The History and Future Of CRM According To Marco Formaggio

I am Switzerland when it comes to CRM (Customer Relationship Management) products and have spoken for vendors including Oracle, Sugar and SAP. CRM and sales enablement technologies are one of the four topics I write about, along with leadership, strategic selling and social selling.

I have known Marco Formaggio for years and he is one of the leading CRM consultants in the SAP arena. I respect him greatly and SAP is one of the powerhouses for enterprise software globally. Their approach to CRM has been different from Oracle, Salesforce, Microsoft, Sugar and others; yet the power of real-time data from a truly integrated enterprise.

I asked Marco to share his thoughts on the history and future of CRM. He was there during the birth of enterprise CRM back in 1997, back when it was merely a philosophy before Siebel burst onto the scene at the turn of the century. CRM became the next big thing following the ERP (Enterprise Resource Planning) craze sweeping the enterprise world at the time. ERP was driven by hysterical fear of Y2K bringing computers around the world (and in the air) crashing down.

Marco believes that CRM is best executed as part of an integrated ERP strategy. He has seen ERP drive productivity, data integrity and systemisation of previously loosely coupled processes within organizations. ERP drove the era ofintegration which was the most commonly used buzzword in IT circles in the mid to late nineties.

Here are some of Marco’s other thoughts. “Customer Relationship Management is really a business philosophy espousing the idea that the enterprise needs to be customer centric. In other words, all process and functions should be designed with the customer at the centre. In this model, processes are viewed from the customer’s viewpoint and enable the customer to connect in every possible way to the enterprise. ERP did not do this! Thus tools were built to cater for this ‘One Face to the Customer’ approach. The best known tool was Siebel. This sought to address the need for a software tool that would allow sales, service and marketing functions to provide consistent data and experiences with their customers. CRM now became a tool!”

“Back when Siebel was gaining momentum, SAP decided to build a standalone system known as SAP CRM to address this need. This system would ‘integrate’ via middleware with the flagship R/3 Solution. In the early 2000’s a number of CRM implementations were carried out with varying levels of success. Needless to say the success for SAP was not as revolutionary as ERP. The success was also mixed for organisations who spent untold millions on integrating their standalone CRM systems with their integrated ERP systems. ‘CRM’ was now on the way to becoming a dirty word.”

“And then came Software as a Service. The advent of tools such as Salesforce.com sought to address the needs of sales and marketing by providing them tools that were not sold to IT but to the very people who were the ‘face’ to the customer. They addressed the needs of the disgruntled staff members who were not getting what they needed from IT to help them drive their customer centric objectives. These systems were implemented rapidly, generally not too focused on integration or process standardisation. They definitely filled a gap and raised the bar in terms of gathering customer related data in a single repository and assisting sales and marketing in the execution of their day to day to roles. ‘CRM’ was now a Sales Force Automation (SFA) tool but where was the customer!?”

“The advent of social media has now driven a wave of change where the customer is now in control whether suppliers like it or not. The challenge now is to provide ‘one face to the customer’ as a business imperative. Customers looking from the outside-in do not care about the businesses disparate systems and do not understand why the sales representative cannot tell them immediately what the progress of their delivery is in the warehouse or the when the imported service part that has been ordered will arrive in the country. For this required integration it requires a customer centric enterprise. This is CRM in the real world; beyond pretty user interfaces!”

Thanks Marco for sharing your experience! Here is a snippet of Dr Michael Hammer who created the term: Business Process Reengineering... enjoy hammer-time!

If you valued this article, please hit the ‘like' and ‘share’ buttons below. This article was originally published in LinkedIn here where you can comment. Also follow the award winning LinkedIn blog here or visit Tony’s leadership blog at his keynote speaker website: www.TonyHughes.com.au.

Main image photo by Dr Michael Hammer. Creator of Business Process Reengineering

CRM: Graveyards of Information or Powerhouses for Improvement?

George Brontén from Membrain has been following my posts and regularly provides insightful comments. LinkedIn is an amazing platform for building relevant connections with thought leaders around the world and we decided to catch-up on Skype.

