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Vijay Vijayasankar

So, what is next in CRM?

Posted by Vijay Vijayasankar in vijay.vijayasankar on May 16, 2009 11:27:13 PM

I blogged about my views on the future of BI last month ( So, what is next in Business Intelligence ?). There was a lot of interest from SCN readers, and a great conversation took place as comments in the blog, as well as through emails and phone calls. This was a great learning experience for me.  CRM is another area I am very passionate about, and this time around I would like to present my thoughts on the future of CRM. 

 

1. No more generic CRM, enter "specific" CRM 

 

For very long, we have had vendors offering a "one size fits all" CRM solution, but very few solutions specific for various industries. Customers were expected to buy this suite and somehow customize it to work the way they wanted. Within SAP itself, there has been a handful of industry specific solutions in CRM space - like High tech channel management. I think customers will increase the pressure on vendors including SAP, to bring more and more industry specific solutions.

 

2. CRM will become a composition canvas

 

Do we need CRM to duplicate ERP functionality? Or would we rather have CRM provide value addition to things that ERP already does well?. Sales order is a good example. Is there good value in doing CRM sales orders, where you still need ERP integration for ATP etc - or is it better to expose ERP sales orders via CRM and then add value added stuff like account information, activity information etc to it from CRM side?. Evidently this plays nicely into the SOA theme too - customer information sits in several disparate systems, and the need for easier integration will increase. This in my mind should mean better XML like standards, and more usage of web services.

 

3. Less batch, more real time

 

Traditionally, CRM interacts with ERP and BI systems primarily in a batch mode. This means there is a delay in getting vital information about your customer to all parts of the organization. I myself have been in production issues where the CRM system had an updated shipping address for a customer ,where as ERP had an older address, and hence shipped a very large quantity of perishable goods to where it was not expected. I expect such interaction to become real time in both directions, with all systems taking advantage of data before it becomes stale.

 

4.Improved segmentation

 

It is costly to do direct marketing unless you know who exactly you are directing your campaign at. Most CRM solutions, including SAP, have some segmentation functionality built in. I think the focus on segmentation will increase manifold in near future and this will give marketing organizations better ROI and customer satisfaction. Householding type segmentation functionality should start becoming commonplace.

 

5. It will be all about ad-hoc

 

As it becomes harder and harder to pre-define what markets and customers have in mind, it will be harder for organizations to have pre-defined business processes and analytics. CRM of tomorrow should have features that support ad-hoc changes in everything from transactions, surveys, analytics etc. This should make CRM a posterchild for BPM.

 

6. Sophisticated  analytics will drive transactions and decisions, and personalize customer experience

 

Simple analytics exist today that uses historic information, but they provide only limited value. Organizations usually define measurements on percieved customer value like CVI (customer value index) today. The sophistication around this will increase - and other measurements like LTV (Life time value, a futuristic value that can tell you for example whether a customer who is not a big buyer now, might change to a high value prospect in future) could become common. Internet sellers already use propensity analytics to cross sell and upsell products and services( remember the "buyers of this book also bought these titles...").  This should also become more widespread.

 

7. A solution that customer service and field staff can use with ease, and minimal training

 

Already, there is a lot of emphasis on CRM UIs. This will continue to evolve, and become more and more unified across all channels used to reach a customer. Not only that, it could also become a reality that interfaces to CRM systems work with natural language.

 

8. CRM and the cloud

 

As cloud becomes more and more popular, a lot more CRM apps are likely to go in to cloud models. However, there is a legal bottleneck. Data privacy laws are pretty different from country to country, and were probably written before clouds were such a big deal as it is today. So for near future, I don't expect a lot of big companies to jump into cloud based CRM for fear of being dragged into court. Plus, there is the lock-in factor. Companies might fear getting stuck with something that may or not may not work. Most companies would probably take only baby steps in this direction in near  future, till the cloud model matures some more.

 

9. Social CRM

 

Companies will be dumb to not take notice of the likes of facebook, twitter and linkedin. However, this is an area that should be handled with extreme care as a backfire will hurt you real bad. Word of mouth publicity can work wonders in increasing your sales. However, if there is bad news about your products - it will spread faster too. Even if it is bad news, there is a case to be made that having a presence in social media to help get wind of it earlier, and hence have a prayer of countering it in time. And of course, Analytics is key to make good use of social media in sales and marketing. Last year, I thought that social CRM will take some thing like 10 years to go mainstream - but now I think we should see this happening in under three years or so.

 

So there you are - those are my takes on what is next for CRM. I am waiting eagerly to hear from all of you.

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