May 24, 2007 The Forrester Waveâ„¢: Customer Service

Making Leaders Successful Every Day

May 24, 2007

The Forrester Wave™: Customer Service Management Software, Q2 2007by Chip Gliedman

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© 2007, Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. Forrester clients may make one attributed copy or slide of each figure contained herein. Additional reproduction is strictly prohibited. For additional reproduction rights and usage information, go to www.forrester.com. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. To purchase reprints of this document, please email [email protected].

TECH CHOICESIncludes a Forrester Wave™

EXECUTIVE SUMMARYForrester evaluated leading customer service management software vendors across approximately 180 criteria and found that Entellium, Microsoft, Oracle Siebel CRM, Oracle Siebel CRM On Demand, salesforce.com, and SAP are Leaders for customer record-centric products; eGain, KANA Software, RightNow Technologies, and Talisma are Leaders for customer interaction-centric products; and Graham Technology, Onyx, and Pegasystems are Leaders for business process-centric products. Within the customer record-centric category, Infor, Maximizer Software, NetSuite, Oracle E-Business Suite, Oracle Peoplesoft Enterprise CRM, SageCRM, Sage SalesLogix, and SugarCRM are Strong Performers. Among interaction-centric products, ATG, FrontRange Solutions, KNOVA, and Numara Software are Strong Performers. Amdocs and Chordiant are Strong Performers within the process-centric category. Differing requirements within an individual company necessitate a careful evaluation of the specific capabilities and individual strengths of each product and probably require the use of more than one tool to solve the full range of customer service management needs.

TABLE OF CONTENTSCustomer Service Emerges As The Differentiator For Many Businesses

Customer Service Management Software Evaluation Overview

Record-Centric Products Trade Depth For Breadth

Record-Centric Vendor Profiles

Interaction-Centric Products Shine For Self-Service And eService

Interaction-Centric Vendor Profiles

Process-Centric Products Must Be Watched With Industry Expertise

Process-Centric Vendor Profiles

Supplemental Material

NOTES & RESOURCESForrester conducted product evaluations in Q3 2006 and interviewed 75 vendor and user companies, including Amdocs, ATG, Entellium, FrontRange Solutions, Graham Technology, Infor, KANA Software, KNOVA, Maximizer Software, Microsoft, NetSuite, Numara Software, Onyx Software, Oracle, Pegasystems, RightNow Technologies, Sage Software, salesforce.com, SAP, SugarCRM, and Talisma.

Related Research Documents“Trends 2007: eService Is Customer Service,” January, 18, 2007, Trends

“The Forrester Wave™: Enterprise CRM Suites, Q1 2007” February 5, 2007, Tech Choices

“The Forrester Wave™: Midmarket CRM Suites, Q1 2007” February 21, 2007, Tech Choices

May 24, 2007

The Forrester Wave™: Customer Service Management Software, Q2 2007Different Markets And Needs Point To Different Solutionsby Chip Gliedmanwith Ian Schuler, Sharyn Leaver, William Band, Liz Herbert, and Mary Ann Rogan

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Tech Choices | The Forrester Wave™: Customer Service Management Software, Q2 2007

© 2007, Forrester Research, Inc. Reproduction ProhibitedMay 24, 2007

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TARGET AUDIENCE

Business process and applications professional; eBusiness, channel, and product management professional; customer experience professional

CUSTOMER SERVICE EMERGES AS THE DIFFERENTIATOR FOR MANY BUSINESSES

Pressures from increased competition, smaller and narrower product categories, transparency of product and pricing information, and a general decline in customer loyalty are forcing both business-to-business (B2B) and business-to-consumer (B2C) organizations to maximize every customer interaction and evaluate every aspect of the service delivery model.1

The Customer Service Software Stack

In 2005 and 2006, Forrester Research evaluated products in an eService product category separate from other customer service management software. But it’s no longer sufficient to treat each interaction as a distinct transaction with associated rules and procedures. Instead, leading organizations are now treating all channels as parts of a larger continuum. The result: The distinction between customer service as an activity delivered through a call center and eService delivered through self-service, email, and chat is disappearing.2 Integration between channels, common underlying workflows and business rules, and seamless transitions between contact media will become the rules rather than the exceptions.3

Creating the software “stack” to support an increasingly complex customer service environment requires a careful evaluation of specific business needs, customer expectations, product architectures, and integration capabilities. Few organizations will be able to solve all their problems with a single vendor, so a clear picture of your required capabilities and desired “end point” should precede any vendor selection. Ideally, the final solution will include three key components (see Figure 1):

1. An outer interaction layer to efficiently and effectively manage interactions with underlying knowledge management, workflow, and business rules engines

2. A customer record repository to aggregate interaction records and manage more complex contracts and entitlements

3. Business process automation to streamline common cross-departmental tasks


© 2007, Forrester Research, Inc. Reproduction Prohibited May 24, 2007

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Figure 1 End-To-End Customer Service Requires Many Layers In A Solution

Offerings Cluster Around Customer Records, Interactions, And Business Processes

Given the potential scope, buying decisions for customer service management software must start with business and customer requirements (such as whether the interaction is an isolated transaction or a component of a deeper, more complex relationship), as well as a functional gap analysis against installed products. This type of analysis will likely point your company toward one of three product subsegments that will act as the core of the complete solution (see Figure 2):

· Record-centric. Complex customer requirements, such as those often found in B2B relationships, dictate that a robust customer repository reside at the center of any solution. These products, often evolving from the traditional CRM suite area, allow the aggregation of multiple individuals under one or more corporate umbrellas; complex entitlement and business rule management; simplified data-sharing with other CRM functions, such as marketing automation, sales automation, and business analytics; and the development of business process

Source: Forrester Research, Inc.40597

Financials Manufacturing Human resources

Business process/workflow engine

Self-service applications

Support ERMS Knowledgeportals Merchandising Orders

Web/Internet Email Wireless Chat IVR/ACD Phone Fax

Customer interaction channels

Captured customer information

Promotional/entitlement information

Front-office applications

Customer information model

Customer information repository



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workflows to span multiple departments within the corporation. While many customer record-centric products have tools for knowledge management, self-service, email response management, and other interaction channels, their strength lies in managing the overall customer relationship rather than an individual interaction.

