Astidian Systems Blog

Companies that fail to invest in CRM strategies because of the tough economic climate will delay perceived benefits by at least 12 months once the economy recovers, giving rivals an advantage in the market, according to Gartner Inc.

Gartner analysts said that lessons learned from previous downturns indicate that 40% of companies will use the current economic slump as an opportunity to generate post-recovery growth via effective use of CRM strategies.
"Just because times are tough and budgets are being cut, companies should not think that means no CRM investment," says Scott Nelson, managing vice-president at Gartner. "Companies need to think in terms of spending smarter, not spending less. There are zero, or low-cost strategies that can be implemented now that can make all the difference, generate competitive differentiation and not draw the attention of the CFO."
Nelson says, in reality, there is no such thing as true "zero cost strategy" - as money has often already been spent on CRM systems and there are ongoing care and maintenance expenses CRM success can be secured without spending more money on technology.
Many organisations have large investments in call centres, websites, marketing systems and sales-force automation. With these pieces in place, companies can wrap effective strategies around these tools and generate real success from a customer standpoint.
"CRM is a journey, not just a one-time and done strategy," says Nelson. "If the right strategies are employed now, then companies will get a 'sling shot' effect going into the eventual recovery, putting them well ahead of the rivals who chose to wait and who equate CRM success with spending more money on technology."
Gartner has identified five strategies that companies can undertake now that cost very little or nothing, but which will generate positive results from a CRM strategy point of view.
* Customer communities - Gartner predicts that CRM of the future will be about creating online communities of customers via emerging social media, such as Facebook, Twitter and similar websites. The economic downturn provides a great opportunity to begin experimenting in this area, and Gartner advises companies to set up accounts on the various websites and learn what they do and don¹t do, and how users interact.
* Analytics - Once bought and installed, analytic tools can be put to good use during economic downturns. Many companies have more information than they know what to do with, and now they have the opportunity to put this to good use studying attrition models, looking at the next most likely to buy models, and figuring out channel usage patterns. While doing so, companies should bear in mind that customer behaviour may change when the economy improves.
* Segmentation - Many segmentation schemes are based on psycho-demographics, profitability or account attributes. However, a down economy provides companies with the opportunity to review their segmentation strategy and see if it really is the very best one that they could have.
* Process redesign - Process is often an overlooked part of CRM and in many cases all that CRM technologies have done is taken out old, broken processes and made them run more efficiently. Now is an excellent time to study customer processes with a view to redesigning them and creating a win/win situation for both the company - which gets greater efficiency and the customer - who gets a "partner" that interacts with them in a meaningful way.
* Organisational redesign - Organisational change is one of the most difficult areas of CRM strategy, but many companies need to make the move from product-centric to
customer-centric. In a down economy, with fewer distractions, many companies will find that this is the perfect time to start to address some of the organisational issues that get in the way of serving the customer.
"At the end of the day, CRM is all about change. Changing from product to customers, changing age-old processes, changing enterprise mindsets, and changing how companies relate to customers," says Nelson. "All of this can be done without new systems, and the challenging economic environment may give companies just the chance they have been waiting for."

Worldwide cloud services revenue is on pace to surpass $56,3-billion in 2009, a 21,3% increase from 2008 revenue of $46,4-billion. According to Gartner, the market is expected to reach $150,1-billion in 2013.

