The time has come once again by liuhongmei


									The time has come once again
                                   The 2004 M
      for CRM magazine to reward excellence and achievement among vendors in the CRM industry.
      CRM vendors have individually and collectively worked to build confidence in the discipline, and
      those efforts are paying off.
      According to AMR Research, com-
      panies are still making modest-                      Enterprise Suite CRM
      but-measurable increases in their                    The Market

                                                                    new competitive landscape emerged among the largest deploy-
      spending on customer manage-                                  ments of CRM this past year. Changes in users’ buying patterns
                                                                    have the enterprise CRM vendors looking for new ways to
      ment tools and strategies, to the                    maximize growth and profitability. One approach these vendors are
                                                           increasingly using is to take aim at each other in an attempt to win over
      tune of an additional $600 million                   existing customers. The maturation of the enterprise CRM market,
                                                           says Chris Selland, vice president of sell-side research at Aberdeen
      in spending expected for 2004.
                                                           Group, means “these days, the only deals you win are the ones you
      Interest is strongest among mid-                     take away from other guys.”
                                                              Another paradigm shift over the past year is the growth of hosted
      market and SMB firms, which we                       CRM technologies. Many of the market leaders have expanded or
                                                           improved their offerings in this area, often focusing on embedded ana-
      classify as those companies under                    lytics, integration, and ease-of-use—the factors that large-scale CRM
                                                           users sought the most. “End-users are looking to consolidate and not
      $1 billion and under $100 million in                 have one or two point solution vendors,” Selland says. “But they don’t
      annual revenues, respectively.                       want to trade off and use a second-tier product just because it’s part of
                                                           their suite vendor.” This year’s market-leading vendors recognized
      But there was plenty to stir things                  these developing trends and tried to capitalize on them.

      up this year. Read on to see what                    The Leaders
                                                           Among the leading enterprise vendors, Amdocs is the one most heav-
      companies prevailed from 2003,                       ily focused on primarily one key vertical: telecommunications. But the
      and how others are leaving an                        company is relying on its ClarifyCRM division to extend its reach to
                                                           other appropriate verticals. This is one reason for its solid 15 percent
      indelible mark on the industry.                      revenue growth in the CRM space, which helped turn a minor overall

  B Y P H I L L I P B R I T T, J A S O N C O M P T O N ,           AND    JOSHUA WEINBERGER
 44    customer relationship management / september 2004
Market Leaders
  ✪Winner /
                                                 CRM Consultancies
                                                 Data Quality
                                                 Enterprise Suite CRM
                                                 Marketing Performance Mgmt
                                                                              Reputation for
                                                                                               Reputation for
                                                                                                 Depth of
      ✔       Ascential Software                 Data Quality                      3.2              3.6
      ✔       BearingPoint                       CRM Consultancies                  4              3.75
     ✪        Best Software (ACT!)               SFA                               3.4              2.2
     ✪        Best Software (SalesLogix)         SMB Suite CRM                     3.6              3.4
      ✔       Business Objects                   CRM Analytics                     3.8               3
      ✔       Capgemini                          CRM Consultancies                2.75             3.25
      ✔       Cognos                             CRM Analytics                     3.8               3
      ✔       Deloitte                           CRM Consultancies                3.25               4
      ✔       E.piphany                          CRM Analytics                     3.6              3.2
      ✔       E.piphany                          Marketing Performance Mgmt        3.2              3.6
      ✔       Firstlogic                         Data Quality                      3.4               3
      ✔       FrontRange Solutions (GoldMine)    SFA                               2.8              3.4
      ✔       Group 1                            Data Quality                      3.6               3
      ✔       IBM Business Consulting Services   CRM Consultancies                 3.5               4
      ✔       Interface Software                 SFA                               4.5               4
      ✔       Maximizer Software                 SFA                               2.6              2.8
      ✔       Microsoft                          Midmarket Suite CRM               2.4             2.25
      ✔       Microsoft                          SMB Suite CRM                     2.4               2
      ✔       NetSuite                           SMB Suite CRM                     3.5              3.6
      ✔       Onyx Software                      SMB Suite CRM                     3.6              3.8
      ✔       Oracle                             Enterprise Suite CRM             2.57             3.14
      ✔       PeopleSoft                         Enterprise Suite CRM             3.86             3.86
      ✔       PeopleSoft                         Midmarket Suite CRM               3.9              3.9
      ✔                     Midmarket Suite CRM               4.2              2.8
      ✔                     SMB Suite CRM                     4.2              2.8
      ✔       Salesnet                           SFA                              3.75              3.6
                                                                                                                Customer satisfaction and depth of functionality
                                                                                                                are based on a 5-point scale, with 5 being the

      ✔       SAP                                Enterprise Suite CRM             3.14             3.36
      ✔       SAP                                Midmarket Suite CRM               3.1              3.4
     ✪        SAS Institute                      CRM Analytics                     4.2              4.8
      ✔       SAS Institute                      Marketing Performance Mgmt        3.6              3.8
     ✪        Siebel Systems                     Enterprise Suite CRM             3.29             4.86
      ✔       Siebel Systems                     Marketing Performance Mgmt        2.2              2.9
     ✪        Siebel Systems                     Midmarket Suite CRM               2.5              4.7
                                                                                                                highest rating.

      ✔       Teradata                           CRM Analytics                     4.8              4.8
      ✔       Trillium (Harte-Hanks) Software    Data Quality                       4                3
     ✪        Unica                              Marketing Performance Mgmt        3.8              4.4
                                                                                                                      REPUTATION FOR          REPUTATION FOR
                                                                                           ENTERPRISE SUITE CRM   CUSTOMER SATISFACTION   DEPTH OF FUNCTIONALITY
                                                                                           Siebel Systems                3.29                    4.86
                                                                                           Amdocs                        3.43                      3
                                                                                           Oracle                        2.57                    3.14
                                                                                           PeopleSoft                    3.86                    3.86
                                                                                           SAP                           3.14                    3.36

                                   2002 loss into a booming $168 million profit in 2003. Coupled                         executive, to head the CRM division underscores the company’s
                                   with exceptionally strong customer satisfaction marks (which                          dedication to integration, a perennial enterprise concern.
                                   explain a nearly 100 percent customer retention rate among                               While observers openly dispute the true nature of SAP’s
                                   ClarifyCRM users), and the continued absorption of last year’s                        CRM growth, AMR Research says the German giant pulled
                                   acquisition of Xchange, Amdocs’ big push in functionality and                         into a dead heat with Siebel Systems for the revenue-share lead
                                   partnerships helped the company stay far ahead of the midmar-                         in the CRM market last year, at 13 percent each. SAP also
                                   ket vendors striving to gain entrance to the enterprise market,                       reaped a massive paper windfall thanks to an exchange rate
                                   and helped it keep pace with its enterprise-level peers.                              that puffed up its Euro-based results. Still, much of the credit
                                       Although busy with its hostile takeover bid for PeopleSoft,                       for the company’s ever-expanding reach in the CRM space goes
                                   Oracle managed to stay in step with its enterprise-level competi-                     to a 2003 mySAP 4.0 release that greatly improved on the pre-
                                   tors. Ranked the lowest among the Market Leaders in terms of cus-                     vious (and much-maligned) user interface. The company
                                   tomer satisfaction ratings, Oracle scored points in terms of                          made a major push into CRM through upgrade initiatives and
                                   functionality—in part because the company addressed two of the                        added trade promotion management and analytics functional-
                                   industry’s key concerns: data integration and hosted CRM. The                         ity, all the while blatantly capitalizing on the uncertainty sur-
                                                                   company met the trend toward                          rounding Siebel and PeopleSoft’s future.
                             ENTERPRISE SUITE CRM