· Interaction-centric. In high-volume, transaction-oriented relationships, such as those often encountered in B2C environments, a full CRM system may not be required or even cost-effective. Speed and accuracy of the interaction is of the utmost importance. Communications between modules will likely be “horizontal,” as customers exploit the various media options available, rather than “vertical,” dipping into a CRM system for direction. These products typically have greater self-service capabilities that can serve both pre- and post-sales needs.

· Process-centric. Some vertical markets, such as finance, insurance, healthcare, media, and utilities, have common processes executed repeatedly. Exposing these processes to the customer — who can initiate the required transaction through a self-service portal — and automating the back-end execution of them increases efficiency and customer satisfaction. While the business process-centric software may require information from external systems and an underlying customer record repository to store interaction history, the true value of this software lies in the workflow engines and automation.

Figure 2 Products Cluster Into Record-, Interaction-, Or Process-Centric Subsegments

CUSTOMER SERVICE MANAGEMENT SOFTWARE EVALUATION OVERVIEW

To assess the state of the customer service management software market and see how vendors stack up against each other, Forrester evaluated the strengths and weaknesses of the top vendor products — including CRM suite and customer service specialty software — across 180 criteria.

Source: Forrester Research, Inc.40597

Customer service segments Characteristics

Record-centric

Interaction-centric

Process-centric

• Typically B2B-oriented• Entitlement-based• Designed to manage complex business relationships• Service is driven from within a CRM solution

• Typically B2C-oriented• Problem-based• May or may not sit on top of CRM database for customer record

• Typically B2C-oriented• Repeatable processes• Most likely tied to CRM database for customer record



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Breadth Of Offering, Integration, And Architecture Drives Evaluation Criteria

For this report, vendors were placed into one of three subsegments — record-centric, interaction-centric, or process-centric — and evaluated against other products within their segment. After examining past research, user need assessments, and vendor and expert interviews, we developed a comprehensive set of customer services-specific evaluation criteria. While the evaluation criteria remained the same across the segments, the weighting of individual criteria was changed to better reflect the relative importance of individual criteria within the context of the specific segment and its likely uses.4 These criteria were also used to evaluate the customer service capabilities of enterprise and midmarket CRM suites.5

The 180 criteria comprising this evaluation are grouped into three high-level buckets (see Figure 3):

· Current offering. We looked at the strength of the vendors’ products across a wide spectrum of customer service functionality. In addition to evaluating support for specific platforms and functions, such as phone agent, knowledgebase, chat, and forums, we also evaluated how the products handled transitions between the platforms, how well they supported common underlying workflows, and their self-service capabilities. Additionally, we evaluated the suitability of the tools for different business models, such as B2B, B2C, and B2B2C. This bucket also included our evaluation of the products’ support for global enterprises, the product architecture, usability, and cost.

· Strategy. We looked at the strength of the vendors’ product strategy and vision and how they intend to support increasingly complex customer service requirements. We also used customer references to help determine the level of complexity for implementation and overall satisfaction with the vendors. Time to value, product strategy, and corporate strategy were evaluated in this section as well, specifically with regard to customer service needs.

· Market presence. We gauged the size of the vendors’ customer base and evaluated the depth of human and financial resources available to enhance their products and serve customers. For products with offerings in other CRM areas, we specifically looked at market penetration among customer service users.

Twenty-Two Vendors Evaluated: 26 Products Across Three Subsegments

The 22 vendors included in our assessment of customer service management software all shared a number of characteristics (see Figure 4). Each has:



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· A product (or products) that is on the minds of our clients. Each of the vendors and products evaluated was the subject of an inquiry, discussion, client evaluation, or other contact between Forrester clients and analysts during the past 12 months.

· A strong presence in the customer service market. Each of the evaluated vendors has hundreds, if not thousands, of customers and significant revenue from customer service licenses and users.

· Functionality that spans multiple functional areas for customer service. The products in the evaluation, with few exceptions, can handle the breadth of customer service management needs. Those products that are lacking in functionality in specific areas likely have a partnership strategy to cover the needs and are nevertheless included due to strong market presence or a high degree of client interest.

Figure 3 Evaluation Criteria

Source: Forrester Research, Inc.

How strong are the product’s customer service capabilities?

How strong are the product’s field service capabilities?

Is the product suitable for global, multilanguage deployments?

Does the product have specialized capabilities tailored to the business goals and processes for specific industries?

How strong are the product’s platform and development tools?

How user-friendly is the product?

What is the total cost of ownership of the product?

Customer service

Field service

Internationalization

Industry business process support

Architecture and platform

Usability

Cost

CURRENT OFFERING

How long does it typically take for the vendor’s product to be brought into production and available to frontline users?

How strong is the vendor’s product strategy and vision?

How strong are the vendor’s corporate strategy and vision?

Time to value

Product strategy

Corporate strategy

STRATEGY

How large is the vendor’s customer base for this market?

What is the depth of human resources available to enhance the product and serve customers?

How strong are the vendor’s financial resources to pursue its strategy?

