Cutting contact center costs is an ongoing obstacle, with managers trying to streamline operations while retaining employees. The contact center market has slowed some with the recession (as most sectors under the CRM umbrella have), but there has been a bit growth in the US, Canada, Europe, and Australia, where there’s been increasing offshoring of contact centers. That information comes from research firm Datamonitor, where analyst Peter Ryan notes that South Africa, Egypt, Kenya, and Malaysia have had considerable success as offshore locations. But there is a general overhaul afoot in the contact center sector.

For one, the landscape of contact centers is changing, as customer segmentation—that is, separating them into meaningful and cost-efficient categories—becomes increasingly important. From a contact-center software standpoint, it’s interesting to note that while the creation of customer subdivisions is gaining popularity, it is recommended that companies employ one unified contact center solution.

And while offshoring is intensifying in the aforementioned countries, companies looking to keep those services close to home are adopting more automated processes, and even employing home agents—Datamonitor’s survey revealed 44% of contact center managers were considering the home agent solution.

As with other facets of CRM, contact centers are also affected by the rise of social networking, and for now, product managers are mostly just strategizing the incorporation of social media. However, it should be noted that customer support devices benefit the most from social media—unlike other CRM tools, where it can be difficult to find a place for all that unstructured data—and will likely bolster growth in this sector after the recession.

In a move to provide more “people-centric” than “document-centric” solutions, Cisco will broaden its business productivity offerings and compete with IBM, HP, Microsoft, and Google. Specifically, the company announced Cisco Show and Share, a collaboration tool, and Cisco WebEx Mail, a mail client using software from PostPath, one of Cisco’s acquisitions.

Cisco Show and Share is being termed a “social video system,” and will help communities “create and manage highly secure video communities.” It also provides users with the ability to edit and share video comments, and offers tagging and RSS feed functionality, as well as speech-to-text transcription. Show and Share will only be offered on-premise for now, and Cisco WebEx Mail will be cloud-based. WebEx Mail will also have Outlook interoperability.

With this move into the collaboration tools market, Cisco takes on Google (whose Wave client offers real-time collaboration) and Microsoft (whose productivity suite recently saw a price decrease). In fact, Cisco WebEx Mail will offer the same ability to collaborate with anyone over the Internet Google Wave does.

Pricing for Cisco’s new products is still being determined, and the company states that in the future, there will be on-premise and on-demand offerings of both. It will be interesting to see what else Cisco has up its sleeve, because this is a company that has aggressively widened its reach during the recession—including various CRM capabilities—and will certainly emerge from it as more than a web conferencing provider.

These days, large companies can hardly expect to proliferate without mobile functionalities or applications to meet the demands of the growing population of iPhone, BlackBerry, and now Droid users. Considering enterprise, this increased development in mobile applications seems an obvious step, and especially obvious considering not only the BlackBerry’s positioning as an enterprise phone, but also the growing number of people using iPhones and Android phones for business.

So with that in mind, should we find it odd that there is little news regarding iPhone CRM applications, or mobile CRM in general? Yes, most CRM providers have created mobile apps, which for the most part offer limited functionalities but access to real-time information. The iPhone CRM apps get most of the attention—no doubt due to the iPhone’s current “it phone” status—but news of innovations to these applications is few and far between.

Surely some new iPhone CRM developments will be announced at this month’s Dreamforce convention, and others will follow on a regular (but infrequent) basis. But the mobile CRM space on the whole seems—and this makes sense—to focus more on using mobile e-commerce for CRM purposes than on adding bells and whistles to mobile CRM applications. It’s doubtful that mobile CRM applications will ever replace the desktop versions, but is this current lag in mobile and iPhone CRM development simply because the desktops allow greater functionality? Or is it also that mobile apps skew toward leisure rather than business, and therefore smart phones are considered personal devices over productivity tools?

By now, it is obvious social media will affect CRM—but questions remain as to how to process the largely unfiltered data, and how to build meaningful relationships through the various platforms. Many companies are having success with social networking sites like Twitter and Facebook, but mining the information is still difficult, mostly because these services didn’t originate as business tools.

Small businesses have a definite advantage when it comes to using social media as CRM tool; since their customer bases are smaller and more refined, SMBs have an easier time understanding these people, and how they use these social devices. Large businesses expect CRM methods to be scalable, and social networks are difficult to scale. Messages must specifically target an audience, and unstructured data is much more difficult to sift through when it’s coming from a large number of people.

Another advantage small businesses have in the social media game is that they are more likely to have trusted relationships with their customers—not that their products are necessarily better, just that the numbers they deal with are more manageable than the ones large enterprises handle. Small businesses are therefore strengthening existing customer relationships while larger ones flounder a bit to build similar intimate connections.

