CRM: More than just a pretty acronym?

IT vendors' current focus on the potential of customer relationship management (CRM) technology is verging on the obsessive. But recent developments show CRM to be more than the acronym du jour.

CRM is about combining data warehousing, computer telephony integration (CTI) and other technologies to help companies improve the ways they deal with customers. This is increasingly important in areas such as financial services, telecoms and utilities where deregulation and competition have increased rates of churn, and often made a mockery of assumed customer loyalty.

As Jacky Olivier, head of Cap Gemini's UK telecoms business, points out: "We all just used to be subscribers in the eyes of telcos, but now we're customers."

However, as companies' CRM strategies start to crystallise, an area which often fails to get a mention is the call centre. That's about to change, as two recent examples show.

At the beginning of April, Lucent Technologies paid $145m for Mosaix, a provider of front office and workflow software whose customers include UK bank, the Halifax.

Lucent said its goal is to help its users keep their customers "coming back again and again - whether through the door, the mail, the phone, the fax or the Web". The world's most successful telecoms equipment supplier will now integrate Mosaix's ViewStar CRM software into its CentreVu suite of customer care products.

In effect, Lucent is fleshing out its call centre product portfolio and the Yankee Group quickly forecast that rivals such as Cisco, Nortel and Rockwell will soon snap up similar companies.

And it isn't just blue chip giants who will benefit from the coming together of CRM and the call centre.

Two weeks after the Lucent deal, Bendata announced plans to merge with GoldMine Software, with the aim of bringing CRM to small and medium-sized companies.

Bendata's flagship software product, Heat, is typically used by internal IT help desks, whereas GoldMine's eponymous product is popular with sales teams maintaining contact records and prospects.

Tony Probert, managing director of Bendata Europe, explains: "Both sides of this deal are equally important, but it has been made with our eyes on the biggest growth opportunity over the next three to five years - CRM."

And Bendata parent company Ixchange didn't spend $83m on a hunch. Analysts are predicting compound growth in CRM solutions of 50 per cent per year - a growth rate second only to that of the Internet.

Sandra Millhouse, a lead analyst at Ovum, says: "This deal shows how important it's becoming to offer unified solutions."

Along with other industry-watchers, she reckons that leading ERP (enterprise resource planning) vendors such as Baan, Oracle, Peoplesoft and SAP will increasingly also be looking at front office as well as back office applications, focusing more on CRM.

And so one year's buzzword, ERP, gives way to another's, CRM.