Posts Tagged ‘social’


Welcome back to the discussion.

At the top of my list is the idea of resiliency, which I consider a more practical form of sustainability for business.  We are now encountering a wave of sustainability-oriented ideas in the popular culture.  Forty miles per gallon is the new thirty, someone said and I have seen or heard the word sustainable used tentatively more than once in advertising.  But I wonder if sustainable is really what we should be shooting for.

In too many cases, sustainable simply slows down our use of a resource to “sustainable” levels but in practice it is a moving target because it has to be tied to things like demand.  What is sustainable at one level may not be at a higher level.  And human nature being what it is, we tend to set a marker and promptly forget about it until something breaks revealing that our sustainable idea is not so any longer.

But the big issue with sustainability is that it often does not engage a new paradigm.  It simply extends an older and frequently decrepit one.  Resilience puts us on a new track with an unlimited future and that’s where I prefer to be.

All this has a practical business and CRM side.  I was first impressed with the idea of resiliency while perusing “The Post Carbon Reader”  a compilation of essays by writers with serious cred on topics like energy, land and water use and much more.  What got my attention, and what inspires this essay, was a report issued by the City of Portland, OR, dealing with how to make that city more resilient to the long term effects of Peak Oil.

Now, I won’t go into what Portland did in any great detail but the very existence of the report made me ask what for me is the obvious question: Do our businesses have resiliency strategies and plans?  Bet not.  But can anyone afford not to have a plan?  If a regional or city government can develop a resiliency plan ought we not do the same for our businesses?

I will probably add to my list of ideas for making businesses resilient over time but for starters, here are three things any, or at least most, businesses can do to help ensure profits in unsure economic times.  Of course, they are all mediated by first class front office technologies.  How could it be otherwise?

Engage in the Subscription Economy

We’ll see some form of economic bounce this year because there is an election looming, that’s my hunch backed up by much historic data.  The bounce might make credit easier to access but the demand for credit — to grow the economy and its availability — may not be well matched.  In lieu of licenses and product sales, we need to think again about subscriptions.  There is some evidence that customers are doing just that.

I think Oracle’s missed revenues in its last reporting period suggest that we’ve hit a turning point in the conventional licensed software business.  I believe the demand for subscriptions is accelerating, so let’s give the market what it is asking for.

I have often said that the two great sticking points for moving more aggressively to subscriptions include changes to corporate business models and to the billing systems companies use.  The business model change is a big and ugly issue because it alters revenue recognition and can upset valuations, which investors abhor for good reasons.

But there is no time like a recession, or whatever euphemisms you use to describe this era, for making a fundamental change like this because the economy is roughly synchronized in a trough.  Much of your competition is in the same predicament and everyone understands this and that makes this year a great time for the herd to move as one to subscriptions.

As for the billing system, well there’s plenty of evidence that there are companies like Zuora, Aria and many others that can help you through the billing system and billing model change.

There’s no time like now for this kind of action and subscriptions will make your business more resilient, no question.

Deploy UCS

UCS or unified communications systems make a lot of sense for anyone thinking about a resilience strategy.  Good UCSs combine calendars, email, text, voice (VoIP) and video in a variety of ways that are dirt-cheap and that enable vendors to efficiently communicate with customers.  The UCS is also part of a must-have system of internal communications for many companies.  A UCS does its work over the Internet, which is far less expensive than going through the phone company.  It’s not a complete strategy because you still need an employee social network but it is a necessary step on your way to becoming a more resilient company.

Ramp Up Your Cloud, Social and Mobile Strategies

Part of cloud and mobile is implied in the above, but not completely.  Cloud and mobile are inextricably tied up with social.  Subscriptions are best driven by cloud technologies and they enable more flexibility and economy in deploying mobility strategies, not to mention the viral impact on and by social.  A good cloud, mobile and social strategy will open up your possibilities for deploying expensive and precious resources, like people, that face customers.

While we’re on the subject a cloud-social-mobile (closobile?) investment opens up other possibilities for involving customers in self-help communities with attendant savings.

Much of this isn’t new but it bears repeating because these ideas happen to work, they have not been universally adopted yet and importantly, because this is the season for implementing plans and resolutions.

Happy New Year!

