By Chris Alliegro [email] [bio]
- Sidebar: Going Big with Dynamics CRM
- Illustration: CRM Architecture
- Illustration: Managing Campaign Responses
- Illustration: Multicurrency in CRM 4.0
Support for hosting multiple organizations on shared server hardware and improved multilanguage and multicurrency support will expand the market reach of the Dynamics CRM customer relationship management product, making it more suitable for service providers offering hosted CRM to small customers and for large, multinational organizations. However, CRM hosters will compete directly with Microsoft, which plans to bring its CRM Live hosted service online in 2008, and large organizations will continue to need custom development to tailor the product and integrate it with other important business applications, such as enterprise resource planning (ERP) systems.
CRM Increasingly Important
Dynamics CRM is a server application that helps front-office workers track customer interactions and plan sales and marketing campaigns. In addition, a variety of tools allow administrators, developers, and other workers to customize and extend Dynamics CRM, create custom solutions, and integrate the product with other applications, such as ERP systems.
Dynamics CRM has evolved into an important product for Microsoft and the partners who resell and customize it. First released as Microsoft CRM in Jan. 2003, Dynamics CRM has garnered about 11,000 customers with a total of about 500,000 seats as of the last quarter of 2007, with nearly 100% year-over-year growth. About half of the product's growth in 2007 was attributable to sales to enterprises, thanks in large part to the efforts of Microsoft's systems integration partners such as Avanade. (For a description of Avanade's Dynamics CRM efforts, see the sidebar "Going Big with Dynamics CRM".). For resellers, Dynamics CRM also has been important because it drives adoption of products and technologies that it requires or integrates with, including SQL Server, Exchange Server, Outlook, and the Office suite.
Dynamics CRM is one leg of Microsoft's competitive strategy against enterprise business application leaders Oracle (which fields the Siebel CRM application) and SAP, both of which have a growing presence in the CRM and ERP midmarket. Dynamics CRM also competes in the small and midmarket with products from ISVs Onyx, RightNow Technologies, and Sage and service provider Salesforce.com, the top vendor of hosted CRM solutions, in a fragmented market that is approaching US$10 billion.
The other leg is Dynamics Live CRM, a Microsoft-hosted online service based on CRM 4.0, which is due to open to general customer signup in midyear 2008. The service, which has been running since the second half of 2007 with a set of trial customers, will target small and midsize customers lacking the desire or necessary skills to run complex applications like CRM in-house, a sizeable market segment as demonstrated by Salesforce.com. However, the launch of Dynamics Live CRM will also put pressure on partners such as Navisite and CRM OnTarget that already offer hosted solutions on Dynamics CRM.
Overview of Dynamics CRM
The collection of client applications, Web applications, and databases that comprise Dynamics CRM aim to help organizations manage front-office processes, such as sales, marketing, and customer service.
Out of the box, the product supports three main front-office processes:
Customer service. Dynamics CRM provides tools for logging, assigning, and tracking customer incidents or cases; creating and managing knowledge bases, such as collections of articles describing problem-resolution steps; and scheduling and dispatching service calls, which is particularly useful for companies that do onsite installation, maintenance, and repairs.
Marketing. The product includes features that help front-office workers manage marketing activities, such as advertising campaigns and mass mailings. For example, an organization could use CRM's marketing features to select lists of potential customers for a campaign; assign, track and manage work activities, such as creation of marketing literature; send bulk e-mails to customers; and manage responses from customers. (For an overview of how Dynamics CRM handles responses to marketing campaigns, see the illustration "Managing Campaign Responses".)
Sales. Dynamics CRM stores and manages information about customers and products; tracks customer communications, such as e-mails and phone calls; identifies and qualifies leads; and tracks and manages quotes, orders, and invoices.
Dynamics CRM also is a platform that customers, solution providers, and ISVs can customize to support specific business processes. Because the platform is fairly generic and flexible, developers can customize and extend it to support processes beyond traditional CRM. For example, the U.S. Air Force has created an application based on Dynamics CRM that manages and tracks troop and personnel movement. Spokane-based Pathology Associates Medical Laboratories uses an application built on the product to track lab samples through testing processes.
(For more information about Dynamics CRM components and an overview of the product's architecture, see the illustration "CRM Architecture".)
Customizations and development options available for Dynamics CRM include the following:
Extended, custom entities. Graphical, Web-based configuration tools help nondevelopers extend and customize CRM entities, a set of predefined record types (such as contact, account, lead, product, and case) that are stored in the Dynamics CRM system. Developers can create new entities, define entity relationships, and modify and create the Web-based forms used for viewing entities. An Entity Editor allows administrators to add, delete, or rename entity fields or attributes, while the Form Editor is used to customize forms.
