CRM Will Become Consumer Relationship Management III

cuttlefish camo

Courtesy of Kings of Camouflage
http://www.PBS.org

In the third installment of looking at the evolutionary path of CRM in a social media sea we will continue using an analog of the cuttlefish ( PBS NOVA show “Kings of Camouflage” ). The cuttlefish’s evolution directly links the cells which manage its camouflage on its skin to its brain and it’s eyes, unlike reptilian chameleons. This provides two distinct advantages; speed in matching the surrounding environment to hide and the ability to mesmerize its prey to eat. Both of these are critical for today’s corporations to survive as well.One of the larger issues today is the integration and coordination of social media in the larger sphere of advertising, marketing, public relations, and consumer relations. Too many corporations take a stimulus-response approach to social media; Twitter bad: reply to Twitter on Twitter, Facebook bad: Facebook on Facebook, etc. Great strategy if you are a planeria flatworm. Bad strategy if you are Pepsi taking on Mayor Bloomberg of NYC regarding fat cola drinking children. Much better to respond by taking people’s temperature with Twitter and Facebook, crafting/commissioning some puff pieces with tame media in multiple outlets, turning into commercial sound-bytes for a mass-market TV ad (in this case like Coke), and resample via Twitter and Facebook for people’s response. Rinse and repeat. This is analogous to the cuttlefish tuning its camouflage to where it is heading as it is running, using its eyes and its brain real-time.

It has been reported that Turkey’s AKP is recruiting and training 6,000 social network storm troopers to counter the opposition’s current use of the social media and get the “correct” word out on the street. Major corporations such as Samsung, apparel design houses, and auto manufacturers “sponsor” influential social media personalities (good recent article in the Wall Street Journal) to try product(s), go to events and take pictures of/with their products. All of this to get past people’s highly evolved resistance to classic media. This all needs to be tracked and coordinated in one place, one data store to rule them all CRM (My Precious). It is too easy for any initiative to go awry without command and control driven by good intelligence. There will of necessity be a large number of relationships to coordinate in a campaign structure and CRM has most of the requisite plumbing in place out of the box.

Now if we add automated software to sweep the Social/Internet space queueing: related keyword topics, natural language parsing of blogs/posts, specific individuals or media outlets, Twitter, etc., a new dimension of potential neural intelligence data will be added. Indexing this information to the social matrix in CRM will allow for its rapid intelligent assessment by people who are informed and in the best position to counter with the total collection of media assets, like a cuttlefish evading a predator or mesmerizing prey. This is why we will see CRM at the nexus of this evolution, it is the fastest way to bring all of the data and all of the people together in one place quickly, without the drag or delay of custom developed systems.

CRM Will Become Consumer Relationship Management II

CuttlefishThis piece expands on the preceding cuttlefish analogy loosely taken from a PBS NOVA show “Kings of Camouflage”. Just as cuttlefish were driven to develop intelligence to deal with a challenging ocean environment, so will CRM need to evolve to managing the total consumer relationship to keep the corporation alive in a real-time social web environment. To oversimplify (and irritate all of the product vendors out there), CRM now essentially manages the sales pipeline (i.e. the food supply of the corporation). Of course there are second and third derivative benefits, such as managing sales force statistics and marketing effectiveness, but the prime directive is essentially feeding the primal corporate beast.

This matches the analogy to any cuttlefish, food first (skip reproduction, not something I want to envision for corporations). Second is defense within the ecosystem, as it is best not to be eaten it you want to be successful. Before we can dive into the evolutionary changes that will occur to CRM we need to look at the environmental drivers of natural selection. I will break the topic into three pieces; a loose description of the ecosystem, how typically corporations handle the external ecosystem, and why it matters.

The ecosystem has become much more complex with the advent of the Social Internet, with the resultant time compression of impression dissemination throughout the total consumer population. Combine the increasing number of competitors, regulators, and special interest groups (predators), with an increasingly informed consumer (food); life for a corporation looks as difficult and precarious as in any primeval cuttlefish sea. A plethora of content starved, advertising fed Web sites are an archival repository of free and unedited consumer opinion, comparison, recalls, pictures, demonstrations, and any combination(s) of products and services (real and imagined). Social media provide the neural synapses of communication for all of this (dis)information to consumers, special interest groups, media, and regulators. Time and thoughtful editing have been successfully disintermediated from the environment.

