January 24, 2002, 12:00 AM

Privacy will gain primacy in CRM in 2002, Gartner says

40% of the organizations that have customer relationship management systems will re-think them this year, with an emphasis on balancing privacy with personalization, says a new Gartner report.

Nearly half of the organizations that have deployed customer relationship management systems will re-think them this year, indicating confusion still exists in the market over the best ways to use CRM information, says a new study from Gartner Inc. Gartner says that 40% of enterprises that have already installed CRM solutions will re-work them in some way this year, with an emphasis on balancing privacy with increasing pressure to support personalization.

``Adequately addressing privacy concerns will be a top business priority,” said Scott Nelson, vice president and research area director for Gartner. “This is going to require re-thinking of how information is gathered, how customers can access and control that data and how enterprises can safeguard it from parties that might want it but shouldn`t have it. Legislation will force this anyway, but in 2002, customers are increasingly going to be demanding it.``

Organizations will find customers increasingly questioning the gathering of personal data, Nelson says. ``Enterprises will find that customers want to see why all this data is being gathered, and they will expect the CRM experience to reflect intelligent use of personal data,`` he said. ``Otherwise, enterprises will not be in a position to ask for the data at all.``

Gartner says the economic slowdown caused enterprises to scale back their CRM initiatives and shift their CRM projects` goals from revenue enhancement to cost reduction. “Through 2002, there will be a return to tactical projects that will hurt the large suite vendors and breathe new life into the best-of-breed players, but only temporarily,” the Gartner report says. “In the end, enterprises will gravitate to the large suite solutions.”

Gartner released its report `Gartner Predicts 2002: Customer Relationship Management`` in anticipation of its CRM conference in Chicago, March 4-6.

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