Customer base

Employees

Financial performance

MARKET PRESENCE



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Figure 4 Evaluated Vendors: Product Information And Selection Criteria


Vendor Product evaluatedProduct version

evaluatedVersionrelease date

Oracle

RightNow Technologies

Salesforce.com

Microsoft Dynamics CRM

Amdocs

Microsoft

Infor

Onyx

Oracle

3.0 December 2005

Onyx CRM

FootPrints

6.0 September 2006

RightNow 7.5 September 2006

2005

Oracle

Oracle

SAP

Pegasystems

Siebel CRM

E-Business Suite CRM

PeopleSoft Enterprise CRM

Siebel CRM On Demand

Infor CRM Epiphany 7.0

7.0

June 2006

11i10

9.0

7.8

August 2006

June 2005

Amdocs CRM

ATG E-Service

6

2006.3 June 2006

September 2004

12 July 2006

Customer Process Manager 5.1 August 2006

Salesforce Salesforce.com’s Summer ‘06 Summer 2006

mySAP CRM mySAP CRM 2005 October 2005

September 2006

NetSuite

Maximizer Software

FrontRange Solutions 7.03Goldmine Corporate Edition/HEAT April 2006

Maximizer Enterprise 9.5 August 2006

11.0

7.5

NetSuite April 2006

Sage Software

Graham Technology

SageCRM

ciboodle

5.8 February 2006

2.4.0 October 2006

KANA Software KANA Suite 9.0 October 2006

Talisma Talisma CIM 7.0 March 2006

eGain

ATG

KNOVA KNOVA

Numara Software

eGain Service 7.6 October 2006

SugarCRM Sugar Enterprise 4.5 August 2006

Entellium Entellium eCustomerCenter Entellium usability release November 2006



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Figure 4 Evaluated Vendors: Product Information And Selection Criteria (Cont.)


Vendor selection criteria

Actively market a customer service solution. Companies with a suite of CRM solutions needed to call out the suite’s customer service capabilities in their marketing or offer the customer service tools as a separate module. Those companies with dedicated customer service tools needed to demonstrate a presence in the market by generating more than $10 million in license revenue for the customer service offering.

Have a broad customer service offering. The products included in the evaluation, whether part of a suite or not, needed to have the breadth and depth of functionality to span most of an organizations’ customer service needs. These products are designed to be the core customer service tool, although a specific organization may chose to complement or supplement specific functionality with other products or services.

Be on the mind of Forrester clients. The vendors included in the assessment were the subject of client inquiries, product assessments, or consulting engagements. Our clients told us who we needed to evaluate.

Forrester included 10 vendors in the assessment of record-centric customer service management software : Entellium, Infor, Maximizer Software, Microsoft, NetSuite, Oracle (four products), Sage (two products), salesforce.com, SAP, and Sugar. 6 Each of these vendors has:

· Independently marketed customer service functionality. All of the vendors in this category tout their customer service capabilities when marketing their suites. Users of these products will need to make a conscious decision to implement the customer service capabilities with a specific purchase of the service management tools. As many of these products are full CRM suites, a decision to implement the customer service module will likely require trading specific best-of-breed functionality for ease of integration between CRM modules.

· A tool set in which the customer record is at the heart of all processes. This central customer repository allows the products in this segment to support customer service as well as other customer relationship processes.

Forrester included eight vendors in the assessment of interaction-centric customer service management software: ATG, eGain, FrontRange Solutions, KANA Software, KNOVA, Numara Software, RightNow Technologies, and Talisma. Not included in the assessment were key point solutions, such as Jive Software and Jelsoft Enterprises for forums, LivePerson and other chat software vendors, Varolii (formerly PAR3) and other outbound customer communications, or InQuira, Kaidara Software, and other knowledge management vendors. Each of the vendors included in our assessment has:

· A focus on the interaction. The tools in this subsegment are designed to work without a full CRM system in place or to sit on top of such a system. Efficiently and effectively managing the interaction is the key selling point for these vendors.



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· Breadth across the “traditional” eService market space. Most of the included products in this category cut their teeth managing self-service, email, chat, and other electronic communications, and generally have solutions spanning the multiple electronic communications channels now available to consumers. Phone agent support is a recent addition for many of these tools, although it is rapidly developing as a key necessity.

Forrester included five vendors in the assessment of business process-centric software: Amdocs, Chordiant, Graham Technology, Onyx, and Pegasystems. Information for Chordiant was incomplete at the time of publication; therefore, a detailed evaluation for this vendor is not provided. Each of these vendors has:

· Strong experience automating business processes and workflows. The workflow engine is at the heart of these tools. In many cases, this engine resides between the interaction- and record-centric products, getting and feeding information from both, while orchestrating the flow of information and process steps across the organization.

· Strong business presence in specific industries. In addition to technology, industry experience is a key criterion for these vendors. Each has deep experience in one or more vertical markets and can offer solutions based upon this experience to future customers.

RECORD-CENTRIC PRODUCTS TRADE DEPTH FOR BREADTH

The evaluation of record-centric products uncovered a market that appears on the surface to have a high degree of parity. However, digging a bit deeper into the products reveals a market in which the leading products have a few strengths as well as some gaping holes in functionality. Fortunately, as Leaders, they can attract key partners to round out their offerings and meet customer needs (see Figure 5):

· Entellium, Microsoft, Siebel CRM, Siebel CRM On Demand, SAP, and salesforce.com lead. The Oracle Siebel CRM product leads with broad and deep functionality, much of which is available to users of the CRM On Demand offering. SAP has broadened its customer service functionality and remains a solid choice for organizations wanting to tie customer service to other business processes. Entellium, Microsoft, and salesforce.com all offer sufficient technical capabilities to handle simpler customer service requirements but package these features in simple, low-cost solutions that are quick to implement and have relatively high user satisfaction.

· Infor, Maximizer, NetSuite, Oracle EBS, Oracle PeopleSoft, Sage, and Sugar offer competitive options. Recent improvements to Oracle PeopleSoft Enterprise CRM and Oracle E-Business Suite (EBS) have improved the customer service functionality in both. NetSuite and Maximizer score high grades for usability, cost, and time to value. Infor, Sage, and Sugar each have attractive features that, given the right set of needs, could be a good match.



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Figure 5 Forrester Wave™: Record-Centric CSM Software, Q2 ‘07


Go online to download

the Forrester Wave tool

for more detailed product

evaluations, feature

comparisons, and

customizable rankings.

RiskyBets Contenders Leaders

StrongPerformers

StrategyWeak Strong

Currentoffering

Weak

Strong

Market presence

Oracle Siebel CRM

Oracle Siebel CRM On DemandSAP

Sugar CRM

salesforce.com EntelliumInfor

Oracle E-Business Suite

Oracle PeopleSoft Enterprise CRM

MaximizerSageCRM

Sage SalesLogix Microsoft Dynamics CRM

NetSuite



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Figure 5 Forrester Wave™: Record-Centric CSM Software, Q2 ‘07 (Cont.)


