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The History of CRM -- Moving Beyond the Customer Database

Customer Relationship Management (CRM) is one
of those magnificent concepts

				in the industry: PeopleSoft, Oracle, SAP,
				Siebel and relative newcomer
that swept the business world in the 1990's
with the promise of forever changing

				Telemation, based on Linux and developed by
				an old standard, Database Solutions,
the way businesses small and large interacted
with their customer bases. In the

				Inc.

short term, however, it proved to be an
unwieldy process that was better in
				The 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 it
				Microsoft'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 of
				Microsoft 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 advanced
				first-time CRM package.


tracking features have vastly improved CRM
capabilities and the real promise of				PeopleSoft was founded in the mid-1980's by
				Ken Morris and Dave


CRM is becoming a reality. As the price of
newer, more customizable Internet				Duffield as a client-server based human
				resources application. In 1998,


solutions have hit the marketplace;
competition has driven the prices down so				PeopleSoft had evolved into a purely Internet
				based system, PeopleSoft 8.


that even relatively small businesses are
reaping the benefits of some custom				There's no client software to maintain and it
				supports over 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 catch
				PeopleSoft branched out from their original
				human resources platform in the

phrase to define the practice of setting up
customer service groups to speak
				1990'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 training is relatively

In the case of larger, key clients it was a
valuable tool for keeping the
				inexpensive to deploy. .


lines of communication open and tailoring
service to the clients needs. In the				One of PeopleSoft's major contributions to
				CRM was their detailed analytic


case of smaller clients, however, it tended
to provide repetitive, survey-like				program that identifies and ranks the
				importance of customers based on numerous


information that cluttered databases and
didn't provide much insight. As				criteria, including amount of purchase, cost
				of supplying them, and frequency of


companies began tracking database
information, they realized that the bare				service.
bones


				Oracle built a solid base of high-end
were all that was needed in most cases: what				customers in the late 1980's,
they buy regularly, what they


				then burst into national attention around
spend, what they do.				1990 when, under Tom Siebel, the



Advances in the 1990's				company aggressively marketed a
				small-to-medium business CRM solution.


In the 1990's companies began to improve on
Customer Relationship Management				Unfortunately they couldn't follow up
				themselves on the incredible sales they


by making it more of a two-way street.
Instead of 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 of				Oracle landed on its feet after a
				restructuring and their own refocusing on


the obvious goal of improved customer
service, but in incentives, gifts and				customer 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 the enterprise

This was the beginning of the now familiar
frequent flyer programs, bonus
				marketplace with the Oracle Customer Data
				Management System.

points on credit cards and a host of other
resources that are based on CRM
				Telemation's CRM solution is flexible and
				user-friendly, with a

tracking of customer activity and spending
patterns. CRM was now being used as a
				toolkit that makes changing features and
				settings relatively easy. The system

way to increase sales passively as well as
through active improvement of
				also provides a quick learning environment
				that newcomers will appreciate. Its

customer service.

				uniqueness lies in that, although compatible
				with Windows, it was developed as a
True CRM comes of age


				Linux program. Will Linux be the wave of the
Real Customer Relationship Management as it's				future? We don't know, but if it
thought of today really began


				is, Telemation's ahead of the game.
in earnest in the early years of this
century. As software companies began

				The last few years...

releasing newer, more advanced solutions that
were customizable across
				In 2002, Oracle released their Global CRM in
				90 Days package that promised

industries, it became feasible to really use
the information in a dynamic way.
				quick implementation of CRM throughout
				company offices. Offered with the package



				was a set fee service for set-up and training
				for core business needs. .
Instead of feeding information into a static
database for future reference,

				Also in 2002 (a stellar year for CRM), SAP
				America's mySAP began using a
CRM became a way to continuously update
understanding of customer needs and

				"middleware" hub that was capable of
				connecting SAP systems to externals and
behavior. Branching of information,
sub-folders, and custom tailored features

				front and back office systems for a unified
				operation that links partners,
enabled companies to break down information
into smaller subsets so that they

				employees, process and technologies in a
				closed-loop function.
could evaluate not only concrete statistics,
but information on the motivation

				Siebel

and reactions of customers.

				consistently based its business primarily on
				enterprise size businesses willing
The Internet provided a huge boon to the
development of these huge databases

				to invest millions in CRM systems, which
				worked for them to the tune of $2.1
by enabling offsite information storage.
Where before companies had difficulty

				billion in 2001. However, in 2002 and 2003
				revenues slipped as several smaller
supporting the enormous amounts of
information, the Internet provided new

				CRM firms joined the fray as ASP's
				(Application Service Providers). These
possibilities and CRM took off as providers
began moving toward Internet

				companies, including UpShot, NetSuite and
				SalesNet, offered businesses CRM-style
solutions.


				tracking and data management without the high
With the increased fluidity of these programs				cost of traditional CRM start-up.
came a less rigid relationship


				In October of 2003, Siebel launched CRM
between sales, customer service and				OnDemand in collaboration with IBM.
marketing. CRM enabled the development of


				Their entry into the hosted, monthly CRM
new strategies for more cooperative work				solution niche hit the marketplace with
between these different divisions


				gale force. To some of the monthly ASP's it
through shared information and understanding,				was a call to arms, to others it was
leading to increased customer


				a sign of Siebel's increasing confusion over
satisfaction from order to end product.				brand identity and increasing loss



Today, CRM is still utilized most frequently				of market share. In a stroke of genius,
by companies that rely heavily				Siebel acquired UpShot a few months



on two distinct features: customer service or				later to get them started and smooth their
technology. The three sectors of				transition into the ASP market. It



business that rely most heavily on CRM -- and				was a successful move.
use it to great advantage -- are


				With Microsoft now in the game, it's too soon
financial services, a variety of high tech				to tell
corporations and the


				what the results will be, but it seems likely
telecommunications industry.				that they may get some share of



The financial services industry in particular				small businesses that tend to buy based on
tracks the level of client				familiarity and usability. ASP's will



satisfaction and what customers are looking				continue to grow in popularity as well,
for in terms of changes and				especially with mid-sized businesses, so



personalized features. They also track				companies like NetSuite, SalesNet and
changes in investment habits and spending				Siebel's OnDemand will thrive. CRM on the



patterns as the economy shifts. Software				web has come of age!
specific to the industry can give


				This article on the "The History of CRM"
financial service providers truly impressive				reprinted with
feedback in these areas.


				permission.
Who's in the CRM game?


				Copyright Â© 2004-2005 Evaluseek
About 50% of the CRM market is currently				Publishing.
divided between five major players

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The History of CRM -- Moving Beyond the Customer Database