CRM Software Quotes
CRM search»CRM Videos»The CRM Industry Month End Review for October 2012

Chuck Schaeffer CRM Industry Month End Review—For October 2012

3.5 stars Average rating: 3.5 (from 63 votes)

Here's What Happened in the CRM Software Industry During October

3.5 stars
Oracle OpenWorld, Fusion CRM & Oracle CX Top Industry News
CRM Software Industry Review The big event in the CRM software industry for October was Oracle’s OpenWorld conference. In this CRM industry month end review, we report the news and take-aways from Oracle OpenWorld as they relate to Oracle Fusion CRM and Oracle’s push toward Customer Experience (CX). This video explores Fusion CRM customer adoption and what customers like and dislike about Fusion CRM.

podcast

CRM software industry highlights for October 2012:

During the month of October, the biggest event in the CRM software industry was Oracle OpenWorld, and from a CRM context, Oracle delivered updated strategy and news on two solutions, its newer Oracle Customer Experience (CX) software suite, and Fusion CRM.

CRM software is a mature market that hasn’t changed that much over nearly two decades. The way businesses manage accounts, contacts, activities, opportunities, campaigns and cases is relatively unaltered. We have seen innovation in SaaS and cloud delivery, social CRM, mobility and big data, but core CRM software capabilities remain fairly constant. Interestingly, one of the primary objectives that has remained elusive since the beginning of CRM is achieving a customer-centric business model, and this void has opened the door to Customer Experience, or CX.

A customer’s experience is the emotional perception of his or her supplier based on the sum of all interactions with that supplier. And with factors such as a stagnate economy, increased focus on existing customers, the rise of social customers and companies desire for a more sustainable competitive advantage, business leaders are increasingly turning to CX as a business strategy, and technology suppliers are stepping up to facilitate this strategy in different ways.

While some software technology suppliers see CX within the domain of CRM or existing enterprise software applications, Oracle sees it differently. To Oracle, CRM software manages key customer facing transaction processes for marketing, sales and service, but falls short in delivering real-time content and knowledge at the numerous customer touch points and channels such as e-commerce, point-of-sale, sales order processing, shipping, returns, warranties and more. To manage all these channels, Oracle is betting big on purpose built CX software technology.

Oracle CX software is the company’s technology bid to facilitate CX business strategies, and is a suite of integrated point solutions that have been largely acquired over the prior three years. In a move that’s unusual for Oracle, the company is positioning itself as a market leader, or possibly even a market maker, in creating the industry’s Customer Experience messaging, and supporting software, and trumpeting the virtues and benefits of CX technology.

Oracle’s CX messaging and promotion is off to a good start, however, hitting some road blocks that must be resolved in order to create and capitalize on the CX software market opportunity. First, more than a few CRM pundits don’t agree that the Oracle CX goals fall outside traditional CRM software, and question whether Oracle is diminishing CRM in order to create new marketing messaging and find new market space to capitalize. Second, while business leaders clearly get the strategic importance and general understanding of CX, they haven’t yet figured out how to navigate the complexity in deploying CX technology.

And there are many deployment challenges to consider, such as creating corporate culture around CX, solidifying measureable objectives, deciphering the right KPIs, delivering real-time and contextual content at each customer interaction across fragmented channels, coding system integration and delivering the right actionable BI as part of a closed loop system for continuous process improvement – all tasks that are all precursors standing in the way of CX success.

It’s easy to suggest that a CX technology deployment should take a phased roll-out; start small and expand. However, CX requires a supporting business culture and holistic approach. Starting small without a big picture plan for predictability, risk mitigation and forecasted outcomes will probably incur stalls, stops and restarts, and possibly jeopardize the entire effort. For Oracle to succeed in its CX positioning, it needs to expand its promotion, better illustrate the unique capabilities with CRM thought leaders who challenge the notion, and deliver guidance to business executives in how to deploy CX with minimum risk and predictable payback. Failure to follow through on these requirements will sacrifice the Oracle CX software suite in favor of customers simply purchasing the piecemeal components individually, and leaving Oracle void of the synergistic opportunity the combined pieces offer when delivered as an orchestrated suite.