CURRENT OFFERING Customer service Field service Internationalization Industry business process support Architecture and platform Usability Cost

STRATEGY Time to value Product strategy Corporate strategy

MARKET PRESENCE Customer base Employees Financial performance

Forr

este

r’sW

eigh

ting

50%40%

0%10%10%20%10%10%

50%30%30%40%

0%60%20%20%

Ente

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3.412.860.413.683.503.214.045.00

4.145.004.253.40

2.202.002.003.00

Info

r

3.202.693.754.014.003.403.373.00

2.783.002.253.00

2.952.503.254.00

Max

imiz

er

2.872.281.693.333.502.353.884.15

3.665.003.003.15

3.303.502.004.00

Mic

roso

ft D

ynam

ics

CRM

3.182.602.795.002.503.234.073.40

4.605.005.004.00

2.752.501.255.00

Net

Suite

3.162.272.164.673.503.303.434.30

3.755.003.503.00

2.402.003.003.00

Ora

cle

E-Bu

sine

ss S

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3.583.584.485.003.003.753.552.40

2.841.003.253.90

2.702.003.504.00

Ora

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Peop

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ft E

nter

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RM

3.893.913.305.004.004.003.852.40

3.062.003.003.90

3.002.503.504.00

All scores are based on a scale of 0 (weak) to 5 (strong).



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Figure 5 Forrester Wave™: Record-Centric CSM Software, Q2 ‘07 (Cont.)


CURRENT OFFERING Customer service Field service Internationalization Industry business process support Architecture and platform Usability Cost

STRATEGY Time to value Product strategy Corporate strategy

MARKET PRESENCE Customer base Employees Financial performance

Forr

este

r’sW

eigh

ting

50%40%

0%10%10%20%10%10%

50%30%30%40%

0%60%20%20%

Ora

cle

Sieb

el C

RM

3.973.954.245.004.004.424.102.00

3.651.004.505.00

4.504.505.004.00

Ora

cle

Sieb

el C

RM O

n D

eman

d

3.502.840.324.673.503.364.134.60

3.684.004.253.00

2.401.005.004.00

Sage

CRM

2.781.960.764.343.502.743.533.10

2.973.003.502.55

2.953.002.753.00

Sage

Sae

sLog

ix

2.962.141.364.673.002.934.053.40

2.833.003.502.20

2.953.002.753.00

sale

sfor

ce.c

om

3.432.831.654.673.003.633.824.20

4.024.004.253.85

3.503.503.004.00

SAP

3.683.513.835.004.004.013.222.50

3.571.004.504.80

4.504.505.004.00

Suga

rCRM

2.711.710.274.343.003.113.243.45

2.963.004.251.95

1.701.501.003.00


RECORD-CENTRIC VENDOR PROFILES

Leaders

· Entellium. Entellium’s eCustomerCenter provides a low-cost hosted application with good usability and customization capabilities that should meet most midmarket customer service needs. The agent activity center consolidates all of the customer service functions in a cleaner package than is typically encountered. A strong workflow engine, flexible routing and queuing capabilities, and an escalation and notification engine create a solid customer service infrastructure that can be modified to match a firm’s unique customer requirements.7

· Microsoft. Although not as functionally rich in core customer service capabilities, Microsoft compensates through architecture, integration, usability, and business strategy. The product is strongest in the support of agents responding to phone and email requests, with these and other



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functions sitting on top of a solid workflow engine. In the future, look for Microsoft to exploit its Customer Care Framework (CCF), a modular XML Web services architecture for rapid development and deployment of contact center solutions.8

· Oracle’s Siebel CRM. Oracle is intent on sustaining the Siebel leadership position in the CRM market. The Siebel CRM customer service offering is especially strong in B2B customer service environments, where the full relationship management capabilities can be exploited. There is good breadth of functionality across the system, including interaction management, field service, and workflow, with all customer interactions being guided by underlying entitlements and corporate relationships. The product can handle complex organizational structures, supports 15 languages, and integrates with most popular telephone systems. It also boasts good industry vertical adaptations. However, application complexity, high cost, a clunky user interface, and lengthy implementation schedules are drawbacks. The product is best suited for buyers that value advanced functionality tailored for specific industries and plan to use the other components of the Siebel product line to manage sales, marketing, and other CRM functions.9

· Oracle’s Siebel CRM On Demand. Oracle’s Siebel CRM On Demand offers many of the same benefits as other software-as-a-service (SaaS) vendors — faster time to value, good usability, and lower upfront costs. The product provides good functionality for phone agents, and the 2006 acquisition of vendor Telephony@Work broadens capabilities in this area. As with many of the record-centric customer service management products, its strength lies in the ability of customer service agents to act in relation to aspects of the customer relationship. Oracle also offers five versions of Siebel CRM On Demand tailored for automotive, high-tech, insurance, life sciences, or wealth management.10

· Salesforce.com. The salesforce.com platform, although not as strong as some other offerings, is complemented by a wide array of third-party applications that are pre-integrated and available almost immediately through AppExchange. As a multivendor solution, the salesforce.com (plus partners) offering is more robust than many single vendor solutions and better integrated than a typical “integrate it yourself ” installation.11

· SAP. SAP’s strengths lie in its ability to tie customer service to other back-office processes, including manufacturing, distribution, finance, and marketing. The product is designed to handle high-volume, global requirements. As fits its heritage, the underlying workflow engine can be used to automate repetitive tasks. Although the company is broadening the customer service product with additional self-service capabilities, organizations with a high proportion of electronic or self-service interactions may want to consider integrating third-party products through the NetWeaver architecture. The product line also contains a strong field service module.12



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Strong Performers

· Infor. The acquisitions of Epiphany and MAPICS provided the foundation for the customer service and field service capabilities offered by Infor. The products provide sound support for most customer service functions, with particular strengths in the ability to integrate cross-sell and up-sell into the service process. Likewise, the field service capabilities are relatively strong and would be a short-list candidate for existing Infor customers, or those in the dozen or so vertical markets in which the company has deeper offerings. Self-service, knowledgebase, and other “eService” channels may require complementary products for full coverage.13

