Step by Step

AIRBORNE EXPRESS’S EXPERIENCE REFLECTS a caution that many CIOs are displaying when it comes to dealing with expensive and expansive IT projects. "Some of those solutions are more comprehensive, and that can be an advantage," says Billings. "But it can also be a disadvantage if you’re paying for more than what you’re going to use in the near term."

Sentiments like that have not gone unnoticed by the big-name vendors. Oracle, PeopleSoft, SAP and Siebel Systems are reacting to buyers’ scaled-down demands. Barton Goldenberg, president and founder of ISM, a CRM consulting company headquartered in Bethesda, Md., recounts the story of a bidding war between Siebel and another vendor. The vendor, whose software is considered best in class, "offered a bid of $650,000 for a package that only covered marketing and sales-force automation," says Goldenberg. "Siebel came in with $1.6 million for their integrated CRM suite." When the battle looked lost, however, Siebel came back with a more targeted version at a better price?and won the contract. And that’s how things are going to be "for the next six to 12 months," says Goldenberg.

For example, Group Health, a nonprofit health insurance company based in New York City, has gone from very basic technology in its 100-member sales department to implementing a successful slice of CRM in two short years. Last year, it implemented Siebel’s sales-force automation software in three months, for an initial cost of about $500,000.

Now Group Health is working on implementing Siebel software that automates the RFP process. Though future modules have been planned, the company is holding off on further investments for the moment because of concerns about the economy. "It will be more difficult to get financing of other modules and more difficult to justify [them] through ROI," says David Henderson, the company’s senior vice president and chief marketing officer, who worked with the IT and sales departments to choose the CRM technology. According to Steve Mankoff, Siebel’s senior vice president of technical services, Siebel customers are looking for "quick win" solutions. Mankoff maintains that Siebel, the current CRM software leader, has encouraged a phased approach to implementation from the beginning and is now seeing more of a focus on ROI. For its part, Oracle is offering subscription and nonsubscription services over the Web for customers who want a cheaper, faster CRM fix. "The goal is to offer customers lots of options through both online and conventional implementations, and to get it up and running quickly," says Lisa Arthur, Oracle’s vice president for CRM marketing. She concedes, however, that "You can’t do all of CRM quickly."