I am Switzerland when it comes to CRM (Customer Relationship Management) products and have spoken for vendors including Oracle, Sugar and SAP. CRM and sales enablement technologies are one of the four topics I write about, along with leadership, strategic selling and social selling.
I have known Marco Formaggio for years and he is one of the leading CRM consultants in the SAP arena. I respect him greatly and SAP is one of the powerhouses for enterprise software globally. Their approach to CRM has been different from Oracle, Salesforce, Microsoft, Sugar and others; yet the power of real-time data from a truly integrated enterprise.
I asked Marco to share his thoughts on the history and future of CRM. He was there during the birth of enterprise CRM back in 1997, back when it was merely a philosophy before Siebel burst onto the scene at the turn of the century. CRM became the next big thing following the ERP (Enterprise Resource Planning) craze sweeping the enterprise world at the time. ERP was driven by hysterical fear of Y2K bringing computers around the world (and in the air) crashing down.
Marco believes that CRM is best executed as part of an integrated ERP strategy. He has seen ERP drive productivity, data integrity and systemisation of previously loosely coupled processes within organizations. ERP drove the era ofintegration which was the most commonly used buzzword in IT circles in the mid to late nineties.
Here are some of Marco’s other thoughts. “Customer Relationship Management is really a business philosophy espousing the idea that the enterprise needs to be customer centric. In other words, all process and functions should be designed with the customer at the centre. In this model, processes are viewed from the customer’s viewpoint and enable the customer to connect in every possible way to the enterprise. ERP did not do this! Thus tools were built to cater for this ‘One Face to the Customer’ approach. The best known tool was Siebel. This sought to address the need for a software tool that would allow sales, service and marketing functions to provide consistent data and experiences with their customers. CRM now became a tool!”
“Back when Siebel was gaining momentum, SAP decided to build a standalone system known as SAP CRM to address this need. This system would ‘integrate’ via middleware with the flagship R/3 Solution. In the early 2000’s a number of CRM implementations were carried out with varying levels of success. Needless to say the success for SAP was not as revolutionary as ERP. The success was also mixed for organisations who spent untold millions on integrating their standalone CRM systems with their integrated ERP systems. ‘CRM’ was now on the way to becoming a dirty word.”
“And then came Software as a Service. The advent of tools such as Salesforce.com sought to address the needs of sales and marketing by providing them tools that were not sold to IT but to the very people who were the ‘face’ to the customer. They addressed the needs of the disgruntled staff members who were not getting what they needed from IT to help them drive their customer centric objectives. These systems were implemented rapidly, generally not too focused on integration or process standardisation. They definitely filled a gap and raised the bar in terms of gathering customer related data in a single repository and assisting sales and marketing in the execution of their day to day to roles. ‘CRM’ was now a Sales Force Automation (SFA) tool but where was the customer!?”
“The advent of social media has now driven a wave of change where the customer is now in control whether suppliers like it or not. The challenge now is to provide ‘one face to the customer’ as a business imperative. Customers looking from the outside-in do not care about the businesses disparate systems and do not understand why the sales representative cannot tell them immediately what the progress of their delivery is in the warehouse or the when the imported service part that has been ordered will arrive in the country. For this required integration it requires a customer centric enterprise. This is CRM in the real world; beyond pretty user interfaces!”
Thanks Marco for sharing your experience! Here is a snippet of Dr Michael Hammer who created the term: Business Process Reengineering... enjoy hammer-time!
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Main image photo by Dr Michael Hammer. Creator of Business Process Reengineering