CRM Comparison

By Michael Burns published in the CAmagazine December 2006

2006 Analysis - Click here for the comparison chart in in Excel format.

Welcome to our third annual roundup of customer relationship management systems. This year, we have 17 systems, including ACT!, Epicor, Epiphany, Exact e-Synergy, GoldMine, Microsoft Dynamics CRM, NetSuite, Oracle, SageCRM.com, SalesLogix, Salesforce and SAP Business One. We are fortunate that many of the leading CRM vendors are participating in our survey this year. We also interviewed Microsoft, Sage and Salesforce.com for their views on trends and what they think makes them different.

The big CRM trends this year are hosting, integration and open source. Salesforce.com and NetSuite paved the way for application service providers to become a respected method for deploying this type of software. ASPs host applications on their Internet sites, which are typically equipped with state-of-the-art technology and security. This allows organizations to avoid the costs associated with managing the computer and database that goes with it. In 2006, both Microsoft and SAP jumped on the ASP bandwagon.

Integration continues to be a huge issue for CRM. An article in ComputerWorld (July 24, 2006) noted that Salesforce.com has “rolled out the latest version of its hosted software with added features that include a built-in link to SAP AG's ERP applications. The move is part of an effort by the customer relationship management vendor to address integration shortcomings cited by current and former users.”

Another indication of the importance of integration was Made2Manage’s purchase of Onyx Software this year in a cash transaction valued at $92 million. A few years ago Onyx was one of the leading CRM vendors. Today many ERP vendors are including CRM, and it has become a big challenge for CRM vendors to compete with systems that are already integrated.

Open source refers to any program whose source code is made available for use or modification by users or other developers. Historically, software developers have not made source code available. But open source software is usually developed as a public collaboration – which is why there is no price tag attached. Still, the “free” applies only to the software, not to support or services. Most mid-sized and larger companies are risk averse and put their trust in systems developed and maintained the traditional way. That said, open source has other attributes, including the ability to change source code if necessary. This gives companies with the appropriate skills the potential to create customized applications without having to recreate more generic functions. It also allows for tighter integration with existing applications.

We try to improve our survey each year, and this year we have added questions about service management – ability to forward/reassign support calls, reason codes for analysis of problems, linking emails to a ticket/call, escalations based on rules, and the ability to close out multiple incidents at the same time if they all relate to the same problem. Our questions don’t include all requirements for service management, but they will give you an idea which vendors are worth examining in more detail.

Salesforce.com
Tien Tzuo, salesforce.com's chief strategist, says his company has 50% of the on-demand CRM market with about 25,000 customers and 500,000 individual users. But he doesn’t know what percentage on demand represents in the total CRM market. My research shows it to be about 10% but growing quickly, especially as other vendors such as SAP and Microsoft follow salesforce’s lead.

According to Tzuo, salesforce’s main selling points are its ease of use, ease of integration and customization. Ease of integration is partly achieved by providing a full set of application programming interfaces (APIs) that allow a third party program to update the database using salesforce’s business rules but without requiring access to source code. Because of the extent of integration required, however, the task can be daunting. Tzuo says salesforce has written integration for SAP as well as other systems, and is working on integration with more of them.

Tzuo says Saleforce has “popped the top off” its system to allow developers to use salesforce tools to build applications complementing salesforce. Apparently, third-party developers have written about 350 salesforce applications, which are available on Salesforce’s AppExchange. The exchange allows you to find and install new on-demand applications, many of which are free and all of which are pre-integrated with salesforce.

Microsoft CRM
Microsoft’s approach, according to Frank Falcone, CRM product manager at Microsoft Canada, is to offer customers lots of choices. You have your choice of user interface (Microsoft Outlook or Internet Explorer) and of payment method (lump sum or subscription). Soon, you will be able to choose whether it’s on the premises or hosted. Microsoft announced hosting through its partners in March 2006. This past summer, it also announced a new offering called Dynamics CRM Live (www.crmlive.com), which will be initially targeted at small and mid-sized businesses. Microsoft will operate and manage the service within its own datacentres but its partners will look after setup, training and customization. Dynamics CRM Live should be more appropriate for organizations looking for fast implementation and requiring little customization. Hosting through Microsoft partners is meant for organizations that have special requirements because of their industry.

