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Consolidation Raises Questions Over CRM

Innovation is on the fast track as vendors raise the stakes in hotly contested market
But some customers in the highly targeted midmarket find value in a fully integrated suite. Patrick Harris, IT director at Sealing Systems, a small, privately held manufacturer, runs Oracle's ERP and CRM applications. "It was more integrated than I ever expected," Harris says. "A lot of people are talking about salespeople with visibility to the CRM system, but this works the other way, too--operations people are using it to see into the [product] pipeline and better prepare."

Consumer appliance manufacturer Tilia Direct Inc. is switching from Siebel's CRM to SAP's to cut down on integration work and maximize its limited IT resources. "We needed to concentrate our resources to be skilled in one area," says Eric Parrott, senior manager of business systems, because it isn't efficient for a company its size to maintain expertise in both Siebel and SAP systems.

PeopleSoft agrees. "In a down climate, the way to cost savings is to limit the number of vendors you work with, which lowers the number of toolsets, upkeep, and maintenance costs," says Joe Davis, VP and general manager of PeopleSoft's CRM division. Should it emerge intact from Oracle's hostile takeover bid and acquire J.D. Edwards & Co., PeopleSoft could have a compelling CRM story when it comes to vertical-industry expertise. J.D. Edwards is skilled in servicing manufacturers, and PeopleSoft rates high in the services industry. "Those skills are hard to come by, and nowhere is vertical expertise more important than in applications for CRM," says Joanie Rufo, research director at AMR Research. "The way you manage relationships, place orders, and manage the sales process is very different by industry."

The packaged CRM market, according to Gartner, has potential: Only 15% of companies have deployed commercial CRM software. Competition will only intensify as a large part of the market weighs its choices.