Lets move on to Oracle Fusion CRM. Oracle Fusion was of course released at OpenWorld 2011, so the question now is how is the suite being adopted in the marketplace? Larry Ellison disclosed that after one year the company has about 400 Fusion customers, near evenly distributed among Fusion CRM, Fusion HCM and Fusion ERP, with about two thirds being deployed in the cloud.

Oracle earns about $1B annually from SaaS, making it the second largest SaaS company. However, those revenues are derived more from the RightNow and Taleo acquired products than the Fusion products. With 380,000 customers, only having 400 Fusion customers one year in shows progress, but is far from setting the woods on fire. I spoke with Fusion customers to determine the Fusion advantages, disadvantages, likes and dislikes, and a few distinct themes developed.

First, the Fusion benefits are well understood by customers. Fusion’s modern technology and very flexible deployment options of SaaS, on-premise or a hybrid combination thereof, were seen as the biggest advantages. Not one customer or prospective customer had any real concerns about Fusions single-tenancy model or how this compares to the often debated multi-tenancy database model from rivals such as Salesforce.com.

However, reservations with Fusion singled in on two factors—product stability and Total Cost of Ownership (TCO). The software stability factor was really just a function of being new. Many CIO’s avoid version 1 software and instead let time pass for the product to mature. However, the TCO obstacle is a much bigger issue for most business leaders with whom I spoke, and most divided TCO into two sides—subscription pricing and deployment fees. Business executives indicated they see the benefits of the cloud and many would prefer to go to SaaS, however, with the current Oracle SaaS pricing, the cost is materially higher for SaaS than on-premise over the anticipated life of the application software. Additionally, most executives believe that the deployment of Fusion CRM is far from routine, and will incur significant professional services and system integration fees. As one CIO put it, “it’s a big win for the system integrators, but not so much for the customers that have to pay their fees.”

Oracle Fusion CRM SaaS pricing may seem high depending upon your perspective and reference points. If you compare Fusion CRM to Oracle CRM OnDemand or cloud competitors such as Salesforce.com, the price is high. If you compare the Fusion suite SaaS pricing to competitors, there’s not as much to compare to, and likely the reason why the price is high. Oracle is early to market with a complete cloud business software suite. There are other enterprise software competitive suites, but not many, and the lack of competition will probably keep the pricing elevated for the near term. And don’t expect traditional Oracle rivals such as IBM, SAP and Infor to release similar cloud business software suites anytime soon which would then introduce new competition and more aggressive customer pricing. SAP and Infor are behind the eight ball with regard to cloud suites so competition will instead come from best of breed players such as Salesforce, Microsoft, Workday and other smaller but innovative publishers.

Fusion TCO is holding back both existing and new Oracle customers. Whether Oracle has correctly calculated optimal pricing elasticity for maximum customer adoption is unclear. What is clear is that until the enterprise software competitive market expands, Oracle will likely not feel the pressure to lower SaaS subscription fees in order to win business away from competitors.

If I've missed anything, please let me know at chuckschaeffer[at]crmsearch[dot]com. Thanks! End


How would you rate this article?   

Marketing Category
 Filed In Categories: CRM Software Videos
Direct Mail Tag
 Tags Tags: CRM Month End Review, Oracle OpenWorld, Fusion CRM, Oracle CX
Trackback
 Trackback Permalink: www.crmsearch.com/crm-2012-10.php
Author
Author  Author: Chuck Schaeffer
Share
 Share Share:    Bookmark and Share
Direct Mail

 

 

Share This Article

 

 

Quote

In a move that’s unusual for Oracle, the company is positioning itself as a market leader, or possibly even a market maker, in creating the industry’s Customer Experience messaging, and supporting software, and trumpeting the virtues and benefits of CX technology.

 

 

Related Videos

 

 

CRM Quote

Follow Us
social
social
social
social

crm search

Home   |  CRM  |  Sales  |  Marketing  |  Service  |  Call Centers  |  Channels  |  Resources  |  Blog