                                   There’s nothing quite like      data integration with its Cus-
                                   pocketing about $100 million tomer Data Hub, uniting data                             The Winner
                                   to get a little attention.      from front- and back-office sys-                                 Siebel Systems, while maintaining its position as
                         ’s initial pub-
                                                                   tems to provide a single complete                                 CRM’s 800-pound gorilla, weathered a steep 17
                                   lic offering ended a year of
                                   big moves and big suc-          source of customer information.                                   percent decline in revenue, according to AMR
                                   cesses for the software-as-a-   Oracle also repositioned and                                     Research, as well as the ignominy of losing its clear
                                   service firm. The company       expanded its hosted offering,                         hold on the revenue-share lead in the space. Meanwhile, com-
                                   broke into AMR Research’s       giving customers the option of                        pany founder Tom Siebel surprised everyone by suddenly
                                   top-20 list of vendors with
                                                                   on-premises managed services.                         stepping down as CEO, handing the position to former IBM
                             the highest CRM revenue, and
                             released new versions of its flag-       With 61 percent revenue                            executive J. Michael Lawrie. But the release of Siebel 7.7
                             ship product and of sforce, its       growth, PeopleSoft seems at                           brought a renewed focus on sales, customer service, and mar-
                             platform for developers. Founder first glance to be the leader of                           keting activities, thanks in large part to the strength of recently
                             and CEO Marc Benioff suffered a       the pack. But revenues hardly                         upgraded Siebel Analytics. Customers and analysts alike were
                             black eye at the hands of the
                                                                   budged at all in the enterprise                       also impressed with the technological leaps forward brought
                             SEC, as the company’s IPO was
                             delayed three times. Even after       arena, as most of the growth                          by acquisitions of Motiva (incentive management), Ineto Ser-
                             all that the company made a           came from the midmarket                               vices (contact center management), and Eontec (retail bank-
                             notable splash in its debut, pric-    through the acquisition of J.D.                       ing solutions), among others. The most notable purchase, the
                             ing above its target and experi-      Edwards. What kept the com-                           acquisition of UpShot (and its integration into Siebel On-
                             encing one of the best first-day
                                                                   pany a Market Leader this year                        Demand), seemed to embody a year of positive redirection.
                             performances of the year.
                                “ has grown          were its development efforts and                      “Everything that Siebel did is pointing toward ambitions in
                             to be a very big influence in the its strong showing in CRM’s                               the on-demand space,” says Denis Pombriant, managing prin-
                             industry, but their footprint         surveys of both functionality                         cipal at Beagle Research Group. —Joshua Weinberger
                             isn’t very big, Selland says.         and customer satisfaction. The
                             “They’re still nowhere near the
                                                                          company’s 8.9 release
                             functionality of SAP or Siebel,
                                                                                ONE TO WATCH

                             but they’re getting there. Even
                                                           ”              kept expectations high all                     Midmarket Suite CRM
                             so, the company is helping to                year—and PeopleSoft
                             make on-demand CRM palat-                    attracted attention by                         The Market
                             able to the enterprise space—

                                                                          beating the drum for                                     idmarket companies, generally cited as being
                             and is forcing its enterprise
                                                                          lower total cost of owner-                               between $100 million and $1 billion in revenues,
                             rivals to reinvent their hosted
                             and on-demand offerings and                  ship and increased ease-                                 have long been considered the ultimate opportunity
                             pricing—with such wins as             of-integration. The selection of                      for CRM vendors. Midmarket companies have problems large
                             SunTrust Banks, ADP Corpo- ,          George Ahn, a former Tibco                            enough to require heavy-duty solutions, budgets big enough to
                             rate Express, and most
                             recently, Cisco Systems. —J.W.

                                                    46   customer relationship management / september 2004                                               
                                                                    REPUTATION FOR              REPUTATION FOR
                                    MIDMARKET SUITE CRM         CUSTOMER SATISFACTION       DEPTH OF FUNCTIONALITY
                                    Siebel                                    2.5                  4.7
                                    Microsoft                                 2.4                  2.25
                                    PeopleSoft                                3.9                  3.9
                                                      4.2                  2.8
                                    SAP                                       3.1                  3.4

accommodate the projects, and growth opportunities significant                                                 significantly larger midmarket

                                                                      MIDMARKET SUITE CRM
                                                                           This year’s midmarket lead-
enough to warrant a major CRM investment. To capture this                  ers list is perhaps more            presence than it had enjoyed
lucrative market vendors are pulling out the stops. Be it enter-           remarkable for the names            in past years. In fact, AMR
prise-grade functionality for pennies on the dollar or on-                 that are not on it than for         Research ranks PeopleSoft as
demand solutions robust enough to run a nationwide company,                those that are. Last year           now having the highest over-
                                                                           Onyx Software was CRM
midmarket CRM is where one can find the most innovation—                                                       all number of CRM users.
                                                                           magazine’s midmarket
and the most unpredictable change. The war for the midmarket               leader, with Pivotal placing           “J.D. Edwards is essentially
is raging, and some of its brightest names are taking hits.                fifth. This year neither one                 a high midmarket play

