As Michael Gentle Highlights in His Articles a Nightmare Scenario for Microsoft CRM And

CRM in the SME market

Microsoft Business Solutions

As Michael Gentle highlights in his articles ‘A nightmare scenario for Microsoft CRM’ and ‘How Microsoft can increase its chances of CRM success’, many factors need to be taken into account when launching a customer relationship management(CRM) solution into any market, in this case the small and medium-sized enterprise (SME)market. Many of the points made by Michael would be true for any vendor, not just Microsoft. Indeed, vendors have been learning the lessons of previous CRM implementations and subsequent implementation ‘failures’ for some time and any new vendors or nascent market entrant must learn from its own mistakes, and those of others, to succeed.

The CRM market has been dogged by controversy and this has led to some horror statistics. But both the market and the technology have developed. The mistakes of the past feed into the success of the future– this is how any innovation works. CRM is now entering a second stage where successes are being unearthed and publicised more and more. The technology has developed and there is more consultative experience in the channel. CRM solutions built for SMEs are, by definition, less complex than those for where CRM was first trialled (i.e. the enterprise). Hence Microsoft Business Solutions focuses on pragmatic CRM.

Microsoft Business Solutions saw an opportunity in the SME market, which has traditionally been over-targeted and under-serviced– currently, only an estimated 20 per cent of the SME market has a CRM solution. No other vendor offers a CRM solution built specifically for this market and there is a clear gap in the market for MicrosoftCRM.

In addition to this market opportunity, Microsoft Business Solutions already had a strong offering in the enterprise resource planning(ERP) market for SMEs via its acquisitions of Great Plains and Navision. These acquisitions coalesced into the Microsoft Business Solutions entity in August 2002. From this point it made sense to develop a CRM product offering to sit alongside the back office products, giving SMEs access to a portfolio of business applications from Microsoft that would rival those available to enterprises from other established ERP vendors.

The solution is therefore a response to customer demand, a defined market opportunity and a fit with current and future business applications strategy.

SMEs are sceptical about adopting CRM because of the high profile scare stories they have heard about. In addition, SMEs tend to adopt technologies that directly impact the bottom line, not to achieve competitive advantage or increase customer loyalty in the first instance. Therefore, with smaller budgets and tighter resource constraints, SMEs are much more cautious about what they buy. Return on investment is important, but it’s not just about numbers. A business needs to quantify what the project sets out to achieve and whether it has met this goal. Sometimes these may not be numbers goals, but increased employee efficiency when dealing with customers, for example.

Microsoft promotes Business Value.This does not necessarily mean ‘cutting cost’, but it can often help by promoting efficiency and streamlining business processes. It depends what the company wants to measure as the success factor. How, for instance, would you measure the ROI of a member of the sales team who was able to close a deal because they had better information access at their fingertips and a better knowledge of their customer? The value to the business is important, the measurable objective intangible.

In order to help our channel work with customers to establish clear ROI goals, Microsoft Business SolutionsCRM has a downloadable toolkit that provides a complete CRM implementation methodology for Partners, covering implementation scoping, deployment,ROI and customisation in steps that are easy to follow and divided into six separate sections. Partners can customise the document to meet their own business and delivery needs. Microsoft provides this toolkit to help ensure both customers and Partners get the best results from any implementation.

Microsoft Business Solutionsbelieves that utilising the channel is the best way to service the SME market. SMEs buy software from resellers and Partners that they have worked with previously, or are in the same geographic location. This is how they prefer to purchase technology. This is why Microsoft Business Solutionshas enabled the channel to sell the Microsoft CRM product, so that SMEs can buy the software from the same Partner thatthey buy other Microsoft Business Solutionsproducts from and benefit from existing licensing agreements. In addition, Microsoft is working with 13 CRM Beta Partners in the UK who have considerable experience in the CRM market.These Partners will work with those in the larger Microsoft channel to deliver implementations if the SME businesses don’t have the skills in-house. This two-pronged approach makes CRM widely available to SMEs, but couples it with the skills of certified Partners with a wealth of implementation experience. Microsoft’s channel is already very effective and it makes sense to use these skills, not sideline them.

In an effort to make CRM as accessible as possible to customers, some Microsoft Partners will also offer MicrosoftCRM as a hosted service– something that has already been delivered in the US. It’s this positive uptake in the US for the solution as a whole that makes Microsoft Business Solutionsso positive about moves into Europe with version 1.2. In the US, Microsoft Business Solutionshad 1,000customers using MicrosoftCRM within eight months. In addition, more than 1,500 CRM Partners have already signed on to resell the product, and more than 300 independent software vendors (ISVs) are currently working to extend the CRM solution. MicrosoftCRM 1.2 will be available in nine languages worldwide by the end of 2004.

With its heritage in the SME sector, experience ofdelivering ERP applications to this market and the vital integration between Outlook and Microsoft CRM,the solution is appealing to SME businesses. Microsoft believes it is well positioned to make a success of the CRM market,working with the channel, its own developers and ISVs, who are a key part of the delivery of the product as they will develop specific vertical and horizontal applications of the Microsoft platform to enhance the CRM product. Microsoft has the ecosystem to support the requirements of the SME and the expertise to make CRM work for SMEs.

SMEs need a provider that can deliver a product that addresses their pain points and that was designed specifically for them. A product that will integrate with systems they already use and with their back office. They want to buy this product from Partners they know and trust. Most importantly, they want to buy from a company that isn’t going to disappear in eight months. One which has a product roadmap that will support their changing requirements at their pace, but also has the capability to invest in research and development to deliver the SME groundbreaking technology at an affordable rate. This is where Microsoft will change the market completely, by learning the lessons of the past and coupling them with the ability to continue to deliver for the future.