How has CRM evolved in 2016?by
Gartner states that across the 12 months of 2015, CRM systems from Salesforce, SAP, Oracle, Microsoft and Adobe accounted for 45% of what was a $26.3 billion market.
Subsequently, according to DMC Software’s Anna Morrish, CRM software “blurred the lines between sales, marketing and customer service” in 2015, as the globe’s leading players attempted to win customers over with talk of the shiniest, most comprehensive, integrated offering.
In many respects, 2016 has seen CRM evolve in much the same way, but as we look back over the year, the following events stood out more than most.
Microsoft dropped CRM from its branding
Perhaps one of the biggest signals of intent was news that Microsoft was intending to drop its branding of CRM in its release of Dynamics 365.
Indeed, come November, and the update of Dynamics saw customers upgraded from their CRM Online subscription to an apps-based model covering every customer-facing function – Dynamics 365 for sales, for customer service, for marketing etc.
Jukka Niiranen, a consultant for Digital Illustrated, who initially broke the story with MyCustomer in October, said the move highlighted Dynamic’s ambition to offer a product suite that was more prosaic for those that used it.
“I'm not convinced that many of the Dynamics CRM deployments I've seen during the past decade of working with the product have actually been true customer relationship management systems at all. Instead, many of them have been used as customer address databases, sales pipeline tracking tools, email newsletter launchpads, customer support ticketing systems and so on.
"Isn't that what you typically do with CRM systems?" Yes, it is, but that doesn't mean it should qualify as CRM. Nor should the existence of this type of a CRM system be any indication that the organisation has an actual CRM strategy in place. They are simply examples of operational business applications that most companies out there can't survive without these days. They also deal with data related to customers on several levels, which means they A) require access to the central customer identity records managed by the organisation, and B) can contribute a lot of valuable transaction data back to the central customer database. But does that make them all "CRM"? In practice, yes, but in theory, no.
“Tools are one thing, strategy is another. I'm not saying that the concept of customer relationship management should be treated as some type of mysterious art form that cannot possibly manifest itself in software orchestrated operational processes. The CRM strategy execution most definitely should result in very tangible changes in the way how companies engage with their customers. Unfortunately, sometimes it simply results in changes of software applications being used.”
But, whilst Microsoft was subtly reimagining its interpretation of CRM, it was also in the throes of making significant additions to its product suite, too.
When Satya Nadella announced the $26.2 billion acquisition of LinkedIn back in June, it was described as “monumental”.
LinkedIn CEO, Jeff Weiner outlined the strategic rationale behind the deal, insisting that “combining forces” with Microsoft would provide “the next stepping stone” toward realising the professional network’s mission and vision.
However, some commentators, such as CRM and social media consultant Paul Ince, saw it as a big shake-up for the CRM market.
“The LinkedIn acquisition makes so much sense for Microsoft and it’s clear the intention is to integrate deeply with Microsoft Dynamics CRM and Office. Social selling, and the ability to understand your prospect/customer before and during your conversations with them is now fairly mainstream.
“What LinkedIn gives a CRM user is the knowledge about their contact’s activity in an instant. What are they posting about? Which awards did they win? What’s their latest promotion? All these insights give the user conversation material and help them form a deeper connection with their contact and keep them close. As anyone who has tried to gain access to its API will know, LinkedIn has always been highly protective of its data so it’s quite a coup for the Microsoft range to have what will presumably be exclusive access, ultimately.”
CRM consultant Richard Boardman, founder of Mareeba Consulting agreed, adding: “From a CRM perspective it does potentially offer the scope for some really deep integrations that could give Dynamics CRM a real competitive edge over its rivals. I suspect Salesforce.com might be a little shell shocked.”
Salesforce, however, had an ace card of its own up its sleeve.
Salesforce got smart
For outsiders it may seem like a bold statement, naming your latest product after the world's most revered scientist. But then Salesforce don’t do things by halves.
When Salesforce announced the launch of Einstein, it was riding the wave of hype around artificial intelligence. AI is becoming big business. So much so that Marc Benioff was quoted in August as saying, "if this is not the next big thing, I don't know what is". Salesforce’s charismatic CEO also stated that Einstein will “democratise AI just as we democratised CRM” and that by introducing the technology to its current CRM platform they were effectively “changing the engines on a 747 in mid-flight”.
The question was, why CRM, and why now?
