Wrestling with CRM’s status as an application deployment nightmare, two technology heavyweights have revealed their CRM strategies in a move that highlights divergent views on the role of Web services.
Both Microsoft Corp. and AT&T Corp. agree that implementing an internal CRM strategy is no picnic but a point of departure has emerged over how large enterprises can simplify the complexity of enterprise integration.
Although both companies rely on Web-based access to data, AT&T is depending on a single-software vendor, whereas Microsoft is adding Web services on top of applications from multiple providers.
Executives from the companies used separate presentations at Frost & Sullivan Inc.’s recent CRM conference in Scottsdale, Ariz., to detail the challenges of their experience with CRM, reflecting widespread concerns about the successful implementation of the technology.
“We’ve contributed to the 70 per cent of failures,” admitted Mark Foster, vice-president of sales channel effectiveness at AT&T Business in Bridgewater, N.J., referring to industry figures regarding the rate of CRM success. For example, a recent Meta Group report stated that 55 per cent to 75 per cent of all CRM projects fail to meet objectives.
AT&T was in the fifth month of an ongoing CRM implementation based on software from the Oracle E-Business Suite 11i, but to date the company has had some trying times, Foster said.
For its part, Microsoft is attempting to deploy its .Net Web services strategy, which Web-enables application services on top of a multitude of CRM offerings such as sales analysis, call centre, and partner management tools from vendors such as Siebel and E.piphany.
“I would say we’re still struggling with CRM today,” said Tim Thiers, general manager of sales and support information technology at Redmond, Wash.-based Microsoft.
Microsoft personnel have had to deal with “vertical silos” of information and integrate core business applications on their own, Thiers said.
“We end up with a one-size-fits-nobody UI approach,” Thiers said.
Microsoft also harbours the opinion that CRM has proven to be a huge, continuous investment that has yielded both low ROI and user satisfaction, Thiers said.
As a result, the company is now endeavouring to enable a unified workflow system based on Web services, Thiers said. Users can access multiple back-end applications via a Web services layer.
Thiers likened the plan to an ATM machine, which provides a simplified interface to multiple back-end banking applications.
“You can do all that with this little kiosk without any understanding of the back-end applications. To me, that’s what Web services are,” Thiers said.
Microsoft’s strategy is to take an “initiative-centric” approach using Web services interfaces to boost agility and usability, according to the company.
Thiers cited one application in development called Alchemy. The sales account manager’s application unifies sales management and analysis, marketing analysis, event management, and technical and sales call centres into one workflow-based interface.
Despite this integration, Thiers said Web services will not solve all issues pertaining to CRM. Challenges remain in the areas of database connectivity, WAN performance, and multilanguage support. Staffing and the ability to upgrade CRM applications are also concerns.
“I do want to caution that I don’t see Web services as a panacea,” Thiers said.
In the case of AT&T, Foster stressed the scope of the giant company’s CRM effort. “The investment that AT&T is making in this initiative is one of the largest [AT&T] has made,” Foster said.
Business workflow complexity is the No. 1 barrier, he said. “Our core competency is adding more complexity onto an already complex environment,” Foster said.
“Our first job is aimed squarely at streamlining the product and process complexity for our sales force,” Foster said. Faced with a 45 per cent annual attrition rate in its sales force, according to Foster, the company wants to make it easier for sales staff to navigate through information.
By deploying Oracle’s off-the-shelf software, AT&T aims to provide a Web-enabled CRM application, Foster said. He explained that using the Web is simpler than a client/server approach, noting that AT&T does not want to customize any base programs which could complicate software upgrades.
Analysing the Options
Comparing Microsoft’s and AT&T’s CRM efforts, analyst David Bradshaw, vice-president of consulting and lead CRM analyst at Ovum, in Wakefield, Mass., said AT&T’s single-vendor software approach to CRM “sounds the cleaner of the two because you’re using a set of applications that are natively Web-based.”
Although Oracle does have a Web interface, its CRM applications are not yet as mature as are market leader Siebel’s, Bradshaw said.
Microsoft’s plan, however, appears to put Web front ends on apps that are not Web-based, Bradshaw said.
“It’s complicated and it means that the application may not make the best use of the user interface. However, on the other hand, if those are the best applications for you in a client/server environment and they’re not yet Web-based, [incorporating a Web interface] may be the least of evils,” Bradshaw said.
Bradshaw noted that an alternative approach to linking CRM applications is the recently announced Chordiant 5 CRM platform, which utilizes XML and J2EE (Java 2 Enterprise Edition) in a component-based architecture. Another alternative would be to set up an internal organizational structure that keeps different business units separate, enabling a company to set function-based access to specific CRM applications, he said. But this structure would require data integration if a service person, for example, wanted to access a sales application.
“[Data integration] is a common problem with any IT system everywhere,” Bradshaw said.
No Matter How It’s Done, CRM is a Challenge
The reasons for poor success rates in CRM adoption are varied. Setting inadequate planning objectives, having inaccurate or incomplete looks at data, not training employees sufficiently, and biting off more than you can chew typically mire the undertaking. Trying to integrate across too many systems at once will only introduce new tribulations.
Microsoft’s Web services-centric approach offers great flexibility, particularly for any company with multiple CRM systems already in service that aren’t ready to be decommissioned. Microsoft (and who knows better the benefits of Web services?) stands to gain considerable payback on its investment over time, thanks to this forward-thinking tactic.
Furthermore, Microsoft can continue to custom-tailor its CRM products based on best-of-breed solutions without being tied to the rollout time table of a single-vendor suite (a seemingly anomalous strategy for a company that has come to stand for “vendor lock-in”).
AT&T has opted to standardize on Oracle, a vendor that is still relatively young in the CRM niche compared to companies such as Siebel and E.piphany. As such, AT&T faces the possibility of serving as a large-scale proving ground for Oracle real-world deployment.
AT&T’s planning cycle for this project likely started a year ago when Web services strategies were still only half-baked. The good news is that AT&T will be able to supplement any shortcomings of its decision by adding Web services capabilities on top of Oracle in the future.
CRM will be an inevitable requirement for every company. In increasingly disconnected enterprises with multiple points of customer contact, it is fast becoming the defining competitive necessity.
CRM is going to keep you up nights. But taking it in bite-size chunks and planning for future flexibility via an open, Web services-based approach will help ensure longevity and reap maximum value from your CRM undertaking.
– James R. Borck