Custom workflows. Users with appropriate permissions can create and extend workflows, which define the steps that must be followed in CRM-specific business processes. For example, a workflow could send e-mail reminding support technicians to follow up with customers by phone within 24 hours of a case being assigned. In Dynamics CRM 4.0, users define workflows with a new Web-based workflow designer and workflow engine based on the Windows Workflow Foundation, which is built into the .NET Framework and used by other Microsoft products, such as SharePoint Server. Dynamics CRM 4.0 also ships with a base set of actions ("Create Record" and "Send E-mail," for instance) for use in workflows; developers can create more complex, custom actions by writing code in Visual C# or Visual Basic .NET.
Client and server extensions, integration. A server-side SDK includes a pair of Web services that let developers access CRM entities programmatically, allowing them to create custom applications or integrate the product with other business applications, such as ERP systems. In addition, an event mechanism called plug-ins in CRM 4.0 (callouts in earlier versions) can help developers create logic that responds to server-side actions (e.g., a program that validates data after a record is updated but before it is written to the CRM database). The product also supplies a client-side SDK that helps developers write custom code or scripts that respond to predefined client events—for example, an onLoad event, which executes before a CRM form is loaded in the browser, could allow a developer to customize the way the form renders for a particular group of users.
Improvements for Hosters, Large Customers
CRM 4.0's new architecture allows multiple organizations to run securely on shared server hardware and makes the product more suitable than previous versions for hosted CRM services. In addition, enhancements in existing features and support for multilanguage and multicurrency deployments could reduce the amount of custom development and third—party add-ons required for large, multinational organizations.
Multitenant Hosting
The most technically significant new feature in CRM 4.0 is support for multitenancy, which allows a single CRM installation to host multiple, distinct organizations. Multitenancy should make the product more practical for hosting large numbers of small customers and could help Microsoft and its hosting partners offer services that compete with Salesforce.com on price, particularly at the entry level.
Because CRM 3.0 lacked this capability, service providers needed to run each customer on dedicated server hardware, which carries higher operating costs than consolidating customers on shared hardware and made CRM 3.0 prohibitively expensive for hosting large numbers of small customers. Although mainly intended to aid hosters, the multitenancy feature could also be useful for organizations with multiple, distinct front-office operations, such as a large holding company.
CRM 4.0 implements the following features for multitenancy:
Separate databases for tenants. In a multitenant CRM 4.0 installation, each tenant organization stores data in its own SQL Server database, which hosters create using the CRM 4.0 Deployment Manager. By default, all tenant CRM databases reside in a single SQL Server instance. These separate databases isolate the data of different tenants and permit the hoster to carry out routine operational tasks for one tenant, such as backing up or restoring its CRM database, without affecting the others. (CRM hosters generally will not allow tenants to access the SQL Server housing the Dynamics CRM data directly.)
Active Directory (AD) for authentication. As is true of previous versions, CRM 4.0 uses AD to authenticate users and for storage of other security information, such as security groups (e.g., user and administrator groups). When used in a multitenant configuration, hosters will create an AD container called an organizational unit (OU) for each tenant; storing information in separate OUs isolates tenants' respective log-on and security information.
Isolated CRM application security. Dynamics CRM provides an internal role-based security model that controls which records and parts of the application users can access. The product maintains its own list of users, each of which must have a corresponding entry in AD, and each of which is assigned to a CRM role that specifies permissions. For example, users assigned to the customer service representative role can read information about products but cannot create new product entries. Dynamics CRM provides 13 predefined roles; administrators and developers can customize these roles and also create new, custom roles. In a multitenant environment, each tenant gets its own set of roles, which can be customized and extended independently of other tenants' roles.
Delegated administration. Hosted services tenants typically carry out simple administrative tasks, such as adding new user accounts and configuring permissions and security settings for those accounts, without the assistance of the hoster. To support such tasks, hosters minimally need to configure both AD and Dynamics CRM to allow delegated administration. In AD, hosters must configure one or more accounts with delegated control in each tenant OU, which allows tenants to manage log-on information in that OU without being able to view information in other tenants' OUs. Within the CRM application, one or more members of the tenant organization will be assigned to the system administrator role, which allows those users to manage CRM application security for their organization but prevents them from accessing the security information of other tenants.