Membrain is a specialist in B2B sales enablement and we ended-up discussing Customer Relationship Management (CRM) technology. I found George’s views provocatively interesting and very cogent. I eventually ask him this question: Is it possible that CRMs aren’t well suited to do everything that their makers claim they’re capable of doing? We recorded our chat and here is a paraphrase of George’s response.

CRM vendors would like sales leaders to believe their technology is a one-size-fits-all panacea but they have added so much functionality over the years that if you ask ten people what CRM is, you are likely to get ten different answers. In many companies, the CRM has become a graveyard of information, instead of a tool that helps improve sales performance.

More feature creep to come: Feature creep isn’t about to go away. The market pressures to grow top line revenue will continue to drive CRM vendors to constantly add new capabilities and acquire new technology. But when it comes to complex B2B sales and other specialized needs, a new wave of cloud-based applications are emerging. They add functionality not available in traditional CRM systems like Salesforce without a lot of hard work; i.e., custom programming and on-going maintenance. [I agree with George that the age of mash-ups is here to stay and that CRM must evolve]

One-size-fits-all or none? The concept of “one system to rule them all” is appealing but has turned sales professionals into data-entry clerks and sales managers into report-creators. Everyone spends too much time gathering information and not enough time on activities and skill enhancements that will help close more business. CRMs typically don’t help sales professionals improve, although that’s what was promised when the system was sold.

Different needs depending on the complexity of your sales efforts:Some may be surprised that CRMs are not well suited for complex B2B sales. Can’t CRMs do almost anything? With a lot of consulting and programming, this may be true. There are certainly many excellent add-ons available but how do you turn a transaction system like CRM into a visual guidance, learning and coaching platform needed in the complex sales environment?

CRM products are best for selling low-risk commodity products which can be transacted but high-risk solutions usually require the consensus of multiple stakeholders and take months, or even years, to come to fruition. The more complex your sale is, the more important each action of your sales people becomes. You need a system that supports complex process.

List, lists, lists or visual guidance and coaching? Sales improvement software should let you implement any sales process you want, and visually guide sales professionals, step-by-step through a sales process and preferably using a specific methodology and sales linguistic. In contrast, CRMs were designed to capture and display large amounts of information, and because most CRMs are developed to adapt to the needs of different user groups and business units within a company, the graphical interface often has a generic – and frankly, a quite ugly - design. The output is often lists of information that look very similar no matter where you are in the system. This type of user experience provides little contextual feedback and focus.

Studies by Sales Performance International, a leading sales development consulting firm, emphasize that a visual overview of the sales process produces significant improvements in sales performance. In general, people can digest visuals better than text, making the graphical design of sales improvement software much more than just points of vanity.

Manage information or drive the right behaviors? While CRMs were originally designed to manage customer relationships and interactions, sales improvement software is designed with one goal in mind – win more business. CRM promises the same focus but rarely delivers in implementation. Sales improvement or sales enablement software takes a different approach by focusing on the sales process itself so that sellers truly understand the prospect. The best systems become a real-time training and coaching platform to drive success throughout the sales process.

The premise behind this new breed of sales improvement software is that most sales professionals fail because they aren’t selling properly. Sales improvement software helps the sales professional know what to do with whom, when and how. This is where you need sales process, methodology, skills and professional coaching.

The future is in “meshing”: I believe that we’ll see more “meshing” in the future, where the concept of data sharing between modern best-of-breed systems removes much of the golden luster of using the same CRM vendor for everything. It will continue to be the system of record, but there will be a limit to how far CRMs can reach into new applications such as sales improvement. [I agree with George here also and I often write about the new world of mash-up methodologies and technology].

The race is on and it will be a fun one: CRM will not go away and we’ll see marketing technology merge with sales technology. It’s not so much about disrupting CRM as it is about evolving the sales profession by developing specific technologies to improve sales results by better supporting sales people, frontline sales managers and leaders. My bet is on technology that will encourage winning behaviors and win more complex B2B sales by growing people and making complex processes easy to navigate.