Like a cuttlefish, most corporations swimming in the Web, have a marketing group who may (or may not) perform market research, target customers, and report market direction. Legal, finance, and engineering/development groups usually track regulation and compliance. Public relations will handle corporate communications. Naturally, all of this will be done independently in the organization, essentially in a vacuum. Some efforts will not even have a persistent data repository or memory, and likely none of it will be correlated and indexed for learning and re-use. In fact, the supporting corporate “senses” are rudimentary and essentially manual (endangered species material to say the least).

Why does it matter now, if it has not to date? Because the Web ecosystem itself has changed with the integration of social media. A Twitter or Facebook reference on any SmartPhone can direct customers to a YouTube video of your company’s semi-transparent exercise pants, its signature product. Even better, an ambitious DA has decided to round-up your customers for indecent exposure after “Mothers for Decency” (an advocacy group) cite your product for contributing to the corruption of minors (cash contributions abound for the DA and “Mothers for Decency” from concerned citizens). Federal and State regulators contact your warehouse in LA regarding your violation of garment content labeling laws with respect to importation and distribution. Your successful corporation is now on full display in the Web ecosystem for predators and number one on the endangered species list (cuttlefish extinction event).

As ridiculously contrived as the example is, the potential is obvious and needs to be addressed. Natural selection in the market will force corporations to evolve and the most successful will prosper. I contend the current corporate IT system most apropos to evolve to act as a repository to consolidate and index is CRM. CRM systems are by their nature flexible to extension and for the most part the latest and most up-to-date addition to corporate IT. Ultimately, this environmental information pertains to all levels of customers; past, current, and potential, a true universe of consumers.

Next we will look at some natural extensions and architectures to evolve.

The Cloud Has No Clothes!

Emperor's New ClothesEverybody remembers the classic fairy tale where an emperor and his people are conned in to believing he was attired in a fantastically beautiful set of clothes, when in fact he was in the buff.  No one was willing to admit they did not have the refined taste and intelligence to see the spectacular cloth and splendid robes. It took the strength of innocence in a child to point out the truth. I am about as far from an innocent child as one can get, but it appears to me the cloud is parading about naked.

Every vendor has a cloud offering, every pundit “agrees” the cloud is the future, investors value every cloud company with a premium, every data center operator is “born again” as a cloud player. Every CIO has a cloud initiative and budget line. Really, I have seen this movie plot before, and it does not end well, especially for the Emperor (and the con-men vendors too).

We have worked internally on projects as well as externally with clients to implement aspects of the “cloud”. Results have been mixed and in the process gathered some hard won experience which I will condense here (while protecting both the clothed and the naked).

First, Software as a Service (SaaS) will work if adopted with minimal software modification and maximum adoption of it’s native business process. It is very cost effective if it precludes investment in internal IT infrastructure and personnel, not bad if it slows the growth of same. Outsourcing well-defined rote functions to the SaaS route works well (such as Email).  Adopting SaaS for new non-strategic functions tends to be successful where there are few users and a high degree of specialization. Data backup into the cloud is an excellent example regarding highly specialized solutions that take advantage of economies of scale provided in hardware.

SaaS fails in terms of cost or functionality when it is subject to customization and extension. Service costs tend to swamp the effort from initial modification through long-term maintenance (humans=$$$$). Costs will especially spiral when you combine many users and many customizations.  Remember the “Keep It Simple, Stupid” (KISS) principle saves money and points to success.

Buying virtual machines in the cloud works well if the configuration is simple; few software products, few users, straightforward integration. Development and early deployment is particularly attractive, as is usage by start-up companies and software proofs, tests, and trials. Again, the KISS principle reigns supreme. Remember hardware continues to drop in price and increase in capacity.  Package software costs are stable. Understand the billing algorithms of the key “clouds”. Each has its cost advantages and drawbacks, and they change rapidly under increasing competition and hype. Always benchmark medium to long-term cloud virtual machines against native hardware virtual machine implementations, the results may surprise you (I have been surprised over and over).

The Emperor’s story is an old one and so is the cloud concept in principle; remember its first turn on the karmic wheel of optimizing the highest cost component was time-sharing. This strategy optimized the high cost of proprietary hardware/software (remember IBM and the Seven Dwarfs, but I digress into another fairy tale). As minicomputers (Digital, Data General, Wang) dropped the price of hardware through competition with IBM, software packages became the gating factor. Workstations continued the trend by another factor of 10 reduction in cost of hardware and package software (human service costs are rising).  Wintel and the Internet have driven the marginal cost of raw computing to almost zero compared to the service component. As hardware has followed Moore’s law and software package economies of scale moved to millions of copies, the human costs have skyrocketed in both relational and absolute terms.