Multicurrency, Multilanguage Benefits
CRM 4.0 supports multiple languages within a single CRM installation, which will simplify CRM infrastructure and maintenance for multinational companies or those operating in regions or countries where more than one language is spoken. With previous versions, a single product installation supported only a single language—organizations requiring multilanguage capabilities needed a separate CRM installation for each language.
To enable multilingual capabilities, administrators install multilanguage user interface (MUI) packs on the CRM Web server (each supported language has its own language pack). Once the language pack is installed and enabled, workers can select the language of Dynamics CRM's UI from a list (multilingual capabilities are available both for the Web and Outlook clients).
CRM 4.0 also supports multiple currencies, which allows workers in global organizations to work with CRM records, such as quotes and orders, in local currencies. Administrators specify a base currency for the system, and a list of other supported currencies and corresponding exchange rates, allowing users to select the currency in which to display monetary fields in the product's UI. By default, administrators must enter exchange rates manually; however, a developer could use the product's programming interface to provide regular, automatic updates of the exchange rates stored in the system.
(For a screen shot of the form used to list available currencies and add new ones, see "Multicurrency in CRM 4.0".)
Previously, support for multicurrency either required custom development or a third-party tool, such as Microsoft partner c360's Multi-Currency Management add-on.
Rounding Out Feature Set
In addition to the more far-reaching multitenant and multicurrency features, CRM 4.0 plugs various other product gaps, some of which were addressed by ISV solutions in prior versions. Closing these gaps will reduce the custom coding and workarounds often required to make previous versions of the product most useful, but inevitably will eliminate some ISV opportunities.
Workflow enhancements. CRM 4.0 eliminates the product's proprietary workflow engine in favor of the Windows Workflow Foundation, the .NET Framework's built-in workflow platform. Support for the Workflow Foundation moves CRM to Microsoft's strategic workflow platform, a more powerful development tool than the product's earlier engine. Among other workflow enhancements, administrators can now configure the product to allow any user to create simple workflows using the product's Web or Outlook client. In CRM 3.0, creating workflows required users to log on to the Web server running the CRM application and use a separate tool called the Workflow Manager, a particularly impractical approach in a hosted environment. CRM 4.0 also adds tools for monitoring and stepping into running workflows; this could help workers manually complete steps that have stalled, such as a step waiting on approval from a worker who is out of the office.
Performance tweaks. Enhancements in data synchronization between the Dynamics CRM Outlook client and CRM database should improve performance for users of CRM's Outlook client. For example, background data synchronization will make it faster for workers to go offline—in previous versions, workers needed to manually start synchronization and wait for it to complete before going offline. Faster processing of incoming mail in the product's e-mail router will help organizations (such as large customer support organizations) that extensively communicate with customers via e-mail, or help companies handle spikes in incoming mail traffic, such as might occur during a popular promotion.
Improved data import. Enhancements to CRM's data import features will make it easier to populate the CRM database with data extracted from other applications, such as another CRM system. (CRM 4.0 includes two data import tools: the Data Migration Wizard and more full-featured Data Migration Manager read data from comma-separated values—or CSV—files and import them into CRM.) Among other improvements, workers can use either tool to import data into most CRM entities; in CRM 3.0, import only worked for accounts, contacts, leads, and campaigns. In addition, workers can create reusable maps that correlate data fields, such as customer name or address, in CSV files with the fields of CRM records. In CRM 3.0, workers needed to map data explicitly each time they ran the migration tools.
New report wizard. CRM 4.0 introduces a new report wizard that allows workers to create reports without having to use SQL Server Reporting Services' development tools. Creating new reports in previous versions required use of Reporting Services tools (typically a developer activity) or third-party add-ins.
Many-to-many relationships. Organizations can define many-to-many relationships among CRM records. For example, an advertising organization might specify a many-to-many relationship between customers and demographic groups, allowing workers to determine which demographic groups a customer was a member of or, conversely, which customers belonged to a certain demographic group. CRM 3.0 only directly supported one-to-one and one-to-many relationships. Creating many-to-many relationships in CRM 3.0 required a clumsy workaround or third-party tools.
Duplicate record detection. CRM 4.0 can be configured to prevent users from creating (or importing) a duplicate of an existing record, such as a contact. Previously, detecting duplicate records required developers to write code or organizations to use a third-party add-in, such as Data Quality Center from c360.
Some Holes Still Apparent
CRM 4.0 adds significant new features for hosters and large organizations and plugs many minor product gaps. However, some important gaps remain and custom development will still likely be required for deployments of significant scale.