Wow… George is not alone in his views and I speak with many who are developing complementary and competitive technologies and cloud software offerings that can change the game for CRM adoption and success. I see an exciting future ahead for sales people who embrace technologies that improve their efficiency and effectiveness.

Now it's your turn. Do you agree with George? Where do you see the future of CRM?

If you valued this article, please hit the ‘like' and ‘share’ buttons below. This article was originally published in LinkedIn here where you can comment. Also follow the award winning LinkedIn blog here or visit Tony’s leadership blog at his keynote speaker website: www.TonyHughes.com.au.

Main image photo by Flickr: Brian Smithson

Could you function without your CRM?

Garbage in, garbage out. GIGO. The modern Customer Relationship Management system or 'CRM' is all too often a repository for the inaccurate. There is little way to enforce a culture where sales people are reformed citizens and tidy record keepers. The customer data is always changing. Here are some bold ideas:

• What if LinkedIn opened up its API to synchronize with all CRM systems so that the data is almost always accurate, up to the minute? Wouldn't this move alone revolutionize the space?

• What if LinkedIn launched its own CRM product. How many more features does Sales Navigator actually need to be an effective catch-all solution in this way?
• We're seeing more and more autofill via LinkedIn, so couldn't prospects just hit a single button from your front-of-site to download a white paper by filling in pre-populated, accurate LinkedIn credentials that transition seamlessly into your database of record?
• Is all the clicking and syncing and searching in CRM shredding our collective productivity? How many hours are we actually wasting on manual processes inside antiquated UIs?

• Could you theoretically function more effectively with just a white board, phone and email du jour? How about an airplane and a cup of coffee?
• Is there sufficiently advanced technology being built that will disrupt CRMas we know it?
• Could Social Selling, Web 3.0 – the web of Context, Big Data, Predictive Analytics and Automation play a far greater role out-of-the-box to help solve the above issues?

• When are marketing automation, drip campaigns and B2B lead gen actually going to get smarter and more sophisticated with personalization beyond the first name andfirmographic telegraphing to present key insights to each type of executive stakeholder?
• What if wearable technology could play a role? Google Glass could pull in real-time data to keep the CRM accurate. A snapshot with a smart contact lens of a business card could serve to update that file automatically after or even 'during' a meeting?

• Will wearables and machine learning technology take voice recognition and Siri to a level of an always-on, executive assistant keeping all our data straight?
• Is there a bright future for CRM or will the sector continue to decay behind the scenes while savvier marketing teams continue to put lipstick on a pig, shellacking an advanced-looking coating on a shell of an ancient engine?

• What is the role of social proximity to serve up networked intelligence based on geolocation, network node overlays and prescience about who we 'should be talking to?' We have the data, now how do we get to it?

These questions are mere icing on the iceberg cake of perplexing issues, no doubt. It will take bold, antifragile, resilient and innovative entrepreneurs within the legacy systems to disrupt themselves in skunk works-like divisions that crop up.

Or, a new breed of CRM and CXM will appear that starts to erode their grip on market share. We've seen these tectonic shifts in so many industries as of late. It's never been easier to launch a startup company and challenge incumbents because of the cloud, CapEx can be virtually eliminated with a controlled OpEx burn.

Who will be the next disruptors in CRM? There's one thing we can never doubt. Ideas are powerful and one big bold idea has the power to change the world and uproot industries in inexplicable ways.

How can CRM be re-imagined from the ground up, with First Principles Elon Musk Physics Thinking. Which portion of the features does your organization actually use? What is the 20% generating 80% of the results? What is glaringly missing? How can we tie back all the ROI of our finest social selling efforts and reflect this within a holistic picture of multi-channel outreach in the modern Full Funnel Marketing approach?

If you valued this article, please hit the ‘like' and ‘share’ buttons below. This article was originally published in LinkedIn here where you can comment. Also follow the award winning LinkedIn blog here or visit Tony’s leadership blog at his keynote speaker website: www.TonyHughes.com.au

Main image photo by Flickr: Roland Tanglao