In FedEx’s case, patching together software from different vendors has helped avoid major problems. For example, when FedEx Services first implemented its Youcentric CRM system, the company underestimated the difficulties some field reps would have in accessing the Web-based system. Struminger and his team were able to modify the system by making changes to the server during a weekend. If FedEx had installed CRM software on all the laptops, "it would have been a costly nightmare," he says, noting that larger CRM packages he had looked at required that type of installation.

Denis Pombriant, research director in CRM at Aberdeen Group, calls this modular approach to CRM the wave of the future. For example, if a company chooses a vendor that uses Java architecture, it can also develop Beans (reusable software components written in Java that can be used by a Java development environment) that will integrate into a legacy system. "In this way, it’s entirely possible to mix multiple vendors," Pombriant says. "I call this ’best of breed on steroids.’"

CRM for Rent

FOR THOSE WHO DON’T MIND FORGOING the ability to customize CRM applications, or for small companies that need only a targeted application such as sales-force automation, ASPs can be an alternative to putting off CRM ambitions. Vendors such as 3-year-old Salesforce.com and 4-year-old Upshot offer rented CRM applications, with a focus on sales-force automation that can be less expensive than what a major CRM vendor would charge for a year. Such nipping at the heels has prompted the top dogs, such as Oracle, PeopleSoft and Siebel, to also offer outsourced CRM packages. For those who need more personalization and control, there is the managed service provider (MSP), such as Wheelhouse, which offers consulting services and some customization in addition to a hosted application. Consulting companies such as Cap Gemini Ernst & Young and IBM Global Services also offer MSP CRM packages. (CIO’s publisher, CXO Media, holds an investment stake in Salesforce.com and Wheelhouse.)

Rodric O’Connor, CTO at San Francisco-based investment bank Putnam Lovell Securities, decided to take the risk of going with an ASP. The economy wasn’t yet in retreat in early 2000, and Putnam Lovell was still growing. O’Connor had to decide whether to add to his six-person IT staff in order to build a bigger infrastructure and maintain complicated software installations. As the boutique bank grew, IT requirements were starting to become unwieldy. Nine separate databases held customer information, and each division had its own contact records. "It was a nightmare, and there was pain involved," O’Connor says. Customers were routinely receiving duplicate research reports, even holiday cards?or none at all. O’Connor looked at vendors including Siebel and Onyx, but he decided outlays of up to $2 million were too much to swallow for a small bank, even with its expected growth.