CRM or BPM?

Last week I had the chance to travel to beautiful Cambridge, MA.  Years ago AT&T sent me to MIT for various business courses, but I hadn't been there in years.  Coming from Orlando with its 100 plus degree days it was a pleasure to walk by the Charles River along with many others.  The weather was perfect and I wasn't the only one enjoying the gorgeous day.

I was in Cambridge to visit with Pegasystems, the leading BPM (business process management) software leader.  Pega (as they are known) boasts major customers including Bank of America, three or four of the "Blues" (Blue Crosses) and many others.

BPM automates common work practices -- and since many companies are like silos -- marketing is independent of sales is independent of engineering is independent of shipping, most processes that cross departments (and don't they all?) get there via email, voice mail, forms, excel spreadsheets. . .  Even when the systems are the same the receiving department has to proactively pull the work into their world.

BPM not only automates processes across organizations, but using quality improvement methods and workflow automation work gets done faster and more efficiently -- thus saving time and money.  In the world of government regulation (such as Sarbanes-Oxley aka SOX) where companies had to keep a tighter track of financial information for auditing purpose) being able to not only automate processes, but to track them becomes a necessity.

Pega is #1 in the BPM software world with their  SmartBPM® product.  Their president, Alan Trefler was named “Computer Software Executive  of the Year” at the 2009 American Business Awards.  So in the world of BPM they are not only the market leader, but the thought leader.  Pega is the leader in the Gartner Group "Magic Quadrant" for BPM.

Recently Pega has dipped its toe into the CRM (customer relationship management) world with their solution CPM (Customer Process Manager).  They have build a contact center customer service support module on top of this BPM engine.   While certainly not a "threat" to the more complete CRM vendors who go beyond the customer service space, the Pega solution is the next logical step for CRM.

Today's CRM solutions are, for the most part, records based.  Whether we're talking of Siebel (Oracle), Salesforce.com or Microsoft Dynamics CRM they all start by creating a record.

Remember those corporate silos I mentioned a few paragraphs ago?  All that great customer information winds up "usable" beyond the CRM application only if it is in a field in said record.  Otherwise that valuable customer "gold" becomes embedded in notes that a CSR or sales rep makes of the contact, and are only available to those who sit and read those notes.

What Pega's CRM does well is to integrate end-to-end customer-facing processes across not only departments but existing applications.  If you already have Siebel and an (enterprise resource planning) ERP solution and a (supply chain management) SCM solution you can bring in Pega underneath them to streamline the hand off of a sale or problem resolution across organizations.  Over time you can begin to implement some of their desktop apps that can be very easily modified on the fly.  The power of Pega's ability to pull this off is shown in their 50% plus growth in the last year.

The most amazing thing about Pega is that they are aimed at the big companies --  1,000 plus users.  Many CRM applications simply can't scale to large implementations, but Pega can -- and it does so based on an open architecture (java).

Pega does have competitors in this new CRM hybrid space.  Chordiant and Sword Ciboodle (a really excellent offer from a Scottish company who is making inroads into the States) to consider along with Pega if the process oriented CRM approach makes sense in your company.

The traditional CRM vendors have noted the interested a hybrid BPM / CRM approach and all have some iteration of it on their product roadmaps.    If you're interested in the CRM world, take a look at Pega, Chordiant ans Sword Ciboodle to get a feel for your future.

The Lazy Hazy CRM Days of Summer and the Holy Grail of Unified Communications

This is the first entry in awhile.  After my last blog the folks at IT Toolbox asked me to begin a blog for them on the topic of CRM.  "Making Cents and Sense of CRM" is focused on how CRM has gone from being the next great invention to improve corporate ROI since the invention of ERP (enterprise resource planning) into a mess of all kinds of applications that have nothing to do with one another (from sales force automation (SFA), to customer service, to business intelligence, to contact center. . .).  You name a solution and no doubt someone has called it "CRM."

