- Category: May - June 2010
Asian e-Marketing recently met two remarkable eCRM experts from Oracle Inc., who have been full of wit when talking about the combination of CRM and software-as-a-service (SaaS).
Presenting their Oracle CRM On Demand solution during the interview session, Mr. Anthony Lye, Senior Vice President, Oracle CRM, Oracle Corporation and Mr. Michel van Woudenberg, General Manager CRM, Oracle Asia Pacific gave me insights into eCRM and their company’s current activities. Oracle started their CRM On Demand solution in 2006, after their acquisition of Siebel systems in 2005, and just announced their new Release 17.
Accessible over the internet and paid for by a monthly subscription charge, the main benefits of such a SaaS solution are low cost of entry, lower total cost of ownership (TCO) and faster implementation times. Although the depth of functionality available is not yet comparable to on-premise solutions, the advantages are more and more appealing to enterprises, as Oracle’s spokespersons confirm.
A Snapshot of CRM
“Looking at CRM over the last 10–15 years and how it has evolved”, Michel van Woudenberg says, “makes clear that “SaaS has obviously changed the delivery model, but hasn’t fundamentally changed the business of CRM.” Thus, Oracle’s goal has remained the same as well, namely making their customers more customer-centric regarding sales, marketing and customer service.
“SaaS started for those that couldn’t afford on-premise software”, he explained, “and we all can imagine that the current business climate is in favour of such solutions. Indeed, it has become a good alternative for those organizations that neither can afford to neglect strategic investments and miss opportunities to better position themselves for sustainable growth, nor afford to increase the size of their sales force and therefore have to focus on optimizing sales channels and resources. It’s simply undeniable that integrating a CRM on-demand solution with other applications such as enterprise resource planning (ERP), billing, and inventory management systems can add value to customer-facing activities. To no surprise, many enterprises have started to make use of it, especially in the past 1-2 years. Since money is tight, companies look for ways to do more with less and one of the fastest ways to achieve improved efficiency is by streamlining key business processes and improving individual productivity.”
Anthony Lye is of the opinion that “CRM has matured as a sort of philosophy”, describing that “most organizations have recognized the need to have a CRM strategy, which wasn’t the case ten or twenty years ago. At that time, people only believed in having a good product strategy, but since then, with globalization and changes in market landscapes, products are commoditizing very quickly. Businesses, now, can no longer differentiate on products. Instead, they have to focus their strategies on customers.” CRM has always been in the forefront of providing organizations with the tools and capabilities they need to focus on: customers, maximizing revenue opportunities, and reducing operational costs.
eCRM is Going Mainstream
According to Anthony “within CRM there are four key things that the leading-edge are doing, that the early adopters have been focused on and which have now become mainstream for anybody else.”
These are, in no particular order:
- Managing and understanding the social customer relationship: This means very simply that customers increasingly distrust vendors and don’t respond well to traditional messaging. Customers increasingly want to talk to each other and so CRM has to manage and facilitate that.
- People invest in the idea of customer loyalty over customer satisfaction: Presently, most companies measure customer satisfaction and only very few companies deploy a customer loyalty strategy. Those that do have a loyalty program tend to do much better than those who just look at customer satisfaction scores.
- A strong need for not only multi-channel but cross-channel CRM strategies: Most people have understood multi-channel CRM which is the customer experience on each channel. Businesses need to be aware and able to support customers who may start the process via the phone but conclude the process in the store. However, vendors still have to try keeping up with those customers that may jump between different sales channels.
- The fourth big area that businesses are focused on is mastering the customer: This means going beyond just having customer information as businesses are examining these in relation to their transactional system, pulling it out and cleansing it, de-duplicating it, enriching it and managing it in the same way as they have been managing their products. Also, they are looking into sales productivity or increase of revenue without increasing expenses.
