Magazine article CRM Magazine

Consultants Adapt to Changing CRM Landscape: On-Demand CRM Remains an Ongoing Challenge, but Social Networking Promises to Be the Real Wild Card

Magazine article CRM Magazine

Consultants Adapt to Changing CRM Landscape: On-Demand CRM Remains an Ongoing Challenge, but Social Networking Promises to Be the Real Wild Card

Article excerpt

CRM has been a boon for the professional services industry almost since Day One, a chance to deploy a fleet of consultants to implement new systems and charge handsomely for the service. Many consultancies had gotten used to the idea that it would be ever thus, but on-demand CRM--which often boasts of not requiring on-site consultants--has forced the industry to rethink its role.

The age of software-as-a-service (SaaS) is upon us: When customers are able to download, implement, and tweak their CRM systems online without the need for on-site consultants, professional services firms stand to lose a significant slice of revenue. Over the past few years, the industry has been busy coming up with ways to cope with this sea change.

"Three or four years ago, a lot of firms were skeptical about how far [SaaS] would penetrate," says William Band, vice president and principal analyst for Forrester Research. But since then, "the demand for [SaaS] is so great, they've had to adapt to the needs of clients."

One way consultants have done that is to look at on-demand as an opportunity to shift from the nuts and bolts of a CRM system to doing what their name suggests--"actually consulting with end users about best practices," says Denis Pombriant, managing principal at CRM consultancy Beagle Research Group. It took a while for major firms to see the value in working with on-demand CRM practices but some, such as Deloitte and Accenture, have established internal units to deal specifically with on-demand. Those units specialize in consulting on maintenance and upgrades, rather than on old-school selection and implementation work.

Other consultancies have gone so far as to create customized on-demand applications, selling them directly to existing users of on-demand CRM. Both Pombriant and Band point to Bluewolf, an on-demand specialist that has found success selling its own Salesforce.com application called MediaTrak SalesPak. Designed to allow media companies to monitor breaking news and conversation in the blogosphere, Bluewolf has sold the product to The Economist and Turner Broadcasting, among others.

Band estimates that SaaS currently makes up only 10 percent to 12 percent of the CRM market, but the rapid growth of companies such as Salesforce.com and NetSuite could nearly double that penetration by 2009. That said, Band doesn't anticipate that SaaS will ever overtake on-premise CRM completely. …

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