Why CRM Architecture is Suddently Hot!

The Days of IT Splurging Are Over

Information technology budgets have been cut to the bone. You can blame this on the tightening global economy. In the high-tech heydays, companies had growing IT budgets. In the late ‘90s, there was a lot of IT overspending thanks to the Y2K piling-on effect--“We should replace all of our systems now with Y2K-compliant ones, and, while we’re at it, let’s spring for the new capabilities we know we need.” We believe that this Y2K technology feeding frenzy combined with the irrational exuberance of the dotcom boom to balloon companies’ IT spending temporarily.

The upside is that, over the past five to seven years, every business has rewired itself to run on the Internet. ‘Net-native architectures are in. Proprietary networks are out.

This is actually great news! It means that we now have a global IT platform and infrastructure that we can use both within and across our organizational boundaries. It also means that we are all ready to get down to business. There will be no more irrational exuberance in IT spending. The wired network foundation is already in place. (Although we believe that a big up-tick in wireless usage and customer demands could provide a new boost to IT infrastructure spending.)

Companies Need to Rationalize Their IT Infrastructures

Now reality has set in. Most businesses are surveying the clutter of systems and applications in which they invested over the past five years, and they have entered a period of IT standardization and rationalization. Lots of companies have made good progress in selecting a few core application suites in Enterprise Resource Planning (ERP), finance, and other “back office” areas on which to standardize as they retire some older systems. At the same time, businesses are beginning to outsource a number of non-core application functions, such as HR benefits management, payroll, and the like.

We also find that many organizations are reducing the number of operating systems, hardware platforms, development environments, databases, and technical skill sets they want to support.

Customers Are Still Our Most Valuable Asset

In the Customer Relationship Management (CRM) slice of the high-tech market, the IT gorging described above coincided with a renewed and very healthy focus on customers. In most companies--starting in North America in the late ‘90s and then rolling through Europe, Asia, and now hitting Latin America and the Middle East--the rallying cries for most companies were:

• “How can we get close to our customers if we don’t know who they are?”
• “We need a 360-degree view of our customers!”
• “We need to find out which customers are our most profitable ones.”
• “We need better tools for sales forecasting and opportunity management.”
• “We need to do a much better job on customer service, and we want to let customers serve themselves so we can reduce our costs-to-serve.”
• “If only we had better marketing software, we could do a better job of up-selling and cross-selling customers.”
• “We need to provide a single, consistent face to our prospects and customers across all channels and touchpoints.”
• “We need to generate better leads, manage leads better, and close more sales faster.”

This positive focus on the need to better understand and serve customers has led many companies to invest in a plethora of CRM applications.

For many businesses, the time has now come to consolidate and integrate their first generation CRM efforts. For others, it’s past time to invest in a CRM solution.

Businesses that are making these investments today are doing so with a careful eye on the IT architecture underlying their CRM and e-business choices.

Customer Systems Are the Next Target for IT Rationalization

Front-office applications, including customer-facing applications and customer-centric applications, are the next target for IT rationalization.

Many companies have already invested in several customer systems. Yours may be among them. You probably have contact centers, e-business Web sites, portal platforms, sales opportunity management, customer support solutions, marketing automation or campaign management applications, as well as customer databases, data warehouses, datamarts, and customer analytics. If your company is like most, you may have purchased these applications over time from several different suppliers. Now, it’s time to consolidate these customer-facing applications and/or to simplify your customer systems.

So the battle is on among the CRM suppliers to be the survivor and/or the chosen one.

The Role of IT Architects in Making CRM Platform Decisions

In the past, the business executives--primarily the sales and marketing executives--have had the power of the purse in making CRM platform decisions. Certainly, these business executives still hold the budget for any CRM investments.

In the past, the information technology organization has played an advisory role, vetting the candidate CRM offerings, giving their input and feedback, and providing application integration support.

Today, the role of IT in shaping the decision about CRM rationalization is a much more proactive one. In fact, often IT architects are the key influencers in the decision-making process.

The Role of IT in Managing CRM Projects

The IT organization is also much more involved today than in the past in project and program managing all CRM projects. These are no longer being set up as separately-run projects under the sponsorship of a business executive and with the project management of a systems integrator. Internal IT organizations now own the success of CRM roll-outs. They typically handle program management, project management, much of the business process analysis and IT planning, as well as the training, testing, deployment, and maintenance.

The Changing Role of SIs & Consultants

Third-party consulting firms and systems integrators are being used much more sparingly today in CRM projects to provide:

1. Industry-specific best practices and expertise
2. The expertise that comes from having done many similar projects before
3. Deep knowledge of the technical capabilities of the chosen solution
4. Application configuration and integration
5. Database migration and cleansing
6. Performance sizing and tuning

Today’s savvy business customers no longer rely as much as they did in the past on system integrators or third-party consultants to help them make a CRM platform decision. They may value the input of a trusted advisor they’ve worked with in the past for successful roll-outs. But they’ll make their own platform decisions influenced at least in part by how well the CRM solution fits into their companies’ evolving and rapidly consolidating IT infrastructure.

How Do IT Architects Evaluate a CRM Architecture?

Today’s savvy IT buyers and influencers are looking at a number of critical factors when they consider CRM architectures. We have provided an architectural comparison framework that mirrors the way most architects do their due diligence. Here are the elements ....