The customer relationship management (CRM) market is rife with dissatisfied customers who are betting millions of dollars on products and services that do not fully satisfy their needs. Approximately $13 billion will be spent on CRM initiatives worldwide in 2005. Forrester Research, Inc. (Nasdaq: FORR) has released a new Forrester Wave™ that evaluates and ranks four major CRM players — Amdocs, Oracle, SAP, and Siebel Systems — to help companies make smart CRM investment decisions.

“Selection of a CRM vendor is a marriage, not a date,” says William Band, a consulting analyst with Forrester Research. “Enterprise buyers must think carefully about the vendor partner they choose and understand the long-term commitment of these decisions. Over the next year, companies will spend an estimated $3.2 billion on CRM license costs alone. In addition, they will incur costs involving hardware purchases, software integration, maintenance, and the administrative expenses for managing new IT assets. Big money is at risk.”

The study finds that buyers are dissatisfied with CRM investments on multiple levels and are demanding easier integration, faster return on investments, and better support from vendors. A survey of 94 business and IT executives found that:

  • Only 29 percent of executives surveyed are satisfied with how easily CRM applications integrate with existing data applications and sources.
  • Just 34 percent are happy with how easy it is to work with CRM software vendors after they have purchased applications and services.
  • Less than 50 percent of buyers are fully satisfied that the business benefits achieved meet their expectations.

While there are several choices of CRM vendors, ranging from licensed vendors serving enterprises to hosted CRM vendors using a software-as-a-service model, Forrester chose to evaluate enterprise CRM suites delivered through an on-premise licensed arrangement. The report evaluates the four leading vendors based on 177 criteria grouped in three categories — current offering, product strategy, and market presence. Forrester’s findings show that while all four vendors’ CRM suites offer advantages, companies must choose the best fit for their specific needs. Overall, Forrester found that:

  • Siebel continues to lead the pack. Siebel continues to offer the most comprehensive solution-set for enterprise-class organizations, with the largest array of front-office solutions tailored to specific industry challenges and opportunities.
  • SAP has momentum and is gaining ground. SAP, through mySAP CRM, has emerged with increasing momentum. The company is investing heavily to fill out its product suite and offers buyers end-to-end business process solutions.
  • Oracle is growing to overtake the leader. Oracle’s recent acquisition of PeopleSoft gives the combined entity full coverage of all major CRM functionalities and a larger, more industry-balanced customer base on which to build.
  • Amdocs is a good choice in special circumstances. Amdocs offers a flexible application with deep customer service functionality, scalability, and profound knowledge of the communications services providers and high-tech industries. The company offers an end-to-end solution by integrating customer-facing relationship management with the important customer billing process.

The CRM Forrester Wave also includes six specific recommendations for buyers to use when shopping for a CRM suite. The full report is available to Forrester WholeView 2™ clients and can be found at www.forrester.com.