Market forces are pushing the healthcare insurance industry to change business processes, reduce administration costs and work efficiently. The executives in the payer organizations have recognized that technology adoption is the key to achieving the above improvement. Pivotal Corporation (the company) has observed the huge business opportunities in the industry these changes represent and decided to vertically expand its CRM software solutions into this niche market; however the company is facing significant challenges by doing so. We recommend the company strategically allocate its internal resources and employ its competencies vigilantly to develop and sustain its current competitive advantage, and provide the company with strategies to adopt TQM methodology to improve its healthcare CRM solutions and to successfully implement CRM software. Finally, we suggest that the company can continue its vertical integration effort, enhance implementation services, and adopt new market channels to achieve long-term success. We suggest the executive team should carefully manage the above changes