Advantages of an on-demand compared to an on-premise CRM solution
According to Anthony, Oracle often gets asked what’s better: an on-demand or on-premise CRM solution and believes that it is because his company is in the unique position to have both an On Premise and an On Demand portfolio. Interestingly, their customers are the ones that are telling them that it’s not one or the other, but rather a combination of both. However, he says: “There are certain environments where On Premise is better than On Demand and those tend to be in high-volume, complex, environments such as big business to consumer-based models, including large telcos, banks and media companies where they have 20 to 50 thousand users everyday in their call centre. They take orders through e-commerce – not even having a direct sales force. What they want is a very high performance system with very complex up-sells and cross-sells and interaction models that can scale to very high volumes. That’s a very dominant on-premise question." To give me an idea here, he told me that one of their customers said if they were to use a cloud/SaaS-based model and the Internet between Oracle and them was unpredictable and if this then impacted each call by one second, even if just to refresh the web pages, they would lose 60 million dollars a year. For such a customer, there is no other way then to opt for an on-premise solution.
However, there are still cases where on demand is more adequate, as for instance in a situation where the CRM system plays a secondary role, such as in B2B selling, and the organization just wants a lightweight CRM system that guides the salesperson and provides support but doesn’t control it. In such a scenario, CRM On Demand is definitely a much better fit.
Further, there are situations where people have a mixed environment. One example is the pharmaceutical industry where Oracle has customers who deploy Siebel On Premise in their tier 1 countries (e.g. United States) where there’s a very sophisticated influence of the physician, a very complex environment set up by the FDA, and other sort of regulatory concerns. However, in the tier 2 and 3 countries, they don’t have such complexities and so they tend to deploy CRM On Demand (e.g. Singapore, China, or India).
So some markets are very much into on-premise, other markets are very much into on-demand and there are a number of markets that deploy mixed modes. Michel added: “And if you look at Asia Pacific, we recognized that many countries in the region are skipping a generation and are going straight for a SaaS solution, as they see the benefits of speed to market, lower cost of ownership and the flexibility of adapting to business changes faster. We see a lot of demand for SaaS CRM in the enterprises that are attracted to the benefits and the fact that Oracle can now fulfill a few of their key requirements which no other vendor catered to before like for instance, security or deployment options around analytics. In that sense, the growth in Asia Pacific is phenomenal. Just look at the market research that is going around like the one from Springboard Research on eCRM.”
Anthony confirms: “I always say, we are very fortunate having both, compared to Salesforce.com that only has on-demand or SAP having only on-premise. We are able to really understand our customers’ strategies and their requirements and propose a solution: on-premise, on-demand or a combination.”
And Michel added: “Oracle is actually the only SaaS provider that owns and operates its own data centers, so that Oracle does not only control the environment from a technology and features prospective, but even down to the facilities, processes, SaaS certifications etc.”
The new CRM ON Demand Release 17
For Oracle CRM On Demand Release 17, Oracle has made significant enhancements in three buckets, according to Michel, namely in core CRM, PRM and life sciences.
- For core CRM, Oracle has extended a lot of features in the core CRM capabilities;
- In the Partner Relationship Management (PRM) bucket, the new release recognizes that companies serve their markets in multi-channel strategies such as through a dealer network and /or resellers. Release 17 contains a set of SaaS applications for that eco-system of partners and Oracle has extensively added capabilities in CRM.
- The third bucket is Oracle’s product for life sciences, which is specifically focused on pharmaceutical sales and medical device representatives. It is not only completely tailored for that industry but co-developed with the industry because 18 out of the top 20 pharmaceutical companies are already their clients. This is an important consideration as pharma companies in tier 1 markets tend to look at an On Premise model while others such as the Asia Pacific countries prefer CRM On Demand.
It can be expected that Oracle continues to provide customers with a powerful and complete, best-of-breed CRM on demand service, as promised by their President Charles Phillips and that the new Oracle CRM On Demand Release 17 will showcase again, how Oracle solves organizations’ essential requirements to advance business opportunities and results.
Without doubt, Oracle is experienced in developing industry-specific solutions, demonstrating that for them, CRM isn’t one-size-fits-all. Instead, they are focused on delivering flexibility and choice with industry functionality and analytics and literally cater hundreds of products and modules to some 23 different industries for their CRM needs.
By Daniela La Marca