Most companies invested in CRM software for the first time between 1996
and 2006. That decade saw the CRM boom and bust. Siebel went public in 1996, signed
huge multi-million dollar software license deals, peaked at a 45% market share
in 2002 and was acquired by Oracle in 2005. The big ERP vendors all entered the
market with varying success, Nortel acquired Clarify for $2.1bn in 1999, (before
selling for just $200m 2 years later) and Salesforce.com was founded in
1999, winning over 20,000 customers by 2006.
The CRM applications that most companies implemented during that decade of
1996-2006 were predominantly Sales Force Automation solutions and Customer
Service /Contact Centre software. Solutions designed to support Industrial Age
distribution models of large field sales forces and customer service agents.
Many projects failed (analyst estimates range greatly from approximately one to
two thirds of projects) and many companies experienced long, painful
implementations that rarely achieved the anticipated benefits. As many of the CRM
projects were so slow and painful to implement, many companies have retained
the solutions that they implemented for far longer than intended and the relics
of these systems still power a large part of the customer experience today.
Looking back at the wave of digital change we have seen over the last
decade or so, I would pick out 2006 as a tipping point. In 2006 worldwide
Internet penetration stood at 15.7% (see http://www.internetworldstats.com/stats.htm).
Since 2006 it has more than doubled to over 30%. During the last 6 years we
have seen enormous changes in technology and communications. We have seen the
mass roll-out of broadband and mobile broadband, an explosion of connected,
smart hardware devices like the iPhone (2007), the iPad (2010) and the
seemingly unstoppable rise of social networks like Facebook (founded in 2004
but hitting 500m users in 2010 and 1bn in 2012), Twitter (founded in 2006) and
GooglePlus (founded in 2011).
There is a stark reality here. Most companies invested in CRM for an
analogue age, designed to support a predominantly field sales force and contact
centre-led distribution model. They invested before worldwide Internet penetration
reached critical mass, before any of the digital disruption we see today became
main stream and before digital became baked into the distribution model. Hence
we now see IT departments in a spin, trying to keep up with increasingly
frantic demands from the business and trying to bolt on new applications,
services and channels to legacy systems that were simply never designed to be
used in the way they are today.
CRM for a digital age has to look different. It cannot be the
technology-centric, monolithic disaster that plagued some (but certainly not
all) of the previous generation of projects. CRM for a digital age is not any
particular software or technology and it will vary greatly from business to
business but it is likely to display some of the following characteristics:
- Designed for Customers and front line customer-facing staff, not just for management
- Focussed on speed to value and positive internal momentum
- Designed with a core foundation (e.g. data, processes) but able to embrace change at the front-end of customer interaction (i.e. devices, apps, social networks etc)
- Delivered in an iterative fashion with constant business involvement
- Open and integratable in nature (often made up of a collection of services rather than a single package)
- Cross-functional in nature, busting through internal silos
- Paid for based on value delivered to the business
The challenge most companies face is one of transition. Shifting not
only from legacy CRM technologies, but also from legacy mindsets, procurement
models, IT delivery models and of course distribution models. Without question,
all of those challenges are difficult, but is it really realistic to continue
with a CRM solution designed for an analogue age?
