Strategies for Vertical CRM Requirements/demands
CRM, the term is old enough as an application area. Across the broader market, lots of vendors are moving towards verticalization including Oracle and SAP. Businesses are relying more heavily on vertical solutions to address the demands of current economic climates and to take advantage of the next iterations of the technology.
It is well known that companies within the same vertical will have some unique requirements. So even a vertical application will require some tailoring. Implementing an appropriate vertical application in a given industry provides many benefits to a horizontal solution. It (Vertical application) enables ease of implementation and lowers cost of implementation. Recently I have read through a white paper 'Oracle Vertical CRM Applications: Realizing Business Benefit Through Industry Best Practices' by Mary Wardley published in Oracle website.The author has explained the two strategies for addressing the demands of vertical business requirements:
1. Purchase a horizontal solution and customize it to their requirements - In this case the customer is purchasing a product for which the supplier's stated strategy is to maintain one code base and iteratively expand its functionality over time. To address specific vertical industry customers, these vendors will customize the software each time.2. Purchase a vertical solution and tune it to their requirements - In this case, the customer is purchasing a product for which the vendor has committed to supporting specific vertical solutions for each market segment. The horizontal application is often the base code, and this code is iteratively upgraded into specific vertical-focused products.
At high level I am under the impression that vertical CRM applications are easy to implement and upgrade instead of buying a horizontal CRM application (licenses).What about your ideas on the above mentioned two approaches? Would like to know if there is any other approach?
Comments
Reading the above lines really made me think why would companies go for horizontal applications rather than the vertical ones in a scenario when the vertical (industry specific) solutions are catering to their needs and they actually comprise or can be customised to most of the functionalities from the horizontal applications.
Definitely, implementing vertical solutions will help the companies to have a much more structured way with the business rules of that particular industry and a competitive edge. So I would like to know what would be the future of the horizontal solutions. Will they be really rolled out from the market or do they have some very significant advantages over the vertical applications?
And going further some more questions arise like
How are the vendors (like Oracle/Siebel, SAP) going to strategise their objectives for the same?
Aren’t vertical solutions and horizontal solutions leading to cannibalisation for these vendors?
Posted by: Madhur P Deshpande | February 27, 2009 9:16 AM