                                                                                                                          ONES TO WATCH
                                                                           ranked in our top five. Both                 in both the front office
The Leaders                                                            companies were once virtually                    and back office,” says
                                                                       synonymous with midmarket
Microsoft’s CRM radar blip turned into a legitimate market                                                              Joe Outlaw, president
                                                                       CRM. But with downward pres-
force this year, once clients began signing on in droves. With at      sure from enterprise CRM ven-                    of Outlaw Research.
least 1,000 customer installs, Microsoft’s CRM strategy cannot         dors and crowding from                           “When J.D. Edwards
be seen as mere dabbling. The company cut through a crowded            aggressive on-demand players,                    first bought YouCen-
world of Outlook-compatible products, leveraging an obvious            both vendors have faced signif-                  tric...less than five
                                                                       icant challenges. These two
advantage with its own code to leapfrog many Outlook-based                                                     percent of [J.D. Edwards] cus-
                                                                       companies have undergone
CRM competitors. “There’s Outlook integration, and then                reorganizations: Pivotal was            tomers had any sort of CRM
there’s Outlook integration—most just have a batch process             acquired by CDC Software,               at all, and [J.D. Edwards was]
that runs in the background or every night,” says Laura Pres-          which recently named Divesh             hoping that it would have a
lan, CRM research director at AMR Research. Combined with              Sisodraker the new president            ready product to sell those
                                                                       and CEO of the unit; Onyx
a highly motivated and aggressive reseller base, Microsoft has                                                 people. I wouldn’t doubt if
                                                                       founder Brent Frei stepped
been able to take a great deal of midmarket revenue in a short         down as CEO to make way for             [PeopleSoft was] doing fairly
period of time, and not just among smaller clients. “We’re get-        Lucent veteran Janice Ander-            well with that built-in cus-
ting user inquiries for companies that are looking at MS CRM           son. Although both have signif-         tomer base.”
as an enterprisewide solution,” Preslan says.                          icant installed customer bases             Although
                                                                       providing maintenance rev-
   Not all is rosy from Redmond, however, and MS CRM Ver-                                                      currently has smaller annual
                                                                       enues, “new license sales have
sion 2 is being closely watched on how it will address some of         been dismal, Kinikin says.
                                                                                      ”                        midmarket revenues than
the limitations in Version 1—which sold very well, but has not            Kinikin also thinks that the         some of its rivals, strong
earned universal applause. Our expert panel rated Microsoft            rough waters have hurt the              growth and high marks for
at the bottom of the barrel for reputation for customer satis-         credibility of the fallen leaders.      satisfaction edge the on-
                                                                       “The midmarket wants a five-
faction and depth of functionality. “They shipped a low-                                                       demand specialist into the
                                                                       year decision, and it’s awfully
function, low-flexibility product to a reseller base that wanted       hard to look out five years and         midmarket leader category
to customize and add value on top,” says Erin Kinikin, vice            assume that Onyx is really              this year. While average cus-
president at Forrester Research. Still, Microsoft makes the            going to be around that long,   ”       tomer size is still well under
CRM magazine leaderboard on the strength of extremely high             she says. So, our eyes are on           20 seats, like Microsoft the
                                                                       both Onyx and Pivotal to
year-over-year revenue growth (nearly doubling its CRM                                                         company has secured some
                                                                       regroup, perhaps to reinvent in
income, the best performance among major midmarket play-               2005, and to reclaim a slice of         significant business from
ers) and a strong bottom line for its CRM business.                    the pie. —J.C.                          major players, and that in
   PeopleSoft joins the midmarket leaders this year largely on the                                             turn has boosted confidence
strength of its J.D. Edwards acquisition and higher-than-average              from the midmarket. “Some of the largest companies in the
analyst ratings. Added to PeopleSoft’s own midmarket presence in              world are running Salesforce: Honeywell, SunTrust...[these
selling joint CRM and ERP/HR solutions, J.D. Edwards (now                     are] huge clients with thousands of agents running the solu-
called PeopleSoft EnterpriseOne) provides the company with a                  tion,” Preslan says. The company’s sforce integration platform

                    CRM magazine has significantly         performance management and data                           ite score of overall CRM revenues
CATEGORIES          expanded the range of Market Lead-
                    ers categories from years past. Rec-
                                                           quality vendors are also included for
                                                           the first time. Recognition for contact
                                                                                                                     and year-over-year revenue growth,
                                                                                                                     while the remainder is derived from

AND                 ognizing the strong growth in
                    demand among smaller companies,
                    this year the Market Leaders micro-
                                                           center outsourcing excellence moves
                                                           to our Service Leader awards.
                                                              We’ve named one winner and
                                                                                                                     market share position and analyst
                                                                                                                     ratings of reputation for customer
                                                                                                                     satisfaction and depth of functional-

CRITERIA            scope looks not only at enterprise
                    and midmarket CRM specialists, but
                    SMB players and sales force automa-
                                                           four leaders (listed alphabetically) in
                                                           each category using a proprietary
                                                           selection formula. Roughly one half
                                                                                                                     ity. We’ve also cited companies in
                                                                                                                     each category worth watching for
                                                                                                                     their potential to shake up their
                    tion providers as well. Marketing      of the rating is based on a compos-                       respective market next year.
                                                                                                  REPUTATION FOR          REPUTATION FOR
                                                                 SMB SUITE CRM                CUSTOMER SATISFACTION   DEPTH OF FUNCTIONALITY
                                                                 Best Software (SalesLogix)               3.6                 3.4
                                                                 Microsoft                                2.4                  2
                                                                 NetSuite                                 3.5                 3.6
                                                                 Onyx                                     3.6                 3.8
                                                                                  4.2                 2.8

                             is getting enterprise attention, but Preslan believes the new              ware giant’s own Outlook-driven CRM package.“All the resellers
                             Studio capability, making it easier for companies to customize             started drinking the Microsoft Kool-Aid,” says Jim Dickie, a
                             the look, feel, and functionality of their deploy-          partner with CSO Insights. Meanwhile, key on-demand players
                             ment, is the real jewel for midmarket customers.                           expanded beyond basic contact management functionality to
                                SAP is the most surprising participant on the midmarket                 become serious contenders against the traditional packaged
                             leaderboard. Although only a fraction of SAP’s CRM revenues                suite vendors that cater to smaller business. And as verticaliza-
                             are attributed to midmarket clients, its growing stake in CRM              tion and right-size applications continue to grow in popularity,
                             business means it must be taken seriously. Market share reports            larger CRM leaders are doing their best to nudge those that cater
                             from CSO Insights indicate that SAP is winning 10 percent of               specifically to smaller business into niche roles.
                             sales-oriented deals in the midmarket, while AMR Research
                             credits SAP with 13 percent of the overall customer manage-                The Leaders
                             ment space. SAP’s focus is expected to remain the larger enter-         Microsoft, by its dominating presence and user adoption, is a
                             prise, but with the muscle and back-office resources it                 bona fide SMB leader in addition to its midmarket standing.
                             commands, the ripple effects are clearly felt in the midmarket.         Growth in Microsoft’s CRM business is extremely strong,
                                                                                                     helped both by its enormous fleet of resellers and its relatively
                             The Winner                                                              recent launch as compared to its competitors. While a clear
                                        Some in the industry deride Siebel Systems’ oft-                                               leader, and despite the
                                                                                                    SMB SUITE CRM

