CRM confusion confronts SMEs

Customer relationship management is still misunderstood in typical small-to-medium sized business in Australia with many organizations still struggling to use it effectively.

According to a survey of 110 local organizations by Accpac Pacific - part of The Sage Group -nearly half of those surveyed thought it was a vanilla 'contact management system'.

At the same time interest is CRM has been escalating and there have been plenty of new installations in the past 12 months.

Budget was the key hurdle in starting and completing a CRM installation and 24 percent of respondents also cited lack of in-house resources.

Accpac Pacific senior vice president Daithi Holden said SMEs -companies up to 500 employees - had certainly discovered CRM but didn't recognize the full potential of what they have purchased.

"Used effectively to support a well-directed business plan, CRM can provide an effective integration of marketing, sales and customer service operations," Holden said.

"This sounds simple enough. But in reality CRM products are often just being used tactically, for contact coordination, rather than strategically to support business-wide growth.

"To harness CRM's in-built power, business managers first need to understand what CRM is all about."

According to IDC Australia market analyst software Chris Chong, there is a lot of room for CRM growth in the SME sector.

Locally, Chong said, the market is still in its infancy.

Gartner principal analyst and research director Dean McGhan said it is mid-sized businesses that really need to get their house in order.

"Mid-sized companies without at least a rudimentary, loosely woven set of customer-centric capabilities and technologies in place will be at a competitive disadvantage if they don't get their house in order by 2006," he said.

McGhan recommends making a significant internal investment in defining processes, validating data and adding workflow capabilities.

"For companies yet to invest in CRM software to remain competitive, they should plan to spend from $3000 to $5400 per user, at a minimum, on CRM software and services throughout the first three years," McGhan said.

"This figure doesn't include internal help desk, user laptops and desktops, and telecommunication charges."