With companies struggling to survive in the age of the customer, Bill Band tolls the death bell for traditional CRM and heralds a new contender: Process-centric CRM.
Customer experience is no new feature in CRM but in the age of the customer, as businesses scramble to move from isolated business process management (BPM) and/or front-office CRM projects toward a more customer-centric approach, many are struggling to adopt the right CRM strategies.
Recent Forrester research found that 27% of the pitfalls in CRM strategy centre on difficulties with business process management including technical/integration difficulties in supporting company processes; poor business process design; and the need to customise solutions to fit unique organisational requirements.
Whilst traditional CRM strategies effectively attended to customer data integration and management Forester analyst Bill Band believes they lack support for the “untamed” processes that touch the customer – pivotal for businesses as they strive to succeed in this customer-centric age.
Band is leading the research into “untamed” processes, and coined a new category of CRM that he believes can help solve the challenges that traditional CRM no longer can: Process-based CRM.
He explains: “CRM traditionally from a technology point of view has a very high degree of focus on customer data and information. It's about getting a lot of data about the customer in one place and using that to make better decisions and run the business, which is all very valid.
“But all the traditional CRM solutions really are is big databases with some logic on top of it. They don't have strong capabilities to manage customer information but what they do assume is that the data is somewhere in the organisation and that they all connect with whatever data stores are available to manage the process.”
He adds: “Process-centric CRM takes a more process view of the problem which means looking at the customer journey – how they go through their interactions with the company and mapping those business processes against the customer journey as they research and buy a product and want to tell their friends about the service.
“So it's approaching the problem more from the view of mapping the processes that touch the customer and then that leads to these other solutions which are around defining processes, putting in rules to manage processes.”
However, the CRM space hasn’t necessarily opened its arms to this new strand of CRM. Scepticism around BPM as a category began a few years back when despite being a tool that had multiple uses, business process platforms had no focus, says Band.
To begin with, organisations would invest in business process vendors such as Pegasystems and BPM Online, they were unsure of their use. Now, as they become more focused on these customer processes, organisations have started to see the benefits.
In his report, Navigate the Future of CRM, Band argues that in 2012, more organisations will pursue agile project management approaches to help them become more nimble through. Based on a collaborative approach in a cross-functional team, agile strategies allow IT and business stakeholders to be much more engaged with each other and in process re-design. Band argues that BPM supports agile development and with a lot of businesses still struggling to develop flexible strategies, acceptance of process-centric CRM is growing.
“BPM plus CRM: that's what Forrester’s trying to call out,” he says. Rather than a emerge as a separate category, Band sees a convergence: “Right now the vendors on the CRM side are trying to strengthen their business process capabilities and those in the BPM worlds are strengthening and focusing their messaging and capabilities on these customer processes. So the two worlds are combining and converging.
“Traditional CRM solutions, specifically the bigger vendors like Oracle and SAP, they have business process capabilities in their portfolios and are starting to try to bring that more strongly into their solutions. Certainly on the BPM vendor side there's a lot more messaging and focus on customer processes, particularly from Pegasystems who leads this topic.”
But not everyone’s convinced about the category and it's growing acceptance. Author of the seminal CRM at the Speed of Light Paul Greenberg agrees it’s a legitimate category but not one that is either growing or inspiring. He says: “There aren’t a lot of vendors that fit this category, really they're companies that emphasise business process management that, rather than purely agnostic, is customer-influenced.
“There are only three companies I can name in that category – Sword Ciboodle, Pegasystems and BPM Online but there are 50 that at least take that aspect into account – Oracle, SAP, Microsoft and any other major enterprise software company that operates at both ends with a focus on CRM.
Greenberg goes one step further and argues that even Sword Ciboodle and Pegasystems are trying to move past the category: “They're getting into social, customer experience-focused stuff and understanding the processes that the BPM stuff they’ve done over the years is part and parcel of the totality of a customer's and company's interaction with each other,” he says
“Process-based CRM isn't going to go away because it’s valid now but I don’t particularly see a lot of companies making an effort to get into the space. You’ll see BPM companies want to get out of pure BPM who will move into becoming more customer-focused but you won't see anyone who'll come into the industry as process-based CRM.”
But Band contends that the market is growing and evolving as a trend: “The overall traditional CRM market is growing 8-10% a year which is actually not too bad compared to other technologies but the BPM group category by itself is growing much faster, partly because it's finding that organisations are starting to apply BPM processes to untamed customer processes.
“The future is more. It’s not something that happens in one year; it's a growing trend that we've seen in the last couple of years and we expect it to evolve in the same way in the future.”