Has the CRM Industry Become Redundant?

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When business needs to change course–take moving from product-centric to company-centric business models, for example–a “change” industry like CRM springs up. Depending on the magnitude of change–in this case enormous–a very significant business opportunity can emerge. That was certainly the case with CRM. Lots of companies jumped in and made lots of money. Those that didn’t take face plants, at least. But has CRM reached the end of the rainbow? And if so, what will become of the key players–software companies, implementation companies, developers, consultants, teachers, writers?

For those waiting for the CRM business to rebound after the recession, let me make this suggestion. Move on. It’s not coming back.

That does not in any way mean that companies will stop migrating towards more and more customer-centric business models. Or that they’ll no longer need websites like this one to inform them along the way. But the days of companies saying, “We’re going to implement CRM,” they’re about over.



As we look around the business landscape we see customer-centricity happening in many companies and organizations–but not usually resulting from CRM implementations. Customer-centricity is slowly but inexorably seeping into business pores.

Smart business planners innately understand the need to put customers in the center of the business circle. And no longer is customer-centric planning the tail on the CRM dog. More and more companies realize they have to start customer-centricity at the beginning, not the end. Amazing anyone thought it could be any other way.

The process industry, our primary residence these days, talks more about customer-centricity the CRMers do. And it’s much more than talk. Back in the 90s, when we developed Visual Workflow (VW) as a total one-off process approach for CRM, we accidently started something more. Today, VW is part of a burgeoning category of process design approaches known as “outside-in” process, so-named because it starts with the customer and works into the company from there, whereas traditional process approaches start with how employees do their work and expands out from there. Amazing that process people ever thought they could reach the customer that way.

And CRM technology folks are gradually understanding that software designed to work with the front office only doesn’t cut it, because behaving in a customer-centric manner requires close collaboration between front and back offices and beyond–clearly beyond the capabilities of CRM software. Pivotal gets it. That’s why I recently wrote a very favorable review here of the new V6.0, which is not only an application for front office functions but a development platform for creating collaborative functionality tying front office to back. And Microsoft has launched “XRM”–exactly the same concept. In fact, considering Pivotal’s close ties to Microsoft its “CRM Plus” may be “XRM” under the hood. Plus Optima and Oncontact quietly switched to this concept several years ago. Amazing that the bulk of CRM software companies didn’t see this coming.



Moreover, traditional CRM software will very soon face another competitive threat. Two of the major telephony software companies are close to launching extremely sophisticated capabilities that go beyond unified messaging and unified communication to support enterprise-wide collaboration and communication-based process management–which, when adopted, obviates a whole bucket-load of what had been CRM software functionality.

Overall, it was a pretty good ride for the CRM industry. Plus, CRM implementations are fun and exciting, and we still hope to do several more. But as Mr. Dylan so succinctly put it, “The party’s over, and there’s nothin’ left to say.” At least not in favor of a CRM industry revival.

11 COMMENTS

  1. I agree Dick — so many companies have started to re-organize their operations around customers and it’s possible that the “CRM boom” is over. But from what I’ve seen, many (most?) enterprises still need help with the building blocks on everything from customer data quality and data integration to address quality, multi-channel coordination, communication management and customer self-service. Vendors who can help companies leverage customer data across the board will still be in demand. Pitney Bowes Business Insight comes to mind. Who else do you see as the go-to suppliers going forward.

  2. Dick, the past couple of years in our annual research on customer-centric practices, we find that many (most?) companies still struggle with CRM basics like having a complete view of customers (customer data, actually) through all channels.

    While the CRM boom may be over, there’s plenty of work left to reap the rewards. And plenty of work to be done on customer experience, collaboration, and employee relationships, too.

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  3. Dick

    I agree with Bob.

    Many if not most large companies already have core CRM technology. But that doesn’t mean that they are using it effectively. Much of my consulting work these days is in helping companies to get more value out of their expensive CRM toys. And to use them to become more customer-centric.

    But I wouldn’t write-off the CRM vendors. There are plenty of new baubles for CRMers to buy, like Real-Time, Marketing Resource Management or Social Media tools. There’s still life in the old CRM dog yet.

    Graham Hill
    Customer-centric Innovator
    Follow me on Twitter

    Interested in Customer Driven Innovation? Join the Customer Driven Innovation groups on LinkedIn or Facebook to learn more.

