how frequently the a solid, lasting foundation for building a Enterprise x Volumes & data is used. better CRM capability, relative to their Data = Frequency • The tolerance for latency—that is, business strategy and the highly dynamic how timely does it need to be? Is it CRM software landscape. Each functional Density Tolerance for acceptable to use data from last month, area within their CRM environment— Latency or is more recent or even real-time data marketing, sales and customer service—is required? scored for business process uniqueness and enterprise data density, using High Enterprise Composite Packages CRM Enterprise Data Density Software Niche as a Service Low Low Uniqueness in High Business Process Figure 2: The CRM Software Cornerstone matrix Surveying and Building Your CRM Future 8

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Each quadrant on this matrix identifies SaaS solutions have enjoyed comes Examples include pricing, quoting and a type of CRM software solution which from the way they have been tailored analytics. One of their key features may be appropriate, based on the for each implementation, to increase is the way they can be integrated process uniqueness and enterprise data user adoption. However, the business with custom code. Historically, each density that the company requires. processes supported (e.g., opportunity vendor has created proprietary tools These quadrants are: management) are more generic. and methods to address this issue; • Software as a service (SaaS) however, greater consistency is now • Niche (best-of-breed) SaaS solutions are also a good fit possible with solutions standardizing • Enterprise packages for processes with lower enterprise on common protocols—either J2EE or • Composite CRM data density. Because data is hosted .NET-based “bolt-ons.” externally in the SaaS model, data Laying the Cornerstone integration is a critical concern for As in the SaaS example, the breadth many organizations considering of data, volumes/frequency and the As part of its CRM software strategy, this option. A common fallacy here level of data latency are kept within a company should consider the is that data integration is neither manageable levels to avoid spiraling implications of each quadrant of the possible nor practical with SaaS; on complexity (and cost) of integration. CRM Software Cornerstone matrix. the contrary: because Web services This approach helps ensure software are now standard, integrating legacy 3. Enterprise Packages choices that are best-suited to business systems with SaaS solutions is usually no more complex than integrating with High strategy and performance goals. in-house systems. The key aspect of Enterprise Composite Packages CRM lower enterprise data density is that 1. Software as a Service (SaaS) Enterprise the breadth of data, volume/frequency Data and the level of data latency are kept Density High Software to manageable levels, to avoid spiraling as a Service Niche Enterprise Composite Packages CRM integration complexity (and cost). Low Enterprise Low Uniqueness in High Data 2. Niche Business Process Density Software Niche High as a Service As enterprise data density increases, Low Enterprise Composite enterprise packages become more Packages CRM Low Uniqueness in High Enterprise relevant to a company’s needs. Business Process Data Implicitly, the level of enterprise data is Density more readily available as part of these Although SaaS solutions may not cover Software Niche as a Service solutions—e.g., for ERP data used across the full breadth of CRM functions Low the organization by the finance, supply that large enterprises require, these Uniqueness in chain and HR functions. Interestingly, solutions have proven effective at Low High Business Process at present, most enterprise package supporting many core functions. solutions still hold CRM and ERP data in Niche offerings are the best fit for separate databases—a legacy of creating Accenture’s view is that CRM SaaS areas that require higher business different modules under an application solutions are best-suited to processes process uniqueness but lower suite (i.e., SAP and Oracle). that require less business process enterprise data density. Niche offerings uniqueness and involve lower data are typically classified as “best-of- However, pre-defined “connectors” density. By definition, SaaS solutions breed” in specific process areas. They do exist, as well as common data provide commodity services; multi-tenant support a high degree of configuration structures and types to simplify the SaaS models like Salesforce.com provide and customization for creating exchange of data. The key aspect of highly cost-effective services because uniqueness in a business process. enterprise packages is how business they can leverage a single model across process uniqueness is managed. multiple organizations and multiple Such solutions are often characterized The golden rule in implementing industries. Such SaaS services can still as engines that accept multiple user- such packages: try to stick within be configured to individual customer defined, company-specific variables the basic application as much as needs. Indeed, much of the success to adapt and tune a business process. possible to minimize customization. Surveying and Building Your CRM Future 10