Learning curve for workflow engine. Users of the legacy Dynamics CRM workflow engine will need time to learn the more powerful and complex Workflow Foundation. Furthermore, although CRM 4.0 will upgrade most CRM 3.0 workflows, some may need to be rewritten to work with the new version. Specifically, workflows that use the post URL action, which was deprecated in CRM 3.0 and eliminated in CRM 4.0, will need to be rewritten.
Connectors, add-ons missing. In early 2006, Microsoft announced plans to release connectors to help customers synchronize CRM data (such as quotes, purchase orders, and customer information) with corresponding data in the Dynamics AX and NAV ERP applications. (The company offers a Dynamics CRM 3.0 connector for Dynamics GP.) However, those connectors never arrived, and Microsoft has not said when they will be available for CRM 4.0. Nor has the company said when it will release an update to the GP connector for CRM 4.0, its CRM adapter for BizTalk Server, or the CRM List Web Part, which displays Dynamics CRM 3.0 data on SharePoint Web pages. Until these tools are updated, integration of CRM 4.0 with other important applications, including Microsoft's, will require developer effort.
Rudimentary provisioning tools. Dynamics CRM provides no integrated, automated tools for provisioning a CRM installation. Administrators use various tools, such as Active Directory's Microsoft Management Console plug-ins, to manually enter information such as user and administrator accounts, e-mail routing details, and information about organizations. This lack of tools could be particularly inconvenient for hosters, for whom provisioning will be a regular, repetitive task.
Operational complexity. Running large numbers of CRM customers on shared hardware will be complex and risky, and service providers will need to design, set up, and manage infrastructure carefully to ensure stable operations and safeguard customers' proprietary information. Doing so will be complicated by the fact that sensitive information may be stored in at least three separate applications (AD, Dynamics CRM, and Exchange), and no tools are provided to synchronize information among them. (For example, if a user account is deleted from AD, its corresponding entry in Dynamics CRM must be deleted manually).
Custom development still required. Some oft-requested features did not make the cut in Dynamics 4.0. For example, the product still does not support field-level security; that is, the ability for administrators to restrict access to certain fields in a record. With CRM 4.0, as with previous versions, access to fields is all-or-nothing—if a user has permission to view a record, all fields in the record are viewable. Such features gaps suggest that many organizations (particularly large ones) will continue to need the help of ISVs and system integrators to complete the picture.
Finally, Microsoft provided little technical information about CRM 4.0 prior to its release and did not offer a public beta, which is unusual for a major Microsoft server product. A free trial released late in Dec, 2007 is the first chance that many interested customers had to look at the product. Consequently, Microsoft could see slower than usual adoption as existing customers begin to work through upgrade and migration issues, ISVs and corporate developers ramp up on programming interfaces, and prospective new customers evaluate the product—activities that typically occur during prerelease beta or preview programs.
Availability, Requirements, and Resources
CRM 4.0 shipped in Dec. 2007. As of Jan. 2008, base language editions and MUI packs are available in Dutch, English, French, German, and Spanish. Microsoft plans to make 18 additional languages available in the first quarter of 2008.
The product requires Windows Server 2003 SP2 (Standard, Enterprise, or Web Editions, or Windows Small Business Server 2003) and SQL Server 2005. Web clients must run Internet Explorer (IE) 6 with SP1 or IE 7; CRM 4.0 does not support browsers other than IE. Users of the Outlook client must run Outlook 2003 SP3 or Outlook 2007 SP1 on Vista, Windows XP Professional SP2, XP Tablet PC Edition SP2, or XP Professional x64 Edition.
CRM 4.0 is available in three editions. An entry-level Workgroup Edition supports all product features but is limited to a maximum of five user licenses and a single tenant. The Professional Server Edition has no user limit and also only supports one tenant. A new Enterprise Edition supports unlimited users and multitenant deployments.
The Dynamics CRM home page is www.microsoft.com/dynamics/crm/default.mspx.
A free 90-day trial of CRM 4.0 is available at www.microsoft.com/downloads/details.aspx?FamilyId=A9C110FD-AAC8-4D2A-B401-7801B1866E82.
The CRM 4.0 SDK is available at www.microsoft.com/downloads/details.aspx?FamilyID=82E632A7-FAF9-41E0-8EC1-A2662AAE9DFB.
Documentation for service providers planning on hosting CRM 4.0 can be downloaded at www.microsoft.com/downloads/details.aspx?FamilyID=6e211231-30fe-4df2-9b81-15cfb87adcf1.
CRM Live was described in "Hosted Service Based on CRM Product" on page 22 of the Aug. 2006 Update.
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