This leads to the question: is CRM a commodity or is it more like an ERP system that can differ widely depending on the industry? For small companies that don’t need any integration with their back-office ERP systems, CRM is more of a commodity. But for larger companies, things get complicated partly because of integration. Microsoft CRM is integrated out of the box with Microsoft GP (formerly Great Plains). The company has “connector tools” for its other products and any other ERP system. Nevertheless, Microsoft CRM is still not integrated with Microsoft NAV (formerly Navision), AX (formerly Axapta) and SL (formerly Solomon), even though Microsoft CRM was first released in January 2003.

Sage Software
Dave Batt, senior vice president and general manager of global CRM for Sage Software, thinks Sage’s three CRM systems -- ACT!, SageCRM.com (formerly AccPac CRM) and SalesLogix – give buyers freedom of choice. ACT! is for small and mid-sized companies primarily interested in contact management. SageCRM and SalesLogix both cater to mid-sized companies looking for more CRM functionality, including sales force automation, marketing automation and service management. SageCRM provides “out-of-the-box” functionality and can be implemented quickly as either an on-premises solution or with SageCRM.com as a hosted deployment. SalesLogix is for organizations whose business requirements make CRM customization a necessity.

Sage recently conducted extensive research on its customer needs and found end-to-end business processes were critical. This means there must be tight integration between the front office (usually CRM) and the back office (usually accounting or ERP systems). But integration is not enough. Sage has begun providing integrated business process processeses so workflow components in CRM are linked to accounting transactions. For example, you could embed a contact management follow-up in one of Sage’s CRM systems and link it to a customer invoice in one of the accounting and ERP systems with which they are integrated to improve processes from sales orders right through to cash collection.

Batt also thinks mobile CRM solutions are a huge opportunity. Sage recently acquired Corum Mobile Division of Corum Corporation, a privately held software consulting and development company based in Concord, Ontario that specializes in mobile CRM technology. The Corum Mobile Platform supports BlackBerry, Microsoft Windows Mobile and Palm hand-held devices that provide CRM access wherever you are.

Those are the main trends for this year. Please send us your suggestions to make next year’s roundup even better. And if any CRM vendors not included in our charts try to sell you their systems, please tell them they need to be included in CAmagazine first.

2005 Analysis - Click here for the comparison chart in in Excel format.

By Michael Burns published in the CAmagazine December 2005

A lot has happened since last year’s customer relationship management survey. The biggest news is Oracle Corp.'s US$5.85-billion buyout of Siebel Systems Inc. The purchase makes sense, since Siebel has been very successful with larger companies over the past 10 years, but has had a tough time lately competing for new business. (At the time of writing, the buyout was pending approval from US regulators.)

For Oracle, this new move comes on top of its acquisition of PeopleSoft in December 2004 for US$10.5 billion. Siebel adds 4,000 customers and 3,400,000 CRM users to the company’s customer base.

Oracle is just one of the 15 CRM vendors in the survey chart, which can be viewed at www.CAmagazine.com/CRMsurvey05. Others include ACT!, Chordiant, Clientele, CommenceRM, Exact e-Synergy, GEM-CRM, Legrand CRM, Microsoft CRM, NetSuite, Oracle E-Business Suite, Sage CRM, SalesLogix, and Salesnet.

Despite all this activity, there is still a lot of confusion about what CRM is all about. In broad strokes, CRM allows everyone throughout a company to work as a team and share information about customers. A typical CRM system includes contact management, marketing automation (marketing campaigns and scripts for telemarketers), sales force automation (tracking leads through the sales cycle) and service management (tracking and resolving customer service requests). Other features include call centre, help desk, business intelligence, knowledge management and e-commerce.

We added more questions this year -- about marketing automation, order processing, Blackberry integration and the cost of having an application service provider host your system on their site. With an ASP, you pay for the number of people using the system each month on a pay-as-you-play basis. According to AMR Research, the use of ASPs for CRM grew 105% this past year. But it still represents only 9% of total CRM market share.

CRM has been showered with hype from vendors and technology analysts. As a result, companies are still jumping on the bandwagon with no good rationale for doing so. Case in point: when a certain mid-market company noticed its sales were far below forecast, it figured the numbers couldn’t be trusted. So it turned to CRM, assuming that its problems could be solved by providing marketing and sales with better tools. What’s wrong with this picture?

