10. CRM delivers ROI -- Forget the failures. Early this year, International Data Corp. said 58% of companies it surveyed got payback on a CRM project in one year or less and more than half generated an ROI greater than 51%. CRM may finally have shed its scarlet letter "F" for failure.
9. CEO exodus -- Several of CRM's top dogs ran away from home. Brent Frei, the former Microsoft coder who founded Onyx Software, turned over the reins to Janice Anderson. Pivotal's Bo Manning and Salesnet's Mike Doyle also stepped down. Plus, PeopleSoft's CRM vice president Joe Davis shuffled off to Coremetrics. (Continue reading for more leadership changes.)
8. Rise of the SMBs -- CRM isn't just for the enterprise market anymore and vendors are swooping in to grab a piece of the action. Siebel just announced its push toward the small and medium-sized business market , SAP announced its own plans in May and many are predicting that SMBs will spend big.
7. SAP, the safe harbor -- In the face of all the uncertainty in the business software market, SAP licked its chops. Its total revenue for the first nine months of the year jumped 6% over last year. In fact, SAP has had such success that AMR Research said it's poised to become the No. 1 CRM vendor in terms of revenue. Now, SAP is probably weeping over the apparent end to the Oracle-PeopleSoft takeover tug-of-war.
6. Successful hosted IPOs -- This is the year when Wall Street and midmarket businesses both validated the hosted CRM model. IPOs from Salesforce.com (ticker symbol "CRM") and RightNow Technologies (symbol "RNOW") both made a big splash. Plus, hosting is so hot that most CRM vendors -- regardless of the size of business they cater to -- are scrambling to get in the game. The most successful hosted providers now count their customers in the five digits.
5. Composite applications -- Integration is the biggest headache in a CRM implementation. Now, Web services are waltzing in, using common standards to get diverse systems to communicate. Vendors are sharing their vision of composite applications -- or the ability to piece together specific functionality from different software to drive business processes. The idea isn't new, but its execution could transform the way organizations buy, develop and deploy software. Stay tuned.
4. Oracle-PeopleSoft, the saga ends -- It finally appears to be a done deal. The $10.3 billion takeover should be final next month. PeopleSoft eventually relented, but not before an 18-month struggle that this year featured an antitrust court battle (Oracle won) and the firing of PeopleSoft's CEO (Craig Conway won -- a reported $37 million severance). Combined, these companies become the world's largest applications provider. The impact on both of their customers will likely be a top story in '05.
3. Dirty data -- Gartner estimates that one-quarter of critical data within Fortune 1000 companies will be inaccurate through 2007. In response, some companies are naming data stewards who bear responsibility for improving overall quality. Everyone now recognizes that when it comes to successful customer initiatives, the devil is in the data.
2. Call centers become strategic centers -- The contact center is no longer a necessary evil; it's a key cog in making good on customer strategies. These days contact centers play a key role in all three of the main components of CRM: marketing, selling and servicing. That means today's call centers are judged on new, qualitative metrics. People, process and technology all play a more important role than ever before in this world of multi-channel communications.
1. So long, Mr. Siebel -- He has long been synonymous with CRM. And, despite Tom Siebel's decision to step down as CEO of the company that bears his name, he'll likely be remembered as the face and the founder of the industry. In May, the former Oracle sales exec turned over the reins of the business he founded 10 years ago to IBM's top salesman. Most analysts agree it was time for new blood. Sure, this changing of the guard is symbolic -- but even Siebel admits the industry is turning the page to Chapter 2, where strategy trumps technology.