Some answers from SugarCRM CEO John Roberts
Proprietary customer relationship software (CRM) vendors gave a party, and all the guests left after one drink. Open source CRM can sweeten the user experience and keep CRM launch parties from falling flat, said John Roberts, CEO and co-founder of SugarCRM, in Cupertino, Calif.
In a recent interview, Roberts explained why 80% of CRM projects fail (according to Peppers & Rogers Group) and how to reverse the trend. In part two of this Q&A, he describes why CRM and Web services aren’t a perfect match.
Why is the failure rate of CRM projects so high?
John Roberts: Billions of dollars have been wasted on CRM applications because users didn’t adopt them.
In my presentations, I ask audiences how many of their companies have CRM. In most cases, 100% of the people raise their hands. Then I ask how many people actually use it on a daily or weekly basis, and only about 20% raise their hands, and even they have sheepish smiles on their faces.
In a lot of cases, companies deploy CRM, and there’s a lot of euphoria over it for the first couple of months. Then, people stop using it. They look at it as ‘Big Brother’ watching them. CRM is sold as a tool to make an organization more effective and efficient; but the end user doesn’t see CRM as making them more efficient and effective.
In general, what types of people use or don’t use CRM?
Roberts: Typically, the people who actually use CRM are at a desk looking at their computer all day long. They’re in one place, and it’s easy for the company to train them on the detailed, intricate user interfaces found on proprietary CRM products today.
The trouble is, the people who should be using CRM are not those who sit at their computer all day. They’re salespeople. They have a different mentality than the person who is using CRM at a desk all day doing routine tasks like order entry. That’s where you have this disconnect.
People in the field use CRM for about 15% to 20% of their time, and a lot of times it’s voluntarily. They may get reprimanded, but they’re not going to get fired for not using it if they’re making their numbers.
What’s needed to get field workers to use CRM regularly?
Roberts: They need an interface that is easy, efficient and fun to use. It’s got to work with the fewest amount of keystrokes. They have a different user experience than the office worker does, and the interface is to appeal to them.
I think there is a lot of work to be done in terms of making CRM applications more intuitive, useful and mission-oriented in terms of providing the info they need to do their jobs better.
How well do business intelligence and CRM work together today?
Roberts: Business intelligence is only as good as the data in the system. Today, too many employees aren’t putting their data into CRM. As a result, management didn’t get the insights into operations that they’d hoped to get.
If your employees use CRM more, they’ll create meaningful data to which you can connect business intelligence tools.
A year from now, there will probably be five to 10 open source business intelligence tools that will be comparable to the proprietary ones on the market today. They’ll provide meaningful alternatives to proprietary-based intelligence platforms.
Why does SugarCRM build on the LAMP (Linux, Apache, MySQL, PHP/Perl) stack?
Roberts: We wanted to build the fastest user interface on the planet. We decided to go with the LAMP architecture, which is an open, user-friendly open source language. Shipping a million lines of C++ isn’t really useful for in-house developers. If you ship a million lines of Java, that’s somewhat useful. PHP, however, is a mature scripting language that people are not afraid of. It’s capable of supporting very large implementations and generating very rich user interface experiences. It’s also extremely fast in the way that it renders, and it runs on pretty much every platform out there.
The LAMP stack works well on top of the service-oriented architecture for a large deployment. In some cases, it adds functionality to use the J2EE [Java 2 Platform, Enterprise Edition] infrastructure underneath LAMP.
LAMP has many more benefits than ASP or .NET for building an extremely rich, super-fast, highly customizable environment.
Web services is the Band-Aid that covers the weaknesses of proprietary customer relationship software (CRM), said John Roberts, CEO and co-founder of SugarCRM, in Cupertino, Calif. It’s a “neat technology,” good for many purposes, but it can’t provide the interactivity or application integration that proprietary CRM products lack. In part one of our conversation with Roberts, he explained why 80% of CRM projects fail and how to reverse the trend. In part two, he describes why CRM and Web services aren’t a perfect couple and why proprietary vendors probably won’t change their models.
I’ve heard a lot about the marriage of Web services and CRM. Is this a good match?
