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Have you figured out what CRM is yet? If I asked you for a

definition, could you give me one? How long have you been

trying? In my column in CRM magazine, I defined it in a

 way that I think was more than passable: “CRM is a philosophy and a 

business strategy, supported by a system and a technology, designed

to improve human interactions in a business environment.”

Memorize it – quick. Because even as I write this, CRM is morphing

into something even more voluptuous and ubiquitous than I described

in that still timely definition. In fact, it is becoming so omnipresent that

the need for CRM as a separate discipline might be moot in five years or

even sooner.

The Customer Ecosystem

Even if you don’t see it, or your company isn’t practicing it yet, we’re now 

living in a new business arrangement – a customer ecosystem has

supplanted the corporate ecosystem that so dominated the post-World War

II business matrix for so long. If you look at today’s business ecology, you see

the customer at the hub of business – the subject of business – not just the

object of business desire, which the customer has been for centuries. In

1995, PeopleSoft elegantly expressed an early inkling that some sort of 

transition of the focal point was taking place with their articulation of what

they called enterprise resource optimization. They stated explicitly that the

customer was now driving demand in the marketplace, not products nor

the manufacturers. At the time, the solution wasn’t to devise customer

strategies; the solution was to respond to the demand from the corporate

side as quickly as could be done with systems and technologies to do it.

The Internet had transformed the customer from a passive purchaser of 

products pushed into a market by demand created by advertising firms.

Product information, which had been scarce and difficult to obtain in

sufficient quantities to make decent purchasing decisions, was now 

available rather easily through theInternet. Not only could you find

several merchants from around

the globe who were willing to ship

products to your door, but information about those products became easily 

available through Internet forums where sites like Epinions became a 

clearinghouse for the thinking of hundreds of thousands of customers who

had used tens of thousands of products. So you could easily find out what

others thought about what you were considering buying. How about finding

a merchant who wouldn’t cheat you on price and service? Not only could

 you do comparative shopping with services like Ask Jeeves, but you could go

to Bizrate to see what your fellow consumers thought of the merchants that

 you could potentially buy the product from. Yahoo shopping provided (and

provides) you with similar benefits. Knowledge was power, and it was

empowering for the customers. Their volatility jumped to new explosive

heights, and customer expectations went through the roof. Everythingneeded to be absolutely, positively right from pricing to delivery or they 

could and would go elsewhere with the click of a mouse.

In the mid-1990s, when all of this was taking place, CRM became a 

heady way of dealing with this new level of competitive management of 

customers who were no longer passive or reactive, but proactive and

 volatile. Companies like Siebel, Clarify and Vantive became the beacons for

the new science and art of managing your customers’ expectations and,

increasingly, your margin of possibility for grabbing part of their consumer

purchasing power. CRM was a technology play back then, automating the

services and some of the processes that were needed to improve primarily 

sales and services. The CRM technology vendors, ever mindful of not

overselling their products (yeah, right), kept repeating a mantra, “It’s a 

system, not a technology.” This was given lip service but not adhered to at

all. “Sure it is. But we know better. It’s cool technology. It automates

customer stuff,” was the way CRM was sold in its infancy.

But then came the dot-com bomb and, on top of that, 9/11, and

everything changed. Customers were not only empowered due to the

success of the Internet as a communications medium, but they now 

CRM Through The EtherCRM is becoming so mainstream that the need to define it as a separate discipline mightsoon be moot.

Paul Greenberg, The 56 Group, LLC

Paul Greenberg is the president of The 56 Group, LLC, a CRM strategic consulting firm in Manassas, Va. He is the

author of CRM at the Speed of Light: Essential Customer Strategies for the 21st Century; 3rd Edition, 2004.

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Future

became cautious when it came to parting with their money because of a 

slumping job market along with the dual threats of global terrorism and

economic uncertainties.

The result? As we move through the new millennium, we have a 

different kind of customer: careful about how they spend but

empowered; knowledgeable about what they are interested in; and

knowledgeable about the resources available to find what they want.

They are eminently multichannel – equally adept at phone, Internet,

email, fax, face-to-face conversation and direct mail as a media for

sticking it to the man, at least the one that they have an interest in

purchasing something from.The old forms of CRM that had been so successfully defined by the

META Group as operational, collaborative and analytic were beginning

to fray at the seams. They were useful but horizontal definitions and

didn’t take into account the social consciousness and cultural changes

that were necessary for CRM to succeed. They saw it as an automated

technology and systems: salesforce automation; enterprise marketing

automation; customer support; some analytic applications; and channel

management. That did the trick back then, didn’t it?

