With all the discussion around customer relationship management (CRM) and customer experience management (CXM), it is hard to believe that one of the major issues facing enterprises is defining CRM strategies. According to Forrester’s William Band, this problem is compounded by a shifting CRM landscape.
Band sat down with CMSWire late last week to have a look at his new "TechRadar for AD&D Pros: The Extended CRM Technology Ecosystem, Q1 2013" playbook, to tease out some of its findings and to find out what exactly is going on here.
For those who haven't come across Forrester playbooks before, they offer practical research and recommendations to help enterprises navigate their way through difficult technology-based landscapes -- in this case the CRM landscape.
Deep Customer Engagement
The first thing to note, he says, is that the way of the future for enterprises is deep customer engagement. This isn't exactly new, but needs to be underlined constantly. In the current CRM space, this means evolving to find new solutions that will engage with social consumers and enrich the customer experience through community based interactions.
Enterprises must evolve to find innovative new solutions to engage with emerging social consumers and enrich the customer experience through community-based interactions across multiple channels. Firms need to take an “outside-in” approach, where deep engagement with customers is the key to success.
Extended CRM Ecosystem
The report itself covers the lifecycle of 20 technologies that constitute the extended CRM ecosystem, and remains key for organizations, even if new capabilities like social engagement, BPM, loyalty management and advanced customer data management and analytics are enabling cross-channel interactions.
While traditional technologies will continue to be used for the benefit of the organization -- what Band describes as an “inside-out” approach -- the enterprises that have an edge will be those that develop outside-in approaches for their clients -- described as an approach that enables strong intra-organizational and customer collaboration between enterprises and their clients.
Enterprises also have to enable customer interactions across an increasing number of touchpoints. While they use existing CRM technology to interact with customers through traditional touchpoints, they can't use traditional or legacy systems.
CRM Market Consolidation
This is all happening against a background of consolidation and turmoil across the CRM landscape itself. Some of the main points here include:
- Oracle: You’d have to be living on a desert island not to see this one. Over the past two years, Oracle doesn't seem to have stopped buying with notable acquisition including ATG, Market2Lead’s intellectual property and InQuira, the knowledge management solution vendor. In 2012, it also snapped up Endeca and RightNow Technologies.
- SAP: SAP has been busy with the acquisition of Sybase and SuccessFactors, the SaaS human capital management company, while it also entered into a partnership with eGain for knowledge management.
- Salesforce.com: It has turned into a bit of an acquisition animal as it builds out its platform with notable acquisitions of Radian6 that completed its Salesforce.com marketing cloud, and DimDim, a collaboration vendor. It also bought out Model Metrics.
- Microsoft: In the past, Microsoft has focused on an internal development strategy for Dynamics CRM, but is now beefing up its integrated marketing capabilities with acquisitions like the Marketing Pilot buy in 2012.
- Pegasystems and KANA: Both are bringing business process management (BPM) offerings into the CRM space. While Pegasystems announced the acquisition of CRM vendor Choridiant in 2010 to strengthen its SmartBPM suite, KANA bought Sword Ciboodle -- a BPM solution with deep capabilities to support contact center processes -- in 2012.
Of course, there are many other smaller vendors that have been buying what they need to build up and out, but the move has been towards consolidation and it remains to be seen just how long it will take before many of these smaller players are snapped up in turn by the bigger players.
TechRadar For The extended CRM Ecosystem
It is against this backdrop that Band has developed this list of what he sees as the 20 most important types of applications in the CRM ecosystem (see diagram below for the full list).
The 20 technologies that appear here are those that support all activities around the management of customer relationships, including: targeting, acquiring, retaining, understanding and collaborating with customers.
In mapping the futures of these technologies, Band says, they found:
- Technology Acquisitions: Vendors are buying what they need so they work in all areas of the CRM tech ecosystem.
- Social computing: Social computing solutions enable deeper customer engagement with enterprises using customer community collaboration technologies, for example, to communicate with clients and gather feedback. The result is the emergence of two new technologies -- customer community platforms and listening platforms.
- Traditional functions: Enterprises still see the traditional functions as marketing, selling, taking orders and servicing customers as critical functions.
