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.
Click
here to view larger image
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.