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May 3, 1999

Customer-Relationship Services Expand

Keane, IBM Global Services among firms targeting this hot new market

By Bob Violino and Bruce Caldwell

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IT Management Resource Center

usinesses striving to understand their customers better are increasingly looking to customer-relationship management systems and services. Their choices are broadening as several services companies unveil or expand offerings.

IT consulting firm Keane Inc. last week launched a customer-relationship management consulting and software development service. Keane will work with clients to plan and develop applications and manage them after they're deployed. The service uses packaged applications, data-warehousing and business-intelligence systems, electronic commerce, and workflow/imaging systems to help companies attract new customers and build greater loyalty among existing ones.

To manage these systems on an outsourced basis, Keane will use performance metrics to determine if a company is using customer-relationship management to its maximum benefit. The firm estimates the service will generate more than $75 million in consulting and software development revenue this year, and expects revenue from the business to increase by more than 35% per year.

IT managers and analysts say customer-relationship management offerings are becoming more important in the effort to retain customers. "CRM is giving us more touch points with our passengers, which allows us to provide better customer service," says Ron Czarnecki, VP of computer services at Princess Cruises Inc. in Valencia, Calif., which has hired Keane for this type of work. Princess is gathering information, such as which cruises customers have taken in the past, places to which they've traveled, problems they've had, and what was done to resolve those problems.

Stephen Lane, a senior analyst covering customer-relationship management services at Aberdeen Group, says Keane's approach follows a trend of offering end-to-end services, including packaged apps, Web interactions, data warehousing and call centers. "To approach CRM in a holistic fashion, you have to bring together these various pieces," he says.

Also on the services front, IBM Global Services and Sitel Corp., a call-center service provider, cemented their relationship last week with a strategic alliance; Emerald Solutions Inc., an IT project-management firm, launched a customer-relationship management practice in late April; and Technology Solutions Co. last month took the initial steps to spin off 80% of its business dedicated to this hot market as an investment option for shareholders.

IBM and Sitel won contracts last year to provide customer-relationship management technologies and services to PG&E Energy Services and General Motors. Sitel designs, implements, and manages call centers for customer contact via phone, E-mail, and the Internet. IBM Global Services' business-process management unit provides consulting, software, hardware, integration services, and business-process outsourcing.