· Maximizer. Maximizer Software provides a low-cost and easy-to-implement suite of tools for small to midmarket organizations with tight integration into Microsoft applications. The applications share a similar interface to reduce training and confusion. The product is strongest in its support for phone and email-based customer service, but the .NET architecture makes integration with other similarly architected products simpler. Unlike most of the products targeted at the midmarket, Maximizer can be installed on-premise.14

· NetSuite. NetSuite CRM+ customer service modules are tightly integrated with the enterprise resource planning (ERP) and eCommerce modules, allowing customer service to take full advantage of knowledge of customer orders, interaction history, and other processes. The products are delivered in an SaaS model but can be customized to match the look and feel of a company’s Web site. The NetAnswers knowledgebase module can be deployed for self-service applications.15

· Oracle E-Business Suite. Oracle’s E-Business Suite CRM has a full-featured customer service application, especially appropriate for companies using Oracle’s other applications for CRM and ERP. The product inherits the global capabilities of the full E-Business Suite product line and can integrate with other Oracle products through the Fusion architecture. The product’s field service module provides advanced functionality to mobile technicians, including parts inventory, returns, tracking, invoicing, and other functions.16

· Oracle’s PeopleSoft Enterprise CRM. Although not the flagship of the Oracle customer service product line, the last upgrade to the Oracle PeopleSoft line added many of the features companies come to expect from customer service software, including fairly sophisticated self-service, chat, email, knowledge management, and customer service agent tools. PeopleSoft customers will benefit from Oracle’s renewed support of the product line. Companies with investments in other PeopleSoft CRM or back-office applications will find straightforward integration with the customer service software.17

· SageCRM. SageCRM provides basic customer service capabilities across phone, email, and self-service channels. For organizations with more sales than service needs, Sage Software can provide a basic infrastructure to record, route, and resolve most customer service interactions. Sage Software makes the product available as both on-premise and SaaS. The two products, SageCRM and SageCRM.com, are identical in functionality.18



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· Sage SalesLogix. Sage’s SalesLogix customer service offerings are predominantly targeted to meet the needs of phone- and email-based customer service agents. Although the company does not offer a specific field service application, the mobile capabilities of the SalesLogix product line, with full functionality available to disconnected users, may make it a good choice for a highly mobile field sales organization to help organize and manage customer service issues among its customer base.19

· SugarCRM. SugarCRM provides an open source foundation that firms can extend and customize to fit their business needs. The customer support module of the Sugar CRM suite provides basic case management, bug tracking, and problem escalations. Sugar provides a free edition of its product, which is targeted toward deployments of 10 users or less, but larger deployments will need to pay for either Professional Edition or Enterprise Edition.20

INTERACTION-CENTRIC PRODUCTS SHINE FOR SELF-SERVICE AND eSERVICE

Although phone calls continue to receive the bulk of customer service headlines (and spending), customers are increasingly attracted to alternate channels. While Web and email are common in the business world, the consumer world is catching up, with 28% of US homes having broadband access (the percentage is even higher in Europe, with the Netherlands leading with 51% of households being broadband-enabled).21 Rather than picking a preferred channel, more consumers are becoming

“channel agnostic,” interacting with companies via every channel available and expecting the same level of service from every channel. IT departments are responding by embracing common channel management, a single platform for all inbound customer interactions, and moving away from “channel islands” that do not share (or leverage) customer data or interactions across channels (see Figure 6).22

· eGain, KANA, RightNow, and Talisma lead the pack. eGain and KANA are notable for their breadth of interaction-based offerings, with an underlying workflow engine that helps improve cross-channel processes. RightNow, with an integrated suite of service tools, manages the customer interaction requirements for a large number of well-known consumer brands. Talisma makes it into the leader category based upon the strength of its broad range of individual channel and knowledge management capabilities.

· ATG, FrontRange, KNOVA, and Numara offer competitive options. KNOVA, founded out of the merger of ServiceWare and Kanisa, retains strong knowledge management and analytics capabilities; ATG brings the combination of eCommerce and customer service; Numara FootPrints is simple to configure and use; and FrontRange HEAT is used by hundreds of companies to manage predominantly phone-based interactions. Generally speaking, it was questions about corporate or product strategy that kept these products from reaching the Leader category — for example, KNOVA is being acquired by M2M Holdings, where it will join the Onyx product line; ATG appears to be concentrating efforts on eCommerce, potentially decreasing the commitment to a pure customer service platform; and Numara FootPrints is predominantly marketed as an internal IT service management solution, as is FrontRange HEAT.



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Figure 6 Forrester Wave™: Interaction-Centric CSM Software, Q2 ‘07






comparisons, and



StrongPerformers

StrategyWeak Strong

Currentoffering

Weak

Strong

Market presence

ATGKNOVA

FrontRange

TalismaNumara Software

eGain

RightNow

KANA Software



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Figure 6 Forrester Wave™: Interaction-Centric CSM Software, Q2 ‘07 (Cont.)

INTERACTION-CENTRIC VENDOR PROFILES

Leaders

· eGain. eGain provides a complete suite of customer service and contact center software that sits on top of a common architecture and infrastructure. All of the components share a common set of Web-based user consoles, knowledgebase, workflows, case records, and analytics. Regardless of the mode of communication between an organization and its customers, all communications are managed against the same rules, escalations, and information sources to ensure consistency. Companies managing more complex relationships with complicated entitlement structures may want to complement the interaction capabilities of eGain with a full customer record system, but many B2C organizations may find that a full CRM system is not required.23


ATG

eGai

n

Fron

tRan

ge S

olut

ions

KAN

A S

oftw

are

KNO

VA

Num

ara

Soft

war

e

CURRENT OFFERING Customer service Internationalization Industry business process support Architecture and platform Usability Cost STRATEGY Time to value Product strategy Corporate strategy MARKET PRESENCE Customer base Employees Financial performance

