CRM is Busting Out Of Its Britches: Operational, Analytical, and Collaborative CRM Are Born

A Brief (!) History of CRM 

In the early 90's, paralleling the publication of Hammer and Champy's Reengineering the Corporation, there were three Northern California companies that each had similar visions of incorporating BPR (Business Process Reengineering) concepts into Front Office applications. They were set to break down departmental barriers, focus on the customer, and enable corporate workers to serve their customers in new, streamlined, and friendly ways. Those three companies were Clarify, Vantive, and Scopus.

Clarify and Scopus started work in the customer support arena, planning to branch out once they gained a customer base and some momentum, while Vantive, with a much broader initial vision that, in retrospect, may have been ten years ahead of its time, focused on a customer-centric database at the core, ringed by all divisions of the company, each having their own "views" into the data they needed. Data was entered one time, existed in one place, and was viewable by all. Very BPR.

My, but we have come a long way. First off, none of those three original companies stand alone any more. The first to go was Scopus, purchased by Siebel in the mid to late 90's to shore up its customer support offering. As an aside, inside information has it that what Siebel bought didn't quite live up to expectations, and they ended up re-building many of the customer support pieces to create the Siebel product you see today.

In 1999, Clarify was purchased by Nortel Networks (see Tech Note Nortel and Clarify: Was There Ever Enough Synergy to Support this Marriage?). Enough said here.

And finally, Vantive was bought by Peoplesoft, the HRMS (Human Resource Management System) plus SCM (Supply Chain Management) software company. At first blush it struck many as an odd pairing of two companies desperate for some good corporate vision. But Peoplesoft (with Vantive) seems to have renewed vigor. If execution and focus are a part of the culture now at Peoplesoft, it all may pay off in the end (see PeopleSoft 8 Launched - Anything to Write Home About?).

All the while, in the late 90's dot-com craze, when "money was free" and intellectual capital and software functionality were key, you had smaller niche players developing ideas about how to do everything from improving customers' online experiences, to establishing vertical and horizontal portals, to analyzing employee performance, to using data to target qualified leads. And other, larger companies, were quietly adding the three letters C.R.M. to their websites, and eating smaller vendors for lunch, for fear of being lost in the Back Office-cum-ERP/SCM, Front Office-cum-CRM world. And wave after wave of multi-million if not multi-billion dollar buy outs and consolidations (for one example, see the Kana reference in the Tech Note sited above) lapped the corporate shores.

As the technology development and consolidation continues unphased, if not stoked, by the economic downturn today, analysts, busy re-defining CRM as "a software space" and "an ecosystem," - very fuzzy - have given rise to the notion of sub areas of CRM; namely, Operational CRM, Analytical CRM and Collaborative CRM. We've got wireless customer service, customer self-service, marketing analytics, collaborative e-commerce, employee portals, operational data stores, data warehouses, data marts, data about data (metadata), business intelligence, OLTP and OLAP, and enterprise value management we can't call all that, simply, CRM, now could we?

Analysts like to compartmentalize in an effort to simplify and understand, and forecast winners and losers, and prognosticate on the future. Sometimes we over-compartmentalize, and over-define, to the point of confusion. And sometimes, we almost make sense of it all, and help buyers of technology know both what's available, and what's right for them. So, let's try if we may.

Some Simple Definitions, Please 

Let's start by looking at OUR definition of CRM Software:

Customer Relationship Management

Customer Relationship Management Software promotes the direct interaction between customers and the company through support of the people and processes involved in the entire customer lifecycle. CRM Software fosters a comprehensive, integrated approach to the customer, putting the customer at the center and integrating such corporate functions as Sales, Marketing, Customer Support, and Field Sales and Service, all in an effort to increase Customer Satisfaction, improve internal morale, increase sales, and differentiate the company from its competitors.

Figure 1.

