The market has witnessed multiple vendors with various Social CRM solutions without a deep focus on current enterprise CRM investments from prior waves. New social analytics tightly woven to the vendor offering to determine sentiment, influence external to business intelligence enterprise tools, the rise of new social work flows gaps inside the business to link community and content search optimization, category aggregation, tablets, mobility, technology connectors, propriety lock-in platforms for businesses strategically navigate in their customer IT strategy, and so on.

Ironically, all the above new complexity and noise (and there is more) can be boiled down to two simple trends we have witnessed in the last decade:

1. Enterprise CRM operations from earlier waves have remained fairly static or have become fragmented organizationally by channel or unit, leading to the growth of technology, business, and data silos internally and a decrease in enterprise coordination around the end customer needs and channels.

2. The networked customer increasingly influences a larger portion of the business relationship across sales, service, and marketing outside of the current enterprise customer operations and expects the business, in turn, to interact in a unified fashion, without regard to channel or business touch point.

These two mega trends have ignited a firestorm of activity across the vendor landscape, be it in software (legacy and start up), platform exchanges, tablets and smart phones, developer partner communities and collaboration, new SI and vendor alliances, and more.

Unlike the CMO driven Social Media initiatives that are in various stages of deployment, the market for Social CRM and associated enterprise CRM intersections between social and operational is still in its nascent stages. Identification of the most suitable solutions, best-in-class practices, silo avoidance, private and public cloud architectural implications, and the appropriate enterprise hybrid technology mix for organizations remains greenfield (while Gartner pegs this sub-sector in CRM to be 1B in 2011, data on the ground appears to indicate otherwise).

This hesitancy has a solid rationale. Unlike the current initiatives creating Social Media COE’s and such, Social CRM has much higher implications for enterprise front office operations, involving thousands resources, organizational constraints, business and legal implications. Its what happens once an enterprise acts on the social insight.

There are a few pioneering vendors that have been able to prove their capabilities and are pursuing a ‘suite’ position in this market. Yet there is a lot of duplication (and major gaps) in the functionality, and, more important, none can claim to replace existing enterprise CRM with new social CRM solutions for the existing enterprise CRM market (that is without creating yet another Social CRM silo). Rather, an integration, hub-spoke, division based, or combination of the above is the sales model approach witnessed, with low risk POC or assessment types of engagements occurring alongside.

Moreover, there is no one vendor that ‘does it all’, unlike prior ‘feature wars’ from the earlier CRM era. As a result the entire evaluation process is fundamentally different, involving stakeholders from Finance (CAPEX vs. OPEX), Technology (Multi-Tenancy, Off Premise vs. On Premise, and SOA implications), Business (Field Adoption, Mobility, and Time to Benefits Realization), and other units, such as PR, reviewing against a completely new set of parameters.

The above considerations are critical in the Business and IT investment decision (or lack thereof, with often today a preference to postpone given the state of the market). Yet, business leaders navigating their future customer strategies, full due diligence is required now more than ever before to be positioned now for rapid execution. Businesses are completing due diligence efforts as the recognition of the need for change, even with the highest ‘noise to signal’ ratio seen in the CRM sector for years, will not abate in the coming years and competitive attrition is around the corner. Rather, indicators on ‘noise to signal’ are that it will only increase.

Without new customer engagement models envisioned that can be operationalized in the enterprise front office, and a plan to harness the benefits of change, sitting on the sidelines, ‘waiting for the dust to settle’, is not an option.

Traditional CRM tools could previously claim to capture most of the customer interaction channels, whether it was a face to face sales visit or a call center call to the 1-800 number. This data was then used in forecasting and analysis on front office effectiveness analysis.

Today, what was perhaps 80-90% of the customer interaction is rapidly shrinking as customers moved to external customer support blogs and sales insight is derived from the latest networking analytics tools.

What does this mean to business? Most that have not begun to look into closing this gap will increasingly be ‘running with blinders’. Forecasts will inaccurate, and support issues managed in the external support sites will be unseen to the business. From the business’ perspective, this could be seen as a shortening of the sales cycle, or a rapid ‘fire drill’ to a support issue.

