Adoption of Cloud CRM Forces Change to Mindset of Over-Customization

There is a story in my book, Lessons Unlearned, about a speech Larry Ellison gave at Oracle OpenWorld in New Orleans in 2001. Oracle was pushing big time into the enterprise applications space with their new CRM offering, and Larry was talking about ‘out of box’ verses customization. To the chagrin of the audience, he said something along the lines of, “Oracle matches your business processes 80% out of box, and you should consider changing your processes to fit ours for the other 20%.” Larry was right of course, though I didn’t necessarily realize it at the time.

In fact, if I were to characterize the first “wave” of CRM, from around 1997 to 2007, I’d say it was “spend millions of dollars on complex software, and then customize the hell out of it because it wasn’t complex enough.” Large companies had CRM projects going on for years, customizing field names, screens, process flows, etc., until the product was practically unusable with dozens…if not hundreds…of required fields, pop up screens and non-intuitive flows.  This of course frustrated the heck out of CRM vendors, who built those vertical-specific screens and processes using ‘best of breed’ process flows from real companies.

I was involved in many CRM implementations during my vendor days, and I have audited many CRM implementations during my analyst days, and usually what I find is consistent: companies were so convinced they were unique that they took packaged applications and rewrote them until they were unusable  Then they started shopping for another CRM platform, and started the process all over again.

Let me be clear: when it comes to CRM, the more customizations, the less successful the implementation. I have seen this over and over and over again, and unfortunately, I still see it happening today. But luckily, a new dynamic is emerging.

Over the last year I’ve seen some of the largest companies in the world decide to implement OnDemand CRM. They recognize that the new cloud platform is far less sophisticated than their existing system and processes, but these companies are on a mission from god to simplify their operations and try to use Salesforce.com–or whatever cloud solution–as ‘out of box’ as possible. This is an unbelievable shift, and definitely a shift for the better. I like to think TSIA has a hand in this shift, because through our benchmarking programs, we show companies that their peers are struggling with the identical challenges, and best practices identified by one company are wholly repeatable within another company. In other words, tech companies are more alike than they are different.

With tightening budgets, shrinking margins, and unstable revenue streams, companies no longer have the luxury of repeating or prolonging mistakes with technology projects. They need to streamline and automate, and they need to do it fast. If that means swallowing your hubris and accepting the Salesforce approach to a process instead of your own, so be it. Those changes are HARD to make, especially for large firms, but I’m seeing it happen.

This is great new for CRM, and for the rest of enterprise applications as well.  I predict that CRM success will become more common, and the usual failure statistics for CRM (50% or higher of CRM projects don’t meet expectations) will begin to fade.

Bottom line: if your CRM implementation takes more than 6 months, you are doing it wrong. Once you remove ego from the equation, you will find those out of box processes are well designed. If you identify an internal process that is radically different from the packaged application, don’t assume your way is better–I’m almost positive it isn’t. If in doubt, talk to the vendor’s product management team about why the process is designed the way it is, and go back to the drawing board and do a real assessment on your approach vs. the industry best practice. And be ready to change.

We are all in this together. Let’s learn from each other, leverage our successes industry wide, and do our best to stamp out over-customization. And thanks as always for reading!

Three Predictions for 2013: Self-service scheduling, BYOD impacts, Real-time collaboration

Oh, January is here, and everybody in high tech with a byline is publishing their 2013 predictions. How can I resist joining the herd? Here are my top 3 predictions for service-related technology topics in 2013:

• Self-service scheduling. NCR takes credit for inventing the concept of self-service with the advent of the electronic teller in the 60s. When was the last time you waited on line in a bank? Tech support has been successfully moving customers to self-service for more than a decade. I think 2013 will see customers demand that the self-service laggard….field service….finally join the revolution, allowing customers to schedule their own appointment times online. Rarely seen in B2C, and unheard of in B2B, with more field support organizations adopting robust scheduling and dispatch platforms, opening up appointment scheduling to end users is a natural progression, and early adopters will get a lot of press–and customer goodwill–for making the effort.
• BYOD impacts. Tablet and smartphone sales now account for some 40 percent of spending on electronics worldwide, with sales of laptops and desktops shrinking each year. I keep hearing more about “Bring your own device,” or BYOD, meaning companies assume both employees and customers are armed with the latest gadgets and the pressure is on IT to be sure all corporate data and applications can be easily and cleanly accessed via mobile devices. This means a lot of infrastructure improvements, massive UI overhauls, and companies beginning to compete on how well they deliver the customer experience to mobile users. This isn’t just about trying to be cool, either. With a new breed of young, fickle Wall Street analysts doing all their research via Blackberries and iPhones, some big legacy brands will start taking it in the shorts when they see buy recommendations downgraded because corporate websites are not easily navigable via a mobile device.
• Real-time collaboration. Salesforce Chatter has made company-wide collaboration a breeze. Community platforms such as Jive are putting a big emphasis on making internal collaboration simple and effective. Vendors such as enterprise search specialist Coveo have introduced the concept of expertise management, making it easy to identify an expert on any topic, product or feature. With high planned spending for the last 2 years on collaboration tools, I think in 2013 we will finally begin to see examples of company (and maybe even customer) experts being pulled into real-time collaborations about critical customer issues. The tools are ready, all we need now is the spirit of cooperation and collaboration, and I think with growing numbers of younger collab-minded workers entering the workforce, 2013 will be the year we see real progress toward making this a support standard.

What are your predictions? Please add a comment and keep the conversation going! And as always, thanks for reading.