The next bright shiny objects
I was so looking forward to getting the Facebook IPO out of the way and then splat, like a ripe tomato in the kisser, we have to learn that the underwriters might not have shared some pre-IPO information transparently. Enough already! Bankers appear to be tone deaf to the fallout from their gross behavior. If you want an historical comparison I think you need to go all the way back to the Renaissance and the Borgia popes. But no matter.
With Facebook’s more or less successful public launch I hope we can turn our attention to other areas of CRM and the front office. It might seem funny to hear but I think the IPO signals the end of the social era. With social so prominent you might wonder how anyone can call it over but that’s exactly the point. Social has advanced very rapidly from the periphery of technology and business to be front and center.
So it’s no longer a disruptor, either you have it or you need it but there’s no longer any doubt about it, which means its over just like the information age or the machine age or whatever age you want. An age ends when it becomes part of the fabric. Next!
And while we’re at it, let’s clear the decks and add mobility and cloud computing to the list. The same story holds there you’ve had more than a decade to discover the cloud and its predecessors and we can say much the same about mobile. The interest in all these technologies today is not so much that the technologies are now ready for prime time. It’s that the majority is finally disposed to or resigned to (take you pick) their reality as business essentials. That’s good for my business because there are lots of companies trying to get the crash course without crashing, if you know what I mean.
So let’s talk about what’s next because there are many candidates. My favorite is the growing need for communications capability within the CRM suite. I am thinking about voice over IP for all, video calling embedded in apps and mobility, any time and anywhere. Social is nice and mobile has a place and we have analytics to tame big data but the emerging issue is how to communicate directly one on one with customers in the middle of a front office business process.
Old reliable telephone service is less reliable today because there are so many phones that aren’t nailed down. The infrastructure might be good but few of us sit at a desk these days, more likely we’re walking to another meeting, in a car or seat 15B on an unexpected trip to customerville. But what if that seat was prohibitively expensive or what if, due to all the connections, it was faster to walk? What if your desk is your lap? It’ll happen, which is why the need for really good communications embedded in our CRM apps. Unified communications is the most important solution we’re all ignoring these days.
You’ve heard me rant about unified communications before and I will continue because it’s infinitely easier to rant than to build software. I’m used to it. I spent years talking about social before it took off and I figure we’re three to five years away from taking unified communications seriously. But last week at least one company showed it was thinking along the same general lines of communicating. Salesforce announced at Cloudforce, London that it was offering two new products that foster communication, Chatter Messenger and Chatter Screensharing.
Don’t let the uninspiring names fool you, each product places Salesforce on a continuum that might lead to voice communications eventually. If nothing else, each tries to fill a communication void found across the front office today. They’re just what they seem, an instant messenger tool to augment Chatter and a way to share a computer screen across the Internet.
With every similar iteration CRM gets closer to the customer, closer to being in the moment when it counts and that’s good. I expect Salesforce to let these new products equilibrate with the customer base and then each will be made available to end customers.
Beyond these new technologies, I think there are many tools that have not received the attention they deserve because they’ve been living in a social shadow. For instance, a lot of work has been done bringing analytics to the sales process where it can do a world of good but we don’t hear much about it. Maybe it’s not as sexy as social but it’s very important.
Companies like Cloud 9 have been busy building really good analytic models for pipeline management and forecasting. They’re doing well today and I expect demand for these solutions will only increase for one simple reason. There’s too much to manage in a sales department today and managing without analytics is next to impossible.
Sales people and their managers have exhausted the weekly spreadsheet report and a good deal more quantitative analysis is the only thing that’s going to save selling. We’ve tried methods, fancy tools, carrots and sticks all with about the same results. The next approach to selling has to be using digital marketing tools to generate sales ready leads and quantitative methods to manage an integrated marketing-sales pipe and the forecast.
Sales people up and down the ladder have resisted this kind of consolidation before but this time is different. We’re coming out of a recession where demand has been week for years and sales people who want to resist quantitative methods have been worn down.
So communications and analytics; those are my two candidates for hyper-exposure a la Facebook. And I think the smart money is already gravitating in those directions.
Sustainability and CRM
There was an interesting article in the New York Times last week, “When Flying 720 Miles Takes 12 Hours” about airlines but the subtext was all about CRM, or at least where CRM has to go. If you know me at all, you know I closely attend to macroeconomics and energy issues and they are all over this article.
The story documented how small regional airlines are having trouble in an economy where fuel prices are rising and there are fewer passengers willing to pay higher prices. The typical response you’d expect in such a situation is some combination of reducing the supply of seats and raising prices to enable the carriers to at least break even.
The article shows both but this is not a simple exercise from ECON 101. Higher prices and fewer flights signal stress on the economy because less business is getting done and that’s a downer economically speaking.
A few years ago a Forbes editor, Chris Steiner wrote, “Twenty Dollars a Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better” that postulated what might happen to the economy as fuel prices rise. We’re right on time with his predictions, but I think there will be much change and dislocation before we see the promised land.
