The Big Three

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I've spent the past few weeks discussing the future of CRM with many people—from those on the front lines dealing with CRM issues every day to CEOs of large global organizations—and stopping to chat with vendors, consultants, and integrators in between. There was one underlying element in all these conversations that struck me as peculiar.

The conversations were about solving problems. In most of them, I found it refreshing that technology was not mentioned as a solution, but rather as part of the solution. It was the first time in many years, in some cases ever, that technology was not called upon to solve a problem. Instead, it was all about solving pain points and creating solutions for the organization.

The reason I bring this up is because all the conversations revolved around three areas. If this column were an interactive event, I'd ask you to guess what these were. I'm certain you'd guess things like what is a relationship, moments of truth, experiences, social (of course), collaboration, communities, and many other issues that are front-of-mind right now for CRM managers. And, to be fair, these topics were mentioned significantly enough.

But my discussions revealed that those weren't the big problems of CRM, and it is this discovery that led me to write this column.

For the most part, problems are simple, small, and solvable—at least in the world of enterprise software: You need to store data, you build a database; you need to interact with customers, you build a CRM system; you need to manage your vendors and partners, you deploy SCM or PRM tools—and so forth. These are not easy to deploy, but they (mostly) work as advertised and do what they say they will do: solve a specific problem. After you deploy them, you have a "solution" that works, sometimes better than others.

This is why you see so many new vendors enter any market in a given timeframe: They have found a new way to solve the problem that they (and their customers) think is better than previous solutions. They have found a way to solve the small problems.

The Big Three

Then, there are the Big Problems. These are not solved with one deployment or one implementation. Even if you do deploy CRM, you would still have to deal with these issues. There are no easy solutions to these problems, no single vendor that is able to solve them. They often require architects, database specialists, business users, IT, and partners to work together over a period of time to create a solution; then you still need to work even longer to implement the solution and make sure it does what you need it to do. Big Problems are not solved every year or even every refresh cycle or budget cycle—they are solved every so many years, and once that happens, they stay solved for a long time.

I found three Big Problems for CRM:


Now, before you tell me that this is a problem for everything the organization does, which is true, I want to focus on the CRM aspects specifically. Data is the reason we implemented CRM in the first place. Whether transactional, operational, demographic, attitudinal, behavioral, and now sentimental, the core of what CRM does is collect and store data from all interactions. We tried for a while to implement analytical CRM and analytic engines to find patterns, trends, and useful information; we never got too far with that.

So we continue to store the data.

The data we stored until now had been a problem, but an annoying one, not really a Big Problem. The BI tools would produce something interesting to look at—which would or would not be used. This worked for a while, but we are now dealing with larger volumes of data (social data). After separating the noise and the signal, we still have 20 to 30 times more data than we had before. Our BI tools cannot deal with that effectively or in a timely fashion, nor can the new crop of analytical tools (in-memory and stream analytics).

Effectively managing the data we collect has now become a Big Problem.


When we use the term knowledge, do we mean data? Or information? Or are we talking about something else?

The answer to all these questions is "yes."

The problem of knowledge in CRM is actually bigger than the problem of data. A large part of what CRM is about is automating "easy" interactions while maintaining the same experience across channels for the user. Automating interactions is done by leveraging knowledge: If you know what the process is, the details of the product or service, the specific business rules that apply, segmenting and customer information, and other details, almost any interaction can be automated. (There are some complex exceptions that must be handled by humans, but at the very least, 40 to 60 percent of interactions are good automation candidates for any organization.)

All the details you need to know are what constitute knowledge, which should be readily available and constantly updated for automation to happen effectively. As you can imagine, not all these elements are always easily available, nor are they always updated, leading to the genesis of our second Big Problem: Knowledge cannot support CRM automation.


What is the purpose of your CRM solution? If your answer is to have a better relationship, that is a cop-out, a non-answer. Let me ask you the question in a more interesting way, an innovation-centric way: What job (or jobs) did you hire your CRM solution to do for you? If you want to understand what the best way is to use your CRM deployment, how to prove ROI or value, how to take it to the next level, this is the question you need to ask. The answers cannot be complex. No "fuzzy logic" or intangibles can be used as answers—just concrete actions.

Most organizations I've worked with have almost never been able to answer this question before implementing CRM—they had some idea of what they wanted to do (increase wallet-share, reduce support costs, find new segments and clients, etc.), but not the answer. It was not until CRM was deployed that they began to explore and figure out what they had hired CRM to do. This is our third Big Problem: We don't know what CRM is doing.

You are wondering whether I am right (Hint: I am always right—well, almost always; I've been wrong three times so far), whether you are spending time, money, and resources on a system that does not allow you to have full control of your data, that does not support the automation of simple tasks, and that you—well, don't know why you have it. Could this be true?

I assure you that in most cases, it is. This is why these are Big Problems: They are not solved by deploying software and changing a few processes. They require a lot more than that to be solved.

Esteban Kolsky is an independent analyst and founder of ThinkJar, a customer strategies think tank focused on solving the Big Problems of CRM (at least on paper). He can be found on Twitter (@ekolsky) most days and at his blog (http://thinkjar.net) every now and then.

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