Crm: Everything Old Is New Again
Sydney Morning Herald
Tuesday June 8, 1999
Katrina Nicholas found a dynamic new concept based on a dynamic old idea.
CRM may be the latest technological buzz word, but it's not all hype. That was the message from US Customer Relationship Management experts brought to Sydney for a conference on corporate data management.
CRM software is designed to allow companies to manage customer relationships and, in turn, provide higher levels of customer service. It allows improved management of customer databases, more effective direct marketing and helps sales teams sell to the customers they want to target.
The market worldwide for CRM has been put at $8.7 billion by research company IDC. There are no figures for the Australian market, although it is estimated at 2-3 per cent of the world total.
"Australian business definitely needs to embrace CRM and many institutions are well on the way to doing so," said Randall Grossman, senior vice-president and director of customer data management and analysis with Fleet Bank, the sixth largest bank in the US.
"Australian banks are early innovators and in many cases, the infrastructure is already in place."
Grossman said that although CRM had been a subject of hype, the concept's worthiness was not in dispute.
"CRM has burst onto the scene and has become a buzzword, but it has moved from being a leading-edge concept to a competitive necessity, otherwise businesses will find their customers simply go elsewhere."
Grossman said that over the past three years, Fleet Bank had spent between $US50 million ($76.9 million) and $US60 million on CRM. About $US30 million of that had been spent on technology and about $US12 million per year on support systems.
"Thirty years ago when computers didn't dominate, the banks actually knew who their customers were and what CRM is trying to do is to recreate that," Grossman said.
"Fleet established a customer data warehouse and is using the information for point-of-contact service in branches and call centres and providing information about products through the Internet and by direct mail."
Rolf Jester, principal analyst with the Gartner Group, said the Australian take on CRM would be similar.
"It is about knowing who a customer is, what they've done in the past and whether they are a good or bad customer," Jester said.
"This is not a new concept - years ago it was simply good business for the corner grocer to know that Mrs Jones always bought self-raising flour and this concept is no different. Smart businesses have been doing this all along."
Local interest in the technology has been demonstrated with a CRM venture announced between PricewaterhouseCoopers, data centre solutions provider Sequent Computer Systems and enterprise software company Siebel Systems.
Sequent's managing director, Nick Lambert, said there was enormous interest from Australian businesses wanting to take advantage of the new, more customer-centric model of operating.
PwC Asia Pacific head of marketing and customer management conbulting services David Rose said he believed any hype, be it CRM or other concepts such as Enterprise Resource Management (ERM), was translating into dollars.
"All the large players in the financial services arena are implementing, or looking to implement ERM, as well as a lot of the telcos," Rose said. "Deals are coming in daily so there has certainly been a shift in Australia from just talking to actually taking it up."
© 1999 Sydney Morning Herald