Trends in CRM - a European perspective

Richard Peynot

Customer relationship management (CRM) sales in Europe are flat and even decreasing in some countries – although the main players (integrators and vendors) refuse to give their numbers. The European economy is uncertain in the high-tech, telecom and IT industries, and IT investments are subject to more control. In this environment, companies want to limit risks in enterprise projects, especially in CRM where some managers remain skeptical about the added value.

In such an economic environment, it is common to see companies that would like to pay the final fees to integrators only if the project delivers real value – which is difficult to measure and prove. For example, 10 percent of fees would be paid only if the company can assess "value realization." Although we are aware of some examples in CRM in the UK and in France, we do not consider this a trend. Indeed, most integrators continue to resist.

Analysis of the current situation

Top management is skeptical about CRM:

Some managers cite the tough economic environment in Europe and the past difficulties in CRM projects as reasons to postpone or cancel large CRM projects. At least they demand commitment on ROI and less risk.

Companies are becoming aware of actual CRM challenges:

Companies are thinking more upstream to the evolution of business processes and the conditions of software integration.

Companies are distributed along the hype curve:

There is no global common CRM situation in Europe-some companies are ahead and have accumulated experience, some are at the first step, and some have not yet started – whether they are large or small. There should be room for CRM projects in all industries and all types of markets.

Marketing departments are playing a bigger role in CRM projects:

Traditionally difficult to integrate in CRM teams, marketing departments are evolving, and even taking the lead in CRM projects.

Trends

Companies downsize CRM projects:

The European market is flat due to the delay of some large projects or, more often, ambitious projects that were reconsidered and divided into small successive projects. Mainly leading systems integrators are impacted and are not using 100 percent of their "CRM resources."

Use of business process reengineering (BPR) tools is emerging but most companies lack maturity:

Leading CRM vendors begin to offer modeling tools for business processes (Siebel, SAP, ...). Pure modeling tool vendors and specialized service companies turn to CRM market. Nevertheless, the first hurdle to overcome is the lack of maturity and education on such tools from entities such as marketing, sales, customer support, etc.

Architecture remains a key selection criterion:

Companies put the architecture of CRM suites as a critical criterion for selection. In particular, IT departments focus on scalability and connectivity. They also better manage and anticipate the evaluation of the required technical infrastructure to support CRM (new data flows, wireless terminals, remote access, customer data integration, etc).

The road ahead

Siebel and SAP take the lead:

While PeopleSoft and Oracle have difficulties taking off in CRM, SAP has a significant growth, mainly in its installed base. Envisaged as quickly becoming No. 2 in CRM in Europe, SAP could even defy Siebel for the leading position.

Marketing analytics still a specialist market:

Marketing departments remain skeptical with the analytics features of enterprise CRM suites and continue to opt for best-of-breed products – even in cases where less sophisticated functions could be sufficient.