This mis-use of the term has caused the market to falter.   Why would people buy something when they either don't know what it is supposed to do, or when it over promises and under delivers?

I think this is where the expression "duh" aptly fits.

So as I sit in Central Florida in 100 plus degree heat (farenheit) pondering how soon I can get back to the beach or at least the pool I've been focusing on the question of whether we need to "re-label" real CRM or whether we can save it with a hail Mary pass?

That "hail Mary" may be tying CRM with Unified Communications.  We've discussed this a little bit before -- how the ability to provide accessibility to people where ever they are from a  "virtual" office phone or email address makes the ability to improve customer service. . .but let's take a look at some "real world" examples.

Toshiba just announced their  Unified Communications Suite, Strata® CIX™.   ShorTel (a VoiP vendor) recently linked their UC to their call center quality assurance processes.   Why are vendors big and small suddenly jumping on the "CRM / UC" bandwagon?

Well, a survey by Computerworld Hong Kong showed that users are worn out from accessing multiple communications points (email, voicemail, cell phone, office phone, etc.) only to be bombarded by people that keep them from getting their work done, while getting to important things and people "too late."   The survey found that 55% were using IM (instant messaging), 42% were using video conferencing, and 29% were using person to person tools that were created original for home use (like Yahoo! and Microsoft Messenger).

While hte survey shows that people need UC (and may even WANT UC) they still don't understand what it is!

Forrester Research also conducted a survey and their's showed that most small and large companies still are uncertain about the benefits of UC!  Forrester surveyed 2,187 North American companies and 55% (55%!) were confused about what it was, let alone its value to them!

Wow, here we are contemplating how to get CRM out of the mess of "what is it and why do I care?" when it has enormous potential to improve the bottom line, when unified communications perhaps has a faster ROI (probably less overall over time, but a huge, quick payback for UC) but no one knows exactly why!

Amazing!

Granted the economy is confused right now and some companies are in panic mode -- but this makes both UC and CRM even more compelling given the ROI -- especially with a shrinking workforce.  Yet 55% are confused about the VALUE of Unified Communications?

Wow, we are sure lousy communicators!

Ellen Daley, (the Forrester Research analyst who authored the report) said: "There's been a 21% increase in UC pilots since 2007 but no increase in firms buying UC. A lot of people are talking about UC, a lot more are tipping their toe in; but at the same time they're all saying they're not sure about the value."

Folks, we can't throw technology at a problem and hope that fixes things!  UC and CRM both hold enormous potential for companies but ONLY if correctly applied to a specific business NEED.  Pilots alone are worthless if the pilot isn't part of a business problem and specific success criteria applied to the pilot.

Far too many IT vendors sell to the TCM (telecommunications manager), or the CIO (Chief Information Officer) or some other technical manager.  Definitely we need to be talking to these folks, but the REAL buyers of UC and CRM are in Marketing and Sales.  These areas are outside of the comfort zone of man typical IT sales person.

UC and CRM vendors need to move up the totem pole and start cross selling into sales and marketing (and perhaps even the CFO and CEO).  If you don't know how to get there and have a compelling story when you do -- prepare to fail.  Sit by the beach or pool in these lazy, hazy days of summer and prepare to sit there during the blizzards of February (or in my case, Disney's Blizzard Beach).

If you lack the ability to get outside of IT you'd better partner with someone who can.

Or we'll attend the funeral of your awesome CRM or UC product -- along (perhaps) with the whole field. See you at the beach!

The Irony of it All

My last blog posed the question:  "Is Microsoft the next Dinosaur?"  My point was that most companies have a lifecycle, just like products do and people do.

Microsoft may or may not be at the precipice of a decline -- it is really up to Microsoft.  The thing I always admired about Bill Gates in the "early days" (and I was a UNIX fan since I worked for AT&T Computer Systems) was that he was always paranoid.  He knew the internet could eclipse the OS as far as the center of the IT universe and so out came Internet Explorer.  Microsoft tried to win the search engine war -- and after repeated lack of success has what looks like a nice product in Bing.