The Shortest Distance

Posted: December 7, 2011 in CRM, Economics
Tags: , ,

Forrester Research has been heating up the marketplace lately with a string of interesting reports and forecasts that impact CRM and the front office generally.  One that I saw, “Capitalizing on Live Video Chat” by Diane Clarkson, August 23, 2011 talks about the bright future of using video rather than text (obviously) chat in sales, service and support.

I like the video chat idea and I can see many important applications for it, especially in a world that Thomas Friedman over at the New York Times thinks of as “Hot, Flat and Crowded.”

Another report out just last week “Social Enterprise Apps Redefine Collaboration,” speculates that the social software market will be worth $6.4 billion in 2016 up from a mere $600 million last year.  I read about the report in a PCWorld article by Juan Carlos Perez of IDG News.

Something in Perez’s fine article caught my eye and made me think:

“Simultaneously, demand for unified communications and collaboration (UC&C) products that offer IM, audio calls, online meetings and video conferencing, will start to drop overall in 2014 because, unlike enterprise social software, they don’t help employees discover peers outside of their work groups with expertise they need to tap, according to Forrester’s report “Social Enterprise Apps Redefine Collaboration,” published this week.

I used to be in awe of anyone who could make such bold predictions about market growth until I tried it myself.  There is a methodology to this sort of madness, which you need to adopt or you will go crazy since nobody has a crystal ball.  The method boils down to assuming the future will be like the past.  A famous and colorful Boston DJ of the 1970s and 80s (I know that dates me doesn’t it?) Charles Laquidara, used to summarize it at the end of his show as, “If the creek don’t rise, if the good lord’s willing, if there ain’t a melt down and if no one pushes the little red button.”

In other words you have to assume straight-line continuity from today through the period you are forecasting.  Good luck with that.  Our recent experience with “Black Swans” is enough to tell us that straight-line projections are feeble at best.  I’m not saying the people at Forrester aren’t hard working or sincere in their research.  It’s just that this kind of prognosticating can go to Hades in a handcart without much of a push.  Still, for most things it’s the best that we have.

But back to that quote.  My reading of the tea leaves says that UC&C will not shrink at all and will most likely grow after possibly being repositioned, here’s why.  It appears that the analysis may not take into account the escalating price of gasoline and other transportation fuels.  Fuel prices drive the economy these days because there is no slack left in the system.  In prior decades when supply got tight prices might have gone up a little but then producers, seeing opportunity for increased profits, began pumping more oil and exploring for even more but that’s over.

Today when economic activity drives energy demands up, higher prices are the result and no one talks about opening the spigot further because production is at one hundred percent and demand is out stripping it.  That’s why, even in this economy gas is over three bucks per gallon and partially why American Airlines filed for bankruptcy last week.  For a very good analysis of this situation read Chris Steiner’s book “$20 per Gallon.” http://amzn.to/vipoQP

So my view of the future is a bit different.  I think it is entirely possible that the social software market will overshoot the $6.4 billion projection (by an integer factor of 3 to 5) and that UC&C isn’t going anywhere but north.  The two technologies do different things and there is a market for both.  While social software is becoming invaluable in sales, marketing and service, UC&C will, I think, grow into a niche that is still expanding.

According to Steiner’s book, as fuel prices continue to escalate we will find our travel options reduced meaning fewer connecting and short distance flights and that will drive demand for online meetings and video conferencing as well as online conferences.  We’ll drive more but at, say, $12 bucks the SUV/land ark will be a quaint part of history and we’ll drive only when necessary replacing face to face meetings with virtual meetings.  Add to that the much lower costs for telecommunications services that UC&C can provide and I think we’ll see increased demand for these systems.

You might think that the cost of transportation could simply be built into a company’s pricing models and that those costs would simply be reflected in higher prices.  But that approach will simply drive an inflation spiral and make everyone’s products unaffordable.  Transportation is going to eat into margins and the only way to fight the inevitable is to reduce demand for energy in your business processes.

To summarize, energy prices and energy availability are the Black Swan in our future.  Straight-line projections are often helpful for sorting out the future within a paradigm but we are entering a new paradigm.  In this case projections that do not take into account the cost of energy will only provide a false sense of security.  Worse, they can cause us to sleep when we ought to be planning and implementing solutions for a very different future.


There’s a huge difference between the enterprise world and the social media community.  While there are many signs of life on the social side, the rank and file global one thousand seem for the most part to be clueless.  That’s not an indictment, just a statement of fact and maybe opportunity.