Yet another problem with focusing on social feeds for information: a lot of the customer conversations businesses would like to see are under wraps, or simply don’t take place. Many companies are building presences on Facebook (and shifting mostly to brand pages), but the conversations there regarding their brands are pretty sparse. This is partly because a lot of Facebook conversations are private, but also partly because just as business managers are having trouble using these social tools for business, customers are not entirely willing to let these leisure sites be about business.

This isn’t to say information gathered from social media is useless, but it will be interesting to see how CRM vendors cope with and manage it—especially since the general consensus is that social networks are here to stay.

Microsoft has been aggressively courting CRM users this week. First, they announced price cuts to their online productivity suite, and yesterday they lowered prices on their Dynamics CRM Online product. In addition to slashing prices, Microsoft is offering six months of free Dynamics CRM usage to Salesforce.com’s and Oracle’s CRM users.

The Business Productivity Suite, a SaaS offering, adopted a new pricing model and is now at $10 per user instead of $15 per user; Microsoft executives are attributing the discount to the recent increase in users. The suite includes Exchange Online (a messaging service), SharePoint Online, Live Meeting, and Office Communications Online, and was updated this month to increase mailbox storage space to 25 GB. In addition to price cuts, the Business Productivity Suite’s availability will be extended to Brazil, Hungary, Israel, and Mexico, to name a few.

The fight for the cloud application space doesn’t stop there: from now until the end of the year, customers of Salesforce.com and Oracle CRM can sign up for a free, six-month trial of Microsoft Dynamics CRM. Before announcing the offering, Microsoft also combined their two CRM Online offerings—Professional and Professional Plus—into one version that has all the features of the latter, but the price of the former: $44 per user per month. There are some stipulations with the free-trial offer: users must be in the US or Canada, and have a minimum of five seats and a maximum of two-times the number of seats subscribed to under Salesforce or Oracle. When the six-month pilot lapses, subscribers will be charged $44 per user per month.

Sweetening the deal a bit, Microsoft has also given Dynamics CRM Online a service update this month (its third in 18 months), featuring enhanced data import and free mobile access. It will be interesting to see how Salesforce and Oracle respond, and especially if the trial and price cuts will indeed draw customers from those companies.

Small businesses tend to manage customer relationships through a number of different applications—documents, contact managers, spreadsheets, etc.—and it is those companies that have the most to gain from implementing a unified CRM system. To help quell some of the apprehensions and concerns small businesses may have with CRM, CRM Buyer recently outlined some tips to help SMBs get the most out of the service.

When introducing a CRM system to employees unaccustomed to using one, the most important step is get them to buy into the system. Without employee support and faith in the product, the product will have little worth and SMBs won’t see the ROI they hoped for. Also, every employee must be encouraged to use the platform, because some will likely eschew the system in favor of familiar methods they know have previously yielded success. It is therefore important to stress the benefits of CRM implementation will give the company, rather than the system’s features.

Training is also important for proselytizing employees. Ideally, training will be included with the purchase or subscription chosen, and online documentation, videos, and tutorials are also helpful. For teaching non-technical people, sometimes it is most effective to familiarize them with certain features that are most relevant to their role. Ongoing training for the office is necessary for keeping up with the system’s innovations.  CRM Buyer also recommends training users in groups—training at intervals will allow those first familiar with the system to help others.

Lastly, it is important to choose the right CRM platform. For small businesses, this often means a simple system. Managers should outline the company’s needs and then select a system based on those requisites, and not by the bells and whistles certain vendors may offer.

When it was launched two and a half years ago, the iPhone was in many ways the positioned as the non-enterprise smartphone. BlackBerry and Windows Mobile devices were the phones for businessmen, and the iPhone offered that same functionality with an added cool factor. Needless to say, the iPhone has since had great success within enterprise and particularly within CRM, and given the astonishing growth of Apple’s App Store, things will only get better.

Aside from featuring the simple user interface characteristic of Apple devices, the iPhone’s success is largely due to its ability to offer many more software choices than its competitors do. While most of these applications aren’t relevant to business users, it is noteworthy that there are currently about 100,000 applications available for the iPhone; rival smartphones don’t even have 15,000 apps.

Despite not being positioned as a business phone, it was quickly targeted for enterprise goals. The year it was released, Salesforce.com made a lite CRM app in the form of a contact manager; the following year they released an app for their CRM subscribers to view and creating information, and Oracle did the same. And over the past year, CRM for iPhone has grown—SugarCRM and NetSuite have applications, and smaller CRM players are joining in. NetSuite recently released an ERP application for the iPhone, and while it currently only has viewing capability, editing functions are soon to come. This seemingly premature release of NetSuite’s app is definitely a view to the status of CRM applications for the iPhone. It isn’t a mature market, but it is a growing one, and these applications are constantly adding more capabilities and proliferating.

