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While the CRM software market has seen significant consolidation over the last several years, organizations making CRM buying decisions still have a wide array of options and other considerations, according to a recent report from Forrester Research.

Forrester Research Inc. hopes its recent CRM software analysis serves as a starting point for companies trying to make sense of the market. In the end, it's up to a buyer to determine what product best fits the company’s CRM needs, according to Forrester analyst William Band.

"We say implicitly that while on the one hand the solutions are very similar, you have to dig deep to find what's unique for you," said Band, the lead author of the analysis.

The Cambridge, Mass., firm evaluated 18 leading CRM applications against more than 400 criteria. It found a market that, among other things, has seen a rapid growth of Software-as-a-Service offerings.

Companies with more than 1,000 employees that are considering SaaS can choose from Microsoft Dynamics CRM Online, Oracle’s cloud CRM products and Salesforce.com, according to the report. For the midsize market -- companies with up to 1,000 employees -- Sage CRM products have been retooled to include on-demand options, and SugarCRM is available in a variety of on-demand deployment configurations, according to the analysis.

Forrester’s report also took note of Oracle, claiming it has a strong portfolio of CRM offerings. Although Oracle E-Business Suite CRM and Oracle PeopleSoft Enterprise CRM have lost ground in the market, Oracle Siebel CRM and Oracle CRM On Demand remain leaders, Forrester said.

The report also cited SAP's long-time investment in its core CRM product, which Forrester says now "boasts significantly improved usability." This has helped SAP's customer base grow to a reported 7.5 million users, Forrester observed.

And the study points to six vendors -- FrontRange Solutions, Maximizer Software, NetSuite, Sage CRM, Sage SalesLogix and SugarCRM -- whose products "offer breadth, but not depth, at lower price points than those of market leaders that focus on large companies."

Even though Forrester's CRM software analysis ranks products, Band cautioned that it doesn't necessarily favor one product over others. Rather, the analysis should serve as a launching point for organizations to further research software and decide what's best for them, he said.

Packaged as two reports, The Forrester Wave: CRM Suites for Large Organizations and CRM Suites for Midsize Organizations, the analysis can help companies at a time of growth and turmoil in the market, Band said. The CRM market has seen significant vendor consolidation and an increase in cloud offerings, he said. Meanwhile, there's no greater challenge for companies than connecting with a new type of customer who now communicates and makes buying decisions through the Web and social media channels, he added.

For the Forrester Wave, Band and several colleagues evaluated the strengths and weaknesses of CRM vendors that are capable of meeting the needs of large and midsize companies. They assessed the 18 leading CRM software solutions against 400 product feature, platform and market presence criteria.

"On the one hand, the market has consolidated and matured. But on the other hand, it's still moving," Band said. "You have to kick the tires hard. The vendors [that make] the most noise might not be the right answer."

Band offers his take on Forrester's CRM software analysis in a blog he wrote earlier this month. The Forrester Wave CRM reports can be purchased from Forrester.

In a nutshell, seven CRM software products were considered Forrester Wave "leaders" for large organizations.

  • Oracle Siebel CRM offers "proven across-the-board CRM functionality."
  • SAP CRM has turned its focus "toward improving the customer experience."
  • Microsoft Dynamics CRM "shines with strong usability and compelling value."
  • Salesforce.com "leads for organizations that aspire to become businesses."
  • Oracle CRM On Demand "is a good option for buyers committed to Oracle technologies."
  • RightNow "anchors Oracle's on-demand portfolio for customer service."
  • Pegasystems "delivers process-centric CRM to tame unruly business processes."

Forrester placed the remaining CRM products for large companies into two other categories: "strong performer" and "contender."

For midsize companies, eight CRM software products earned Forrester's "leader" status.

  • SAP Business All-in-One "supports quick time to value," or the time it takes to deliver the product so they can see value from the product.
  • SugarCRM "proves that open source is a viable approach for CRM."
  • CDC Software's Pivotal CRM "offers flexibility to support unique business practices."
  • Sage SalesLogix "is proven and user friendly."

As with the review of products for large companies, Microsoft Dynamics CRM, Salesforce.com, Oracle CRM On Demand, and RightNow also cracked the leaderboard for midsize companies.

"There's no one for everybody," Band said. "Although you're seeing a fewer number of players -- 18 solutions -- you can't say one is the best for everything. That's not the case. They stand out in different ways."

The analysis comes after several major vendors acquired smaller vendors so they can offer more expansive CRM products aimed at customer engagement, Band said.

For instance, Oracle as well as Salesforce.com acquired a handful of smaller social media companies, including Buddy Media and Vitrue, to widen their CRM portfolios. IBM purchased Tealeaf, a customer experience analytics company, as well as Unica, a marketing management software maker. And Oracle got into the game with its deal to buy RightNow Technologies.

But with all this expansion, complexity increases, Band said. It remains to be seen if the systems acquired by the large vendors will mesh with their long-standing products. "The big question is can all these acquisitions work with one another," he said.

Companies must also decide if they want to use a traditional CRM solution or a cloud-based one, Band said. Midsize companies prefer low upfront costs and the flexibility of SaaS CRM, he noted in the analysis.

This was first published in July 2012

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