At the Enterprise 2.0 conference in Boston last week I got an eyeful of the reality.  It’s still very early in this market’s evolution.  The vendors are all lined up including the small innovators and the big companies looking to cash in by being fast followers.  But what’s missing is the numbers of interested companies ready to be saved by the new solutions, a.k.a. customers.  I haven’t witnessed the beginnings of a land rush for social technologies in the big companies that will ensure its success.

Perhaps everyone is tired and cautious after witnessing in rapid succession the rollouts of enterprise ERP and CRM.  They were both large-scale infrastructure plays that were as necessary to modern business as they were painful to implement.  A few weeks back I posted an article comparing the growth in U.S. GDP and the rise of the information age.  From a baseline of $1.6 trillion in 1975 the GDP has steadily risen to over $14 trillion today.  Other regions of the world have seen similar expansions.

If it’s not institutional memory holding the market back — and holding back may be too strong a phrase — it could be that people in the enterprise just don’t understand in sufficient numbers yet the only thing that counts.  Maybe too few people see a way for social technologies to help them make money.  The halls of the Enterprise 2.0 conference were not exactly jammed with pioneers and pilgrims trying to get wise.  But don’t get the wrong idea, the show was in a big place and it was well enough attended to call it a success.  All I am saying is that the stampede has not yet started.

So what will it take for the avalanche to begin?

For a long time I’ve been harping on the challenges all companies face in demographic changes and most importantly transportation costs.  As we discover that fuel price fluctuations will adversely affect business we might see greater adoption of social strategies in the biggest companies.

But that’s asking a lot, here’s why.  Back in May, I was in Chicago for a speech and I noted the high cost of gasoline.  It was approaching five dollars and at the time people were mad about high prices all over the country.  Since then, prices have eased and in many places gas is a relative bargain at less than four dollars.  A few years ago three dollars and change didn’t seem like a bargain but it shows what you can accommodate.

Now, this isn’t good news for a couple of reasons.  First, fuel prices mirror economic activity.  When prices are on the rise, it’s because demand is higher due to increased economic activity.  The reverse is also true but it can take many months for the effects to be fully realized as an economic downturn.  This latency is a big problem because it separates cause and effect in many people’s minds.  As fuel prices fall we reap a temporary gain and think that things are returning to normal but we may fail to notice the country simultaneously slip back into recession.  I am not forecasting this, but it’s on my mind.

 

The second reason for concern is that fuels are transitioning from a cheap commodity to a scarce and expensive one.  Traditionally when this happens there’s a round of inflation and the market adjusts by bringing more supply to bear.  As I’ve written before, that’s not happening.  According to the IEA, global demand is about 90 million barrels per day (mbpd) and supply is 88 mbpd enough of a shortfall to cause the price tightness we see.  Instability in some regions is no help either.  Fuel is becoming more expensive in an absolute sense and that affects business from raw materials to travel.  In a situation where supply is limited a round of inflation will simply breed another round of inflation and in short order, stagnation.

Alternatives include various transportation substitutes including smaller cars, less flying, bio-fuels, trains and electric cars.  All of these require at least some modest change to infrastructure, which is expensive and will take many years.  On the other hand, the Internet is an already built infrastructure and social media is well developed and understood and can fill in for at least some of the transportation demand by making us more attuned to customers and more responsive to them.

As the transportation issue unfolds it might prove to be the driver that enterprises need to begin thinking outside of their boxes.  It’s going to take a lot because we’re not simply talking about adopting a new technology, we’re talking about changing out a hierarchical management structure that goes back to the industrial revolution for something that is distributed, inclusive and very twenty-first century.  For some companies that will make implementing ERP and CRM look like child’s play.


I trade business cards like I traded baseball cards before the designated hitter and division play.  So I get to see the broad diversity in how people arrange their information for public consumption.

There isn’t much under the sun that you can do differently with cards these days and for many companies — like mine — they are the only thing that actually gets committed to cellulose.  So it takes a lot for me to comment on something as mundane as the business card but something occurred to me this week that got my attention.

At the Enterprise 2.0 conference in Boston, I noticed that some companies were omitting some of their usual business card information.  One card in particular that I received had no phone number, just some social and email contact stuff.  Someone informed me this was a new thing.  After years of adding various social handles and extending printing to both sides of the card, a small minority of companies has begun removing vital information like phone numbers.