 Apparently not. All of a sudden we began seeing reports from

Gartner, IDC, META Group, Forrester Research and GIGA that CRM

 was failing at the rate of 55 to 70 percent. Why? Lack of user adoption

 was a big one. Why? Because it didn’t take into

account the personalized self-interest of the users

themselves. Additionally, CRM was seen as a 

siloed application suite – different from supply 

chain management or enterprise resource

planning. CRM was “customer-facing.” CRM was

more than on the map. It was a multibillion-

dollar business. But the so-called failure rate(which in reality was a “didn’t get the ROI

expected” rate) was vexing. But several things

occurred. There were spectacular success stories

from companies like Cisco, Maytag, Brother

International and hundreds of others who had

learned that CRM was actually more than just a 

system and a technology. They learned that, as I

defined it in February 2003, CRM was “a 

philosophy and a business strategy, supported by 

a system and a technology, designed to improve

human interactions in a business environment.”

When this concept was adopted by companies in

 whatever form they did – when they took into

account not just the supportive technology 

system but the process change and the culture

change in addition to the strategic planning and

the concerted effort toward user adoption, it

 worked! Dramatically well.

Then in late 2002 and into the present, there was another change in the economy that led to a 

change in the business ecosystem. The economy 

began to creakingly move, and then in a more

loose-limbed fashion began to grow again. This was in conjunction

 with studies done by the same analyst organizations and others like

CRMGuru that showed CRM’s success rate had surpassed 50 percent.

The combination of the healthier economy and the uplift it caused and

the success of CRM transformed the thinking in most of the business

 world. CRM, which had been a strategic consideration as a part of a 

corporate strategy became the corporate strategy. Period. Companies

recognized that the customer had gained the pre-eminent role in the

business hub, and thus the business model changed. The customer is not

simply that individual who plies you innocently with money for goods

and services, rather he is that savvy individual with whom you exchange value. That changes the definition of the customer. The paying client is

no longer alone as the customer. The customer is also those parts of a 

collaborative inter-enterprise value chain that includes your employees,

 your business partners and/or channel, and your suppliers and vendors.

Each of them has to be satisfied to maintain the links in the collaborative

chain that will ultimately net you your business return.

If you look at Figure 1, you will see the “soon to be the present” of 

CRM as an ongoing, all-encompassing strategic consideration, not just a 

technology and system.

Figure 1 points out something very cogent to the change in CRM.

That customer demands are now in real time and that these demands

20th Century Business Model 

Self-contained enterprisewide efforts

IT infrastructure that dealt with legacysystems and third-party applications withinthe company

Web-enabled architecture

CRM part of the corporate strategy

Customer-driven corporate ecosystem

CRM a competitive differentiator 

Integration of CRM, ERP, SCM; extendsthroughout the enterprise

Web-enabled but primarily connected anddesktop access

Customer segmentation

Near real time

Data-driven

Software-focused technology

21st Century Business Model

Collaborative network 

IT infrastructure increasingly Web services-infused to communicate with othercompanies’ infrastructures and applications

Service-oriented architecture

Corporate strategy is customer strategy

Customer ecosystem

CRM is a mainstream strategic necessity

Demand, supply and support chainintegration to a single value chain that

extends beyond the enterprise

Connected or disconnected increasinglymobile access to all necessary services

Customer personalization

Real time

Process-driven

Service delivery model

Source: CRM at the Speed of Light: Essential Customer Strategies for the 21st Century, 3rd Edition, 2004

Figure 1: 20th and 21st Century Business Models

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are increasingly personal. The customer is interested in having offers

made to him or her, the individual, not them, the customer segment.

 Also, because of the abundance of choices both in product and in

 vendor and the commoditization of many of the products that the

customer may be interested in, not only do the choices have to be in

real time, but often the product itself is a giveaway for what are now 

being called on-demand services.

For example, if you look at Bizrate, it operates as a portal to

hundreds of retailers for consumers to purchase goods. Each of the

retailers is rated. Yahoo is a news portal that will provide you with

news in any way on any subject. Salesforce.com created what Denis

Pombriant, president of Beagle Research, called a “disruptive

innovation.” It provides CRM services for a monthly subscription feeand virtually eliminates implementation overhead, and it wants to be

 your application provider service (not just your ASP) – the place you

start out every day to go do your business – wherever you are and

 with whatever device you have handy, whether a desktop, an IPAQ, a 

Blackberry, a laptop or a cell phone. So CRM is becoming the strategy 

for that omnipresence.