If we can keep history as our lens and focus on our cost pressure points, we can maintain our child-like innocence and see others prancing naked while we keep our kilts and heads about us.

CRM Will Become Consumer Relationship Management

CuttlefishI was watching a PBS NOVA show “Kings of Camouflage” about cuttlefish, a close relative of the octopus and squid (yes, everyone has strange ways to relax…), and was struck by the creature’s intelligence and how that intellect had evolved. Being at the top of a family that includes clams and other mollusks would not seem to indicate a source of intelligence (well, given some people I’ve spoken to…), but natural selection has driven the development of intelligence and cutting-edge camouflage to blend with its environment and evade predators. It seems cuttlefish are a great packet of pure protein and at the top of the list for just about every other sea creature from fish to dolphins. This has been the imperative for it to be smart and a chameleon.

At this point you are wondering what does all of this “Wild Kingdom” digression have to do with CRM? Actually, from an analogous point of view, a great deal. If we view the Web and all of its manifestations as the sea and a corporation as the cuttlefish, with CRM as part of its brain and nervous system, the evolutionary comparison is a compelling analogue. In early life, the organism looked inward to its development to organize its cellular organization; however, it quickly had to shift its view externally to survive the environment.

The issue is the same, CRM organizes a company’s sales, marketing, and customer efforts with respect to itself. The Web with search engines, social media, mobile devices, etc. is always on, like the sea. Predators abound in this sea; a consumer with a bad experience, an advocacy group with contributions and grants on the line, government regulators with promotions or political office in mind, competitors looking to take your share and territory, employees, prospective employees, vendors, the list is endless. All of this information needs to be linked and correlated in one place with all of the corporate communications, sales, and marketing resources to ensure a fast and consistent response with tracking and reporting. I believe the best place to evolve that functionality within corporate IT infrastructure is to extend CRM’s nervous system outward.

Unlike IT, natural section rarely evolves competing “smoke stack” organs, it cannot afford to or the organism will be lunch. The rate of change of technology, the Web, and societal change will not allow IT the luxury to create vertical smoke stacks and then consolidate them later. Evolution will have to occur now, in realtime, ready for mobile. CRM would seem to be the best candidate as a starting point.

I intend to add further installments extending both the analogy and the proposed architecture. So kick back, get an order of calamari, and watch the show (PBS NOVA show “Kings of Camouflage,” too).

Cloud 2012 Redux

Ready for Cloud-01

You shouldn’t have to commit everything at once

This year will be remembered as the year the cloud moved beyond the realm of “Back to Time-Sharing” or a curio for greenfields and start-ups.  While Software as a Service (SaaS) is interesting, it can not be a center piece of your IT infrastructure or strategy due to its limited scope and cost/scalability metrics.  By the same token, every IT system is not a greenfield opportunity, and most require a steady evolutionary response incorporating the existing infrastructure’s DNA and standards.

Just illustrating a “private cloud” with a “public cloud” next to it does not cut it.  What does that really mean?  Ever wonder what is really in that cloud(s)?  Better yet, in safe understandable steps, explain it; cost benefit 3-5-7 year projections, organizational impact for IT and business process, procedural impact for disaster recovery, etc.  Sorry, “Just buy my product because it is what I have to sell!” does not work; I need a tested time-phased architectural plan, with contingencies, before I commit my company and job.

For the first time in the continuing cloud saga, we have been able to put together and test a “non-aligned” approach, which allows an organization to keep IT infrastructural best practice and not “sign-in-blood” to any individual vendor’s ecosystem.  With the proper design, virtual machines (VMs), can be run on multiple vendors’ platforms (Microsoft®, Amazon.com®, etc.) and on-premise, optimized to cost, performance, and security. This effectively puts control of cost and performance in the hands of the CIO and the consuming company.

In addition, credible capabilities exist in the cloud to handle disaster recovery and business continuity, regardless of whether the supporting VMs are provisioned on premise or in the cloud. Certain discreet capabilities, like email and Microsoft Office™ Automation, can be “outsourced” to the cloud and integration to consuming application systems can be maintained in the same manner many organizations have historically outsourced functions like payroll.

The greatest benefit of cloud 2012 is the ability to phase it in over time as existing servers are fully amortised and software licences roll-off and require renewal.  Now we can start to put our plans together and start to take advantage of the coming margin-cutting wars of the Cloud Titans in 2013 and beyond.

Product-based Solutions Versus Custom Solutions : Tomb Raider or Genesis?

