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Smarter CRM
Sometimes, the cloud is not enough.
For the rest of the June 2012 issue of CRM magazine please click here
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Migration to the cloud has been the dominant trend within CRM for the last several years. But what is it that is being moved to the cloud? And will it enable organizations to achieve the CRM goals that they are setting for themselves? More important, will it enable them to fulfill the expectations customers today have of those who market, sell, and provide services to them?

Into the Cloud

The migration to the cloud has been, overwhelmingly, a move of transactional CRM applications from the company data center into someone else's data center, with application end users connecting to their CRM applications via the cloud. The justification typically has been decreased IT costs and increased end-user adoption, the latter translating to cost reductions, cost avoidance, and/or margin improvements for the business.

The migration to the cloud has therefore, in practice, targeted mainly people who use the technology, whether they work for the company itself or for the company's channel partners.

Another goal of migrating to the cloud has been to improve the customer experience. But this goal has seldom been realized in a meaningful way. In part, the limited impact is due to customer service (a key driver of customer experience) posing technical challenges for cloud-based applications and integrations. Also playing a role is the fact that customer experience is determined by considerably more than transactional CRM applications.

As a result, for many, this move has been only a new path toward an old goal: achieving operational efficiency and effectiveness for those in marketing, sales, and service who use the technology. The benefits can be substantial. But are they accruing to customers?

Beyond the Cloud

Smarter organizations are realizing that they need to go beyond a CRM strategy of migrating transactional applications into the cloud. They are pursuing next-generation CRM strategies centered on serving customers, facilitating collaboration, and generating actionable and predictable insight. The goal is to generate more profit for the company by generating more value for customers and partners.

Smarter CRM strategies require robust transactional applications, often, but not necessarily, in the cloud for marketing, sales, and service. They also require capabilities for orchestrating transactions across devices, channels, and organizations; for managing structured and unstructured data; and for generating the aforementioned actionable—and predictive—insight.

These strategies must extend beyond the traditional customer-facing domains of marketing, sales, and service to encompass the upstream and downstream domains of supply chain and order fulfillment. These processes directly affect a company's ability to deliver consistent and predictable outcomes to employees, partners, and customers.

Making the Move

Organizations need to look beyond the cloud because the empowered customer of today demands it.

The first step for Smarter CRM is to enlist the organization and obtain funding. Advocates must develop a traditional business case (with a traditional focus on internal metrics). They must demonstrate that the Smarter CRM program will position the organization both to improve the experience for customers and partners and create new value propositions for both.

The justification can be challenging. Data management and transaction orchestration have historically proven difficult to explain and justify.

One key is to demonstrate the connection between these IT-centric and customer-centric outcomes. Another is to quantify the value of alleviating internal users' pain due to unreliable or inaccessible data.

The justification for Smarter CRM must include a model of the experience to be targeted, monitored, and managed. The model must include definition and assessment of key interaction points with customers and/or partners. The treatment plan that emerges can lift the organization from merely aspiring to deliver an outstanding experience to having roadmaps, initiatives, and capabilities for delivering the customer experience.


J. David Lashar is a partner in IBM's consulting organization, where he assists organizations in defining and executing CRM business strategies. He can be reached at dlashar@us.ibm.com.


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