High Enterprise Composite Packages CRM Enterprise Data Density Software Niche as a Service Low Low Uniqueness in High Business Process Figure 3: The evolving CRM ecosystem However, following this rule has For situations where business process The Evolving CRM presented challenges for many uniqueness and enterprise data organizations attempting to create density are both high, composite CRM Software Ecosystem greater uniqueness in their business solutions are emerging as the best fit. processes. Customization has a large Essentially, a composite CRM solution By definition, an ecosystem is a living impact on maintenance and increases is a solution that enables organizations thing, always evolving. Although the complexity and cost of upgrades. to move toward SOAs. Accenture ecosystems may evolve in unexpected Higher levels of customization also defines a SOA as a business architecture ways, Accenture believes that a make the pre-defined integration where separate business functions on dominant feature in the evolution of the connectors less useful, increasing autonomous systems inter-operate CRM ecosystem will be the increasing overall integration complexity. to execute a business process. This popularity of SaaS solutions and business architecture is “orchestrated” composite CRM solutions. (Refer to the 4. Composite CRM by a separate mechanism rather than sidebar on page 12 for examples of two hardwired into applications. This means companies that used these solutions to High that highly adapted company-specific their advantage.) Enterprise Composite services can be created to drive a high Packages CRM level of uniqueness for individual business Enterprises are likely to continue Enterprise Data processes, by tapping into new custom expanding their offerings to support Density functions, existing legacy systems or composite CRM. Niche vendors will likely Software as a Service Niche external services. The SOA end-state also expand into the SaaS space—either on enables a high level of enterprise data their own or, more likely, by partnering Low density, with a shift toward increased with other established players—for Low Uniqueness in High Business Process master data management across a single example, using Salesforce.com’s logical and even physical data repository. AppExchange or perhaps leveraging new SaaS platform providers. (See Figure 3, “The evolving CRM ecosystem.”) 11 Surveying and Building Your CRM Future

One implication of these trends is are moving their customers in that organizations must approach this direction whether they feel their CRM software decision as if prepared or not. Accenture can help they were boarding a moving vehicle. these organizations understand the Organizations that today would buy technology, identify which areas of enterprise or niche software may soon their business will benefit from a SOA find that a SaaS solution or a composite and develop a plan for implementing it. CRM solution may be a better fit. One thing is clear: CIOs and other IT Some early SaaS adopters have been decision makers are moving through a surprised to find the implementation more complex, dynamic and unpredictable more challenging than they expected. In landscape when it comes to CRM. The those cases, they may have customized principles and strategies they relied on in their business processes to an extent the past when making software decisions that makes an easy implementation will no longer serve them well. impossible. Other organizations in this situation may need to re-engineer their Accenture can help. We believe business processes before trying to that by focusing on what matters implement a SaaS solution. most, organizations can establish a strong foundation for building CRM When it comes to SOAs, few capabilities that help them achieve organizations have completed a high performance. Our experience and successful end-to-end implementation; diagnostic models will provide insight users may prefer to wait before into these issues, and help prevent or heading down this path. However, mitigate future problems. CRM enterprise platform providers Surveying and Building Your CRM Future 12