"Cloud computing is a broad and diverse phenomenon. Much of the growth represents a transfer of traditional IT services to the new cloud model, but there is also scope for creation of substantial new businesses and revenue streams," says Ben Pring, research vice-president for Gartner. "Cloud computing enables a shift in IT provision from direct purchase and payment for services to provision of services which are free at point of use and where revenue is derived from advertising. Services supported by advertising are currently, and will remain, the largest component of the overall cloud services market through 2013."
Cloud computing is a style of computing where scalable and elastic IT-enabled capabilities are provided "as a service" to external customers using internet technologies.
Business processes delivered as cloud services are the largest segment of the overall cloud services market, accounting for 83% of the overall market in 2008. The segment, consisting of cloud-based advertising, e-commerce, human resources and payments processing, is forecast to grow 19.8% in 2009 to $46.6-billion, up from $38.9-billion in 2008.
The largest component of the overall cloud services market is cloud-based advertising. This component represented 60% of the market in 2008 with revenue of $28-billion and is forecast to reach $33-billion, and make up 58% of the overall market in 2009. This reflects the success of Google in creating a new business and delivery model for IT-based services, which is being emulated by Yahoo, Microsoft and others.
"Advertising as a cloud service is the capability to deliver advertising where the content and the fee charged are determined at the time of end-user access, usually by an auction mechanism that matches bidders with spots as they become available," says Pring. "We expect cloud-based advertising to continue to reshape and redefine the advertising and media markets over the next few years."
While much of the publicity for cloud computing currently centres on systems infrastructure delivered as a service, this is still an early-stage market. In 2008, such services accounted for only 5.5% of the overall cloud services market and are expected to account for 6% of the market in 2009. Infrastructure services revenue was $2.5-billion in 2008 and is forecast to reach $3.2-billion in 2009.
"Cloud-based infrastructure services are expected to see significant adoption through 2013," says Pring. "This segment probably has the largest range of possible outcomes, depending on how aggressively cloud computing is embraced by the major outsourcing vendors and their customers."
Cloud application services, evolving from software-as-a-service (SaaS) offerings, were almost twice as large as the market for systems infrastructure and will continue to show strong growth. Not all current SaaS offerings qualify as cloud services based on scaling constraints and lack of true multi-tenancy capability. Over the next five years, an increasing array of application functionality will become available as cloud services to supplement those from current cloud application vendors.
"The IT market trends for the next couple of years remain highly uncertain. While short-term growth is expected to be inhibited, the potentially lower cost of cloud services is attractive to customers and will drive growth for these offerings," says Pring. "While that growth for many of these cloud services will be relatively modest through the next two years, we expect it to accelerate as these approaches prove themselves and then benefit from increased spending levels as macroeconomic conditions improve."

Redwood Shores, Calif. – Mar. 11, 2009 – Compiere, Inc., a global provider of open source business solutions, today announced immediate availability of Compiere Cloud Edition ERP software on the Amazon (NASDAQ: AMZN) Elastic Compute Cloud (Amazon EC2). Compiere Cloud Edition is a comprehensive business application that automates processes from Accounting, to Purchasing, Order Fulfillment, Manufacturing, Warehousing and CRM. Compiere's Cloud Edition is delivered with a complete technology stack, certified by Compiere, comprised of an operating system, application server, and database that can be deployed on Amazon EC2 in a matter of minutes.

The combination of Compiere Cloud Edition and Amazon EC2 provides a convenient virtual computing environment that reduces the cost of ERP deployment by eliminating up-front capital costs for hardware and software, while also reducing ongoing IT infrastructure support costs. Based on internal estimates, Compiere Cloud Edition can save companies up to 80 percent in the total cost of ownership of ERP software.

"We are pleased that Compiere is leveraging Amazon EC2 to offer their customers more options in deploying cost-effective, flexible and dependable ERP solutions," said Steve Rabuchin, director of developer relations and business development for Amazon Web Services.

According to Geoffrey Mobisson, managing director of Levementum, a Compiere system integration partner, "The Cloud Edition provides broad-scale access to comprehensive ERP technology that previously was available only to large companies with extensive budgets. With our experience successfully implementing customers on Amazon EC2, we are convinced this offering meets the market demand for more cost-effective business solutions, and significantly raises the bar for other ERP vendors."

With Compiere Cloud Edition, customers can leverage the advantages of cloud computing technology to instantly scale the application up or down, depending on their particular needs. Cloud computing allows IT departments to increase capacity or add capabilities "on the fly" without investing in new hardware, personnel or software by accessing virtual servers available over the Internet to handle computing needs. Compiere is deployed in a secure, private environment, giving customers total control of their application and computing resources.

Don Klaiss, president and CEO, Compiere said, "We are excited to be first to offer ERP users the convenience of utility computing, the lower operating costs of cloud computing, and far more flexibility than other available SaaS alternatives. Cloud Edition users, operating in their own secure environment, can quickly and easily customize their Compiere system without programming. Compiere Cloud Edition is the logical next step in our commitment to making ERP easier and more affordable to own, implement and use."