The Product-based Solution is where most of Corporate America is going for IT today.  The talent required to povide a successful implementation (one you actually renew license maintenance on rather than let let quietly die an ignominious death) requires the tenacity, deep specialized product  knowlege (read arcane dark arts), and courage of a cinema Tomb Raider.  The team required has to know the target product as well as Indiana Jones knows Egyptology; with equivalent courage, problem-solving skills, and morals (one can’t be squeamish hacking a solution into submission) to be able to achieve a usable solution versus an embarrassing product snap-in.   In addition to their product skills the team must be able to quickly navigate the jungle of existing applications with their mysterious artifacts to get the proper integration points and data (Gold! Gold! I say!).

What if the team can’t or don’t navigate your jungle of existing applications or do not know all of the idiosyncracies of the product to be installed?  Well you get an Embarrassing Product Snap-In (Do Not Pass Go, Do Not Collect $200, Do Flush Career).  Every seasoned IT professional has seen one of these puppies, they are the applications you can’t get anyone to use.  Usually because the do not connect to anything users currently work with, or have real usability issues (Harry Potter vs. MIT interface).  Yes, the product is in.  Yes, it tests to the test plan criteria.  Yes, it looks like post-apocalypse Siberia as far as users are concerned (What if we install CRM and no one comes? Ouch! no renewal for Microsoft/Oracle, bummer).

Custom Solutions are more like Genesis, Let there be Light! (ERP, CRM, Order-Entry, you get the picture).  It is a Greenfield Opportunity!  The team you need is just as talented as a Product-based Solution, but very different.  They need to be able to create a blueprint of your desires, like a rock star architect for a signature building.  The team needs to be experts in software engineering and technology best practice.  As well, the team needs to be able to translate your user’s meandering descriptions of what they do (or not) into rational features resembling business process best practice.  That was Easy!

In the case of custom the risk is creating Frankenstein, rather than new life (It’s Alive!, It’s Alive!).  Again, every seasoned IT professional has seen one of these embarrassing creations (Master, the peasants/users are at the gate with pitchforks and torches!).  The end result of one of these bad trips (Fear and Loathing in ERP) is the same, but usually more expensive, than the Product-based alternatives.

Debby Downer what should I do?  Reality is as simple as it is hard; pick the right solution for the organization, Product-based or Custom.  Then get the right team, Tomb Raider or the Great Architect of Giza.

Is Custom Development Dead?

Is Custom Development dead? After the last two years of custom development’s nuclear winter, (following 2008s Financial Armageddon), one would think the the Grim Reaper did his best in the blast. I really hope not, designing and building strategic systems make the more mudane aspects of software engineering worth enduring the mind-numbing syntactical pain of creation. Nothing like the smell of napalming the competition with a totally new way of doing business in the morning (my view of “Apocalypse Now” with a business bent). Maybe, just maybe, I hope rumors of Custom Development’s death are greatly exaggerated.

Did Custom Development die of natural causes, maybe pulled off of life support by risk-hating Executive Management as a perverse form of parental control after the financial snafu (Custom Development moves from PG-13 to XXX)?  Off-the-Shelf software products and the ever increasing cost of continuing maintenance really hurt Custom Development as a viable systems choice, but is that enough to put it down? Cloud and “nouveau Cloud” technologies (read SaaS, SalesForce.com) may have provided the coup de grace.  I seriously doubt it, every time I look into the Cloud I get serious PTSD flashbacks to the 70s and 80s IBM Mainframe World Domination (OMG there is a 3270 in the corner!!).  At least there was alot less hype and easier choices back then (Nobody got fired picking IBM!).

It is possible Custom Development died offshore (simple Mickey Finn, bag over the head, Shanghaied and Held for Ransom!)?  While Business Processes and System Maintenance have done reasonably well offshore (Castor Oil of the Corporate world, let Mikey take it!), strategic custom development has had less success.  Quality innovation that can transform a corporation really requires a local team steeped both in the host company and surrounding culture.  Plus, Custom Development tends to have a high infant mortality rate so it is best attempted in short phases supported by an Agile Methodology, definitely not in Offshore’s financial model wheelhouse.  So I don’t think Offshore is implicated.

There is the theory that evolution has spoken and Product-based Solutions have succeeded Custom Development, just as mammals succeeded dinosaurs.  Product companies would like you to believe that, but does that seem plausable (Land of the Lost, Jurassic Park where are you?)?  While Product-based solutions have advantages in success rates and cost, they by their nature lack the true freedom that drives raw creativity and innovation.  Custom Development is that wellspring.

