CRM: The Past and the Future

The CRM industry is now 25 years old--it's time to celebrate. In this issue's column we'll look at the impressive accomplishments of CRM over the past 25 years; next month Reality Check will focus on the future of CRM. When CRM began, in the early 1980s, the emphasis was on SFA. Companies like ACT! and Telemagic led the way with fairly rudimentary contact management business functionality. The next wave of vendors focused on customer service and support functionality, and companies like Scopus and Clarify began to offer incident assignment, escalation, tracking, and reporting for call centers. In the early to mid-'90s Aurum, Brock, and Siebel began to offer SFA plus customer service-and-support functionality in the same software package (along with limited reporting capabilities). These vendors became known as integrated (or suite) vendors, as opposed to point solution vendors. Soon thereafter marketing automation vendors began to appear. Point solutions vendors like Rubric and MarketFirst led the way with campaign management and other marketing functionality, aimed at more closely linking a company with its customers. Most of these integrated vendors also began to offer marketing automation capabilities; toward the end of the 1990s business analytics and e-customer business functionality began to show up in CRM software. Companies like Crystal Reports and Cognos covered the analytics side, while BroadVision and Silknet covered the e-customer side. And once again, most integrated vendors expanded accordingly, now offering the full suite of sales, customer service, marketing, business analytics, and e-customer functionality. The past few years have seen continued improvement in CRM's functional richness (e.g., better customer self-service, improved content management); a resurgence of hosted solutions from such companies as Salesforce.com, NetSuite, and Siebel Systems; and new business functionality, which is a result of effective leveraging of wireless and Internet capabilities that have allowed CRM to move into real time). Regrettably, these past 25 years have overemphasized the tech side of CRM at the expense of process-and-people issues, which are intimately responsible for successful CRM implementations. The dot.com crisis helped to align this critical people/process/technology mix. Today, most CRM vendors and users are now aware of the need to do three things, in this order: First, ensure that solid customer-facing business processes are in place; second, ensure that CRM users have bought into the CRM concept; and third, introduce the CRM technology component as the enabler and optimizer of improved business processes. This is a big shift from the early CRM days, where technological wizardry led the way. The results have been impressive in that most studies, including our own research, now confirm that an organization has greater than an 80 percent chance of meeting or exceeding the expectations it sets out for in its CRM initiative. So what is the latest industry challenge? It revolves around how best to integrate CRM into a company's legacy systems and related technical infrastructure. Two main camps have emerged. Vendors in the first camp provide strong CRM business functionality and are now offering their own integration platform, e.g., SAP's NetWeaver integration platform and Salesforce.com's App Exchange integration platform. Vendors in the second camp tend to offer less comprehensive CRM business functionality and place their focus on providing a strong open-integration platform tool set, including workflow and middleware tools, with particular emphasis on integration capabilities. Vendors in this second camp include companies like BEA, IBM (WebSphere), and Tibco. What will come of this latest challenge? The CRM industry has grown into a multibillion-dollar industry by successfully navigating the many challenges that it has faced over a quarter century. The current challenge will be resolved, but I am particularly pleased with it since it raises the role of CRM to a new level by zeroing in on integrating customer information across all departments of the organization. Be sure to read the second installment. Barton Goldenberg is president and founder of ISM Inc., a CRM real-time enterprise consulting firm in Bethesda, MD. He is the author of CRM Automation and the publisher of The Guide to CRM Automation. Contact him at bgoldenberg@ismguide.com