There is now a services-oriented business model that is based on a 

collaborative business strategy that links partners, suppliers and brand

holder, because it takes a village to meet the needs of that hungry end

client. It is no coincidence that one-time bitter rivals Microsoft and

Oracle are partnering to provide valuable services to customers, as are

Microsoft and Sun. My, my, hasn’t the world changed.

But what also is characterizing the transition of CRM is the

breakdown of the barriers between supply chain, back office functions

and customer-facing functions. Everything is becoming a customer

issue. For example, if you are implementing a traditional CRM solution

such as salesforce automation, you now have to be concerned about the

success of that solution. Are your inventory, delivery and logistics

departments ready to handle an upsurge in sales if the SFA applicationsand strategies are successful? If not, your business could die from its

success as back orders and poor delivery begin to eat into the sales

success your SFA helped to create.

This is hardly news to many companies or even to the public sector.

The Defense Logistics Agency in the United States, the $32 billion

behemoth responsible for supplying everything from milk to weapons to

all our military, is signing thousands of contracts per day with either

private sector companies or other government agencies. This is a 

massive supply chain, and you would think that their priority is the

supply chain, since lives in Iraq or Afghanistan depend on their success.

Well, it is their priority, but they see the new ecosystem we live in

means that the partners and suppliers they deal with and their soldier-

customers are all customers – and they allocated $70 million for a CRM

program that involves the supply chain and massive cultural change

 within the DLA and among its partners.

In the private sector, there is an increasing awareness that the

success of this effort depends on the collaboration of the users –

 whether the users are internal to the company or external partners.

In fact, ChannelWave, a premier provider of collaborative CRM, alsoknown as partner relationship management, calls the operation that

is necessary to sustain the real-time customer demands support chain

management. Rightfully so.

But these changes are also hitting the customer at the micro-level.

There is an increasing proliferation of desire among CRM vendors,

consulting firms and integrators to provide a differentiated customer

treatment. Each customer should be “known” through the capture of 

more complex and sophisticated customer data, and each customer

experience should be personalized. Companies like E.piphany have

active, real-time analytics engines that they provide with their applica-

tions that can not only call up a specific customer record but can also

capture actual customer activity on the Web or via other media so that

offers to that customer can be developed and personalized on the spot,

using analytics engines that are telling you why you must have that

Kansas City Monarchs baseball cap at 15 percent off, that will be good

for only this session. The Amazon.com Gold Box is a great example of an offer optimization engine – though one that went wild. I have yet to

buy a thing from it, but I get the spirit.

But there is another side to this all-encompassing presence. Anytime

means all the time, and that is just a matter of analytics and automation,

so to speak. But what about anywhere? Mobility, my friends, mobility.

CRM is not quite device-independent, but it is trying to achieve that

state. All the vendors that you can think of have versions of their

applications that are good for the Web via laptop or desktop, good for a 

PDA or other wireless device and good for an offline version that allows

laptop synchronization where you can’t get online all the time. This is

not easy when you’re dealing with disparate systems that have to

communicate with each other. For example, if you are an insurance

claims adjuster and you are at a site taking care of a claim, you might

have a PDA that has the claims form and the ability to attach a digital

photo of the claim. But if you’re in a rural area, you might not have

continuous online capability. If you are urban the next day, you might.

You might have to fill out the claim form and then transmit it to a 

claims management system that accesses a database that determines the

 value and payout of the claim, which is then modified due to thecustomer history of the claimant who then has to pay a larger premium

because of the claim. Within a short while, you can give him the payout

and the new premium cost. But how many systems did you have to

access from financial systems and large databases to a legacy claims

management system and the communications needed for the PDA in

either rural or urban areas? Wow. Complicated.

But the new architectures that are helping to make this ubiquity 

real are the service-oriented architectures (SOAs) that use Web

services as a common lingo that allows the different systems to speak 

to each other. Not easily, yet. But the SOAs – the architecture using

XML and SOAP and various interfaces to facilitate the interchange of 

systems – are the au courant CRM (and ERP and SCM) architectures of 

both choice and future.

So what do you have? You have a CRM that is strategic, that is

available to any device and can communicate among customer, supplier,

partner and employee systems and link their processes so that the end

client is served well. This is driving a new customer ecosystem’s

business model that is tying together all customer requirements and

needs in real time so that customer value given is also customer valuereceived. In other words, you have CRM becoming mainstream and

simply the way that business is being done. So goodbye CRM as we

know it, and hello customer strategy as it is now becoming.■

CRM Through The Ether