With fuel heading for five bucks a gallon, we are seeing mergers and acquisitions of sick air carriers along with fewer feeder routes according to the Times article and Steiner. As prices continue to escalate we’ll see fewer short hops and fewer long distance routes as airlines try to hang on.
But also, Steiner thinks places that exist on the end of an umbilical cord filled with jet fuel — Las Vegas, vacation destinations (think ski areas and islands in the sun) — will see a decline in the traffic that brings tourists and their cash. The immediate fallback position is cars, but gassing up a car that gets 12 or even 20 miles per gallon has already gotten old.
The secondary default position will be to get serious about alternatives and since trains and new cars or especially more hybrids are an expensive proposition the next steep won’t be travel alternatives but conservation in the form of travel reduction.
Just a few weeks ago people were talking about the resurgence in U.S. oil production. We went from producing 4.95 million barrels of crude per day to pumping 5.75 mbpd and French champagne started flowing. But the sad reality is that we need 19.2 mbpd every day and while 5.75 mbpd is nice, even getting up to the 9 or 10 mbpd optimists predict would be nice but still leave us quite a bit short. And those are today’s numbers, they make no accommodation for growth.
Even worse, in 2007 just before the financial meltdown, U.S. crude demand was 20,680,000 mbpd meaning that the recession has done as much to reduce demand as drill baby drill has done for supply. I dare say reduced demand will be easier to come by than increasing domestic supply.
When we think we have spare capacity we lose track of the longer-term need for alternatives and we stick with what we know. That’s one reason we don’t have a more aggressive energy and transportation policy. But when we’re feeling sanguine about energy we’re also riding an economic roller coaster up and then down because higher prices inevitably choke off growth. So we find ourselves in a position where the economy gets a little better then a bit worse with the peaks never reaching the previous troughs and the moving average is ever downward.
Alternatives do not simply mean smaller cars or windmills. If you can find a way to do business with fewer energy inputs, you could call it conservation but in reality you are developing an alternative path to profits and that’s where CRM can add so much.
First off, the huge move towards social technologies is one example of using alternatives. Social (along with analytics) enables us to communicate with and understand customers without jumping on a plane or into a car all the time for a face-to-face meeting. But there’s more. We are rapidly approaching a time when the videoconference has to replace at least some face-to-face meetings. Video conferencing can be easily built into CRM applications and as a stand-alone it is a great way to communicate with people.
Some companies are using video conferencing to knit together enterprises strung together across time zones and supply chains. Others are embedding video chat into customer service — another good practice because it produces a more intimate interaction and improves the customer experience.
Companies are looking over unified communications solutions right now but few seem to have the interest in pulling the trigger. That’s to be expected. Big companies like ATT, ShorTel, Siemens, Cisco and Microsoft are offering solutions though I don’t know any CRM vendor with an eye on the subject just yet. It’s too bad because I think unified communication is where social was about 5 years ago — on the periphery but moving inexorably into the CRM suite.
Given unified communications’ upside and relatively modest down side it’s a wonder to me why more companies — vendor and customer alike — are not swarming this solution class already. Business is a game of thrust and counter thrust and everyone must be ready for change or risk being road kill. This is our next challenge and CRM is right in the middle.
I hate to sound like Dr. Doom and Gloom but have you paid attention to the cost of gasoline lately? Of course you have. It’s sickening to watch as prices resume their inexorable climb. The last time we saw prices spike was the last time the economy was in decent shape — right before the wheels fell off in 2008.
The global economy is based on the assumption that transportation and raw materials are cheap and will remain so. Petroleum is our dominant fuel source and it doubles as a raw material for plastics, rubber, fertilizer cement and many other materials that make the world run.
The price rise is no surprise. As the global economy began to feel better we all began to use more petroleum and electricity. The authoritative IEA (International Energy Agency, based in Paris) pegs global demand at 90 million barrels per day (mbd) while supply has never gotten above 88 mbd. The small difference for all of you supply and demand types drives the higher cost of driving.
While you might see this as a catastrophe, I smell an opportunity. This is a disruptive moment and whenever a situation like this arrives, it usually means there’s an imbalance opening a niche for a new solution. Frequently, though not always that means a technological solution.
Historically CRM fit that description. On-demand computing, embedded analytics, social media and an array of sales, marketing and service applications followed CRM’s debut. The universe is still resonating from that big bang and we are now at the start or the middle of another. High transportation costs open the door to a variety of solutions that help organizations to reduce their traveling while maintaining their business agility.
Consider unified communications systems (UCS), which bring together voice, mobile, calendars, chat and video conferencing. UCS has two jobs in a high cost transportation environment. First, leveraging UCS can mean less travel for anyone who currently commutes to an office to work on a computer. Much of that work could be done remotely if we have good communication between the hub and spoke. That works for people in call centers — which have leveraged Internet technologies for a long time to do this — as well as sales and other business people as well as for creative types.
For customers, a video chat or conference might speed solutions and reduce the need for all parties to converge in a conference room saving everyone travel costs but also time, which is even more valuable.