“If you really want a fully engaged customer in modern business, you have to provide a personalised interaction, and you may at times need to do that for millions of people – that’s not something humans can deal with on their own anymore,” says Paul Greenberg, CRM expert, consultant and author of CRM at the Speed of Light.
“AI becomes an important component at this juncture, enabling the personalised engagement you need to provide in customer-facing fields. AI is still learned behaviour but now we’re talking about something that goes beyond traditional process automation.
“The technology is learning from the behaviour of the targeted individuals within your CRM, be it customers or employees, and telling itself how to behave and delivering insights and recommendations. Consequently this will provide a much more personalised action with whoever the target audience is, whether it be your service function or your sales and marketing.”
Writing for Diginomica, cloud computing blogger, analyst and consultant Phil Wainewright stated that there were a number of aspects that would need to be ironed out:
“The advantage that Einstein has is that it can deliver value in small increments, and therefore I think the impact will be seen much faster.
“But there are a lot of unanswered questions. I feel that data privacy issues have not been fully thought through — Europeans in particular will want clearer answers on that score. And while Salesforce is eager to get Einstein in the hands of customers and developers, I got very unsatisfactory answers about how this is being rolled out to the vendors’ massive partner ecosystem — pricing and licensing decisions there apparently are still at an early stage.
2016 saw many businesses continue to grapple with the sheer scale of data passing through their CRM systems, as well as the evolution of data-collecting, connected technology.
As a result, new approaches to CRM have been a necessity for many.
“Companies can't afford to let their CRM projects ‘run on autopilot’ or operate in silos,” said Brian Manusama, research director for CRM at Gartner, speaking to MyCustomer ahead of this year’s Customer Strategies & Technologies Summit in London.
“Too much is changing, too fast. Companies need to balance enterprise-wide needs with departmental needs for innovation.
Manusama says the answer has been to invest more time and resource in ‘bimodel’ CRM strategies.
“Bimodal is a collection of principles, capabilities, methods, behaviors and approaches that enable an organisation to differentiate the normal from the abnormal; the evolution from the revolution; the continual improvement from the disruptive innovation — and manage them differently but coherently,” he says. “It's about the business, not IT, even if in some cases bimodal starts within IT.”
Bimodal strategies marry more predictable evolutions of products/technologies with the new and innovative. As the name suggests, bimodal strategies consist of two elements:
- Mode 1 focuses on predictability and has a goal of stability. It is best used where requirements are well-understood in advance, and can be identified by a process of analysis. It includes the necessary investment in renovating and opening up the legacy environment.
- Mode 2, meanwhile, is exploratory. In this case, the requirements are not well-understood in advance. Mode 2 is best-suited for areas where an organisation cannot make an accurate, detailed, predefined plan because not enough is known about the area. Mode 2 efforts don't presume to predict the future, but allow the future to reveal itself in small pieces. This work often begins with a hypothesis that is proven, disproven or evolves during a process typically involving short iterations/projects.
Manusama is keen to emphasise that bimodal has been a distinct shift away from agile CRM software development, though agile can be the ideal platform for bimodal capability.
“Agile is a great place to start (along with similar iterative methods for software development). It is an essential capability for any bimodal organisation,” he explains. “Agile's principles pervade the whole bimodal approach.
“Organisations will rightly apply agile to Mode 1 initiatives as well. Any organisation that suffers project failures that are due to ‘bad requirements’, or where stakeholders don't appear to know what they want, should be considering iterative approaches to developing solutions, whether in Mode 1 or Mode 2. What makes Mode 2 distinctive is its focus on innovating, exploring and managing uncertainties.
“Bimodal is much more than agile and much more than enterprise agile. It includes a range of capabilities all focused on exploring the future in small chunks and reacting to what is discovered. Capabilities developed in Mode 2 include, but are not limited to, agile, DevOps, adaptive sourcing, lean startup practices, a focus on minimum viable product, employee and team empowerment, differentiated funding, and performance management and customer experience. For leadership teams familiar with lean, bimodal will feel more comfortable, because many of the capabilities and principles that underpin bimodal have their roots there.”
Chris was an Editor at MyCustomer from 2014 to 2022. He is a practiced editor, having worked as a copywriter for creative agency, Stranger Collective from 2009 to 2011 and subsequently as a journalist covering technology, marketing and customer service from 2011-2014 as editor of Business Cloud News.
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