- Analytics: Customer analytics and data management are still primary functions. Many organizations are still looking for 360° views of their customers, even if this isn't achievable yet.
For the sake of presenting all the information he has uncovered in meaningful way, Band has divided the 20 technologies into four groups, depending on where they are in the CRM lifecycycle. The information is detailed and complex and we can only offer a summary of it here. The four life stages for technologies are:
- Survival: Voice-Of-The-Customer solutions coming into the spotlight
- Growth: Social Customer Engagement and loyalty solutions move into the growth stage
- Equilibrium: Marketing, Sales, Order Management and Customer Service remain key
- Decline: Mature technologies get incorporated into emerging categories
1. Survival Technologies
- Enterprise feedback management (EFM):These are technologies that establish dialogues between employees, partners and customers regarding key issues and concerns. They can be difficult to integrate into customer interactions.
- Revenue and pricing management: These include traditional pricing solutions, but now come with support for business intelligence for analyzing profits. Cutting-edge companies are starting to use these, but many are hesitant to use them because of the sensitive nature of pricing decisions.
- Field service management (FSM): These include technologies for supporting repair and testing activities at customer sites. Significant integration challenges into customer base because of disparate technologies with multiple code bases and no guarantees of future support. Not important for many verticals.
2. Growth Technologies
- Customer analytics: Enables companies to analyze customer data to optimize customer decisions with many of the companies Forrester surveyed, saying it was crucial to their success. This is offset by usability issues, as well as issues around IT business considerations in buying. Vendors are struggling to find the right mix here.
- Customer data management: Vendor solutions for customer hub/customer data integration/customer data quality solutions have developed a lot in recent years in all areas. Only a few offer solutions that deliver optimal convergence between infrastructure and customer focus.
- Commerce platforms: These are solutions that support product buying, including shopping car functionality, checkout and order processing, promotions management, etc. Forrester says it expects demand to remain high for these kinds of technologies.
- Product life-cycle management (PLM): These are technologies that support product development and efficiency through gains in better management and control of product data. PLM adoption has grown as collaboration across the enterprise has developed with vendors offering new functionality to cater to this.
- Contract life-cycle management (CLM): This is currently used to manage relationships between partners, but Forrester says it will soon be used to manage internal relationships in the enterprise.
- Enterprise listening platforms: These are used to capture social data, as well as manage and analyze that data through text analytics, delivering insights through dashboards. These are hot technologies in the current market, witnessed by the rush by CRM and customer service vendors to buy social listening platforms.
3. Equilibrium Technologies
- Billing: This includes technologies that support anything to do with bill -- from provisioning to invoicing to tracking to payment and analysis. Enterprises are using it to gain software visibility and to better understand customer behavior patterns in this respect.
- Cross-channel campaign management (CCCM): This is increasingly focused on execution in real-time channels and is used to improve customer dialogue. While it is a well defined concept, marketers also select from a subset of vendors based on their needs in interactive marketing.
- Sales force automation (SFA): The technologies in this space are, and will always be, in demand, supporting sales representatives in managing their contacts and helping close sales. Enterprise SFA integrate sales performance management (compensation) abilities and their sales organizations with their customers.
- Order management: This technology may stretch across the entire CRM environment as enterprises look for ways to manage and optimize orders. Forrester says that many of the enterprises surveyed said they believed these technologies to be critical to their success. As a result, they will remain a critical element of the extended CRM ecosystem.
- Customer service and support: Enterprises hope these technologies will cut them a competitive edge by taking market share form their competitors. The high perceived value of CSS solutions has resulted in this category being one of the earliest-adopted and most successful categories of solutions in the extended CRM technology ecosystem.
4. Decline Technologies
In the decline technologies, there is only electronic bill presentment. As might be expected, this category has been subsumed into other categories. The range of vendor solutions available to support configure, price and quote (CPQ) has consolidated as market demand for, and acceptance of, these solutions has reached its peak.
Again this is an extensive report that deserves some study. The research is exhaustive and gives a crystal clear view of the CRM space in Q1 of 2013. However, the market is changing rapidly, as Band points out and undoubtedly by this time next year there will be changes. Watch and wait.