  4. Dick Lee – folks, I agree there’s huge potential to improve in-place CRM implementations. The two points driving my post are:

    1. The number of “let’s start CRM from scratch” implementation will not likely rebound to previous levels, and in fact may not rebound much.

    2. Using a house-building analogy, construction defects aside, once a house is built and you’ve lived in it for sevaral years, do you call a general contractor to upgreade your kitchen? No, you call a kitchen specialist. Similarly, when you need a better customer strategy, better customer-aligned process or technology that properly supports process, will you call in a CRM generalist? not likely, I believe. You’ll call a specialist in the specific area of concern.

    Unfortunately, CRM implementing companies (and consultants) rarely have specific expertise across all the elements of CRM implementation – strategic planning, process, change management, even technology. When any “change industry” matures as CRM is doing, generalists tend to give way to specialists that drill down deeply in their areas of extertise.

    So lots of work remains to be done. But perhaps by different folks.

  5. We still build & we still renovate. So we need all types of specialists. The challenge is, for those of us called in to provide the competencies, is asking the right questions. What’s your business all about – where is your company headed & how will you measure that success ?

    Then the real work begins. Oh, and sometimes, it may need software. Or services. Or both. Or none.

    It’s making business work – which can be murky on the first dive.

    -= David
    Talking About Customers

  6. The CRM ride has still got a way to go. It may be getting tougher, but as the market is changing, CRM is changing with it – integration between business processes, ‘CRM 2.0’ , xRM, reworking older systems etc all mean there’s plenty to do.

    But above all there’s still a large market of organisations that have yet to buy in to CRM. We still get enquiries for first-time CRM implementations every week, and its remained steady. Plus, we recently took a snapshot survey (results to be released shortly) of a cross section of industries and organisational sizes – 48% still didn’t have a CRM system in place. Now, even if half of those will never implement CRM, that’s still a lot of potential out there.

    Peter –

  7. We have been implementing CRM solutions for a number of years and there has been a definite shift from traditional front office CRM solutions with minimal or manual feeds to the back office, to more holistic solutions.

    CRM is still used as the phrase to describe this type of solution but many packages now provide a framework to allow system implementers to develop solutions which by the time they are live, often bear little resemblance to traditional CRM packages.

    We now almost exclusively deliver holistic, business solutions including CRM, Finance, legacy integration, BI, infrastructure, security consultancy, etc. The key requirement being to hide the boundaries from end users, allowing them to do their ‘day job’ without switching from one piece of software to another whether they work in the office, at home or on the road.

    I’d agree that solo ‘pure play’ CRM is becoming far less appealing and seen as just another piece of software to maintain and support. Solution providers hoping to specialise purely in CRM will find it harder to compete moving forwards.

    Regards
    Michael

  8. Great question Dick and valuable comments, thanks to all. Gartner says the number of CRM users in 2008 was 11 million, Salesforce tells their shareholders that their potential market is 300 million, so there’s still a long way to go. I see the trend in business moving from “outcomes” such as relationships and experiences to “source” issues such as internal Customer Management competency and top quality consultancy support for projects.

  9. I agree, in that some CRM generalists, like me, are beginning to see the light of the outside-in view of process design. I’m not seeing the people selling it change as much.

    As companies begin to realize that they are not getting the most out of their CRM software implementations, there will be a whole new set of eye-candy placed in front of them to “solve the problem” — from business intelligence eye candy to the yet to be refined social media fog.

    The bottom line for me is making sure the customer is viewing the problem from the proper angle, so someone doesn’t convince them the a Twitter integration has more value (i.e. “it will solve all your problems”) than a simple enlightenment meeting with Dick Lee. 🙂

    Mike Boysen
    Effective CRM Consulting

    P.S. Sage has been working on SData, which is going to be the means by which all Sage products (front and back office) can simply communicate with each other based on a standard protocol. Not sure if this is the sort of thing you would be looking for, but it’s there (not completely).

  10. Dick Lee – come on Mike, Twitter is IT (for another 6 months). In fact SData does represents the XRM trend I was referring to. I hadn’t heard of it before. Guess I’m not reading enough CRM technology magazines :-).

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