Perhaps this is simply a way for a social company to eat its own dog food or to encourage me to do likewise, but I don’t like it.  It seems like a form of self-mutilation.  Removing information, making yourself harder to do business with is no formula for success.  In a world of less is more, this less is less.

I have no problem with people attaching additional information like those funky square bar code-like things that I don’t even know the name of.  But taking information away — especially when it’s human readable — makes no sense.  So if this is a new trend, in all sincerity, stop it right now.  Please.


One of the more revealing things I heard from Marc Benioff at Cloudforce 2011 in New York last week was his idea about how his company will continue to build out its product line.  Marc’s never been super secretive about his general direction though product specifics have always been closely kept.  But in our conversation, he reiterated a long held belief that makes more sense than ever.

For a long time the natural assumption has been that a software company needs to balance out its offerings.  So, a company focusing on back office financials should build or buy CRM and a CRM company should build or buy ERP.  But the number of companies that succeeded at this approach is small.  Only a few companies I can think of actually succeeded in this and they were all back office software companies to start with.

SAP, Oracle and Microsoft come to mind and you can add Sage too if you also add the caveat that Sage buys everything.  NetSuite built everything at once, more or less, but started as an ERP company and its DNA remains squarely in the back office.  Ask CEO Zach Nelson about his approach and he’ll tell you that ERP is the system of record, period.  I am not saying any idea is good or bad.  The companies I’ve named have been very successful and they are long lived.  But past performance is no indicator of the future, as they keep telling me in the mutual fund industry.

Siebel was a successful front office company that never expressed interest in developing back office technology.  Siebel’s expressed strategy was to be a good integration partner.  They might have pursued a strategy like what I think Salesforce is pursuing but they ran out of runway.  The product had issues and there were reputation issues that may or may not have been their fault and the investors grew impatient.  At any rate, Siebel became an asset of Oracle and continues to be the backbone of Oracle’s CRM platform and it is integrated well with Oracle Financials at this point.

The other day at a lunchtime Q & A in New York, Benioff was asked directly if Salesforce would turn more attention to the back office.  It was a logical question for many reasons.  We are in the midst of a replacement cycle in ERP for one thing.  The systems in use today were put there a decade ago or longer largely by companies looking to beat the millennial clock.  Ten years is a long time in the software business and those ERP systems are ripe for replacement.  Indeed many vendors are staking their strategic lives on the replacement cycle.  But not Benioff.

At the Cloudforce 2011 lunch in New York, Benioff patiently explained that Salesforce has a budding ERP system in FinancialForce and the company has a strong partner base and that its products are open allowing for easy integration with any products including ERP.  But he resisted the idea of becoming a back office company saying that Salesforce would not build an ERP system and instead questioned the logic of the front to back office product line approach today.

According to Marc, with partners and integration capabilities and openness the primary reason for integrated front to back office solutions looses steam.  What was once received wisdom just a few years ago, that customers ought to buy all their software from the same source — products already integrated — no longer holds in the modern cloud economy.  As important a statement as that is though, it was not Benioff’s major point.

Marc’s big idea and strategic vision is that the front office is still being built out and Salesforce intends to continue leading the charge into what it sees as fertile, if still undiscovered, new territory.  One might think that sales, marketing, service, support, help desk and field service filled up the available niches and for a long time there was little argument with that idea.  But the application of social technology to conventional systems has raised everyone’s sights.

The introduction of Chatter and the less well appreciated (as social applications) Sales Cloud and Service Cloud indicate that Benioff might be right.  The biggest part of the front office might still be awaiting invention.  This idea motivates Salesforce and Benioff’s belief that his company is building a customer information system.  The final form of the customer information system may still be years in the making and it might not come to fruition or Salesforce might not be the company to accomplish the task.  But as things look today, it’s hard to argue with — and hard to find a company with a better front office vision.

So as the rest of the industry’s suite vendors pursue a front and back office strategy Salesforce is pursuing a market whose outlines may be clearly defined as social but their forms still need filling in.

In addition to social aspects there is also the multi-tenant cloud computing imperative.  In a world of increasing energy and transportation costs and increasingly mobile computing the future looks less like a front to back hierarchy and much more like a mashup governed by openness and standards based API’s.  In that world Benioff’s strategy makes very good sense.


