CRM is not delivering the goods, say 85% of IT directors

85% of IT directors in the UK say CRM (customer relationship management) applications deliver the lowest level of business value. This is the, to many unsurprising, result of a survey conducted by research firm Vanson Bourne for ERP vendor JD Edwards. It was based on a sample of 100 UK IT directors and CIOs (chief information officers). Evidently the survey sought to identify the applications seen by non-IT company management to be delivering best value. Almost one third (32%) said that e-business initiatives (undefined) had delivered higher levels of business value when compared with other core business applications. Stand-alone CRM, however, was roasted as delivering lowest value. Most (76%) said that CRM had delivered less value than e-business, supply chain and ERP systems. In fact, it found that manufacturing specifically has failed to achieve virtually any benefit from CRM. Just 4% of IT directors listed it as the application “delivering the highest level of business value to the company”. ERP was given the thumbs up as delivering greatest return on investment, despite criticism in recent years, with 48% listing it as their most valuable application, mostly in terms of operational efficiencies. There will be several reasons for this, not least of which is that CRM has been so vastly hyped by a vendor community apparently desperate to have something different to sell. But to this, observers and those that have done it would add the problems of user, as well as management, acceptance, and integration with the incumbent ERP system. Cynics would also comment that CRM, for most in manufacturing, needs to be nothing more than an extension of the sales order processing module of ERP. Proponents of CRM say it provides businesses with better visibility; detractors note that ERP, executed properly, has always been about that. Certainly, asserting that CRM conveys the ability to perform functions like web-based product configuration, supplier relationship management, even supply chain management and aspects of supply chain execution, is little short of insulting our intelligence. Those suites exist and have done for some time – and the web largely makes them cheaper and more worth implementing. Joel Reed, product marketing manager for JDE’s formerly Youcentric CRM offering, notes that in his experience manufacturers express key problems as lack of visibility of demand on the one hand, and sales forces still taking orders and promising delivery for products that are neither on the production schedule, nor in stock. And that results in the familiar expediting nightmare. Does that say CRM required? He argues that ERP systems to date haven’t delivered that kind of visibility and hence the problem. But Colin Hudson, CRM specialist for the firm, notes that market forces direct vendors to separate CRM as a special, separate application – the market forces promulgated by the vendors themselves. That’s not to say we don’t need to support what’s tritely called the customer-facing aspects of our businesses with robust and helpful IT. And there’s no doubt that this needs to be sales force focused and therefore process-orientated and free format, as opposed to purely transactional. But for most, suites like product configurators added to their existing ERP systems, and data driving customer/sales modules, even dare we say, a spreadsheet or two, are quite enough. Nevertheless, JDE says that no fewer than 60 of its CRM systems have been sold world-wide since the acquisition and integration programme last year, with two in the UK. And the firm quotes a couple of satisfied users. Indianapolis-based Inland Paperboard and Packaging, for example, is using a module of CRM module called Advanced Order Configurator (AOC), which lets sales staff configure product orders for customers ensuring right product, right time, and the implication is that it’s helping in ‘mass customisation’. Inland is also implementing a self-service web site, a place where its customers can buy products and check order history and delivery status. Sounds good, but don’t call that CRM.