There is another player recently added to the mobile CRM application race—the Android—and Oracle and Salesforce.com have already reached out to HTC (the company making the phones) about developing programs. Droid has also eschewed enterprise positioning, but the phone’s compatibility with Google programs is attractive for enterprise users. Currently, one of the drawbacks in using the Android as a business phone is its lacking security, but these problems are not without solution. Whether the new Droids—or any competing smartphone—will surpass the iPhone in CRM and general enterprise use is tough to say. Only time will tell.

Sales force automation (SFA) has been growing steadily over the past few years, and the folks at CRM Buyer predict that when the economy leaves its slump, SFA will surge.

Most apparently, SFA is making inroads with new price points and offerings for different verticals. Catering to specific industries is a smart move to stay competitive; the change in pricing was a bigger necessity. A Gartner analyst noted that many companies subscribing to SaaS SFA platforms are nearing the end of their contracts, and are both shopping around and negotiating lower prices for the service already in use. In addition, there’s been an emerging demand for role-based pricing.

Several CRM sectors have seen boosts with the downturn, and SFA is one of them—companies looking to do more with less money frequently turned to automated systems. However, the “more with less” motto is not a recession-era fad, as it’s always trendy to save money, so SFA is expected to do well after the economic decline.

With this expected increase in demand, new technologies are surfacing: Shadetree Technologies recently released an application that marries marketing automation and SFA. Whether or not more such apps emerge, SFA will likely see a boost through the purchase of marketing automation applications, as they work best in an SFA environment. And many SFA applications are getting service information integrations, which will help sales departments learn more about customers.

CRM Buyer did point out a slightly surprising absence: Facebook. While other enterprise systems are enjoying the information and opportunities created by social networking, SFA applications are eschewing them. LinkedIn still interests vendors because it maintains a professional tone throughout, but Facebook (and probably Twitter) are too unstructured and leisurely, and serve mostly as distraction.

Not long ago, CDC Software announced plans to acquire on-demand companies in order to create one SaaS software solutions provider to complement its on-premise products for various verticals. Last week, CDC announced they have signed a binding term sheet for the future acquisition of a SaaS provider for not-for-profit (NFP) organizations; the name of the company was not disclosed.

Given the rise of SaaS—a recent global study by Avanade consultancy shows that within 2009 alone, the number of companies using only on-premise solutions decreased from 61% to 41%—this is a smart move for CDC to offer customers multiple deployment options. It is even smarter to offer a combination, as the hybrid SaaS model is proliferating at light speed. CDC plans to take these SaaS and on-premise offerings worldwide, via 22 offices and 1200 resellers and partners. In terms of the NFP vertical solution, business should be good—market research shows there are 1.5 million registered NFPs in North America alone, and SaaS solutions are extremely cost-effective. The soon-to-be-acquired company is venture-capital financed, and provides solutions for ERP, CRM, financial management, e-commerce and others, in one platform.

This pending acquisition will also be fruitful for other CDC solutions: it will provide cross-selling opportunities for CDC MarketFirst and CDC Respond by expanding product functionality into marketing automation, lead management, and complaint and feedback management. Full procurement of the unnamed company is expected by the end of 2009.

Update 11/23: Read about how the SaaS hybrid model is even making headway in the eCommerce software market.

Cloud computing is here to stay, which is a certainty that even Larry Ellison embraces, even for all his posturing with Salesforce.com founder—and self-proclaimed “cloud-computing evangelist”—Marc Benioff. Last week at Oracle OpenWorld in San Francisco, Ellison announced that a full version of Oracle Fusion applications would be available next year, marking the company’s first serious SaaS offering.

Prior to Ellison’s keynote announcement of Oracle Fusion apps, the other buzzed-about speech was the one given by Benioff, mostly because he and Ellison have exchanged thinly-veiled insults for quite a while. Ellison has historically balked at cloud-computing, even though he was one of Salesforce’s first investors. During his speech, Benioff painted Oracle as a bit of a straggler for their favoring on-premise solutions, but also made digs about Oracle’s being more suited to large enterprises, while Salesforce is accessible to businesses of all sizes. Even though Oracle products have been a ground station for many cloud-computing vendors (including Salesforce.com, which uses the Oracle database to support its service), perhaps Benioff’s presence and speech were more a nod to Oracle’s future in SaaS than anything else.

Of course, just because Oracle has pledged to the cloud-computing club doesn’t mean initiation will be easy: some tech pundits note that making a shift to SaaS at this stage of the “game” could mean having to change your business model. Still, Oracle will have a solid stable of on-premise products to cushion the blow of any on-demand failures. There is also the fact that while cloud-computing is wildly popular (and undoubtedly the future), legacy applications haven’t been eradicated yet, and there is still a demand for traditional licensing.