The newest game in town is CRM application modernization. Many an IS director and many a Business Executive is being hotly courted to re-engineer or modernize their CRM application portfolio. This article looks at the basic reasons why you may not be entirely ready for CRM modernization. It also discusses some of the pitfalls to avoid.
CRM applications in particular need to be constantly modernized because the majority of today’s business organizations have become “subject to change without notice”. A CRM application which was developed or acquired to solve yesterday’s business problem based on yesterday’s business requirement, may not fulfill the needs of today’s business process. The application must be aligned to the business needs and this is not a one-time alignment but rather an on-going need.
Even more important, most of the CRM applications existing today, were developed in the context of moving products through the sales channels and were not concerned with collecting information relevant to targeting a market. Thus, the average company’s customer data is not only scattered around hundreds of separate files and databases — sometimes with different data names for the same data elements, but also is not relevant to the company’s need to have a proper marketing strategy. Modernization allows us to ensure that the CRM application is presenting the right information to the user from the right sets of customer data. We cannot ever lose sight of the fact that the basic reason for the CRM application today, is to process data to build a proper marketing message.
Many of today’s CRM application were developed in the nineties or before, when there were none of today’s web based platforms such as social networking and mobile computing. To market products effectively, companies must have a presence – including applications for customers to use – in many online places. These include Facebook, Twitter, MySpace and various mobile platforms. Modernization offers a streamlined way to adapt applications for these channels, just as it has provided a way for companies to more easily integrate and share internal applications. All of the user interfaces were character-based in nature and fulfilled the needs of the user of that era. An application which does not support some or all of these technologies may be considered by the user to be unfriendly and not very usable.
Today’s customer has also changed significantly. The customer now only cares about “What’s in it for me”. The response time to answer a customer’s inquiry could have been hours or minute a decade ago. Today’s customers want the answer now while they are on the web. They are always one click away from your competition. Today’s customer is also much more value conscious and is always looking for the best deal. Our CRM applications must therefore cater to these new customers.
When do we modernize?
We must understand the way customers think before we can determine whether an application meets today’s business requirements. The first step is obtaining a working knowledge of the marketplace before trying to modernize the applications. Some form of business process reengineering is the appropriate step before we run off and start redeveloping or reengineering the application.
Only after we are sure that the application as it exists fulfills the business needs can we determine that the only fix needed is one of restructuring of the database or WEBfying the application. If we do not, then to borrow a phrase from an old friend of mine, “WEBfying an application is like putting lipstick on a bulldog. You still have a dog”
How do we modernize?
If the application needs rewriting, then we need to select the right redevelopment tool. If you are a small company and is tempted to squeeze every ounce of life out of your IS systems. You may be putting in a temporary fix and will need to return to remedy the application’s lack of support for the marketing process. Content management systems (CMS) should only be chosen after a careful analysis of the maintenance burden of the application. Many of these tools are justified if the application needs to be constantly modified which in effect is the norm today.
Beware of the IS shop that has to implement the latest technology like SOA or service oriented architecture. SOA is nothing more than the treatment of software like paper and plastic: given to “reduce, recycle, reuse”. Like most new technology, SOA cannot be implemented effectively in a CRM environment without a certain basic level of knowledge of how the marketplace operates.
Beware also of the mad rush to support new platforms, such as social networking and mobile computing. To market products effectively, companies must have a presence – including applications for customers to use – in many online places. These include Facebook, Twitter, MySpace and various mobile platforms. We cannot determine which platforms to support unless we truly understand how our customers think and operate. Anything short of this is simply applying technology for technology’s sake.
Very important is the fact that the majority of data that will be collected from these social sites is random in nature and needs some form of analytical engine to analyze and parse the bits and pieces of data. Without such an engine all we will have done is added volumes of data yielding minimal marketing strategy information.
Lastly be careful of the lure of software as a service applications. SaaS applications typically give you the most flexibility because of their inherent ease of implementation. From an enterprise viewpoint this is not necessarily the solution which brings you the easiest system to manage, both from a data analysis and decision making viewpoint and also from a network connectivity, from a data security and data ownership standpoint.
If we seem to keep coming back to the same point you are right. No matter how badly your CRM applications need modernizing, unless you first perform basic business analysis you had better be careful. The marketing strategy needs of the business are now dragging CRM technology along after it. This will continue to be so for decades to come. First understand the business and only then begin to fix your CRM application.