Compiere Cloud Edition subscriptions include application support, service packs and access to Compiere automated upgrade tools. In addition, Compiere or its partners can provide additional services including implementation, customization, integration and customer-specific cloud images.

Compiere Cloud Edition is available immediately through Compiere and its authorised partners. Please contact info@astidian.com or Sandy on +1 281 844 0504.

Dear President Obama,

Congratulations on your historic and unprecedented presidential victory. We, the authors, are proud to live and work in the nation that elected you and hope your presidency will be as successful as your campaign.

As software development professionals and executives, we were encouraged to read about your plan to bring American medical records into the 21st century. We agree that standardizing medical records in a digital format will reduce the cost of health care in this country, improve the quality of care Americans receive, and create jobs.

We also believe in the critical role of open-source software to create the applications and infrastructure necessary to support electronic medical records and other government-funded technology projects. Open-source software has already resulted in dramatic cost reductions in many technology areas, including:

* application hosting & infrastructure, thanks to open-source operating systems, application servers, and other products like Linux, Apache, Tomcat, and others;
* application development and deployment, thanks to tools like Eclipse, Ruby on Rails, subversion, and many, many others; and
* communication and collaboration, thanks to open-source applications such as OpenOffice and WordPress.

But, open-source software isn't just about providing solutions to general problems. It is also starting to produce solutions for specific, "vertical" industry problems as well. One example of this is TriSano™ from Collaborative Software Initiative, an open source, citizen-focused surveillance and outbreak management system for infectious disease, environmental hazards, and bioterrorism attacks. It allows local, state and federal entities to track, control and ultimately prevent illness and death. TriSano was deployed statewide in Utah the day you became our President.

As you've said, we will be judged on what we build, not what we destroy. Building high quality software at much lower costs through collaboration will be a catalyst for good work between software developers in the IT industry and subject matter experts, like doctors and nurses, in the public sector. Open-source software brings transparency to software development. There are no "black boxes" in open-source software and therefore no need to guess what is going on "behind the scenes." Ultimately, this means a better product for everyone, because there is visibility at every level of the application, from the user interface to the data implementation. Furthermore, open-source software provides for platform independence, which makes quick deployments that benefit our citizens much easier and realistic.

For these reasons, we urge you to make it mandatory to consider the source of an application solution (open or closed) as part of the government's technology acquisition process, just as considering accessibility by the handicapped is required today (as defined by section 508).

Mr. President, we believe the open-source industry is changing the world of software development in many of the ways you have promised to change American politics. The values of open source mirror those you promoted in your campaign: hope, change, and openness. We, the undersigned, sincerely hope that you will make the use of open-source software a key component of every new technology initiative the United States government enters into during your presidency.

Open-source software is really just the tip of the iceberg in changing the way the government works. We want to encourage you find ways for states and agencies to collaborate together on solutions that ultimately are better than the sum of all the individual efforts combined and at much lower cost to each participant. Open-source software encourages this type of collaboration by making the results of previous successful efforts available to others with similar goals and needs.

Thank you for taking the time to read this letter. It's encouraging to have, as President of the United States, a man who appreciates the role of science and technological innovation as part of America's larger role as a world leader, and who wants to stimulate and encourage America's growth in these areas.

Thank you.

David Christiansen
Senior Developer
Collaborative Software Initiative
www.techdarkside.com

Stuart Cohen
Chief Executive Officer
Collaborative Software Initiative
www.csinitiative.com