John Roberts: Traditionally, software companies have hidden the code from everyone and built proprietary environments. In CRM, for example, Siebel created a huge proprietary application that was at its peak in 1995 and 1996.
As CRM matured, users said, ‘We need to connect to it, to interact with it.’ That’s the nature of CRM; it’s a human-interaction platform. But, because of their hidden code, the only thing the proprietary CRM vendors could offer was Web services. ‘You could interact with your salesforce via Web services.’
The powerful thing about CRM is that it’s a foundation for building, customizing and using all sorts of applications internally. Web services, just editing XML files going back and forth, is not a good development environment for building and customizing CRM applications for enterprises.
So, this Web services push is proprietary vendors doing a good job of marketing a weakness as a strength.
Could you elaborate on Web services’ weaknesses as a CRM development environment?
Roberts: For one thing, editing XML files is a tedious process. For another, there are millions of PHP programmers around the world who want to be able to use GUI tools to customize a CRM app without writing any code. In an instant with PHP, you can drop in and customize every form in SugarCRM. You can’t do that in a proprietary app with XML.
In the rental model, with Web services, you’re completely locked by the API [application programming interface] the proprietary vendor supplies. You have to buy more of their products just to use this Web services environment, which really isn’t that great in terms of an integration environment.
With open source code, you can customize software and do some really cool extensions and leverage existing PHP applications. You can’t do that with proprietary software. You’re stuck.
Do you expect any proprietary CRM vendors to move to an open source model?
Roberts: Maybe the proprietary software guys will adopt an open source strategy. However, it’s difficult, if not impossible, to take a company founded and made profitable by a proprietary model and change it to a commercial open source model. The two models are so radically different. The company would have to reboot its entire revenue stream and focus on building a community. That takes time, effort and the community’s trust.
Is wireless capability a must-have for CRM suites today?
Roberts: It is necessary now. There is a huge conversion to wireless happening now. As communication and wireless networks continue to get stronger in terms of their bandwidth throughput, it’s only going to escalate.
Traditionally, to get wireless connectivity with a CRM application, you had to go with third-party proprietary wireless extensions that had proprietary wireless infrastructures.
Today, most users in the CRM world are addicted to their Blackberrys or Trios, and are using the Web browsers in those devices, which have gotten much better and faster.
We measured the form factors in Trios and Blackberrys, in terms of their screen resolutions and so on. They both support HTML browsers, so we wrote wireless versions of Sugar for those devices. It was easy to ship a wireless version of Sugar by focusing on the browsers and devices and not having to force customers into some proprietary wireless standard.
A wireless device user can go to our Web site today and type the URL and play with the app. It doesn’t require any infrastructure to start using the app.
Where you see CRM going in terms of new technologies?
Roberts: I still think there’s a lot of innovation needed to culminate in a better user experience. That’s where open source will play a major role. On SugarForge, for instance, you get people from all over the world who are experimenting with extensions and advances.
Just yesterday, I read about a project that connected Sugar to Yahoo for maps. So, you’re on your wireless device somewhere, and you can find out, based on your current location, where there are other nearby customers who you can visit. It’s a great idea, and there are many more projects like that.
You’re going to see a radical explosion of innovation. For example, VOIP [Voice over Internet Protocol], the future of telecom and CRM are being used in major call centers today.
| John Roberts - Chief Executive Officer & Co-Founder |
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| John Roberts, CEO and Co-Founder of SugarCRM, is a pioneer in the enterprise software market. As co-founder of SugarCRM, John established SugarCRM’s commercial open source business model, co-led the product design of SugarCRM products, and helped build the Sugar Community into one of the largest open source communities on the Web. With experience across marketing, business development and product management, John has established SugarCRM as the only viable alternative to established proprietary CRM solutions. |
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| Prior to co-founding SugarCRM, John spent 14 years in various product management and sales engineering roles at leading CRM companies E.piphany, BroadVision, Baan/Aurum Software and IBM. John holds a BS in Business from Virginia Commonwealth University
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Sanver E-Solutions provides CRM Consulting and SugarCRM Implementation Services. For more details please visit http://www.sanver.com/crm
