InformationWeek

These near-term investments will yield short-term operational and selling efficiencies. Companies will realize sustainable competitive advantage, however, only after significantly altering sales and marketing strategies and processes.

By 2002, most large companies will successfully deploy CRM technologies in highly focused implementations based on clear channel, segment, and product priorities. Only market leaders with highly focused business models and limited product, channel, and market complexity will successfully deploy CRM solutions that reach across the enterprise by 2001.

Global 2000 companies will implement mid-to long-term companywide plans for CRM systems, integrating across channels, business units, and into back-office systems, but they won't achieve enterprise-level optimization of customer relationships and selling costs until 2002 or later. Companies that use CRM to win new customers will see sustainable revenue value and competitive advantage from their CRM investment.

A Cap Gemini/IDC study finds that even in large global companies, 37% of CRM projects cost less than $2 million. In all, 44% of CRM projects have a payback period of 12 to 24 months, with 17% showing a return in less than 12 months. Although CRM may sound like management jargon, it's all about identifying your most-profitable customers, maximizing customer service, and increasing profits. Because of its impact on profitability, a customer-relationship management program is typically initiated at the top management level.

Operational management such as marketing and sales initiate 44% of CRM programs, while 45% of general management initiate CRM programs. The IT department is the project champion in only 11% of the companies surveyed. CIOs are in charge of the overall project management, however. The study indicates that winning new customers is no longer the key to monitoring sustained growth. In today's market environment, companies must focus on customer retention in order to increase business performance and shareholder value.

The Cap Gemini/IDC study of 300 global companies finds that providing a personalized service and getting to know the customer better are key reasons for starting CRM projects. These goals are considered far more important than gaining new customers or cost reduction.

The survey also shows that these companies are investing heavily in Internet technology. Within two years, 95% of the Web sites of the companies will be fully interactive. The initial reluctance among businesses regarding online payment systems is also fading. Although only 7% of the companies' Web sites are able to handle electronic payments, this will increase to 28% within two years.