John Powell
Chief Executive Officer
Alfresco
www.alfresco.com

Carl Erickson, PhD
President
Atomic Object
www.atomicobject.com

Chris Gladwin
CEO
Cleversafe
www.cleversafe.com

Don Klaiss
Chief Executive Officer
Compiere
www.compiere.com

Javier Soltero
Chief Executive Officer
Hyperic
www.hyperic.com

Roger Burkhardt
Chief Executive Officer
Ingres
www.ingres.com

Deb Woods
Vice President, Product Management
Ingres
www.ingres.com

Brian Gentile
Chief Executive Officer
Jaspersoft
www.jaspersoft.com

Rick Jung
Chief Operating Officer
Medsphere
www.medsphere.com

Ross Mason
Chief Technology Officer & Co-Founder
MuleSource
www.mulesource.com

Steven L. Grandchamp
President and CEO
OpenLogic
www.openlogic.com

Bertrand Diard
Chief Executive Officer & Co-Founder
Talend
www.talend.com

Anthony Gold
President, Open Solutions Alliance
Vice President, Unisys Open Source Business
www.unisys.com

Scott C. Sanchez
Chief Architect
Unisys Open Source Business
www.unisys.com

By William Band, Forrester Research

Despite the current economic downturn, the need for organizations to create differentiation through unique customer experiences, strive for deeper insight into customer needs and behaviors, and serve customers cost-effectively has not disappeared. The need for “CRM” is not going away.

However, when I surveyed 133 organizations, using at least one of 24 different CRM technology solutions, I found that the risk of a spectacular project failure is still high. These companies reported over 200 problems, comprised of 27 risk areas in four categories. Thirty-three percent of the problems were related to technology; 27% spotlighted inadequate business processes; 22% were related to “people” challenges; and 18% comprised CRM strategy and deployment issues.

Consider these statements as they portray your organization. A “Yes” or “No” answer will spotlight the hazards before they sink your program.

Technology

1. “The CRM solution we have chosen is mature and well-proven in use at other organizations with requirements similar to our company.”

2. “The CRM solution we have chosen is flexible and can be easily adapted to meet unanticipated requirements in the future.”

3. “The CRM solution we have chosen does not have any major functionality deficiency gaps relative to our requirements.’

4. “We have clearly defined how the data required to support our CRM solution will be defined, transferred, maintained, and governed.”

5. ‘We have determined that the CRM solution we have chosen can meet our specific system performance requirements.”

6. “Our business and IT resources have sound understanding of the CRM solution we intend to implement.”

7. “We have a sufficient number of technically competent internal resources available to implement our CRM solution.”

8. “We have done due diligence to confirm that the vendor resources to be assigned to our CRM project have sound technical skills with respect to their company's solution.”

9. “The CRM solution we have chosen uses the most up-to-date role-based UI design principles so that it can be easily adapted to a range of user needs in our organization.”

Business Processes

10. “We have undertaken to define and document the business processes we expect our CRM solution to support.”

11. “The vendor solution we have chosen is flexible enough so that the tool can be easily mapped our business processes.”

12. “The CRM solution we have chosen can with little effort be sufficiently customized to meet our requirements.”

13. “The CRM solution we have chosen is compatible with the technical architecture environment and future strategy of our organization.”

14. “The CRM solution we have chosen has well-proven capabilities to integrate with specific important applications and databases within our organization.

People

15. To be successful, the new business processes and CRM solution we intend to introduce will require little change in the culture of our organization.”

16. “We have a well-defined program to support the changes to the new ways of working in our company including visible leadership and communications from top management.”

17. “The CRM initiative will require little change to the business processes used by frontline employees.”

18. “We understand the challenges of gaining acceptance for the use of CRM solutions and have specific plans in place to mitigate these challenges.”

19. “We are investing sufficient resources to provide adequate training and education for users to support their adoption of our CRM solution.”

20. “We have complete CRM solution documentation and will provide sufficient ongoing help for users to support their adoption of our CRM solution.”

Strategy

21. “We have achieved clear and documented agreement between business and IT leaders about the project objectives for our CRM initiative.”

22. “We have defined and documented the business requirements for our CRM initiative.”

23. “We have defined a CRM deployment methodology based on best practices.”

24. “We have a sufficient number of business and IT resources available for successful completion of our CRM initiative.”

25. “Our schedule for implementation is realistic in light of the experiences of other organizations similar to our company.”

26. “We have put in place a sound cost management governance structure and tracking system.”

27. “We have negotiated a transparent contract with our vendor that clearly defines scope, cost parameters, and service levels.”