                                         reinvented midmarket strategy as merely a ploy to get           GoldMine parent Front-        promise of easy, powerful
                                         in the front door of smaller firms to upsell them to            Range Solutions has           Outlook integration, not all
                                                                                                         unsteadily positioned itself
                                        Siebel’s full enterprise suite. (Once known as the Mid-                                        are convinced that Microsoft
                                                                                                         as a complete CRM vendor
                             Market Edition, the vendor’s main offering is now called Siebel             for some time, but the        is an ideal solution for
                             Professional.) Siebel answered those intimations decisively with            coming months will be         SMBs, due to hefty server
                             the acquisition and ongoing integration of UpShot into Siebel               FrontRange’s make-or-break    requirements. “There’s a lot
                             CRM OnDemand—and despite shrinking year-over-year rev-                 opportunity to provide enough      of Microsoft infrastructure
                                                                                                    integrated functionality in sales,
                             enues, Siebel has staked a solid claim to the midmarket vanguard.                                         you have to install before
                                                                                                    marketing, and service to be a
                                Even with a clear minority of its revenues coming from the          legitimate contender for SMBs      you can even begin with MS
                             midmarket, Siebel does substantial trade with midsize enter-           in need of a complete solution.    CRM,” says Erin Kinikin,
                             prises—more than many of its midmarket peers put                       An on-demand version of Gold-              vice president at For-
                                                                                                    Mine is imminent, and given
                                                                                                                                               ONE TO WATCH
                             together—owing to sales of OnDemand, its midmarket suite,                                                         rester Research. How-
                                                                                                    the success enjoyed by SMB
                             and its core Siebel Enterprise product. Siebel has clearly set its                                                ever, Laura Preslan,
                                                                                                    leaders NetSuite and Sales-
                             sights on a midmarket looking to buy capabilities that were  , it may be a crucial             CRM research direc-
                             once considered out of reach, and by any name, its offerings           step in establishing a foothold            tor at AMR Research,
                             will be on many RFPs from the very same mid-tier companies             in the market. The hosted solu-            says that Microsoft’s
                             the CRM industry expects will provide strong growth in com-            tion could open the door to get-           strong integration is
                                                                                                    ting more functionality to
                             ing years. In the midmarket as in the top-tier enterprise, Siebel                                                 leading to record user
                                                                                                    customers faster, and without
                             is on everyone’s mind. —Jason Compton                                  the need for consulting. “Any-     adoption rates.
                                                                                                    body can implement a Gold-            From humble beginnings
                                                                                                    Mine or MS CRM or ACT!, but        as NetLedger, an on-demand
                             SMB Suite CRM                                                          the big issue is synchronizing
                                                                                                    forecasts and doing rollup, and
                                                                                                                                       alternative to small business
                                                                                                                                       accounting software, Net-
                                                                                                    the hosted vendors can do that
                             The Market                                                             much better with much less         Suite has grown into a

                                      he small business CRM space has been flooded with             pain than the traditional desk-    legitimate CRM contender.
                                      functionality at affordable price points, and integrators     top guys, Kinikin says.
                                                                                                              ”                        Although its CRM function-
                                      and customers alike can’t be blamed for shaking their            As the company works to         ality is not as deep as some
                                                                                                    reassert its sales leadership and
                             heads and working out just what their options are. Business as                                            established players, it has
                                                                                                    to establish true across-the-
                             usual was rocked by the arrival of Microsoft last year, which—at       board functionality, FrontRange    enjoyed explosive growth
                             least temporarily—shifted a great deal of attention onto the soft-     should finally realize the poten-  among customers seeking
                                                                                                    tial that the GoldMine name has
                                                                                                    carried for years. —J.C.

                             48   customer relationship management / september 2004                                                         
                                                                                                      REPUTATION FOR          REPUTATION FOR
                                                                    SALES FORCE AUTOMATION        CUSTOMER SATISFACTION   DEPTH OF FUNCTIONALITY
                                                                    Best Software (ACT!)                 3.4                      2.2
                                                                    FrontRange (GoldMine)                2.8                      3.4
                                                                    Interface Software                    4.5                      4
                                                                    Maximizer Software                   2.6                      2.8
                                                                    Salesnet                             3.75                     3.6

                              sales and back-end integration capabilities. The lure of NetSuite              Best also deserves honorable mention for adding ACCPAC
                              is simple: run essentially all business functions, front and back          CRM to its SMB mix. The Web-based service is sold both as an
                              end, on one hosted platform.                                               on-demand and on-premise solution. The market penetration
                                 Onyx Software is a curious presence in our market leader                for ACCPAC CRM remains low, but the company hopes to slot
                              calculations. Although primarily a midmarket player catering               it between ACT! and SalesLogix in its product mix—and come
                              to larger companies, it enjoys substantial uptake with smaller             to the on-demand market with a more appropriate offering than
                              firms—and has been shoved out of its traditional midmarket                 the ill-fated attempt of a few years back. “ACCPAC
                              leadership role by such enterprise players as Siebel and People-           fills a couple of holes for them, but it is not clear where ACCPAC
                              Soft. “Onyx is seeing success in the public sector,” but even              is going to end up,” Kinikin says. —Jason Compton
                              strong verticals won’t protect the company from competitive
                              realities, says AMR Research’s Preslan. “I think they have a lot
                              to fear in Microsoft.”                                                     Sales Force Automation
                                 No one expects Onyx to reinvent itself as an SMB provider—
                              the company continues to serve large midmarket firms and to                 The Market

                              seek larger midmarket deals—however, it does serve a substantial                 ales force automation, say the seasoned veterans of CRM,
                              share of the SMB market.                                                         is where it all began. When contact management was
                        rounds out the SMB leaders, having                             largely limited to index cards and pipelines were figments
                              attracted a substantial small-business following with simple               of delirious imaginations, SFA came to bring order. Even as
                              pricing plans and an implicit promise to make CRM easier                   CRM increasingly becomes a company-wide strategy, the num-
                              than competitive packaged products. Although the company’s                 bers clearly indicate that there remains an important place for
                              sforce integration platform is largely seen as a play to encour-           sales-focused initiatives in modern enterprise.
                              age enterprise adoption,’s SMB customers                       SFA products from such vendors as Siebel,,
                              should soon see the fruits of third-party plug-ins.                        and Onyx continue to be sought-after when sales efficiency and
                                                                                                         sales effectiveness solutions are needed, particularly at larger
                              The Winner                                                                 firms. However, because of the maturity and evolution of the
                                          Last year’s midmarket runner-up has lived in inter-            SFA market, we chose to focus on those companies that remain
                                           esting times, which in this case some see as both a           primarily pure-play SFA vendors.
                                           curse and a blessing. Parent company Best Soft-
                                          ware continues to grow its CRM stake and                       The Leaders
                              SalesLogix is driving that growth. But not all has been easy.              “The news is that GoldMine and Maximizer both survived the
                              Difficulties with SalesLogix 6 appeared to cost general manager            past year,” says Jim Dickie, a partner with CSO Insights. Micro-
                              Tim Fargo his job. His replacement, Jon Van Duyne, dismantled              soft’s entry into CRM drew the attention of many traditional SFA
                              SalesLogix’s direct sales force to restore reseller confidence, and        integrators, cutting into the reseller base available to both CRM
                              is refocusing the company’s efforts to improve functionality and           and SFA vendors. Even so, GoldMine is faring quite well in the
                              to promptly resolve software problems. As a result, Best enjoyed           SFA market. As a result, parent company FrontRange Solu-
                              continued (if muted) growth of its CRM revenues, and has a                 tions has enjoyed strong quarter-to-quarter growth in recent
                              strong lead in SMB market share. Van Duyne largely managed                 months, and brought in a new channel director to bolster confi-
                              to keep the reseller channel together despite the lure of                  dence among GoldMine VARs. Although FrontRange consid-
                              Microsoft, and has been handed a gift-wrapped package in                   ers its GoldMine/HEAT pairing a complete CRM suite, analysts
                              ACCPAC CRM and its large partner roster.                                   say they are waiting for improvements in GoldMine later this year
                                 Although turnkey vertical packages and on-demand CRM have               that will give the software true CRM functionality for SMBs.
                              become watchwords, and analysts and CRM adopters both ago-                    Maximizer Software, a name once uttered in the same
                              nized about the costs and potential pitfalls of heavily modified CRM       breath as ACT! and GoldMine, had fallen on hard times, but
                              platforms, Van Duyne has embraced a contrarian approach. He                that hasn’t stopped the company from continuing to improve its
                              directly touts SalesLogix’s strength as a customizable software sys-       product. The release of Maximizer 8 this past May resulted in a
                              tem for business—and cites that capability as the appeal for its large     strong spike in sales for the company, hinting that the wait-and-
                              reseller network and 6,000-plus and growing customer base.                 see period for Maximizer is over. And although the company

