The Trouble with CRM

CRM applications do not in themselves deliver what they say on the label. How can they, when business processes, data, applications, and services are so disparate?

A CRM system is just one cog in a machine that not only needs to be well-oiled but also automated.

Trefis, an independent research Web site, recently published an analysis of Salesforce.com and the global CRM market. Their estimates put the global market for CRM at a value of $18.2 billion in 2011.

With such a high price tag and uptake around the globe on a steady climb, CRM is often hailed as a veritable panacea when it comes to generating, developing, and maintaining an enterprise's client base.

Silo woes

The main challenge of effective CRM is the need to bring together multiple elements of a business into one single view.

As businesses have grown, their processes and supporting technologies have, in turn, evolved on a piecemeal basis. This is often through no fault of their own—it goes back to the days of the Industrial Revolution and the need for improved productivity and the division of labor.

The opening up of global markets has further exacerbated the complexity problem. Brands now supply their products worldwide and procure raw materials from the most cost-effective source, wherever that may be. Shipping distance becomes irrelevant when the product is at the right price. As businesses increase their physical reach across the globe, the number of process silos grows as well.

On top of this, enterprises merge, acquire, and continue to adopt increasingly complex applications and systems to maintain a competitive advantage. They then have the added challenge of having to connect with legacy systems. Technologies and manpower are therefore duplicated; best practices are impossible, and integrating processes at the enterprise level is a painful, time-consuming, and expensive undertaking. Today, this seems an obvious mistake to make, but until recently, unifying technologies were not mature enough or even available, so enterprise integration wasn't a rational or cost-effective option.

Consequently, siloed practices occur in nearly every enterprise in the world today. As such, it becomes a case of "the right hand not knowing what the left is doing," resulting in major hiccups that can harm a company's otherwise sound reputation—as highlighted in the recent RBS/NatWest debacle.

All things considered, CRM systems are never going to work effectively if enterprises remain so disconnected.

Customer loyalty is dead

Customers don't care about silos; they just want everything to run like clockwork. They are more demanding, savvier, more informed, and more vociferous if they have a bad experience than ever before.

If a customer goes into a retail store, she expects her specific size to be available. If a utility or phone bill comes through the door, she expects the bill to be accurate. If she calls a bank, she expects the teller to know the balance of her various accounts and exactly when her mortgage payment was due. For the customer, anything but a seamless experience is failure, and in today's digital world, jumping onto Twitter or Facebook to voice disapproval is no longer just for "geeks." Social media platforms are becoming the mouthpiece of the people and the bane of the underperforming enterprise.

So if CRM is not the be-all and end-all when it comes to customer engagement, management, and maintenance, how can businesses truly please the end user in today's fickle and loyalty-lacking world?

Connecting the dots with cloud automation

It's obvious that companies would be able to provide better customer service if they had a more complete view of their customers' experiences. However, to get that view, enterprises need to take a hard look at their current ways of conducting business.

What customers don't realize is that in many instances, there is surprisingly significant manual effort occurring in the background, as enterprises struggle to unite systems and applications to make the overall customer experience a compelling one. This Frankenstein monster of a solution is neither cost- nor time-effective, has limited long-term applications, and just isn't working.

It's critical for organizations to align CRM processes with other business procedures that aren't necessarily part of their CRM system, but that are essential to painting a full customer portrait. For example, a multinational financial services organization used automation to process more than 24 terabytes of sales intelligence every single day.

A viable, proven, and cost-effective solution to connecting the many silos within the business is looking to the cloud to automate and manage enterprise processes, whether they reside within the business or externally. Managing processes in the cloud can provide the speed, flexibility, and connected delivery model that organizations need to unite CRM technologies with any other business process without time-consuming manual patches or painful software installations.

The status quo: You've got to break it to make it

The fear of change is holding businesses back from realizing the increased efficiencies and profitability that process automation can deliver. It takes a leap of faith to move to a new way of doing something, but until businesses realize that spending money should focus on breaking rather than maintaining the status quo, their operations will stagnate and they will be left behind the competition. Businesses need to take the leap and break out of the endless cycle of archaic processes.

Enterprises can gain that utopian one-customer view by connecting processes across multiple platforms and various technologies. What's more, the enterprise will also achieve the speed, flexibility, and delivery model necessary for today's demanding market.

Tijl Vuyk is the founder and chief executive officer of Redwood Software. As CEO, he is responsible for setting the company's vision and worldwide business strategy.

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