Staying the course

The global economic ship is starting to right itself and navigate into less turbulent waters, though not without organisations placing more importance on customers. Nathan Statz investigates how CRM is faring in the current climate.

For many organisations, the warmth under the customer relationship management (CRM) blanket is a familiar feeling, particularly as the technology bundles together sales leads, contacts and customer information. This is particularly relevant in the Middle East, where CRM has emerged from its role as an IT system to being viewed by many as a core business technology, without which they would be left out in the cold.

This was not always the case, especially before the global economic turbulence hit the region. Growth was rampant and many organisations began struggling to satisfy the exploding demand and were not as concerned with maintaining customer relationships.

"I think the crisis has been good from that perspective, in that it has made many organisations focus more on the customer. The old adage that it is far cheaper to keep a customer than it is to win a new one is correct, and certainly in these times I think that it has been driving the uptake of CRM," says Kevin Scott, vice president of industries for South East Europe and the Middle East at SAP.

Scott believes that the most successful technologies are the ones that are not pushed up into the business realm by the IT department, rather that a technology really only becomes successful when businesses start seeing value in it.

From a vendor point of view it makes sense to push CRM as a core business technology, as when a product leaps out of the realm of being some back-end system that only the computer science graduates understand to being a mainstream system, more businesses will be buying it. Beyond the financial results, there is a noticeable improvement in sales volume when CRM is utilised effectively.

Deepak Katyal, vice president of information technology at Bahrain's TAIB Bank, explains that CRM is an integral technology for any sector. This stems from knowing that any business is driven by customers and you have to obtain proper organised information about customers to make this work.

"If you don't treat customers well, how will you serve them? From a technology standpoint, the technology is a support mechanism to drive the business. Obviously [CRM] is one of the initiatives that any organisation must have if they want to take the full benefit out of their customer database," he says.

According to Katyal, CRM is an integral piece of technology for TAIB bank as just like any other type of business, the organisation needs to maintain databases and manage how and when representatives are going to touch base with the customers.

"CRM is definitely a business initiative, but one that is driven by technology. I would say that it goes hand-in-hand with technology and the business, obviously, has to be driven by IT but it is a business strategy to have CRM," he adds.

Katyal explains that with CRM, you need to be careful with what technology the organisation is buying. This is due to the potential for one vendor's offering to look good on paper, but be completely different when it is actually implemented. Evidence of this will show up most strongly when it comes to the user experience where it can often translate into a system that the sales team does not want to use.

"When the user comes into using it, that's where the whole thing comes up and at times we need to push them. I would say that if our placement or marketing guy is a forward-looking or progressive kind of guy, he will definitely make use of CRM to its full extent for the business," adds Katyal.

Besides making organisations more aware of the need to retain customers, the economic conditions of the past 12 months have caused many CIOs to rethink their plans for technology refreshes. On the one hand it means potentially causing problems by lagging behind in upgrades, but in the short term it means saving costs by not having to part with any capital.

When it comes to planned technology refreshes, Katyal explains that it depends upon the CRM you have chosen, as some vendors have mechanisms already in place whereby the system will be updated every month or every quarter, while others compile all these changes into a big release which is pushed out yearly.

"Either way it doesn't matter, because from the organisation's point of view you definitely need to update because there are some benefits that these companies bring into the [software]. My demands today or my requirements today might be different than other organisations, but by looking into different segments of customers then they will have some different requirements. Obviously if I have a customer belonging to that segment coming into my fold I will require the same kind of thing, so even if I'm not using a feature it's good to have that kind of thing available in the form of an update," adds Katyal.

This isn't to say that CRM is suffering a noticeable decline in the region thanks to the repercussions of subprime mortgage lending on the other side of the world. SAP's entire business posted 49.7% year-on-year growth in the Middle East for quarter two, while Microsoft's CRM business is growing at a rate of 75%, so things are not exactly on a downward slide.

Tamer Elhamy, business solutions manager at Microsoft Gulf, explains that the software giant's growth in the region can be seen by the high-profile organisations that have implemented its software in the last year. That list includes large companies like the RTA, Mashreq bank, Dubai Bank and the regional chapter of Barclays.

"There are a lot of interesting points for organisations to deploy CRM, like maintaining customers and up-selling. It's becoming harder and harder to sell during the current economic situation so I want to be very close to my customer. I want to service them better so I can earn their trust and I listen to their feedback and maybe sometimes change from my product in order to accommodate that need," he says.

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