                             50    customer relationship management / september 2004                                                     
                                                                                                                                REPUTATION FOR          REPUTATION FOR
                                                                                               MARKETING PERFORMANCE MGMT   CUSTOMER SATISFACTION   DEPTH OF FUNCTIONALITY
                                                                                               Unica                                3.8                     4.4
                                                                                               Aprimo                               3.4                     3.8
                                                                                               E.piphany                            3.2                     3.6
                                                                                               SAS Institute                        3.6                     3.8
                                                                                               Siebel Systems                       2.2                     2.9

                                    has a smaller market share than its traditional rivals, some in-                                  Now part of the Best Software family, the company had
                                    dustry watchers attribute that variance to Maximizer’s focus on                                pledged to work to build more links between ACT! and its wide
                                    profitability instead of new revenue growth. CRM magazine’s                                    range of SMB accounting software. If Best is true to its
                                    Leaders formula does not account for profitability, but living to                              announced strategy, ACT! users will soon have a smooth
                                    fight another year is its own reward.                                                          upgrade path to ACCPAC CRM, the company’s hybrid pack-
                                       Doubtless below the radar for many SFA customers compared                                   aged/on-demand solution.
                                    with the over-the-counter high flyers ACT! and GoldMine,                                          New functionality for ACT! has not been quick in com-
                                    Interface Software is a segment leader by virtue of strong                                     ing—as of this writing, it has been more than one year since
                                    performance in its vertical (professional services companies like                              ACT! saw an upgrade. For an established workhorse, that’s not
                                    law firms) and extremely high marks from analysts. The strong                                  necessarily a bad thing. “Here’s something that wasn’t broke
                                    market ownership by SFA mainstays, combined with pressure                                      when they [Best] bought it, and the great thing is that they left
                                    from on-demand services, has all but forced new entrants to find                               it alone,” Dickie says. For a while, anyway. ACT! 2005 was
                                    a niche and serve it well. “In [Interface’s] field…I consider them                             released August 24. —Jason Compton
                                                                      tops,” says Rich Bohn, executive
                             SALES FORCE AUTOMATION

                                    An up-and-coming on-              editor of
                                    demand provider with the             On-demand leadership in the                               Marketing Performance
                                    promise to make a signifi-
                                    cant splash, Entellium
                                                                      SFA-only space comes from                                    Management
                                    already offers strong sales       Salesnet. While accumulating
                                    tools and some support and        customers more slowly than on-                               The Market

                                    marketing functionality to a      demand cohort,                                             arketing performance management (MPM) is a
                                    growing customer base. The        Salesnet took a more focused                                              catch-all that takes pieces of both marketing
                                    system emphasizes process
                                                                      approach than attempting to be                                            resource management and marketing operations
                                    and workflow, and currently
                                    sells at a significant discount   all things to all people. And con-                           management and blends them with the campaign manage-
                              to larger on-demand rivals. En-                 trary to popular wisdom                              ment and lead management functionality that many vendors
                              tellium already promises Out-                   that says on-demand solu-                            include in their marketing automation suites. Not surpris-
                                                                                    ONE TO WATCH

                              look integration, sought after by               tions tend to be less flexi-                         ingly, all that blending makes it difficult to definitively locate
                              customers who rely on Outlook
                                                                              ble to individual corporate                          the boundaries of the market, and so the blurring of its con-
                              for email and basic contact man-
                              agement tasks.                                  needs than packaged soft-                            stituents is inevitable. Generally speaking, though, the MPM
                                 The highly modular solution,                 ware, Dickie gives high                              space is the top-level approach to marketing efforts, designed
                              designed to let companies turn                  marks to Salesnet for its                            to reach out to both prospective and existing customers.
                              on support and marketing func-                  ability to mold to a com-                               As if all those blurred lines didn’t make selling in this mar-
                              tionality as needed, is already
                                                                      pany’s specific sales process.                               ket challenging enough, the rules kept changing this past year,
                              aggressively targeting compa-
                              nies with complex ERP integra-          “Salesnet is clearly the strongest                           with the creation of the national Do-Not-Call registry, the
                              tion needs. Because most                player in the marketplace for                                implementation of the federal CAN-SPAM law, and the bur-
                              companies find it easier to             companies that have a struc-                                 geoning threats of phishing and identity theft. Despite all the
                              experiment with on-demand               tured [sales] methodology,” he                               obstacles there’s been “an uptick in the number of deals this
                              sales, we expect Entellium’s ear-
                                                                      says. The company has already                                year,” says Elana Anderson, senior analyst of enterprise appli-
                              liest leadership and success will
                              come in the SFA space. —J.C.            launched three vertical solution                             cations at Forrester Research. Anderson estimates that licensed
                                                                      packages, with more on the way.                              software sales in the marketing automation segment grew by
                                                                                                                                   about 6 percent in 2003, to roughly $350 million.
                                                       The Winner
                                                               After all these years ACT!—what some consider to                    The Leaders
                                                                 be the original SFA tool—remains locked in a fight                By most estimates privately held Aprimo’s revenues are
                                                                 with archrival GoldMine. Arguably the most avail-                 roughly divided between campaign management and MRM
                                                               able CRM tool in the world, sold through integra-                   offerings, which are powerful enough to attract big-name
                                                      tors as well as retailers, ACT! claims to have 2 million active              clients like Bank of America and Merrill Lynch. Analysts say
                                                      users and claims that the number is climbing.                                Aprimo’s strength is serving the B2B market. This year the

