The Blog

  • April 3, 2017
  • Blockchain: CRM’s Next Frontier

    Since 2000 we’ve seen a parade of technologies including browser-based cloud computing, social media, mobile technology, workflow, journey mapping, and big data and analytics coming into the front office. It’s typical that at first there’s only a tenuous relationship between the technology and CRM’s original mission but over a short time innovators adopt and commercialize the innovation often by rethinking or inventing from whole cloth business processes that leverage the technology’s attributes.

    I think the next invasion of CRM will be blockchain technology. If you haven’t heard of blockchain, you shouldn’t be surprised because it’s been slowly making its way around the back office and it’s still early days for the technology even there. In this article I’ll delve into what blockchain is and how it might be used in CRM, but remember, blockchain isn’t in CRM yet and it might not be ever. This is all my hypothesis.

    So, what is it?

    Blockchain is an approach to data management that enables disparate organizations—none of which has absolute control of the data—to trace data through long processes involving multiple computer systems owned by different parties whose goals and requirements can be vastly different. Blockchain provides a common denominator for just the data these disparate entities need to collaborate on and a pedigree of the data that’s hard to fake.

    So for example, an article in Harvard Business Review, by Michael J. Casey and Pindar Wong, “Global Supply Chains Are About to Get Better, Thanks to Blockchain,” discusses how the technology can potentially help manufacturers keep track not only of goods but of associated attributes like quality control by providing the provenance of everything in the supply chain proving to the end consumer (either a business or an individual) that the component meets contractual standards, for example.

    Contracts are an area where blockchain has strong roots. According to the HBR article it, “…allows users to attach digital tokens—a unique, negotiable form of digital asset, modeled on bitcoin—to intermediate goods as they progress along the production, shipping, and delivery phases of a supply chain and as title to them passes between different players.”

    I suspect but do not know for certain because I am not a security expert, that some form of blockchain technology could be useful for improving security regimes in many applications. Blockchain would be useful to, “transfer title and record permissions and activity logs so as to track the flow of goods and services between businesses and across borders,” say the authors, so why can’t it be used to do the same with enterprise data?

    Current security approaches spend a lot of effort building taller walls to keep invaders out but that’s a recipe for an arms race: for every 16 foot wall there’s an 18 foot ladder. What might happen if once those invaders gained access they were stymied because they didn’t have the right permissions because authorizations were scattered across many data centers and servers or because they couldn’t provide accurate pedigrees for their requests?

    What about CRM?

    Blockchain would be especially useful to help understand demand and thus figure out where to deploy resources. The current state of our thinking about customers is that we need to get 360-degree views of everything they are about but very often, even in this advanced CRM age, that’s prevented for two reasons. First, data is siloed in different departments. Like it or not the marketing view of customers is department-centric as are the service and sales views. Second, much of our customer outlook is still supply driven, in other words, even with analytics and machine learning to coax and prod users to do things with or for customers, actors still need to interrogate data themselves.

    In effect, CRM users are still boxed into a position where they are supplying things, either information, service, or product, to customers. But if the effort of CRM is to always be available to customers to supply a need, then the most cost effective approach is not in trying to supply but to manage demand. Since demand is capricious and ephemeral, something like blockchain technology probably coupled with analytics would be the optimal approach to meeting that demand. For instance, in the Internet of Things, where machines communicate with machines, it becomes vital to provide not only data but its bulletproof provenance as well.

    We’re rapidly moving into an era where fragmentation means that no single entity controls all of the data that we depend on for modern life. The alternatives are to withdraw from interaction or to find approaches that continue to leverage existing structures while improving our processes to make them more secure so that we can have high confidence in the data we use. Withdrawal is a fool’s errand and history is littered with attempts that worked for a time but ultimately collapsed. The current anti-globalism and populism movements provide an example. Although I do not wish to make this a political argument another example includes the Luddites who fought automation and lost. But perhaps the most interesting example of failed withdrawal was the Shaker sect. They set up their own communities and were successful at withdrawal but their dedication to celibacy kept their movement from growing https://en.wikipedia.org/wiki/Shakers .

    My point is that after several decades of innovation in a variety of technologies, blockchain might be one of those useful tools that occasionally arise to tie everything together. As Casey and Wong point out, “the sophisticated, decentralized, internet of things–driven economy that many are projecting might well be impossible,” without it.

    Published: 8 months ago


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