This is an incorrect viewpoint. What has really occurred is a transfer to the same activities to other tools, forums, and sites. This transfer has moved to the control of the customer.

To close this current CRM gap, companies will need to how best assess integrating Social CRM into their CRM infrastructure so that they are engaging the customer where the interaction is occurring. While the Social CRM niche vendor landscape has changed, the metrics remain the same. What is critical is how best to navigate the new landscape to realign metrics and regain business benefits.

Combined with the current global economic environment, this loss of forecast predictability only adds to uncertainty in sales management.

The net result of this trend has implications for both buyers and sellers. Companies that cannot connect with the new socially driven sales process will be in a poor position to respond to perceived ‘last minute’ customer inquiries when in fact due diligence has been completed on the buyer side. As the networked customer has assumed more aspects of the traditional sales cycle than has been the historical precedent, businesses must also adapt. Those companies that can bridge the current disconnect and engage the customer wherever the social sales conversations are happening, will be best positioned to win.

To put it in context, I can understand the desire to run fast waving the new “Inbound Marketing” flag. The first wave of CRM solutions neglected, to some degree, the marketing functions. First and foremost, it focused on enabling SFA (it’s the pipeline stupid!). Service came next, but usually with another CRM silo bolted on (it’s the ticket stupid!) or web self service. During this phase, Marketing was supported via CRM campaign management, web analytics, etc. but often the critical effectiveness data often came from within the internal CRM Sales and Service systems (or internal marketing tools and external data providers).

That’s not to say customer alignment across front office units was not the most critical enterprise goal from above during this period. It was always the mandate, required for the ever elusive 360 degree view. Various initiatives were kicked off to do just that, with some successes here and there, some failures, and lots of internal cross-unit complexities to manage.

Does anybody think the end customer cared during this phase of business activity? While corporate front office business units and IT were sorting out their differences between tools, data, systems, and business languages – - the customer moved on. The technology cost curve made it possible for individuals to invest their own set of Sales (research), (self) Service, and Marketing (platforms) reaching millions in a nano-second. Many of these customers now aim this newly acquired arsenal directly back at the company (rightly or wrongly).

Or, in other words, inside out processes turned outside in, customer relationship management turned into customer managed relationships.

So where are we today? Even now, most companies are in a reactionary mode. For organizations that exist in markets where there is individual choice, it’s simply matter of time before the new customer arsenal hits their turf (and of course there are always – two – ways to learn).  For others trying to be proactive on the wave, it has been mostly directed as a mandate for “Inbound Marketing” or “Social CRM/Twitter” based initiatives (side note: I have a problem with the “Inbound Marketing” term as its seems just as flawed as “Outbound Marketing” – last time I checked customer conversations and engagement are bi-directional, no?).

This is a start, but will still miss the end goal as we are repeating the past. Creating a truly customer centric operating model that is cross Sales, Service, and Marketing is a bigger imperative now more than ever. If anything, the new drivers should seek to empower Customer Service agents as much as it does Marketing.  And Sales, always looking for the most complete customer profile and activity data, needs to be in sync with Service and Marketing now as well. Revenue generation (or loss) activities on an account can occur at any touch point (so long pipeline and tickets!).

So what’s my point? Unleashing Social CRM initiatives via a Marketing-only silo has the potential to repeat historical failures if not properly planned and synchronized. Deployed in isolation, Social CRM can make the company look even more flat footed and less connected. In the first phase of CRM much of these miss-steps were, for the most part, invisible to the end customer.  Today, it can be blasted with all the world to see.

So really, this should be a mandate for real culture change within the front office first (the change that didn’t happen during the first wave), integrated strategic planning across Sales, Service, and Marketing second, and then deploying and managing the shiny new Social CRM initiatives, tools, and services last. #scrm #crm

Jigsaw CEO Jim Fowler presented last Wednesday on “DaaS is the new SaaS“. The indirect, horizontally integrated sales model has been the norm in the technology industry, but analogs can be applied to many other sectors, such as the dealership model in insurance or automobiles, franchise in retail, or social service delivery in the public sector.