At a macro level the days of the ten- or twenty-thousand attendee (or more) conference might be ending. Vendors and their customers spend huge sums annually to attend user groups and similar meetings. Visionary vendors are already taking advantage of Internet conferencing technologies to get the job done with much less travel and cost.
The savings might go back into the corporate pocket but some of those dollars could also be recirculated to support more frequent Web conferences. Think about it — we have cloud computing with multiple releases per year yet the user conference is so expensive to put on that we only see one per year. That could change with on-line conferences and that would speed up the cadence of change in many companies.
Personally, I would miss visiting some of the cities I visit each year and many attendees might miss the travel perks. But that might simply be the symptom of another opportunity to fulfill.
The important point to keep in mind is that no change of this type is total and complete change is not even what’s required. If we start a process that enables us to get energy supply and demand back in synch then we will see reductions in other costs. This can also mean that the economy whipsaws for a while with prices and economic activity moving in opposite directions. To avoid this we will need to pick new directions and stay with them.
There are other good reasons to consider these and other additions to the CRM suite. In a global economy customers are everywhere and many potential new customers are too far away to seriously contemplate face-to-face interactions. The traditional answer has been to open offices in other countries but that’s expensive. More importantly, many of the things we sell on line, are delivered at price points that will not support that kind of expansion. All of this makes the case for expanding an increasingly sophisticated communications footprint.
The high cost of transportation might be the proximate cause of this expansion, but as this short examination shows, the downstream benefits can be big. If the future works out as I think it will, it makes sense for all of us to consider again how we can best build out the front office suite.
I almost never attend a webinar unless I am speaking. When I need to know something I usually get a one on one with a CEO or other leader of a company. They’re very gracious with their time and the tutelage helps me as an analyst though often I don’t run out and write something about my experience.
Part of the reason for my reticence is that most briefings are on background — the leaders are often trying out a new idea and looking for feedback. Frequently those ideas undergo significant modification before they finally emerge. Other times, the briefing in embargoed pending an official announcement. And often a briefing is about an incremental release — suffice it to say there are lots of reasons not to write about something. At least right away. Sometimes, months later, an idea strikes and I write something. It’s not the best system in the world but I doubt I am the only scribe that uses it.
Last week I broke with precedent and attended a webinar on Microsoft’s unified communications server also known (I think) as Office Communication Server. It immediately reminded me of why I don’t do this more often but after I got over the pitch aspect and the interminable demo, I got the big picture and was happy I made the effort. Now, breaking with another looser precedent I am writing about it because I think it’s important.
Lots of companies, mainly in the telco space, are deploying unified communication servers; they include, but the list is hardly limited to, Cisco, Avaya, NEC and Microsoft, just to pick a few. This is a new field and standards are still loose and one vendor’s gear might not work with another’s. But Gartner has a Magic Quadrant for them so it’s a real market.
If UCS is new to you and you are not a dyslexic fan of USC football, it’s all about bringing together your calendaring, email, mobile, voice mail, VoIP, video and other telecommunications under one roof to better coordinate workflow, customer access and intra-company communications. I think it’s important, especially from a sustainability perspective.
I’ve been researching sustainability ideas all my life but my interest intensified in the last couple of years and now I am writing about it. I think UCS coupled with other new product ideas like content libraries, SharePoint and Salesforce’s Chatter, offers the potential to squeeze a lot of friction out of business.
By friction I mean all those things that suck up energy — both the personal and the carbon based kind — without delivering business benefit to either customers or vendors. Unified communication brings together the exploded cornucopia of communications technologies that have been invented over the last few decades into a manageable framework giving users the ability to tame what has become a communications beast.
Unified communication integrated with CRM offers the possibility of making us all more proactive and responsive to customers but in ways that simplify rather than complicate our lives. It seems like whenever we get a new technology one of the first uses we dream up for it is to somehow accelerate a business process, like selling. Ironically, that’s true occasionally but quickly everyone gets the same idea and what was once an accelerator turns the whole thing to gridlock.
A classic example might be email. As a tool for sales and marketing it proved very useful and many companies like Responsys, ExactTarget or ConstantContact (just to pick a few) have elevated it to a science. But then came various flavors of social networking with the same idea and in a short time we had way too many technologies trying to use the same basic technique resulting in jammed (and spammed) inboxes.
Unified communications reverses this trend partly. It does little to arbitrate between your media of choice but because it can track the whereabouts and activities of the recipient, it can result in one message rather than several from an impatient colleague, vendor or customer. It may not accelerate many processes but then again it might surprise you. What unified communications will certainly do is help us organize how we communicate and liberate time that is wasted because we simply don’t know.
More importantly, when you add video, VoIP and other advanced technologies, you may come to realize that what used to take a face to face meeting now only requires a quick chat. My research shows that as the recovery gains momentum, the cost of transportation will increase just as it did in 2008 when liquid fuel prices spiked. Having an alternative like unified communications might be the difference between doing business and not.
Unified communications wasn’t on my radar until the webinar and I am glad that I attended that one.