By focusing on what matters most, organizations establish a strong, lasting CRM foundation. A Composite CRM Solution Based on this evolution, and on more adapted across each line of business and recent events involving Oracle’s across multiple regions. An accelerated for a Financial Services acquisition of Siebel Systems, the approach enabled gap-fit analysis Company bank is in the process of designing of Salesforce.com capabilities to the a new system infrastructure for its business process. Standardizing business This large North American bank has applications, aimed at leveraging SOA process to industry and cross-industry been one of Siebel System’s largest capabilities within a composite CRM leading practices was enabled through a North American customers. Over time, model. By leveraging a service-oriented highly empowered governance structure the bank’s Siebel solution came to architecture (SCA and SOA solutions across the regions. In this way, process play a critical role in supporting core such as Oracle Fusion Applications), the variation (business process uniqueness) business functions, such as call center bank expects to address requirements was minimized, with agreed differences customer service and branch account for high levels of enterprise data density handled through specific Salesforce.com management, including opportunity and meet its integration challenge profiles. Enterprise data density was management. Supporting these head-on. In a process-centric, composite tightly managed alongside the business mission-critical, complex business application, heterogeneous systems act process. System integration requirements processes required the integration of in concert, accessing data and business are restricted to basic membership/ multiple legacy and online systems. The logic where they reside to support a subscriber counts by key entities. application also needed to support a unified, differentiated business process. growing number of users and business To date, more than 500 sales and functions. Together, the integration account management users have complexity and the need to support A SaaS CRM Solution for a been successfully deployed as part of more business functionality were Healthcare Company the phased regional implementation. driving higher total cost of ownership, Performance metrics are tracking and degrading system performance. A major North American healthcare behavioral change within the sales company is enjoying enormous success force to shift to a more proactive mode Siebel Systems proposed a solution in applying a SaaS CRM model, based of operation and to create a greater involving a new product set called upon Salesforce.com, to enable a number of trusted advisor relationships Siebel Component Assembly (SCA). SCA strategic sales transformation. The with customers. is a custom development framework, challenge for the company was how as well as a set of next-generation to operationalize its sales strategy at The best fit for the SaaS model is front-office applications built natively speed across seven autonomous regions being truly exploited by managing on standard technologies leveraging a over five different lines of business, down business process uniqueness service-oriented architecture (SOA). while driving down overall total cost and enterprise data density. In of ownership. The company engaged parallel with the Salesforce.com Siebel Systems asked Accenture to Accenture to help, given Accenture’s implementation, the company is also participate in the early stages of the proven SaaS implementation experience. applying niche solutions for pricing, SCA development and piloting efforts. using Oracle PeopleSoft for enterprise- Because of this experience, the bank Accenture and the company worked level requirements and piloting a SOA asked Accenture to team with Siebel to define a common standardized program. Systems to integrate the SCA solution business process for sales and account with the bank’s overall architecture. management which was progressively 13 Surveying and Building Your CRM Future

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Accenture can help you understand the changing CRM landscape and build a strong, lasting foundation for high performance. About the Authors Saideep Raj is a senior executive with Would You Like to the CRM service line at Accenture, where he is responsible for developing Learn More? Saj Usman is a senior executive with the CRM service line at Accenture, service-oriented architecture solutions Accenture wants to help your where he is responsible for the that help companies transform organization survey and understand company's CRM capabilities in North sales performance. Mr. Raj created what the shifting CRM software America. He is also responsible the Accenture methodology for landscape means to you. We are the for Accenture's CRM alliances implementing software-as-a-service trusted CRM advisor to hundreds of worldwide, including the company's solutions, and he has led major leading organizations around the CRM relationships with Oracle, CRM on-demand implementations world, and a consulting partner to the SAP, Salesforce.com, Microsoft and for large enterprises. He has CRM industry's leading technology Callidus, among other companies. worked with clients in multiple vendors. For more information about Mr. Usman has extensive experience geographies and industries, including how Accenture can help you achieve with CRM packaged software, custom high-tech, healthcare, chemicals, high performance, contact applications and service-oriented telecommunications and utilities. He sajid.usman@accenture.com. architectures, including solution received a Bachelor of Engineering planning, architecture design and from University College London. program management. He has worked with organizations in many different industries, with a focus on financial services providers. He received a Bachelor of Arts in Computer Science from Boston College. 15 Surveying and Building Your CRM Future

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About Accenture Accenture is a global management Accenture is widely regarded as consulting, technology services and the leading provider of consulting outsourcing company. Committed solutions and managed services to delivering innovation, Accenture designed to deliver high performance collaborates with its clients to help to your business. The company infuses them become high-performance marketing, sales and customer service businesses and governments. With operations with strategic insight, deep industry and business process sophisticated data analysis, advanced expertise, broad global resources and technology and operational excellence. a proven track record, Accenture can Combining experience, innovation mobilize the right people, skills and and a global delivery network, our technologies to help clients improve Customer Relationship Management their performance. With more than professionals team with clients across 133,000 people in 48 countries, the virtually all industries to design and company generated net revenues of implement strategies for creating US$15.55 billion for the fiscal year customer experiences that enable ended August 31, 2005. Its home page growth, increased profitability and high is www.accenture.com. performance. Copyright © 2006 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

Surveying and Building Your CRM Future:

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Surveying and Building Your CRM Future: Document Transcript