The Next Big Winner?

A close relative of CRM could emerge as the technology industry's sleeper.

If bookmakers gave odds on what would be the next big thing in the technology market, one of the big favorites would have to be customer relationship management (CRM). Reasons: By one estimation, the market reached $6.4 billion last year and is growing at a 50 percent-plus compounded annual rate even in the current economic doldrums. And while most IT companies are floundering and some of the smaller CRM players such as E.pipany seem a little shaky of late, leading CRM vendors such as Siebel Systems and PeopleSoft registered strong second quarters.

But dont overlook CRMs first cousin in the technology stakes, partner relationship management (PRM). Granted, by comparison the PRM business—Meta Group projects the market will hit $1 billion by 2002, while International Data Corp. only goes as high as $500 million by 2003—is dwarfed by CRM. Nonetheless, there are at least three good reasons to look beyond the favorites and check out this long shot.

1) Virtually every company that sells indirectly is a candidate to use PRM software, which enables you to manage ties and work with partners, share leads, and make collaborative sales forecasts. To date, the technology has been used mainly by big technology concerns such as Hewlett-Packard and Intel, but now other industries such as manufacturing and insurance are climbing aboard the PRM trolley.

2) The bean counters may have vastly underestimated the PRM market. They are tallying the software sold by PRM companies such as Webridge, Allegis Partnerware and ChannelWave and are largely overlooking PRM initiatives that were done by the likes of Cisco and IBM on a customized basis, says Bob Thompson, president of Front Line Solutions, a PRM consultancy. Also, some of the big software vendors such as Siebel have moved into this area and are undertaking major efforts. For instance, Siebel is implementing Compaqs e-channel initiative, which ties together 60,000 partners in 50 countries, in which 17 different languages are spoken.

3) The PRM business is potentially a bonanza for IT solutions providers. "Theres a tremendous business opportunity here for consultants and integrators," Thompson claims.

"The technology is only 25 percent of the solution." The real work, he argues, is in planning and developing a strategy for collaborating with partners and developing a customer-centric business, overseeing change management, and integrating PRM systems with the back office. Thats where the IT consultants and integrators can possibly make a few bucks—that is, if theyre willing to bet on a long shot.