2008 Forecast

Posted: December 19, 2007 in CRM

Gazing into a crystal ball is a children’s game at best, adults should avoid it yet here I am again making some predictions for next year.  Let me go way out on a limb and say that the US will win some gold medals at the Summer Olympics and while we’re at it, there will be a presidential election and an extra day added to February.  There, now I have something I can proudly point to at the end of the year to show how prescient I am.

Now for the hard stuff — here’s what I think will be important in CRM and what I expect in our little corner of the world in the year ahead.

1.      We are at a point in the business cycle and in the life cycle of the four decade old technology boom when I expect that customers are getting a little fatigued for multiple reasons.  That means it will take increasingly more work to achieve the economic results we want.  Translated, that is the driving force for a resurgence in marketing which I believe is being manifest by the boom in Sales 2.0.  As I have noted before, Sales 2.0 is really about taking a different tact with marketing and consequently I am forecasting that marketing will grow in importance even as Sales 2.0 continues to gain traction.  Next year will be a good time to be a software company specializing in marketing so long as your customers have some budget.  The most successful companies will glom onto Sales 2.0.

2.      I have also previously noted the importance of governance, risk and compliance and for the same reasons noted above I think GRC will be a growing issue in the executive suite.  GRC is already an $8+ billion market according to John Hagerty of AMR and in the coming years its revenues could easily overshadow those of CRM.  This will continue to manifest itself in CRM in products that do a better job of documenting parts of business processes through business rules, workflow and auditing.  A good example of an area that I think will gain in importance in the year ahead is CPQ or configuration, pricing and quotation.  These systems are used in sales to do things like segregate the duties of selling and discounting as well as to provide auditability in some aspects of complex sales processes.  By many measures, CPQ is still a young market though some consolidation is occurring.  Another example is sales performance management and sales compensation management.  These applications run together and there is definite impact on CRM as well as the finance side of the organization.

3.      Authenticity will replace the idea of customer experience — interestingly, Joe Pine has been one of the leaders in both of those idea areas and authenticity is the newest.  Briefly, in Pine’s own words, “[Authenticity is about a company] being true to itself, and being what it says it is to others.”  Pine’s last idea, the customer experience, remains valid but we seem to have forgotten that an experience is something that is uniquely staged for a customer to provide a transformation in the customer’s life.  Today, experience is simply about what happens in an encounter, good or bad, and often that experience is inauthentic in one or more ways.  So out with the old (experience) and in with the new (authenticity).

4.      The idea of platforms will continue to gain momentum and with that the definition of a platform will suffer the same dilution and loss of focus as customer experience has over the last five years though platform has a long way to go before that happens.  We’ve seen salesforce.com introduce the concept of a development platform and we will see other companies introduce less grandiose versions of their own platforms.  Already, I have seen Microsoft describe its CRM as an ideal development platform for almost any business application and SAP and Oracle all have played riffs on this theme too.  Also look for platform to stand for a smaller piece of CRM reality such as “marketing platform” or “BI platform” etc.  Those terms are already with us but they are thought of in lower case and are used as descriptors.  Soon I think we’ll see them approach the importance of Brand Names and the word “Platform” will be written with a capital letter.

5.      In line with the platform’s growing importance, I think we will see a new emphasis on the business process; in fact I see them going hand in hand.  The platform will be positioned by its vendor as a solution for whatever end-to-end business process it supports.  So rather than sales or marketing we might hear more about the lead to cash process again.  I think this could be an important shift and a way for even point solution vendors to participate in the consolidation game without being absorbed by a competitor or sidelined into irrelevancy.

6.      SaaS will continue on its merry way and events like NetSuite’s Dutch auction IPO will shine more light on it.  At the same time though, the popularity and success will bring dilution and a certain amount of confusion as large vendors like Oracle and SAP try to put their own spin on what SaaS means.  Look for continued discussion of “hybrid” solutions in which vendors attempt to provide a customized solution that inevitably includes on-premise as well as on-demand technology to better fit an individual customer’s needs.  Also look for a renewed assault on multi-tenant architecture.  Much of this will boil down to vendors selling what they can produce and making a case for it (a.k.a. making lemonade from your lemons).  What it means is that if a vendor can’t easily deploy a multi-tenant architecture it will sell garden variety single tenant with a new skin while telling you the difference isn’t important.  That’s where the confusion and dilution will come in.

7.  Lastly, watch out for unintended consequences of Sales 2.0 and all things social networking related.  I think there will be a tendency to capture a lot of data and treat it as the gospel truth but the down side of capturing data from social applications is that the whole approach is not scientific.  The approach can give you valuable qualitative information but it is not the same as posing a question and expecting a thoughtful response.  There is great potential to over-do social networking and Web 2.0 and if un-managed I think we could see some neat bloopers.

That’s all I can think of for now and I hope that I will be around in a year to eat my words when none of this turns out .  I am most grateful for all of you who read this column, comment on it to me and on your blogs as well as to those of you who re-circulate it in other blogs.  Thanks for reading and for your good ideas and Happy Holidays!

On Manny! On David! On Jonathan! On Mike! Go Red Sox!

So, what did you think?

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s