Forr

este

r’sW

eigh

ting

50%40%

5%5%

30%10%10%

50%30%30%40%

0%60%20%20%

3.443.274.343.503.653.143.34

3.153.003.503.00

3.453.503.253.50

4.134.184.673.754.134.073.89

4.294.004.504.35

3.604.003.003.00

2.712.404.343.252.323.533.17

2.984.003.002.20

3.003.003.003.00

4.153.995.003.754.064.534.45

4.004.004.253.80

3.654.002.753.50

3.662.925.004.004.054.373.89

3.293.003.503.35

2.903.502.501.50

3.283.135.003.002.674.373.93

2.834.002.752.00

2.953.001.754.00

Righ

tNow

Tec

hnol

ogie

s

Talis

ma

3.763.835.004.003.293.094.83

4.125.004.253.35

4.104.004.004.50

3.473.454.344.003.143.154.17

3.904.004.253.55

3.453.503.753.00




18

· KANA. As a best-of-breed eService provider for more than a decade, KANA Software continues to evolve the breadth and depth of its suite. Originally an email response management vendor, KANA has evolved into a robust, capable customer interaction solution provider. The product is especially strong in Web collaboration, email management, self-service, and knowledge management. KANA appears to have righted the corporate ship as well, as it is now current with its required regulatory postings, is reporting revenues and expenses to the market regularly, and posted a 25% increase in revenue between 2005 and 2006. Companies interested in a solid set of interaction tools can now focus on evaluating the products against their needs, without the overhanging uncertainty about the corporation itself.24

· RightNow. With a strong suite of tightly integrated tools spanning contact channels, RightNow Technologies presents a robust offering for customer service, especially for consumer-facing organizations. Phone, email, chat, and forum activity are all integrated into the customer records, and information presented during any interaction is available when transitioning to another medium. Cross-sell and up-sell opportunities are addressed within the tools, helping to maximize the value of each interaction.25

· Talisma. Talisma tracks all phone, email, chat, knowledgebase, and email interactions for display in the unified customer history. Service-level agreements (SLAs) and entitlement are supported. While interaction records are tracked, Talisma’s CIM module does not contain case management. CIM implementations typically integrate to a third-party CRM system, with routing and workflow managed from within the CRM system. Talisma is particularly strong in education, with about half of its customers being universities and other similar institutions.26

Strong Performers

· ATG. ATG’s products are optimized for the support of online commerce and will help drive a customer to close an online transaction. ATG’s acquisition of Primus, one of the pioneers in case-based reasoning, gave the company a solid platform for knowledge management and self-service. Support for phone-based customer service organizations is more limited, although the acquisition of eStara in 2006 added click-to-talk and click-to-callback functionality.27

· FrontRange. FrontRange HEAT, initially deployed in midsize enterprises as an internal customer support product, has found an additional home as an external customer support tool, with approximately 40% of HEAT customers using it in this way. The product has good support for phone-based agents but is more limited for self-service, email management, chat, and other interaction media. The HEAT Plus Knowledge module adds basic knowledge management capabilities.28



19

· KNOVA. KNOVA’s strength in knowledge management reflects its ServiceWare heritage. The product delivers the ability to fine-tune the customer experience with micro sites based on external customer metadata. KNOVA is especially appropriate for some of the more technical industries in which its strength in guided problem resolution helps address complex service resolution issues. KNOVA is also one of the only vendors with integrated forum capabilities —which adds to its appeal as the social aspects of the customer experience rise in value.29

· Numara. Numara FootPrints, acquired from UniPress Software, was originally developed as an internal customer service solution. However, the ease of deployment and customization has led about a third of its customers to deploy it for external customer service. The product’s strengths lie in its very solid workflow and follow-up capability, including a powerful escalation system, SLAs, task management, and change management for approvals.30

PROCESS-CENTRIC PRODUCTS MUST BE MATCHED WITH INDUSTRY EXPERTISE

Business process-centric platforms allow development, deployment, and management of applications that automate decisions using rules-processing algorithms and tools. The result can be speedier and more flexible decision-making and information processing, compliance with corporate policies, and application change at a low cost. However, specific industry process experience varies by company, emphasizing the need to check customer references with similar requirements (see Figure 7).

· Graham Technology, Onyx, and Pegasystems, lead the pack. Pegasystems, one of the first business process automation vendors, appears to be returning to its roots as a customer service automation platform, with strong depth in financial services, insurance, healthcare, and media. Graham Technology, a relatively new player, has advanced workflow capabilities coupled with deep professional services expertise that has been applied in utilities and finance, among other industries. Onyx combines the features of many of the record-centric tools, adding a strong process engine for service automation.

· Amdocs offers competitive options. As a key provider of billing and software for telecom and media companies, Amdocs is often the source of truth about an individual customer. As these industries are notable for highly repeatable business processes, Amdocs, using the customer service technology it acquired from Clarify, has a solid position in these industries for services such as provisioning, billing, mediation, and settlement.



20

Figure 7 Forrester Wave™: Process-Centric CSM Software, Q2 ‘07






comparisons, and



StrongPerformers

StrategyWeak Strong

Currentoffering

Weak

Strong

Market presence

OnyxPegasystems

GrahamTechnology

Amdocs

Full vendor participation

Incomplete vendor participation

Chordiant



21

Figure 7 Forrester Wave™: Process-Centric CSM Software, Q2 ‘07 (Cont.)