But no sooner did I post my Blog and get lots of comments (most not so nice from Microsoft proponents) along comes PC World with an article that asks the very same question I asked: 

Is Microsoft Following GM's Road Map?

Analysis: GM's bankruptcy marks the end of an era. Is Microsoft repeating the automaker's mistakes?

J. Peter Bruzzese, InfoWorld

// Jun 3, 2009 6:00 pm

"Microsoft has faced a few serious bumps over the last 10 years but came out fine. . .Knowing the work Microsoft developers put into their products, I believe they are the saving grace of the company -- as long as they are allowed to hear the voice of the people. This is an area where I've seen a problem."

I worked for AT&T at the hey day of Bell Labs.  We had the brightest, most awesome minds around -- just like Microsoft does today.   Microsoft ca be its own best friend or its own worst enemy.  Only time will tell.

Happy 2009!

Times are tough.  Businesses large and small are shutting down or looking for government hand outs.   Will GM and the other auto manufacturers survive?   Are we facing a depression??  Job loss is rising and it seems that daily we see new layoffs reported.    It is even rumored that Microsoft may lay off up to 17% of its workforce.  Link.

I'm not picking on Microsoft, simply highlighting the situation that our economic down spiral is just that -- when one thing goes bad it impacts another line of business. . . from the mom and pop restaurants who lose customers, and thus so do their suppliers to the big firms who are household names.

Yet I started this blog saying "Happy 2009" and I really am optimistic.   As FDR said so many years ago "All we have to fear is fear itself."

There have to be opportunities -- and with the new Obama administration about to take over it seems there will be a number of attractive areas.   Obama has promised global Internet access -- so the network providers have a golden opportunity to come out of this downturn quickly.  The new administration is also very pro "green" -- so if look for environmentally friendly solutions in your field.   The other attractive markets?

Government itself as a customer (federal for now, as the local governments who rely heavily on property taxes are "hurting") and health care.  Baby boomers are aging and putting more and more stress on health care.  Again, the new administration is very interested in universal health care.  Keep in mind that Hillary Clinton, slated to be our new Secretary of State, was in charge of the Clinton Administration's health care vision about fifteen years ago.  Back then I was working closely with the Chairman and CFO at Adventist Health System Sunbelt, and the CFO was on Hillary's committee.  A lot of the visions then (electronic patient records that are patient-centric, not owned by individual doctors) are part of the vision yet today.

Tom Daschle has been named as Secretary of Health and Human Services in the new administration.   In his book Critical: What We Can Do About the Health-Care Crisis, he  discusses price controls (meaning health care providers need to find a way to improve quality to reduce costs).    Daschle is a big fan of Britain's National Institute for Health and Clinical Excellence (NICE) which has a two tier approach -- everyone has access to a base level of health care and you can pay for private access if you so desire.

Time will tell what the Obama administration will do, but the time to begin exploring how you can take advantage of the new opportunities is now.  Welcome to 2009!

CRM doesn't mean all customers are created equal!

In recent years many jobs in the United States have been outsourced and off-shored with the thought that reducing costs results in higher profits.  You’d think that would make sense.  But it doesn’t.  Not all customers are created equal and the highest profits come from a handful of customers.  In the “old days” this was known as the 80/20 rule.  80% of sales come from 20% of customers is the old chestnut — and it had more than a kernel of truth in it. Businesses today can’t take a “one size fits all” approach to their customers had hope to be profitable.   Funneling everyone through a touchtone interface (press “1″ for sales, “2″ for service) and a contact center agent who doesn’t speak English very well is illogical and will result in a loss of sales.  With all the data at hand today we have the ability like never before to analyze who are profitable customers are and to target them.   CRM and “1 to 1 Marketing” are often mistaken as Communism — treating all people alike.    The opposite is true — you should spend more money on your profitable customers — and less on those who don’t add to the bottom line.  The secret is in using the data that you have and turning it into powerful, actionable revenue producing information.