From the Top
From the Top
- Executive to Executive -
CRM is about more than just managing customer relations. In capital-intensive business, service and support often involves the management of large amounts of inventory, assets and human capital. Industry veteran, Zack Bergreen, CEO and Chairman of Astea International, discusses the state of the industry, his vision of the future, and how CRM can re-build credibility.
Zack Bergreen,
President, CEO and Chairman
Astea International
RealMarket: You talk with CEOs from leading companies. What do they see as the number one issue or opportunity facing CRM today?
Bergreen: I think the issue of credibility is big today. Certain expectations, and quite frankly missed expectations, over the last two or three years have been immense. CRM was touted as something that would fix all sorts of business problems. In reality we have seen quite a bit of bad press about money invested on CRM that didn’t really fix the business problems. Most companies have not seen the benefits they signed up for. The challenge for the industry and the suppliers is to rebuild credibility.
RealMarket: How do you suggest the industry re-build credibility?
Bergreen: The primary industry objective has to be to grow again. A lot of the CRM players, not all but quite a few, have focused on sales force automation (SFA). When you look through the SFA view, most companies look the same. The business of selling is similar across most verticals with very similar sales processes, funnel management, etc. There was an expectation that ‘one-size-fits-all’ given the similar views. When you get closer to the customer and the customer issues, you all of a sudden recognize the world is not all that uniform. Inevitably, companies spent enormous amounts of dollars to conform to the business and customer expectations thus the “one-application-fits-all” model falls apart.
| "Suppliers should pick the industries where they can do the best job and not be everything to everybody. I submit the concept of “CRM” is, in essence, dead or perhaps never existed." |
The industry needs to recognize the world is not uniform. Astea came from the world of field service and customer service and we recognize the glaring differences in industry segments. Suppliers should pick the industries where they can do the best job and not be everything to everybody. I submit the concept of “CRM” is, in essence, dead or perhaps never existed. This is maturation of the market with emerging segmentations with specific needs. Now that the market has matured a bit, we are seeing suppliers settle into specific vertical industries.
RealMarket: What areas have you focused on?
Bergreen: We have always looked at the world of capital-intensive markets - ones that require real assets as a part of the service and support function. This involves medical device manufacturers, telecommunications, office automation (copiers, fax), industrial automation (plant equipment, elevators, security systems, robotics), etc. The common denominator is that service involves the movement of repair parts.
RealMarket: Does that mean you would tell a financial service company like Fidelity or Bank of America to look elsewhere?
Bergreen: In financial services, customer service is about things like credit checking and consumer billing. That is not us. You can find other suppliers that have more domain expertise than Astea. We work with organizations like Citibank, but our work is supporting the infrastructure of ATMs. That is our contribution and focus because it involves capital assets that need to be up and running.
RealMarket: In a crowded market, how does Astea differentiate itself?
Bergreen: Clearly, our message has been aligned with our focus - we are not trying to be everything to everybody. Our focus and value proposition pertains to Service Lifecycle Management. Service Lifecycle Management is critical in terms of tracking the equipment throughout its deployment and servicing until the equipment is de-commissioned. We look to extend CRM into the whole area of SCM because we deal with the utilization of spare parts. We try to provide good functionality in the call center and weave into human capital optimization and inventory management.
We think it is profoundly critical to have domain expertise. Our solution is not only a product out of the box. It is a product that can be easily deployed with a user interface that is easy to navigate. The system is also easy to learn.
In addition, we continually focus on our customers and prospects. We stay very close to them during implementation. For example, we don’t rely on third parties. We want to really understand how the product is deployed and used. This allows us to stay connected with the key executives of the companies and understand their long-term vision so our products are aligned with those respective visions.
RealMarket: While Astea has a broad range of applications, many analysts believe that no one vendor can provide an entire CRM solution set. Do you agree?
Bergreen: I agree with that. Because of the immense pressure from shareholders to meet intense Wall Street expectations, companies like Siebel have tried to portray a one-vendor solution. That is not the case in reality. I submit that we are focused on an optimized suite for certain verticals dealing with mission-critical asset based companies.
RealMarket: When it comes down to the short list when a prospect is deciding between you and one other company, what company is most often the other one on the list?
Bergreen: We find ourselves along side the larger players like Siebel and SAP not because they are the best fit but because of the sheer dominance of their name recognition via the press. We quite often see other players that are vertically focused liked us. We do run into internal development especially in the overseas market. This is quite often the case in Japan. So we see the spectrum depending on the opportunity and geographic territory. It is fair to say that as we move into the enterprise spectrum with worldwide solutions we see the large players.
| "We are pleased with the .NET platform and are working to integrate it into our suite. Microsoft has acquired Navision and Great Plains and both are focused on the low to mid tier of the market so I don’t see them marching into the enterprise space over the next five years. " |
RealMarket: What do you think of Microsoft’s entry into CRM?
Bergreen: I think Microsoft is a wonderful company and we have embraced their technology as part of our web interface. We are pleased with the .NET platform and are working to integrate it into our suite. Microsoft has acquired Navision and Great Plains and both are focused on the low to mid tier of the market so I don’t see them marching into the enterprise space over the next five years. They don’t have the domain expertise, vertical knowledge or credibility. They will have to build that up and get away from the pigeonhole perspective of being a low-end player. I don’t see them impacting the market we play into. Perhaps they will impact the sales management market addressed by companies like Saleslogix, Onyx, Pivotal, etc. The field service segment requires immense domain knowledge that is very specific and takes time to build up.
But they could buy into the market - perhaps Siebel or someone like that. However, I doubt it given Microsoft’s current challenges of building up their security and .NET technologies while continuing to expand their low-end enterprise software businesses.
RealMarket: Tell me more about Astea’s roadmap to providing better ROI and a more complete solution offering.
Bergreen: Again, we are going to stick to our knitting by focusing on areas that will have the most positive impact for our customers. I think we will focus on how to make our existing customers more competitive. Our segments and verticals are going through dramatic changes so we need to make sure that the new technologies, like wireless, are an integral part of our product strategy. I really see wireless extending into other areas like device relationship management where black boxes will constantly monitor the equipment and report back to the CRM control center that will oversee and continuously monitor alerts and alarms. It will also manage and record statistical data for predictive service.
For example, Coca-Cola has introduced the smart vending machine. Marconi has developed black boxes that monitor the performance of the unit and other vital parameters. This information is transmitted to our system. Bottle count, cash counts, and system temperatures are some of the parameters that control centers can have visibility to that will allow them to maximize the value of the asset.
Lastly, you will see more metered usage licensing versus perpetual licensing.
RealMarket: What is the average size Astea implementation? What is the ratio of implementation services to product?
Bergreen: Typically, an Astea implementation is about $200 - $250K for the product.
The services-to-product ratio is in the range of fifty cents to one dollar for every dollar of product. This means two things. First, the total cost of ownership is much less than many others that have two to five times the services cost in relation to software costs. It makes your wonder how anyone can see ROI with these types of ratios. The second benefit is a quicker ROI because our implementations rarely go beyond six months. I believe the days of protracted implementations, costing millions of dollars over many years, are gone.
RealMarket: Looking to the future, what is the biggest change you see on the CRM horizon?
Bergreen: The biggest change that we are seeing is the proliferation of XML. The whole effort of interconnecting the information highway within an organization is very, very big. That is the Holy Grail and seamless integration claims just are not valid yet. Intelligent or adaptive analytics is another big area. Giving users clear visibility of how the user’s tasks are being performed and recommending changes to optimize performance can have tremendous business benefit. We are spending quite a bit of our research dollars in this area.
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