The History of CRM -- Moving Beyond the Customer Database

Customer Relationship Management (CRM) is one ofbetween five major players
those magnificent concepts
in the industry: PeopleSoft, Oracle, SAP, Siebel and
that swept the business world in the 1990's with therelative newcomer
promise of forever changing
Telemation, based on Linux and developed by an old
the way businesses small and large interacted withstandard, Database Solutions,
their customer bases. In the
Inc.
short term, however, it proved to be an unwieldy
process that was better inThe other half of the market falls to a variety of other
players, although
theory than in practice for a variety of reasons. First
among these was that itMicrosoft's new emergence in the CRM market may
cause a shift soon. Whether
was simply so difficult and expensive to track and
keep the high volume ofMicrosoft can capture a share of the market remains
to be seen. However, their
records needed accurately and constantly update
them.brand-name familiarity may give them an edge with
small businesses considering a
In the last several years, however, newer software
systems and advancedfirst-time CRM package.
tracking features have vastly improved CRMPeopleSoft was founded in the mid-1980's by Ken
capabilities and the real promise ofMorris and Dave
CRM is becoming a reality. As the price of newer,Duffield as a client-server based human resources
more customizable Internetapplication. In 1998,
solutions have hit the marketplace; competition hasPeopleSoft had evolved into a purely Internet based
driven the prices down sosystem, PeopleSoft 8.
that even relatively small businesses are reaping theThere's no client software to maintain and it supports
benefits of some customover 150 applications.
CRM programs.PeopleSoft 8 is the brainchild of over 2,000 dedicated
developers and $500
In the beginning...
million in research and development.
The 1980's saw the emergence of database
marketing, which was simply a catchPeopleSoft branched out from their original human
resources platform in the
phrase to define the practice of setting up customer
service groups to speak1990's and now supports everything from customer
service to supply chain
individually to all of a company's customers.
management. Its user-friendly system required minimal
In the case of larger, key clients it was a valuable tooltraining is relatively
for keeping the
inexpensive to deploy. .
lines of communication open and tailoring service to the
clients needs. In theOne of PeopleSoft's major contributions to CRM was
their detailed analytic
case of smaller clients, however, it tended to provide
repetitive, survey-likeprogram that identifies and ranks the importance of
customers based on numerous
information that cluttered databases and didn't provide
much insight. Ascriteria, including amount of purchase, cost of supplying
them, and frequency of
companies began tracking database information, they
realized that the bare bonesservice.
were all that was needed in most cases: what theyOracle built a solid base of high-end customers in the
buy regularly, what theylate 1980's,
spend, what they do.then burst into national attention around 1990 when,
under Tom Siebel, the
Advances in the 1990's
company aggressively marketed a small-to-medium
In the 1990's companies began to improve onbusiness CRM solution.
Customer Relationship Management
Unfortunately they couldn't follow up themselves on
by making it more of a two-way street. Instead ofthe incredible sales they
simply gathering data for
garnered and ran into a few years of real problems.
their own use, they began giving back to their
customers not only in terms ofOracle landed on its feet after a restructuring and their
own refocusing on
the obvious goal of improved customer service, but in
incentives, gifts andcustomer needs and by the mid-1990's the company
was once again a leader in CRM
other perks for customer loyalty.
technologies. They continue to be one of the leaders in
This was the beginning of the now familiar frequentthe enterprise
flyer programs, bonus
marketplace with the Oracle Customer Data
points on credit cards and a host of other resourcesManagement System.
that are based on CRM
Telemation's CRM solution is flexible and user-friendly,
tracking of customer activity and spending patterns.with a
CRM was now being used as a
toolkit that makes changing features and settings
way to increase sales passively as well as throughrelatively easy. The system
active improvement of
also provides a quick learning environment that
customer service.newcomers will appreciate. Its
True CRM comes of ageuniqueness lies in that, although compatible with
Windows, it was developed as a
Real Customer Relationship Management as it's
thought of today really beganLinux program. Will Linux be the wave of the future?
We don't know, but if it
in earnest in the early years of this century. As
software companies beganis, Telemation's ahead of the game.
releasing newer, more advanced solutions that wereThe last few years...
customizable across
In 2002, Oracle released their Global CRM in 90 Days
industries, it became feasible to really use thepackage that promised
information in a dynamic way.
quick implementation of CRM throughout company
offices. Offered with the package
Instead of feeding information into a static databasewas a set fee service for set-up and training for core
for future reference,business needs. .
CRM became a way to continuously updateAlso in 2002 (a stellar year for CRM), SAP America's
understanding of customer needs andmySAP began using a
behavior. Branching of information, sub-folders, and"middleware" hub that was capable of connecting
custom tailored featuresSAP systems to externals and
enabled companies to break down information intofront and back office systems for a unified operation
smaller subsets so that theythat links partners,
could evaluate not only concrete statistics, butemployees, process and technologies in a closed-loop
information on the motivationfunction.
and reactions of customers.Siebel
The Internet provided a huge boon to the developmentconsistently based its business primarily on enterprise
of these huge databasessize businesses willing
by enabling offsite information storage. Where beforeto invest millions in CRM systems, which worked for
companies had difficultythem to the tune of $2.1
supporting the enormous amounts of information, thebillion in 2001. However, in 2002 and 2003 revenues
Internet provided newslipped as several smaller
possibilities and CRM took off as providers beganCRM firms joined the fray as ASP's (Application
moving toward InternetService Providers). These
solutions.companies, including UpShot, NetSuite and SalesNet,
offered businesses CRM-style
With the increased fluidity of these programs came a
less rigid relationshiptracking and data management without the high cost
of traditional CRM start-up.
between sales, customer service and marketing. CRM
enabled the development ofIn October of 2003, Siebel launched CRM OnDemand
in collaboration with IBM.
new strategies for more cooperative work between
these different divisionsTheir entry into the hosted, monthly CRM solution niche
hit the marketplace with
through shared information and understanding, leading
to increased customergale force. To some of the monthly ASP's it was a
call to arms, to others it was
satisfaction from order to end product.
a sign of Siebel's increasing confusion over brand
Today, CRM is still utilized most frequently byidentity and increasing loss
companies that rely heavily
of market share. In a stroke of genius, Siebel acquired
on two distinct features: customer service orUpShot a few months
technology. The three sectors of
later to get them started and smooth their transition
business that rely most heavily on CRM -- and use itinto the ASP market. It
to great advantage -- are
was a successful move.
financial services, a variety of high tech corporations
and theWith Microsoft now in the game, it's too soon to tell
telecommunications industry.what the results will be, but it seems likely that they
may get some share of
The financial services industry in particular tracks the
level of clientsmall businesses that tend to buy based on familiarity
and usability. ASP's will
satisfaction and what customers are looking for in
terms of changes andcontinue to grow in popularity as well, especially with
mid-sized businesses, so
personalized features. They also track changes in
investment habits and spendingcompanies like NetSuite, SalesNet and Siebel's
OnDemand will thrive. CRM on the
patterns as the economy shifts. Software specific to
the industry can giveweb has come of age!
financial service providers truly impressive feedback inThis article on the "The History of CRM" reprinted with
these areas.
Who's in the CRM game?permission.
About 50% of the CRM market is currently dividedCopyright © 2004-2005 Evaluseek Publishing.