First, new technology does not automatically fix inefficient and ineffective business processes. In some cases, it can make them worse. If the staff members lack the skills, training or motivation to provide more accurate sales forecasts, great technology won’t help. Second, CRM cannot solve every sales and marketing problem. At the company in question, the biggest problem was that the two standalone order processing systems were disconnected from the company’s other systems. Sales and marketing feed those systems with quotes and forecasts, but they also need feedback. Most CRM systems don’t include order processing. So for this company, CRM wasn’t enough. The company is now investigating ERP systems that would replace their standalone order processing systems and include integrated CRM.

People used to look at CRM as software for the front office while ERP was for the back office. However, the front and back offices need to be in constant touch. In the early days of CRM, companies spent fortunes integrating CRM with the back office only to discover it still did not work very well. Today many CRM vendors offer integrated CRM and ERP systems that work seamlessly together in the same office.

This leads to the issue of best of breed vs. ERP integration. With the best of breed approach, you work with what is deemed the best software for a particular function and integrate it with other best of breed systems. Although this approach offers advantages in terms of both software and service, problems can arise with integration and synchronization – i.e., knowing which system owns the data and what happens when a contact is added, changed or deleted. Also, different user interfaces make for a longer learning curve, and there is a potential for finger-pointing if problems occur between systems.

CRM moved into the mainstream for small and medium-sized companies when Microsoft launched Microsoft CRM a few years ago. Now other vendors, such as Salesforce.com and RightNow, are shaking up the industry with their ASP approach. Others such as NetSuite (also an ASP) and SAP Business One are offering CRM as part of their ERP solution. All this competition is putting downward pressure on prices, so there’s never been a better time to invest in CRM.

2004 Analysis - Click here for the comparison chart in Pdf format and here in Excel format.

A few years ago, most small and medium-sized companies had never heard of customer relationship management. CRM was aimed squarely at big companies – some of which spent truckloads of cash on expensive implementations that didn’t live up to their promises. Fortunately, things have improved considerably. The market has opened up to include smaller companies, competition has brought prices way down and the software is more stable and flexible. Now it’s hard to avoid hearing about CRM. In fact, in a survey by Forrester Research, 21% of North American companies and 33% of European ones said they were planning new CRM investments by the end of 2004. And many CRM vendors are ready to roll out their solutions. But is all this bustle and hype really justified?

For the most part, yes. CRM allows everyone throughout a company to work as a team and share information about customers; there are no more silos. “CRM provides employees across the organization with up-to-date customer information, significantly reducing the time spent sourcing and updating critical data,” says Krista Kuehnbaum, CRM product manager for Microsoft Canada Co. For example, CRM would prevent a salesperson from calling a customer without knowing about a serious service problem.

A typical CRM system includes contact management, marketing automation (marketing campaigns and scripts for telemarketers), sales force automation (tracking leads through the sales cycle) and service management (tracking and resolving customer service requests). Other features include call centre, help desk, business intelligence, knowledge management and e-commerce. Vendors continue to play functional leapfrog as they add new functions and expand the scope of CRM.

But CRM is not just about functionality or technology. A successful implementation could require major changes to attitudes and business processes. First, information needs to be shared – something that many employees are reluctant to do. This might be simply because they don’t have time to update the system, or it they might feel that sharing customer information will diminish their importance or power.

As well, an organization might need to adjust its strategy to focus on customers rather than products. According to Michael Lawrie, CEO of Siebel Systems, "CRM is not a product. CRM is not an event. It's a business strategy to drive companies closer to their customers." Microsoft’s Krista Kuehnbaum echoes this view when she says, “Customer Relationship Management is as much a business practice as it is an application.”

That might be why CRM is one of the hottest technologies around today. In the past, Siebel Systems was the 800-lb CRM gorilla with SAP and PeopleSoft as its main challengers. Today there is lots of competition and the market leaders face big challenges from vendors such as Microsoft CRM and Salesforce.com.

The survey

We issued our first-ever CRM survey vendors representing about 40 different systems, and received responses for 15 of the leading CRM systems – ACCPAC CRM, ACT, Clientele, CommenceRM, E.piphany E.6 CRM Suite, InterAction, Luxor CRM, Maximizer Enterprise, Microsoft Business Solution CRM, mySAP CRM, NetSuite, Oracle E-Business Suite, QuickBooks Customer/Client Manager, and SalesLogix. The products cover a wide range, from ACT to SAP -- which shows that CRM is being targeted to companies of all sizes.

