CRM technology selection...
The recent bankruptcies of Rover, Red Letter Days, and EU Jet, are a painful reminder that when companies go into administration the customer can get hurt, whether that’s the sudden depreciation of a recently purchased car, the un-experienced experience of a life time, or being marooned in a distant international airport.
Software companies of course don’t often go bust; they tend to get acquired because they have value in their customer base in the form of ongoing support revenues. These acquisitions can still be damaging. The acquiring company may have limited obligation to further develop or support a client’s software, or can charge punitive maintenance fees in the knowledge that it's rarely easy to up sticks and go elsewhere.
SME’s face a second potential point of failure in that they are often purchasing systems from Value Added Reseller’s (VAR’s). The VAR business model can be a precarious one, and companies not infrequently cease trading, or revise their portfolio of supported products. If the worst happens, clients can end up stranded with paid for support contracts which may no longer be honoured, uncompleted work, and undocumented customisations.
On the plus side, if one VAR leaves the business there are others to take its place. However there’s cost and pain involved in these transitions, particularly as clients are likely have gone through a run down in the quality of support and service as the VAR starts to struggle, or loses its focus.
With the CRM technology market in a major consolidation phase (Epiphany for example was acquired by SSA this week) and the economy looking less robust, wise technology, and if applicable, VAR selection, is going to be an increasingly key factor in getting long term value out of CRM.
Software companies of course don’t often go bust; they tend to get acquired because they have value in their customer base in the form of ongoing support revenues. These acquisitions can still be damaging. The acquiring company may have limited obligation to further develop or support a client’s software, or can charge punitive maintenance fees in the knowledge that it's rarely easy to up sticks and go elsewhere.
SME’s face a second potential point of failure in that they are often purchasing systems from Value Added Reseller’s (VAR’s). The VAR business model can be a precarious one, and companies not infrequently cease trading, or revise their portfolio of supported products. If the worst happens, clients can end up stranded with paid for support contracts which may no longer be honoured, uncompleted work, and undocumented customisations.
On the plus side, if one VAR leaves the business there are others to take its place. However there’s cost and pain involved in these transitions, particularly as clients are likely have gone through a run down in the quality of support and service as the VAR starts to struggle, or loses its focus.
With the CRM technology market in a major consolidation phase (Epiphany for example was acquired by SSA this week) and the economy looking less robust, wise technology, and if applicable, VAR selection, is going to be an increasingly key factor in getting long term value out of CRM.
posted by Richard Boardman at 4:21 pm
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