                                                      52   customer relationship management / september 2004                                                       

                                      company outpaced all but one of its peers, as it landed several                    executives say the marketing module is one of the company’s
                                      new tier-one clients, retained nearly 100 percent of its existing                  fastest-growing offerings, and several analysts said its
                                      users, and introduced Aprimo Marketing 6.0, adding new                             enhancements this year in loyalty management are a major
                                      workflow capabilities, among other features, to the flagship                       step forward. Even though the company’s marketing line is
                                      product. All that effort paid off, with the company scoring near                   less mature than its others, “they’ve been able to get mind-
                                      the top in functionality and customer satisfaction.                                share in this market with what is a rudimentary product,”
                                         Despite E.piphany’s avid fan base among customers of its                        Selland says. According to Anderson, this edition is the first
                                      marketing offerings—the company “provides the best cus-                            marketing automation solution “that will be able to get
                                      tomer references, bar none,” Anderson says—it still yearns to be                   [Siebel] to the table to compete against vendors like Unica
                                      considered a vendor of full-suite enterprise CRM. The com-                         and E.piphany in high-end consumer marketing companies.”
                                      pany made compelling progress last year, trimming losses and
                                      refocusing its efforts, going to an indirect sales model outside                   The Winner
                                      of North America and Western Europe and targeting five main                                    Unica scored off the charts in CRM magazine’s sur-
                                      vertical markets: financial services, insurance, tele-                                          vey of functionality and customer satisfaction—one
                                      communications and media, travel and leisure, and retail. The                                   of the few Market Leaders to top both lists in its cat-
                                      E.6 product line, including what Anderson calls “best-of-breed                                 egory. “Unica knows more about database marketing
                                      functionality for real-time decisioning,” won over a number of                     than any vendor in the space,” Anderson says. The company
                                      analysts and customers, helping the company score high among                       released Affinium 6 this past year, and the entire Affinium prod-
                                      the leaders in customer satisfaction and functionality.                            uct line scored excellent reviews, especially for its Optimize and
                                         SAS Institute remains the most recognizable name in the                         Interact modules. Anderson says the company also has “a good
                                      marketing arena, having parlayed its strength in innovation,                       footprint across a marketing automation suite that is continu-
                                                                       data mining, and analytics to                     ing to expand.” Campaign management is still the focal point of
                                                                       become, as Aberdeen’s Vice                        the suite, Anderson says, but this year Unica “has significantly
                             MARKETING PERFORMANCE MANAGEMENT

                                     Why build expertise when          President of Sell-Side Research                   ramped up its resources to sell the Affinium Plan module, and
                                     it’s out there to be snapped
                                                                       Chris Selland says, “the gold                     is starting to gain some traction with Affinium Optimize.”
                                     up at bargain-basement
                                     prices? DoubleClick spent         standard, and the dominant                           The company leveraged its strength in database marketing
                                     the year gobbling up vari-        force.” Analysts agree that the                   and marketing automation to keep ahead of its competition,
                                     ous bits of marketing func-       company’s Marketing Automa-                       landing more new clients than most of its peers—achieving
                                     tionality, most notably in        tion 4.0 is a powerful release,                   record revenue growth, totaling $31.4 million in 2003. And
                                     the form of SmartPath,
                                                                       one that’s rumored to make the                    Unica’s latest product launch, Affinium eDelivery Services,
                                     which had been seen as
                                     Aprimo and Unica’s closest        usability issues that have dogged                 promises to extend the company’s functionality lead.
                                     competition. The result is a      SAS a thing of the past. Accord-
                                     vendor offering all the           ing to analysts, SAS’s offer-
                                     fixin’s when it comes to
                                     marketing performance
                                                                       ings—which scored a close                         CRM Analytics
                                                                               second to Unica in
                                     management. Now all the
                                                                                                                         The Market
                                                                                            ONE TO WATCH

                                     company has to do is con-                 breadth of functional-

                                     vince prospects that it has               ity—could even pose a                                ore top business executives are demanding data
                                     the wherewithal to inte-                  threat to Unica’s leader-                            analytics as part of their CRM software purchases.
                               grate all that newfound func-                   ship in the space.                                   “There’s been a real growing focus on CRM appli-
                               tionality—and remove the
                                                                                  Until this year’s                      cations in analytics in the past year,” says Gareth Herschel, a
                               banner-advertising stigma that
                               still wafts around it. Since Dou-               release of Siebel 7.7,                    research director at Gartner. “Companies are getting on the
                               bleClick is more of a service                   Siebel Systems had                        CRM bandwagon for analytics as they see that a raised [CRM]
                               provider than a software                put little emphasis on its mar-                   profile can do a lot to drive an organization’s revenue.”
                               provider, according to Selland,         keting tools. But that has never                    With this increased awareness and demand comes oppor-
                               “in many ways [it’s] the Sales-
                                                                       stopped the company from                          tunity for growth. And the analytics vendors—especially the
                      of this market.    ”
                               Luckily for DoubleClick, he             trying to trample over its bet-                   market leaders—are seizing that opportunity. “The big guys
                               says, “this is a market that’s          ter-entrenched peers. Siebel                      continue to dominate the market,” says Chris Selland, vice
                               more likely to go for a Sales-
                      model. —J.W.

                                                                54   customer relationship management / september 2004                                
                                                                                                             REPUTATION FOR          REPUTATION FOR
                                                                                     CRM ANALYTICS       CUSTOMER SATISFACTION   DEPTH OF FUNCTIONALITY
                                                                                     SAS Institute               4.2                     4.8
                                                                                     Business Objects            3.8                      3
                                                                                     Cognos                      3.8                      3
                                                                                     E.piphany                   3.6                     3.2
                                                                                     Teradata                    4.8                     4.8

                                             president of sell-side research for Aberdeen Group. One rea-        Data Integrator 6.5 for specialized data cleansing activities.
                                             son for this, according to AMR Research analyst Paul Kirby, is      Cleaner data means better analytics, so Business Objects could
                                             that many potential customers implement technologies from           parlay the partnership into increased sales.
                                             the larger companies to have a single analytics provider.              Cognos, which Herschel ranks just behind Business
                                                                                                                 Objects for a vendor with a broadly focused data analytics
                                             The Leaders                                                         operation, is seeing significant interest in its Web-based enter-
                                   Teradata, the data warehousing and analytics division of                      prise query and reporting application, Cognos ReportNet,
                                   NCR, is one of the big guns in the analytics market, accord-                  released in September 2003.
                                   ing to Selland. Teradata “handles a tremendous amount of                         The application is integrated within Cognos’ business intelli-
                                   data in its data warehouse business,” Kirby says. “As the vol-                gence offering. Cognos ReportNet builds on the business intel-
                                   ume grows, the analytics increases accordingly.”                              ligence application’s query and reporting functions. It offers
                                      However, according to Herschel, Teradata is so driven by the               multiple-language support for companies with business in mul-
                                   warehouse business that it will allow competitors to take the                 tiple countries, helping the company strengthen its relation-
                                   analytics portion of a contract as long as Teradata gets the ware-            ships with current customers, while catching the attention of
                                   housing end of the business. Nevertheless, Teradata’s analytics               new prospects. The multilanguage capability is increasingly
                                   business continues to grow as many of Teradata’s clients see                  important as companies seek one solution for multinational
                                   increased need for more comprehensive analytics.                              operations, giving Cognos a stronger worldwide offering.
                                      Business Objects offers a solid, broadly focused applica-                     E.piphany unveiled a new version of its application, while
                                   tion, according to analysts. The company added to the depth                   returning to some of its roots, according to Selland. In 2003 the
                                   of its offering when it acquired Crystal Decisions in December                company rolled out E.piphany 6.5, which the company credits
                                                                   2003. With the acquisition                    for its 30 percent revenue growth over fiscal year 2002. The
                             CRM ANALYTICS