Some might argue that products such as ACT should be classified as contact management systems. Our perspective is that contact management systems are also CRM systems, but offer limited functionality. This could be perfect for a smaller organization. As well, contact management systems have grown in functionality and include other components found in CRM systems.

Some CRM vendors are focusing on specific industries such as Interaction that claim 90% of their customers provide professional, scientific and technical services. Some vendors focus on a component of CRM, such as sales force automation. Some offer their CRM solution through an application service provider. With an ASP, you rent, rather than buy, the product, and you need only a browser on your computer which is connected to the ASP’s server where all the processing occurs and the data is stored.

Our survey includes about 200 questions about cost, user base, target market, technology and CRM functionality. The objective for the functionality questions was to show differences between the systems, assuming the basics were covered. You will see the high-end solutions seem to have it all. For larger organizations, they will be a good fit. But for small and medium-sized companies, too many features and too much flexibility can actually be a negative in that these systems are more complex and take longer to implement.

One big event related to CRM was the launch of Microsoft CRM in January 2003. Microsoft CRM was designed for small and medium-sized organizations, especially those with 25 to 500 employees. Microsoft hopes to woo its 250,000-plus Microsoft Business Solutions customers (Great Plains, Navision etc.), as well as 92 million Outlook users and 200 million Office users. Microsoft seems to be doing well in winning customers; it now reportedly has 2,500 customers worldwide.

Founded in 1999, Salesforce.com shook up the CRM market with its ASP approach. Offering access to CRM applications without the need for making any upfront investments is a compelling choice for smaller companies with lower budgets and scarce IT resources. Salesforce now claims more than 11,000 customers. However, you may find that the total cost of ownership is greater with the ASP approach if you consider the costs over a three- or five-year term.

Since there are many touch points between an ERP/accounting system and CRM, integration can be a major concern. Some ERP systems include CRM; some CRM systems have built links with other systems. Beware of vendors that tell you that it’s a snap to integrate the two systems because they can easily connect the databases through technology such as Open DataBase Connectivity (ODBC). And don’t believe the vendors who claim integration is a snap because their CRM system is on the same database as the ERP/accounting system. It’s a lot of work to integrate the systems and to maintain the links as both systems evolve.

Accounting firms have a specific need for relationship management. For example, accountants would like to know how much new business can be attributed to referral sources. Yet it seems most firms have yet to implement CRM. Accounting firms typically have big problems in sharing customer information; they have different systems (practice management, accounting, e-mail, contact management, marketing, etc.), which all have client information but are not integrated. Explanations for the slow adoption of CRM in accounting firms include partners’ unwillingness to share client information, concern about wasting time updating the system, many CRM systems’ inability to satisfy the specific needs of accounting firms, lack of integration with practice management systems, and cost.

For any professional services organization, the key to success is relationships. You need to leverage existing client relationships and offer clients new and additional services. But relationships can be complex. You will have multiple contacts within an organization and any of those contacts could have multiple relationships that you should know about, such as family members, lawyers or bankers. And you don’t want to set up any contact more than once; otherwise you are duplicating information and possibly giving different spellings of the same contact.

As mentioned earlier, big mistakes have been made in CRM implementations in the past. Some companies proceeded based on CRM hype, and focused on the technology without having a solid business case for introducing the system in the first place. That’s probably why Craig Downing, ACCPAC vp of product management, says to start small with a CRM implementation. Pick portions that will demonstrate ROI within two months. This approach is less risky and will lead to faster adoption of the system. Actually, this is good advice for any project.

Craig also made an interesting comment on the difference between Canada and the US with respect to CRM sales. He finds US prospects are typically upgrading from a low-end CRM solution, while Canadians are considering CRM for the first time. It seems marketing is much more aggressive in the US than it is in Canada.

As you probably know, ACCPAC was purchased by Best in 2004. Best already had two CRM systems before the acquisition – ACT for smaller companies and SalesLogix for mid-sized companies. The acquisition of ACCPAC included ACCPAC CRM, which is also targeted to the mid-market. According to Craig, SalesLogix is designed for companies with more complex needs that require a customized solution, whereas ACCPAC CRM is designed for companies whose needs can be addressed with an off-the-shelf package.

If you have not jumped on the CRM bandwagon yet, there’s still time. Moreover, it’s a buyer’s market, and you can negotiate significant discounts. But don’t stop there – ask for concessions on implementation and maintenance such as capping rates or fees. Just don’t tell the vendors who suggested this.