IBM to offer hosted CRM service

IBM Global Services next week is launching a hosted customer relationship management service that it says speeds the process of deploying and upgrading customer relationship management applications.

Aimed at large and midsize enterprises, Big Blue's offering, known as CRM Management Services, provides businesses with a range of options, including implementation, management and hosting of marketing, sales and customer service applications; business intelligence and reporting; and call center services. IBM is also offering customised products for integrating existing CRM and back-office applications for businesses.

With the service, users can opt for CRM packages from the likes of Siebel Systems, PeopleSoft, SAP AG and Kana Communications. IBM then provides business intelligence in four areas: customer behavior, customer value, contact value and the customer server operator's performance.

IBM will develop CRM templates for vertical industries such as retail, telecommunications, utilities, consumer goods and financial services to collect data for their specific customer needs. For instance, the CRM template for retail companies would track the buying patterns of customers in order to keep up with current consumer trends.

Big Blue claims some of its customers shortened their CRM deployment time 10 per cent to 20 per cent with its hosted offering.

Analysts say IBM's managed CRM offering comes at a time when businesses are strapped for cash as they try to upgrade and integrate their CRM systems.

Companies realize CRM systems are difficult to implement and integrate because they impact every part of a business - sales, marketing, services and partners, says Erin Kinikin, an analyst at Giga Information Group. CRM implementation and integration "isn't just about changing software, it's about changing the way you do business," she says. As a result, some companies either slow down or postpone CRM projects, but outsourcing would be a viable option for them, she says.

AMR Research's Louis Columbus says IBM will have to address why businesses should opt for a hosted CRM offering during the current economic slowdown.

"Even if companies are struggling with integrating their existing CRM system, IBM will have to convince chief financial officers why they need to spend money on its hosted CRM service" and show it has ROI, Columbus says.

Still, according to International Data Corp., the CRM services market should grow from US$26.2 billion in 2000 to $36 billion in 2002, as companies grapple with decreasing IT budgets while retaining customers.

IBM's CRM Management Services runs on IBM Unix servers at various data centers. Big Blue is working with call center providers Teletech, APAC, Sykes and 7C to provide call center functions.

Pricing for IBM's CRM Management Services is based on customer requirements.