                                  License revenues for             Business Objects now has part-                release offers better analytics of marketing campaigns, as well as
                                  Siebel Systems grew more         nerships with more than 1,500                 deeper analysis of marketing campaign parameters. E.piphany
                                  than 80 percent in fiscal        firms, including systems inte-                also announced several major new customers during the year
                                  year 2003, according to the
                                                                   grators, original equipment                   that chose E.piphany in large part for its improved analytics
                                  company. In one of the
                                  most recent “wins” for the       manufacturers, and value-                     offering. According to Gartner’s Herschel, E.piphany has the
                                  analytics division, Siebel is    added resellers—and an esti-                  best operations system among the CRM analytics vendors.
                             providing analytics support for       mated 24,000 customers
                             Minneapolis-based Jostens, a          worldwide.                                    The Winner
                             maker of class rings, year-
                                                                       BusinessObjects 6.5, which                           The behemoth of the analytics market continues to
                             books, and graduation prod-
                             ucts. Though analytics is only a      started shipping at the end of                            be SAS Institute, which dominated the market
                             small portion of Siebel’s total       June, integrates with Crystal                             with $1.34 billion in total revenues. In 2003 the
                             business, Selland says, the           Version 10 products. The com-                            company launched the SAS 9 business intelligence
                             company’s sheer size makes            bination offers Web query and                 platform, which includes predictive modeling. The company
                             potential analytics customers
                                                                   analysis, as well as reporting                also released a customer intelligence application, SAS Mar-
                             take notice.
                                Editor’s note: SPSS was the        and analytic capabilities. This               keting Automation 4, which is based on SAS 9. “SAS is the
                             2003 Market Leaders CRM Ana-          breadth of functionality is get-              Rolls Royce of data analytics,” Aberdeen’s Selland says.
                             lytics One to Watch, but during               ting attention from cus-                 The new predictive analytics capabilities should help the
                             the 2004 judging process the                  tomers and analysts.                  company maintain its market dominance. “SAS sells more than
                                                                          ONE TO WATCH

                             firm was restating its financial
                                                                           Business Objects also                 anyone else and has the staff support to keep the growth on tar-
                             numbers, thus could not be
                             included. The company is con-                 entered a partnership                 get,” says Herschel, who also considers SAS the best vendor in
                             ducting a review of its audit                 agreement with First-                 terms of predictive analytics.
                             committee. With the potential                 logic, one of CRM maga-                  Although other companies are attracting attention as the
                             uncertainty, SPSS wasn’t con-                 zine’s data quality                   analytics arena continues to gain in importance, SAS’s large
                             sidered among the leaders,
                                                                           leaders. Under the agree-             customer base remains among the most loyal in the category.
                             though a few analysts did men-
                             tion the company as an impor-         ment Business Objects embed-                  And while the company continues to add new clients, its lead-
                             tant player in its market niches:     ded tools from Firstlogic into                ership can only stay strong. —Phillip Britt
                             education, healthcare, and
                             financial services. —P.B.

                                             56   customer relationship management / september 2004                                             
                                                                                                                        REPUTATION FOR          REPUTATION FOR
                                                                                       DATA QUALITY                 CUSTOMER SATISFACTION   DEPTH OF FUNCTIONALITY
                                                                                       Acxiom                                4                      4.6
                                                                                       Ascential Software                   3.2                     3.6
                                                                                       Firstlogic                           3.4                      3
                                                                                       Group 1                              3.6                      3
                                                                                       Trillium (Harte-Hanks) Software       4                       3

                                            Data Quality                                                                   as a leader in the market. A 2003 Meta Group report cites First-
                                                                                                                           logic as the leading pure-play data quality company. For CRM-
                                            The Market                                                                     specific applications, Firstlogic goes to market with such
                                                       ata quality continues to grow in importance. In fact,               partners as traditional CRM vendors Siebel and PeopleSoft.

                                            D          analysts agree that there’s a direct correlation between
                                                       the quality of a company’s data and the financial per-
                                            formance of the company itself.
                                                                                                                              Trillium acquired Avellino Technologies at the end of Feb-
                                                                                                                           ruary, a deal that should add to the profitability of this division
                                                                                                                           of Harte-Hanks, Friedman says. The Harte-Hanks relationship
                                               The outlook for the market is promising due to the increased                is an important one, analysts say, because it gives Trillium the
                                            interest from large enterprises, according to Gartner analyst Ted              financial backing that private data quality vendors don’t have.
                                            Friedman. Meta Group expects data quality adoption rates to con-               Trillium’s acquisition buoyed the company’s presence, which
                                            tinue to expand 20 to 30 percent annually over the next few years.             already benefits from partnerships with such industry leaders
                                                                                                                           as Accenture, IBM, and Siebel. Trillium also unveiled several
                                            The Leaders                                                                    major, successful installations with large telecom companies
                                   Group 1 continues to enjoy the benefit of a bigger market                               and financial services firms.
                                   footprint than its competitors, though Firstlogic, Trillium,                               Ascential Software has completed the successful inte-
                                   and Ascential have been more innovative lately, according to                            gration of recent acquisitions into its own product offerings,
                                   Friedman. He estimates that about a third of Group 1’s                                  strengthening the attractiveness of its overall suite. “Ascential
                                   $100 million in total revenues comes from data quality work.                            Software has gained market mind-share by leveraging its size
                                      Growth has been a strong suit this past year. “Outside of                            and market presence,” Friedman says. “It acquired data qual-
                                   acquisitions, much of their revenue has come from the                                   ity technology from Vality Technology and Metagenix in
                                   strength they already had in the marketplace,” Friedman says.                           2002. Positioning around the importance of data quality in
                                   “They built up a large installed database over the years.”                              integration initiatives, Ascential has been integrating the
                                      Group 1 also added to its business through its acquisition of                        products and has repackaged them as the QualityStage and
                                   Sagent Technology in October 2003. (Sagent is now part of                               ProfileStage components of its enterprise integration suite.”
                                   Group 1’s enterprise solutions division.) The combined offering                            Analysts also cite Ascential’s handling of customer data
                                                                  enables client companies to                              issues and the flexibility to address data domains as key
                             DATA QUALITY

                                  Market research firm            access data from multiple sources                        strengths that help bolster the company’s market presence.
                                  Winter Corp. recognized         to populate CRM and other
                                  Experian Information Solu-      enterprise systems. Group 1 also                         The Winner
                                  tions in 2004 for having the
                                                                  has market strength from its                                        The top data quality vendor from a CRM stand-
                                  world’s most-used client
                                  database, one that handles      partnership agreements with                                           point is Acxiom, which receives an estimated
                             887 simultaneous queries at its      Siebel and other CRM vendors to                                       $700 million of its $1 billion in revenue from
                             peak workload. Though CRM-           offer data quality support within                                    CRM-related data quality analytics, according to
                             related data quality represents      those vendors’ applications.                             Gartner analyst John Radcliffe’s estimates. Though an esti-
                             only about a quarter of Exper-
                                                                     In the past year Firstlogic                           mated growth rate of just over 5 percent may not look spec-
                             ian’s total revenue, according
                             to Radcliffe, the Atlanta-based      released its new technology plat-                        tacular, it continues a trend of steady increases from the
                             company ramped up its data                   form, IQ8, which com-                            35-year-old data quality company.
                                                                            ONE TO WATCH

