Salesforce1 Tour, Boston
Relentless might not be the first word you associate with Salesforce.com but in retrospect, it fits very well. Other words might include logical and well planned. President and Vice Chairman Keith Block came to Boston this week with a troupe of “forcers” to deliver the company’s post Dreamforce message to an appreciative audience.
Block’s message was augmented by his announcement of new offices at 500 Boylston Street housing 150 employees with ambition to double. Also, in a surprising move, Block announced the company’s intent to overtake SAP as the dominant enterprise software provider and number three overall global software company behind Microsoft and Oracle.
The world is a shark tank these days and Woody Allen’s adage that if you stop swimming you die is hard wired. But to hear such naked ambition was both a surprise and a statement of received wisdom. I have been discussing the company’s eventual ascension into the Fortune 500, for example, so the idea of this kind of rise is ambient. But saying it out loud tempts the childhood notion that if such aspirations are vocalized they might never come to pass.
But that’s all so much childish nonsense. Salesforce’s relentlessness well precedes this latest announcement and part of Block’s presentation retraced the company’s journey and accomplishments along the way, which includes Gartner Magic Quadrant leadership for Sales Cloud and Service Cloud as well as Platform. But it goes much deeper. There are various Forbes, Fortune, and other magazine coronations and accolades from MSNBC’s Jim Kramer for being consistently one of the best companies to work for, one of the fastest growing, and one of the most innovative companies on the planet. And magazine publishers apparently can’t get enough of Mr. Salesforce, Marc Benioff who’s been named one of the most respected CEOs and philanthropists.
Salesforce is, one could argue, the whole package, and not by accident — its relentless ambition is most visible in retrospect. So where to next? Block also used the occasion to announce the company’s intent to push vertical solutions into six broad industry categories including financial services/insurance, healthcare/life sciences, retail/consumer products, communications/media, public sector and automotive/manufacturing. It is a logical thing to do and emulates the bigger companies that Salesforce contends with, though at this level of granularity you might also say that, the designations are overly broad. However, you have to start somewhere.
For instance, manufacturing and automotive strongly suggest discrete manufacturing but this says nothing about process. Or does it? Retail and consumer beg the question of conventional vs. subscriptions, and healthcare and life sciences is a dog’s breakfast of care delivery, insurance, medical device manufacturing and more. It is also a walled garden maintained by thirty-plus year old mini-computer software. I could go on but all of this suggests not simply antagonists but real opportunity.
There isn’t a company under the sun that cannot benefit from a cloud and platform-based modernization of its sagging software from the last century. This is just the sort of thing that an ambitious company like Salesforce can turn its relentless drive towards.
To be sure there is plenty of competition. Oracle, Microsoft, and SAP all want to play in this new era as well and they are as relentless and ambitious as Salesforce. But Salesforce seems to uniquely understand that it lives in a multi-polar world, one where the winner take all approach of the last few decades in software is being replaced by cooperation and best of breed solutions.
This is also an era of diminished focus on transactions and increasing importance of process, which drives the need for platform. To one degree or another the others may offer cloud-based products and services but they are still wedded to a business model that Salesforce and its kin have made obsolete.
Transaction or Process?
After many years, I think I can boil down CRM to this: Vendors prepare for transactions but customers expect process. Of course this demands elaboration and neither of these ideas is stationary. The desire for better processes evolves as customers and markets do and transactions become more sophisticated as vendors play catch up with their markets. You can also say that a transaction is simply the logical end point of a process, at least most of the time, and yes, transactions don’t always involve money. At any rate CRM is an interesting study in transactions and processes.
To be sure, transactions are implied in almost any business process. A sales process is supposed to result in a sale, a service process is supposed to resolve customer issues, and the marketing process is intended to fill the top of the sales funnel. They are transactions with specific results but there is an important difference between a transaction and a process. For me that difference is this: a transaction is a frame from a movie but a process is the movie.
This analogy immediately falls apart when you try to piece together a bunch of transactions into a business process because it is as if you were reconstructing the original movie. A process requires a foundation; something that takes you from point to point to point but a transaction is designed to be complete unto itself.
I’ve spent a lot of time investigating customer sentiment recently and discovered that very often when customers are disappointed it is because of a process failure and not a transaction per se. But interestingly, the processes that fail are viewed as transactions by vendors and very often, the individual transactions are seen as successful. How can this be?
A business has many customer facing processes for sales, service, customer care, renewals, whatever. Let’s assume for the sake of simple math, that a typical process is made up of five steps so there are five potential failure points. Finally, let’s also say that the average step has a 90 percent success rate, meaning that a high percentage of the time, a desired outcome happens — someone gets something appropriate to a situation.
A vendor might see these five steps as individual instances or transactions but a customer might view all five together as a single thing because success is not assured until the last step is complete. If something messes up min the middle it’s not viewed as a simple transaction failure by the customer, it is a process failure. Who cares if you logged on successfully if you couldn’t place an order?
If you are the vendor you see 90 percent and think that’s good and maybe you want to raise it to 95 percent to be even better. But if you are the customer in need of successful completion of all steps, you might see mediocrity due to what I’ll call the tyranny of small numbers. Roughly speaking that’s because a number less than one multiplied by another like it results in a smaller number.
For the customer, the probability of successfully completing all steps of this process is not 90 percent, instead it’s .9 x .9 x .9 x .9 x .9 or 59 percent. That’s a big difference and it’s a contributing cause of the dissatisfaction you see on customer sentiment sites.
In my experience, the complaints voiced at these sites are about processes gone bad and not transactions. So here’s the interesting point: if your approach is transaction oriented rather than a true process, your cobbled together process most likely lacks the things that real processes offer, namely the ability to bail out and deal with a higher authority, frequently a human being.
CRM was born in transactions but it is moving inexorably toward process though I find it comical how often vendors avoid using the “process” word for fear of needing to do a lot of development.
This might be the biggest hidden reason for the high interest in analytics and platforms more generally. The idea of transaction based processes can work for a while as we layer on functionality like workflow, analytics, and collaboration but at some point the amalgamation of all these systems is not as powerful or as easy to manage as a system built on a foundation that assumes a process orientation. Analytics identify customer moments of truth and workflow addresses the need to opt out of the automated pathway when needed.
So as I survey the CRM landscape it strikes me that in a short time we’ll begin merging all of the point solution technologies we have heard so much about lately such as social, mobile, analytics and more, into a more comprehensive and strategic vision. I think it’s time.