The only thing we have to fear, is fear itself!  Adversity to risk is curbing animal spirits, creativity, and innovation, ….for now.  Custom Development is not dead and will return from its vacation with Puff in the Cave by the Sea when Jackie Paper locks-and-loads and we begin some serious innovation and transformation with strategic custom software systems (BTW thats when the Jobs return too!).

Doublin’ Down in Hard Times

Hard times are definitely here.  By this time everybody in IT-land has done the obvious: frozen maintenance where possible, put off hardware and software upgrades, outsourced where possible, trimmed heads (contractors, consultants, staff), pushed BI/CPM/EPM analytics projects forward, and tuned up data and web resources.

Now is the time to think outside the bunker!

IT needs to consider what will need to be done to nurture the green shoots poking through the nuclear fallout. All of the talking heads and pundits see them ( glowing with radiation or whatever) and  the utmost must be done to make sure they survive and grow or we shall all sink into the abyss!

This is the time to double down in IT (poker speak).  It is not about heavily hyped Cloud Computing or the latest must-have tech gadget, but about something much more mundane and boring: improving the business process.  There, I’ve said it, what could possibly be more boring?  It doesn’t even plug-in.  In fact (shudder!), it may be partially manual.

Business process is what gets the job done (feeding our paychecks!).  Recessions are historically the perfect time to revise and streamline (supercharge ‘em!)  existing business processes because it allows the company to accelerate ahead of the pack coming out of the recession.  In addition, recession acts as something of a time-out for everybody (I only got beatings, no time-outs for me), like the yellow flag during a NASCAR race.  When the yellow flag is out, time to hit the pits for gas and tires.  Double down when it is slow to go faster when things speed up again, obviously the only thing to do.

How? is usually the question.  The best first step is to have existing business processes documented and reviewed.  Neither the staff involved driving the process at the moment nor the business analysts (internal or consultants) are that busy at the moment.  That means any economic or dollar cost of doubling will be minimized under the economic yellow flag.  The second step is to look for best practice, then glance ouside-the-box to maximize improvement.  The third step is to look for supporting technology to supercharge the newly streamlined business process (I knew I could get some IT in there to justify my miserable existance!).

Small and medium businesses get the biggest bang for the buck (just picture trying to gas and change the tires on the Exxon Valdez at Daytona) with this strategy.  This process allows SMBs to leapfrog the best practice and technology research the Global 2000 have done and cut to the chase without the pioneer’s cost (damn those arrows in the backside hurt!).  Plus implementation is cheaper during recession ( I love to be on the buy-side).  The hardware, software, and integration guys have to keep busy so they cut prices to the bone.

The way forward is clear, IT only needs to lead the way, following is kind of boring anyway.

Now is the Time for Comfort IT

comfort-foodWhenever crisis strikes and people enter uncertain and frightening times they close up like a clam.  They do not take on new risks like new cars or houses, instead they find comfort in life’s little pleasures.  Macaroni-and-cheese, tomato soup, and meatloaf seem to sooth the troubled mind and are the perfect accompaniment to the theater of financial meltdown.  IT has it’s equivalent of comfort foods, short (less than one budget cycle)  projects with easily measurable gains.  Projects which enhance core business functionality and projects which increase visibility are usually easy wins.

Projects like “Let’s Outsource All IT”, “Let’s Go to the Cloud”, or “Let’s Move to Open Source, Oracle, Microsoft, etc. to Save Money” are not Comfort IT and elicit the image of someone running down the hallway with their hair on fire screaming (does not look comfortable to me, let’s skip this one).  These projects will have their time in the sun when the Great Wheel turns again and risk is the entree of the day.  It will be fun to see how fast the major vendors morph their tune to a new reality; they are already shifting from guppy sales representives to bonafide sharks via the layoff lever (I am ever thankful for Email, Voicemail, and Spam Filter Purgatories).

If your organization is light on legacy projects and issues, now is the time to start some (ha ha ha!).  All joking aside, this period is a breather in the steady march of technological leverage of the corporation.  Companies can leapfrog past the painful pioneering process inherent in most technical innovation, at a bargin price.  Just about every hardware, software, and services vendor will have capacity to sell.  It is a buyer’s market , which gives the most comfort of all. 

This is the perfect time to review projects.  Determine cost-to-complete, or can it be completed.  Will it enhance the business process and ultimately be welcomed by its users, or is it a statue to political personal vanity (or an ediface to technology).  Sacrificing projects on the altar of the crisis is considered a statesman-like action and a career-saver for both the guilty and innocent.  For the fearful, consultant priests are available to both identify and cleanse  corporate IT sins for a small fee in these times (put another project on the fire!).  Nothing like a second opinion to sooth the soul, a true IT comfort food.