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Operational CRM

Operational CRM is at the heart of what we've previously just called CRM. It includes the components of CRM software that interact with the Back Office applications (such as ERP, SCM, and e-Procurement) in order to get product moving; it includes all of the business intelligence to automate or help facilitate the daily tasks of the Service, Marketing, and Sales teams, and to move information between them, and out to the Logistics and Financial folk; it also facilitates the flow of information to and from the forces in the Field, both Sales and Service. In a simple way, you can think of Operational CRM as Internal CRM, though that would give the image that it's a misnomer considering our global definition of CRM, above. It's not. The Operational aspects certainly promote timely and successful interactions with the customers, but behind the scenes.

Analytical CRM

Analytical CRM is a subset of the larger game of Corporate Business Intelligence, which itself grandly intends to reach across the boundaries of CRM to pull together all the data resources in the company, extract and transform the data in a sensible way, load it into one place, and be able to analyze corporate performance in a unified manner. Analytical CRM focuses specifically on the customer interaction and satisfaction piece of Corporate Business Intelligence.

Through measurement of customer reactions and interactions, it can help a company analyze and understand such things as: the success rate of marketing campaigns; sales rates and the performance of the sales team members; other sales related issues such as Customer profitability (considering both Sales and Service costs), Pipeline Revenue analysis, and product line success and trending. It can also help companies understand customer satisfaction rates and trends, and the performance of their service personnel; it can help cmpanies perform so-called web clickstream analysis to understand what their customers are looking at on their site; hence, what they like about or on the web site, and what doesn't work or attract so well; etc. And it can do this with new, real-time technology using data stores and user-interface dashboards, or OLAP (OnLine Analytic Processing), or the more mundane hard reports, and pushing it all to web information portals that are either customer-facing, or internal-facing, or both.

Remember, "you can't change what you don't measure." Analytical CRM, and Corporate Business Intelligence, are hard core and here to stay, and will only become more important as the fight to keep customers loyal and happy rages ever fiercer.

Collaborative CRM

Now, we get to the wizzy, obvious, up-front stuff that has given CRM the e-CRM makeover, and made everyone so excited about reducing costs and improving web-based service. This is the part about the new, cooperative efforts in CRM, like web conferencing, web forms handling, automated email handling, and unified message handling and intelligent message routing; web assistance tools such as Live Chat facilities, and Voice over IP (VoIP), and collaborative web browsing; and guided selling, and the soon-to-be omnipresent Call Me button.

Problem is, the more ways that you give people to interact with you, and the easier you make it, the more often those people will interact with you, and that may not save you Service overhead costs. You need to carefully understand the people-power ramifications behind e-CRM before making the leap. Just because customers may be happy with the new, often less-personal methods of interacting with their consumer companies, doesn't make this a wise decision for your company. Your support costs may actually rise. That may be OK, if your happy with the offsetting customer-satisfaction numbers. But be aware.

We're Ready, and We Want All Of It: User Recommendations 

CRM implementations, if done in their entirety, can literally take years of time and millions of dollars. Phased implementation planning is a necessity. "You just can't eat all of the food you'll ever eat in your entire life, at one sitting." Your focus must be on prioritization, which in turn is based on asking yourself several key questions: where are the worst pain points in my company? Are my customers complaining of lousy service? Is internal morale low? Are my sales folks lone gunmen, running Act! 2000 on their own laptops with those cool screen layovers that don't let anyone look over their shoulders? Are we giving away services that we shouldn't be? Do we know where our profits are really coming from, and which of our products are dogs?

The First Phase of any successful CRM implementation is the Alignment and Planning phase. Align your corporate processes with your corporate goals. Then plan on multiple, short-term, quick-win phases. With this approach, you'll win over your customers, let your employees settle more slowly into new roles or processes and let your CFO swallow purchase order requests in smaller chunks.

According to Forrester Research, for most companies, it's not a question of whether to CRM or not to CRM: Forrester says that 47% of all companies are "considering CRM," and 37% are in the implementation phase. Get in the ballgame, but play it one inning at a time.