This week we profile one of the less well known pioneers of the social revolution, Diane Hessan, CEO of Communispace.  From the beginning Communispace took a different path from conventional social vendors.  Rather than using community as an opportunity to broadcast information, Commuinspace led a revolution in listening to customers.  Listening to customers is underrated according to Hessan.  In her characteristic style she says, “It’s just unbelievable what happens from a marketing point of view if you just shut up and listen…There’s magic to doing that.”

I don’t under rate her and I invite you to read the whole interview at our Website.


“Call rewrite!”  That’s what they said in the olden days on movie sets when the script needed doctoring.  It’s also what the technology industry metaphorically does about every ten years.  We rewrite much of what we’ve been relying on for information processing because the accumulation of new technologies over the previous decade has made our current batch of gear and applications uncompetitive and relatively expensive.  So say Larry Ellison, Marc Benioff and many others.  So the cycle begins again though when exactly is a tricky thing.

By the looks of this economy the new cycle couldn’t arrive soon enough and thoughtful people are asking what the new world might look like.  Some of us may have been lulled into believing that the ten year replacement itch applied to other departments but not CRM.  After all, haven’t we been steadily accumulating changes all along?  And haven’t new technologies like SaaS, pretty much eliminated this cycle?  Well yes and no.

On-demand, SaaS or Cloud Computing—call it what you will—has done a lot to flatten the technology replacement curve but the reality is that new stuff finds a way to creep into the world and our existing infrastructures don’t always handle the newbies smoothly.  The case in point is Cloud 2.

Cloud 2 is as significant a departure from the norm as CRM or SaaS computing were when they were first introduced.  Driving Cloud 2 are three technologies that we are all very well versed in but which, taken together, add up to the call to rewrite.  Let me explain.

The three technologies aren’t even new.  They include mobility, social media and analytics and they’ve been around for decades in some cases.  The convergence of these three technologies within the CRM suite is driving us to rethink CRM and they have the potential to drive the next economic cycle.

Social media is transforming CRM but so is analytics though we are earlier in that deployment curve and while mobility has been a factor for a long time, the convergence of these factors is something special.  It reminds me of the 1990s.

The ‘90’s saw a wave of productivity enhancement and a long period of growth with low inflation and the two are rarely seen together.  It caused Alan Greenspan, chairman of the Federal Reserve, to speculate that we had entered a new economic era of permanently lower inflation and higher productivity.  With so much evidence around him, Greenspan could be forgiven for this thinking but the laws of economics had not changed and, in fact, they were working as advertised.

Under normal economic conditions, increased productivity—i.e. getting more output from workers—required more input.  More production translated into more people, more machines and more raw materials.  But that didn’t happen in the 1990’s as knowledge workers leveraged technology to increase their output.

The computer automation boom of the previous decade—the 1980’s—was largely responsible for the aggregate productivity improvement.  While individual companies might have been hard pressed to provide a valid ROI calculation for their technology investments, many decision makers knew that without those technology investments, they would surely be left behind.  It wasn’t until the 1990’s that this infrastructure buying spree aggregated forming the productivity boom.

The same kind of situation may be forming right now as three new drivers—social media, mobility and analytics—converge, especially in front office business processes.  As in the prior example, these technologies have been accumulating in our culture and they have become more robust in each passing year.  Social media may be new but its adoption has been significant.  With half a billion Facebook users alone social technologies have become ubiquitous, a key requirement in deploying any new networking technology.

Today mobility benefits from investments in infrastructure by the carriers and in devices by individuals that provide the essentials for using social media.  Finally, analytics have existed for decades but their coupling with social media is a critical turning point.  Social media generate mountains of data that must be analyzed to be useful and studies show that analytics adoption is shadowing social media adoption in business.

So here is the critical point for me—your investment in mobility will be enhanced and your investment in social media will be justified by how well you adopt social analytics.  That’s right, analytics is the last mile in this journey and analytics, if implemented appropriately, will make the other investments look shrewd because analytics alone will give you insight into the data churned up by the other technologies.  Analytics along with the other drivers provide the essentials for Cloud 2 and for a new round of prosperity.  Most importantly, analytics and Cloud 2 move the discussion from the hardware and software to the business process, which is where we’ve been trying to get for decades.