Microsoft CRM 1.0 Viability and Outlook Integration Drive Adoption

Microsoft CRM 1.0 hit the U.S. market a year ago, January 2003 to be exact. Early adopters have overlooked functional gaps in favor of long-term viability and ease of integration with other Microsoft products.

The Bottom Line: The real benefit of Microsoft CRM is the Outlook and Office integration, but it is still only a good fit for Small and Midsize Businesses (SMBs) in industries with low product complexity.

What It Means: Microsoft reports that more than 1,000 companies have purchased its Customer Relationship Management (CRM) product. Early adopters we talked to report the following:

• Outlook integration rules the day. The ability to drag a contact from Outlook into Microsoft CRM to create a new opportunity is a huge win for salespeople. While this capability seems very simple, a significant amount of code must be written in order to make many other tools do this. The Takeaway: Outlook integration is worth it.
• Companies are willing to wait for functionality in favor of viability. Current product functionality includes robust contact management, some basic sales capabilities, and fundamental customer service components. Several major gaps exist, including analytics, marketing, and support for multicurrency (limiting its utility outside of North America). Three years ago, midmarket CRM decisions were largely based on functionality. Today, it’s all about viability. The Takeaway: Early Microsoft CRM adopters are more than willing to overlook key functionality gaps in the current product and even in version 1.2, confident that Microsoft will fill these holes over time and will be in business in the long run.
• Is it right for my company? Microsoft CRM 1.0 is only a good fit for SMBs that have basic sales, marketing, and service processes, basic functionality requirements, low product complexity, and that only want to implement the application in the United States. The Takeaway: Microsoft CRM buyers are currently companies with less than $75M in revenue; the robust functionality required for $1B+ companies will not be available for three years.

Conclusion: Microsoft CRM is still in the proving stage, but SMBs and departments of larger organizations should add it to the selection list if basic contact management, sales, and customer service functionality fulfill the majority of requirements.

AMR Research originally published this article on 17 December 2003.