Barton Goldenberg has seen it all. As president of Bethesda, Maryland-based Information Systems Marketing (ISM), since he founded the company in 1985, this influential customer relationship management (CRM) consultant has witnessed a decade-long transformation from what was largely a sales force automation industry to what is now a comprehensive business segment that builds loyalty and boosts customer retention through advanced technology and processes. He has made a name for himself not only as an astute observer of industry trends and the right-hand-man to such big-name companies as McGraw-Hill, Lucent Technologies and the New York Stock Exchange during CRM implementations, but also as publisher of The Guide to CRM Automation, an annual ranking of the top CRM vendors.

In other words, if anyone knows CRM, it’s Goldenberg. And according to Goldenberg, the industry has come a long way, but it’s still got a long way to go.

For starters, the CRM business faces some clear challenges today, the first of which is a more widespread recognition that CRM is not simply about technology. Rather, it’s about the integration of people, process and technology – and technology is the smallest piece of that pie. “Most companies don’t appreciate how much ‘people stuff’ is involved,” says Goldenberg, ticking off a list of such people-oriented functions as change management and user acceptance. In a successful CRM project, he says, people are likely to be 50 percent of the equation, followed by process at 30 percent and technology at just 20 percent. “Companies need to recognize we’re talking about much more than technology” when it comes to CRM, he emphasizes.

The industry’s second challenge today is the integration of CRM, eCRM and mCRM. Although he says eCRM is increasingly being viewed as a piece of, rather than a replacement for, CRM, eCRM companies by themselves do not yet offer robust, comprehensive solutions that can stand alone. In Goldenberg’s opinion, “We’ll see more CRM companies offer eCRM capabilities. Companies such as Siebel and Pivotal are already offering more competent eCRM products.” Additionally, “We’ll see eCRM companies buying one another and ultimately figuring out how best to integrate with CRM.”

If perfect integration between CRM and eCRM were measured at 100 percent, we’re about 40 percent to 60 percent there, says Goldenberg. Getting all the way there will take another three to five years. Yet it is critical the industry gets there. Today there are roughly 240 million Internet users worldwide. By 2009, that number will have climbed to 1.4 billion, so there will be many more e-customers or potential e-customers. The question, Goldenberg asks, is the industry ready for them?

So far, Goldenberg says, most vendors are doing a fairly good job leveraging the Web. The eCRM vendors are leading the way, but CRM companies increasingly are recognizing the need for a strong e-presence. “There’s an increased capability on the e-side, but the integration of classical CRM offerings and emerging eCRM still has a way to go. At one vendor, if you want to run their e-side you have to run one set of servers and then run another set of servers for the classical CRM application, even though it shares the same information,” explains Goldenberg. “The companies that can do this right will be the winners.”

Two more challenges face the CRM industry today, one of which is the need to state whether an implementation has succeeded or not. There needs to be more use of metrics that can show “how to justify CRM, then measure and monitor it,” says Goldenberg.

Security and privacy issues are also of concern. The challenge here is one of reassuring clients of safety when passing critical information over the Web. Vendors, stresses Goldenberg, need to talk up the success of the Internet, the fact that there have been no major cases of fraud and that you won’t receive unsolicited e-mails if you don’t want them. Trusting the Internet will be key to customers accepting and using it with abandon in the future.

Bright Future

Despite the challenges that remain, the industry is making enormous strides forward. In fact, there are a number of trends taking shape today that demonstrate the real value of these systems. Wireless and voice recognition technologies, for instance, are becoming reality. Jiffy Lube launched a program in February where customers can call, tell the company they’ll be in, say, Cincinnati at the time their scheduled oil change comes up, and ask for a reminder call to get it done. “You’ll be in your car and your phone will ring and a voice will say, ‘Hi, this is Jiffy Lube. Here are our locations in Cincinnati,'” says Goldenberg. And they may offer a discount as an incentive to get you in the door.

The goal is to make it easier for customers to do business with you, giving them more information and more control. That’s what’s happening on the customer service side of business, as well. “Cisco is a classic example,” says Goldenberg. “Eighty-two percent of all its orders are now made online; 83 percent of support issues are resolved online; 1,600 technicians and customer service personnel have been freed up and moved into revenue-producing positions; the company saw $330 million in savings in 1999 and $506 million in 2000; and customer satisfaction has gone up 25 percent per year in each of the last two years.”

We’ll see more customer self-service going forward, Goldenberg notes, “and Cisco is a classic example of getting it right.”

However, it’s certainly not the only example. In fact, there’s a growing cadre of success stories just as compelling as Cisco’s. They’re organizations that have achieved the right balance of people, process and technology and they’ve understood the metrics, explains Goldenberg. And the industry is only likely to see more of these in the future.

“By bringing together a holistic profile of the customer, by offering tools to the customer to do business in the way they want to, I really believe CRM builds loyalty and retention over the long run,” Goldenberg says. “We have our challenges, but we’re little by little chipping away at them to produce a really powerful tool.”