                             quality business in the past                 pany officials say took                             “You can’t do CRM without data quality,” says Radcliffe,
                             year. Experian also developed                2.5 years and 103,000                            who sees Acxiom as offering the most complete package in
                             the Express version of its ana-
                                                                          man-hours of engineering                         this area. “Having [data quality] is vital just to pass go.”
                             lytical marketing database, for
                             smaller clients that have                    work to develop. This was                           AMR Research analyst Paul Kirby also calls Acxiom a strong
                             smaller budgets. Though it still             a welcome release to its                         data quality player due to its focus on CRM.
                             has a strong focus in the credit-            already satisfied customer                          Acxiom is expected to continue its solid growth on a world-
                             reporting arena, Experian is         base. “Firstlogic benefits from                          wide scale as it realizes some of the benefits of last year’s
                             continuing to grow its CRM-
                                                                  strong customer service and sup-                         acquisitions of Caritas Europe and Consodata. The business
                             related data quality presence.
                             Based on the company’s sheer         port,” Friedman says.                                    deals expanded Acxiom’s European operations to five addi-
                             size, its growth in data quality        Firstlogic is continually cited                       tional countries. —Phillip Britt
                             could push it into a leadership
                             role in 2005. —P .B.

                                            58   customer relationship management / september 2004                                                         
                                                                                                              REPUTATION FOR          REPUTATION FOR
                                                                                    CRM CONSULTANCIES     CUSTOMER SATISFACTION   DEPTH OF FUNCTIONALITY
                                                                                    Accenture                     3.5                    4.25
                                                                                    BearingPoint                   4                     3.75
                                                                                    Capgemini                    2.75                    3.25
                                                                                    Deloitte Consulting          3.25                     4
                                                                                    IBM BCS                       3.5                      4

                                       CRM Consultancies                                                         made a firm commitment to provide CRM clients with balanced
                                                                                                                 scorecards and metrics to help assess the value of CRM projects.
                                       The Market                                                                    Deloitte Consulting is best known for giving clients the
                                              veryone loves the idea of out-of-the-box simplicity, but           star treatment. The firm has what one analyst calls “a collegiate

                                       E      no one honestly expects to remove third-party consul-
                                              tants from the CRM equation anytime soon. Much like
                                       the enterprise CRM market, consultancies are staking out posi-
                                                                                                                 atmosphere to it, [and] its clients tend to have an affinity with
                                                                                                                 it.” Another analyst characterizes Deloitte as “a better-focused,
                                                                                                                 better-run company” than its peers, one that doesn’t try to be
                                       tions on either side of the best-of-breed divide: Some claim to           everything to everyone. It does especially well in its areas of
                                       be one-stop shops for strategy, integration, and maintenance,             expertise, such as real estate and consumer packaged goods.
                                       while others are content to specialize in one niche or another.           Though a distant third in terms of revenue, based on client sat-
                                       In the end the continuing need for both strategic and tactical            isfaction alone Deloitte would get top marks—and that’s the
                                       assistance kept this year’s winners very much on the move.                main reason several analysts said Deloitte would be one of only
                                          The market itself is decidedly top-heavy, with five firms              a handful of consultancies to see growth in the coming year.
                                       combining for about half of what analyst firm IDC estimates                   IBM Business Consulting Services has spent the year
                                       was an $8.6 billion market for CRM-related consulting in the              finalizing the absorption of what used to be PwC Consulting,
                                       United States last year. Not surprisingly, those five were the            and doing a fine job of it. One measure of that successful
                                       Market Leaders this past year, but for highly varied reasons.             assimilation has been continued growth that most other con-
                                                                                                                 sultancies would envy, in part thanks to the new partnership
                                       The Leaders                                                               with Siebel Systems for its OnDemand offering, which is just
                          Considering BearingPoint’s flat revenues, the fact that it has                         one of many partnerships that helped drive business to IBM’s
                          maintained a leadership position is testament to its perseverance.                     consulting practice last year. “IBM has the most momentum
                          The firm focused on fewer industries than some of its competi-                         in the marketplace around CRM, because of PwC,” says Laura
                          tors, but it excelled in them, particularly the more technical verti-                  Preslan, CRM research director at AMR Research. According
                          cals. BearingPoint also benefited from vendor-specific                                 to some analysts, however, customer satisfaction slipped a bit,
                          specialization, with deployments of some of the smaller CRM                            as some poor staffing choices may have impacted results.
                          vendors. “BearingPoint, for its size, probably has more KANA or                        “They’re missing the basic blocking and tackling,” says one
                          E.piphany resources [than IBM BCS or Accenture],” says one                             analyst, who says existing PwC clients had come to expect a
                          analyst. That targeted approach may explain the firm’s sterling                        higher level of attention. That wasn’t enough, apparently, to
                                                           customer satisfaction rating—                         scare away the long-standing accounts that helped generate
                   CRM CONSULTANCIES

                        Inforte stood out for its          outscoring its competitors.                           what one analyst firm estimated to be more than $2 billion in
                        sterling reputation and               Capgemini’s strengths in                           CRM-related revenue last year.
                        laserlike concentration on         Europe and in certain verticals
                        CRM. Its March acquisition         (e.g., communications, life sci-                      The Winner
                        of SAP business intelli-
                                                           ences) bring it back to the table                                One thing Accenture’s clients don’t have to worry
                        gence specialist Compendit
                        only added to its strengths.               again and again. The com-                                  about is that the consultancy is going away anytime
                                                                    ONES TO WATCH

                        The resulting combination                  pany’s CRM practice bene-                                  soon—not with $3.51 billion in cash on hand.
                        leverages Inforte’s existing               fited this past year from a                              Accenture’s big draw is the breadth and depth of its
                   focus on SAP implementations,                   series of phased projects                     expertise, but at least one analyst says the firm’s single best dif-
                   but even before the merger the
                                                                   that required business-                       ferentiator is its clear strategic vision, not its record for execu-
                   firm had already more than
                   doubled operating income.                       process work before an                        tion. Accenture’s traditional dominance in Siebel Systems
                      Another consultancy with an                  implementation, playing to                    implementations doesn’t cast the long shadow it once did, as
                   eye on cracking the list is Unisys,             Capgemini’s strengths and                     Siebel’s fortunes have dimmed somewhat, but Accenture still
                   which played a strong hand in           helping to win over clients that may                  managed to notch a 6 percent increase in CRM-related revenue.
                   the financial services and trans-
                                                           have been skittish about long-term                    The firm’s renewed focus on analytics and marketing sciences
                   portation industries, and in the
                   public sector. If the firm can          contracts. The North American                         helped it branch out into CRM’s more fertile fields, as well—
                   spread its wings a little by cross- division began to address its attri-                      and explains in part why Accenture got the category’s highest
                   ing over to other verticals, there      tion problems this year, and has                      score in terms of breadth of offerings. —Joshua Weinberger
                   may be a new member of the
                   top five next year. —J.W.

                                       60   customer relationship management / september 2004                                                    

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