CURRENT OFFERING Customer service Field service Internationalization Industry business process support Architecture and platform Usability Cost STRATEGY Time to value Product strategy Corporate strategy MARKET PRESENCE Customer base Employees Financial performance

Am

docs

2.862.433.553.683.503.242.922.25

3.042.003.253.65

4.605.004.004.00

Forr

este

r’sW

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ting

50%40%

0%15%

5%20%10%10%

50%30%30%40%

0%60%20%20%

Gra

ham

Tech

nolo

gy

3.703.650.982.693.754.673.883.25

3.904.004.003.75

1.751.001.254.50

Ony

x

3.713.561.154.014.003.863.523.65

3.704.003.253.80

2.752.502.254.00

Pega

syst

ems

3.763.821.593.683.004.633.023.00

4.004.004.004.00

2.452.002.254.00


PROCESS-CENTRIC VENDOR PROFILES

Leaders

· Graham Technology. A relatively recent entrant to the process-centric customer service tool market, Graham Technology offers a flexible, process-oriented solution that combines a full customer service application and a robust workflow engine to model advanced business processes. The company has experience in the utility, telecom, finance, and retail markets. It considers its professional services organization, with deep experience in best practices for process automation and industry requirements, to be a key element in its overall solution.31

· Onyx. Onyx is a leading business process modeling tool for customer service applications, especially in organizations standardized on the Microsoft application architecture. The company was taken private by the better-capitalized M2M Holdings in August 2006 — which will help allay buyer concerns about the long-term viability of the product and company. Onyx provides strong call center tools, with robust knowledge management capabilities, CTI integration, scripting, workflow, and analytics.32



22

· Pegasystems. Pegasystems, one of the early entrants in the business process management (BPM) tool market, has a leading offering for organizations looking to automate customer service processes.33 Pegasystems’ workflow and business process-driven approach is especially powerful for large organizations with repeatable service events. The products are especially strong in supporting financial services, insurance, healthcare, and other process-oriented industries. The company complements the robust BPM engine with predefined applications for many industries to speed implementation and process development. Business process elements are developed and maintained independently, greatly improving reuse and maintainability.34

Strong Performers

· Amdocs. The Amdocs customer service solution is built upon the foundation established by industry pioneer Clarify. Amdocs’ tools for contact centers, phone agents, and field service technicians, especially in the company’s core competency of telecom and media, are as good as any on the market. However, as a full customer service suite, the products are lacking in multichannel and self-service support tools, although third-party solutions can be integrated. For industries where the trend is toward direct customer initiation and back-office automation of repeated processes, Amdocs is a Strong Performer.35

This evaluation of the customer service management software market is intended to be a starting point only. Readers are encouraged to view detailed product evaluations and adapt the criteria weightings to fit their individual needs through the Forrester Wave Excel-based vendor comparison tool.

SUPPLEMENTAL MATERIAL

Online Resource

The online version of Figure 4, Figure 5, and Figure 6 is an Excel-based vendor comparison tool that provides detailed product evaluations and customizable rankings.

Data Sources Used In This Forrester Wave

To assess the strengths and weaknesses of each solution, Forrester used a combination of four data sources:

· Vendor surveys. Forrester surveyed vendors on their capabilities as they relate to the evaluation criteria. Once we analyzed the completed vendor surveys, we conducted vendor calls where necessary to gather details of vendor qualifications.

· Product demos. We asked vendors to conduct demonstrations of their product’s functionality. We used findings from these product demos to validate details of each vendor’s product capabilities.



23

· Customer reference calls. To validate product and vendor qualifications, Forrester also conducted reference calls with a minimum of three of each vendor’s current customers.

· History of past customer interactions. Forrester also gathered information on the vendors and products under evaluation during the interactions we have with our own customers and others during inquiries, conferences, events, and other sources. Such interactions can balance the vendor-supplied customer references and help to create a broader picture of a product’s usability and satisfaction.

The Forrester Wave Methodology

We conduct primary research to develop a list of vendors that meet our criteria to be evaluated in this market. From that initial pool of vendors, we then narrow our final list. We choose these vendors based on: 1) product fit; 2) customer success; and 3) Forrester client demand. We eliminate vendors that have limited customer references and products that don’t fit the scope of our evaluation.

After examining past research, user need assessments, and vendor and expert interviews, we develop the initial evaluation criteria. To evaluate the vendors and their products against our set of criteria, we gather details of product qualifications through a combination of lab evaluations, questionnaires, demos, and/or discussions with client references. We send evaluations to the vendors for their review, and we adjust the evaluations to provide the most accurate view of vendor offerings and strategies.

We set default weightings to reflect our analysis of the needs of large user companies — and/or other scenarios as outlined in the Forrester Wave document — and then score the vendors based on a clearly defined scale. These default weightings are intended only as a starting point, and readers are encouraged to adapt the weightings to fit their individual needs through the Excel-based tool. The final scores generate the graphical depiction of the market based on current offering, strategy, and market presence. Forrester intends to update vendor evaluations regularly as product capabilities and vendor strategies evolve.

ENDNOTES1 Price is more important than brand names for 49.7% of respondents. See the November 10, 2006, Trends

“Consumers Increasingly Focus On Price.”

2 The distinction between customer service as an activity delivered through a call center and eService, delivered through self-service, email, and chat, is disappearing. Integration between channels, common underlying workflows and business rules, and seamless transitions between contact media will become the rules rather than the exceptions. See the January 18, 2007, Trends “Trends 2007: eService Is Customer Service.”






24

3 The integration of multiple channels into a seamless experience varies by industry and corporate maturity. Leading retailers and financial services institutions are among the early adopters of such a platform. See the February 7, 2007, Trends “Trends 2007: Multichannel Retail” and the August 30, 2006, Trends “The Multichannel Organization.”

4 We included our evaluation of the field service capabilities of the record-centric and business process-centric software, but we set the weighting of this category to zero in the default model, as only a subset of organizations have field service requirements.

5 Forrester evaluated 13 products targeted to large enterprises and 15 products targeted to midmarket companies against approximately 490 criteria spanning sales, marketing, service, field service, partner channel management, analytics, and other areas. See the February 5, 2007, Tech Choices “The Forrester Wave™: Enterprise CRM Suites, Q1 2007” and the February 21, 2007, Tech Choices “The Forrester Wave™: Midmarket CRM Suites, Q1 2007.”

6 We included the customer service components of Oracle Siebel CRM, Oracle Siebel CRM On Demand, Oracle PeopleSoft, and Oracle E-Business Suite in our assessment. The company also offers Oracle Siebel Professional Edition, targeted to the midmarket. However, as this product is functionally equivalent to the Oracle Siebel CRM solution in every way other than packaging and licensing, we did not include it as a separately evaluated product.

7 View the vendor summary for more detailed analysis on how Entellium fared in this evaluation. See the May 24, 2007, Tech Choices “Entellium Leads In Record-Centric Customer Service Management Software.”

8 View the vendor summary for more detailed analysis on how Microsoft fared in this evaluation. See the May 24, 2007, Tech Choices “Microsoft Leads In Record-Centric Customer Service Management Software.”

9 View the vendor summary for more detailed analysis on how Oracle Siebel CRM fared in this evaluation. See the May 24, 2007, Tech Choices “Oracle Siebel CRM Leads In Record-Centric Customer Service Management Software.”

10 View the vendor summary for more detailed analysis on how Oracle Siebel CRM On Demand fared in this evaluation. See the May 24, 2007, Tech Choices “Oracle Siebel CRM On Demand Is A Leader In Record-Centric Customer Service Management Software.”

11 View the vendor summary for more detailed analysis on how salesforce.com fared in this evaluation. See the May 24, 2007, Tech Choices “Salesforce.com Leads In Record-Centric Customer Service Management Software.”

12 View the vendor summary for more detailed analysis on how SAP fared in this evaluation. See the May 24, 2007, Tech Choices “SAP Leads In Record-Centric Customer Service Management Software.”

13 View the vendor summary for more detailed analysis on how Infor fared in this evaluation. See the May 24, 2007, Tech Choices “Infor Is A Strong Performer In Record-Centric Customer Service Management Software.”





















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14 View the vendor summary for more detailed analysis on how Maximizer fared in this evaluation. See the May 24, 2007, Tech Choices “Maximizer Is A Strong Performer In Record-Centric Customer Service Management Software.”

15 View the vendor summary for more detailed analysis on how NetSuite fared in this evaluation. See the May 24, 2007, Tech Choices “NetSuite Is A Strong Performer In Record-Centric Customer Service Management Software.”

16 View the vendor summary for more detailed analysis on how Oracle’s E-Business Suite fared in this evaluation. See the May 24, 2007, Tech Choices “Oracle’s E-Business Suite Is A Strong Performer In Record-Centric Customer Service Management Software.”

17 View the vendor summary for more detailed analysis on how Oracle’s PeopleSoft fared in this evaluation. See the May 24, 2007, Tech Choices “Oracle’s PeopleSoft Is A Strong Performer In Record-Centric Customer Service Management Software.”

18 View the vendor summary for more detailed analysis on how SageCRM fared in this evaluation. See the May 24, 2007, Tech Choices “SageCRM Is A Strong Performer In Record-Centric Customer Service Management Software.”

19 View the vendor summary for more detailed analysis on how Sage SalesLogix fared in this evaluation. See the May 24, 2007, Tech Choices “Sage SalesLogix Is A Strong Performer In Record-Centric Customer Service Management Software.”

20 View the vendor summary for more detailed analysis on how SugarCRM fared in this evaluation. See the May 24, 2007, Tech Choices “SugarCRM Is A Strong Performer In Record-Centric Customer Service Management Software.”

21 Source: Forrester’s Consumer Technographics® 2005 North American Benchmark Study of more than 60,000 households and Forrester’s Consumer Technographics Q2 2005 European Study of more than 25,000 households.

22 IT organizations are beginning to embrace an architectural and organizational focus point for multichannel projects, thus supporting IT and architecture governance. See the December 8, 2005, Best Practices “The Battle For Multichannel Ownership.”

23 View the vendor summary for more detailed analysis on how eGain fared in this evaluation. See the May 24, 2007, Tech Choices “eGain Leads In Interaction-Centric Customer Service Management Software.”

24 View the vendor summary for more detailed analysis on how KANA fared in this evaluation. See the May 24, 2007, Tech Choices “KANA Leads In Interaction-Centric Customer Service Management Software.”

25 View the vendor summary for more detailed analysis on how RightNow fared in this evaluation. See the May 24, 2007, Tech Choices “RightNow Leads In Interaction-Centric Customer Service Management Software.”

26 View the vendor summary for more detailed analysis on how Talisma fared in this evaluation. See the May 24, 2007, Tech Choices “Talisma Leads In Interaction-Centric Customer Service Management Software.”
























26

27 View the vendor summary for more detailed analysis on how ATG fared in this evaluation. See the May 24, 2007, Tech Choices “ATG Is A Strong Performer In Interaction-Centric Customer Service Management Software.”

28 View the vendor summary for more detailed analysis on how FrontRange fared in this evaluation. See the May 24, 2007, Tech Choices “FrontRange Is A Strong Performer In Interaction-Centric Customer Service Management Software.”

29 View the vendor summary for more detailed analysis on how KNOVA fared in this evaluation. See the May 24, 2007, Tech Choices “KNOVA Is A Strong Performer In Interaction-Centric Customer Service Management Software.”

30 View the vendor summary for more detailed analysis on how Numara fared in this evaluation. See the May 24, 2007, Tech Choices “Numara Software Is A Strong Performer In Interaction-Centric Customer Service Management Software.”

31 View the vendor summary for more detailed analysis on how Graham Technology fared in this evaluation. See the May 24, 2007, Tech Choices “Graham Technology Leads In Process-Centric Customer Service Management Software.”

32 View the vendor summary for more detailed analysis on how Onyx fared in this evaluation. See the May 24, 2007, Tech Choices “Onyx Leads In Process-Centric Customer Service Management Software.”

33 Human-centric processes require people to get work done by relying on and interacting extensively with business applications, databases, collaboration tools, and documents. Examples of human-centric processes include claims processing, loan approvals, accounts payable, and customer service. See the February 24, 2006, Tech Choices “The Forrester Wave™: Human-Centric Business Process Management Suites, Q1 2006.”

34 View the vendor summary for more detailed analysis on how Pegasystems fared in this evaluation. See the May 24, 2007, Tech Choices “Pegasystems Leads In Process-Centric Customer Service Management.”

35 View the vendor summary for more detailed analysis on how Amdocs fared in this evaluation. See the May 24, 2007, Tech Choices “Amdocs Is A Strong Performer In Process-Centric Customer Service Management.”















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