In all these sectors, a key historical issue has been on how best to integrate, segment, and collaborate sales and customer data with business partners and regain control of the end to end customer experience. Its a very complex business issue on its own and has not had an adequate technical approach until recently. The emergence of B2B Platforms, with an assumption of some level of core data model standardization via a Cloud option, has potential to address many of the prior issues. Extremely complex and costly middleware rule customizations, or worse, point to point solutions, were the options pursued earlier with the end result of, usually, zero adoption.

For an example of how that went in the auto sector a decade ago, feel free to lookup the story of Commerce One.

As a second pillar, the exponential growth in Social Networking can address much of the unstructured data at the customer conversation end point, empowering not just Marketing with new tools, but Service and Sales as well. The real pressure is on integrating across all front office functions, not just Marketing. There is a danger in viewing the trend in Social CRM as a Marketing only led, or “Twitter” led initiative, leaving the cross-unit strategy and planning phase behind. This phase is now more important than ever, with any missteps being highly visible (look up the Walmart “fake blogger” story). If left to a single front office function or group, the results will likely be zero ROI or worse, loss of customer trust. There are signs this is already happening.

That perspective was resonated loudly in the conversations last week at SugarCon. More on that later.

It was interesting that the SugarCRM conference was followed with Chirp, the Twitter developer conference in SF. Its very clear that Salesforce is investing heavily in both trends, with Chatter covering the social side, and Jigsaw as one piece of the B2B platform play. But this story is just starting, and is not about a single CRM vendor.

In the early days of the CRM software sector, a product focus helped to “hang your hat” on when starting out and the corporate front office was full of disconnected MS Access databases (or worse). A CRM product focus was a path to gain expertise in key architectural concepts and solution delivery. Many businesses were asking for “10 Years Siebel CRM” when it was only 4 years after the IPO. Indicating a winner in the Valley, we had a proliferation of CRM “Web 1.0″ companies shortly thereafter. Then the business need morphed into “Which CRM Tool?” as there were so many players in the space with overlapping functions. 2001 and the M&A activity of the the following years naturally resolved the clear architectural duplication in the sector. Creative destruction at work.

Today, with CRM SaaS, “Cloud” Platforms, and Social CRM, its happening all over again.  Its the “creative” part of Schumpeter’s theory and a natural aspect of regional innovation cycles and will, hopefully, never stop as its critical for competitive advantage. An analogy can be like that of making a movie.  The fundamentals of movie making are still primarily the same since the 1930′s but “the how” has changed immensely. Those who understand both “the art” and “the how” win. Those who do not, lose. Software innovation has a similar regional dynamic, innovation cycle, and pattern.

The current landscape is ironic in that much of the CRM technology is easier to access at an exponentially lower cost. The gated enterprise CRM garden has been opened up. This has uncovered a huge amount of untapped market demand and many vendors are reaping the successes all over again. But, for CRM buyers, this new context is also making customer interaction strategy more important now than ever before. When the access is so easy now and the CRM technology playing field is flattening, the way a company uses technology can be a “make or break” competitive differentiator and market maker.

So today both CRM business and technology hats are needed in different degrees, now more depending on your specialization and career path. I would argue against boxing one or the other out in terms of technology and business, as the lines are increasingly blurring now and will continue as new generations enter the workforce. But one needs to be careful to avoid “jack of everything, master of nothing” as the space has grown so much wider and specialized at the same time. At the same time, one also needs avoid being locked into a single CRM technology that will be obsolete in 5-10 years.

Its a constant balancing act (and what makes it fun).

I know we live in an 140 char world, but without the means to understand that world, its noise. I recall seeing a similar complaint on how someone thought they were a Twitter expert because of the #s of followers they had generated through various “optimization” tools. You get what you measure, and when you are floating in a sea of noise, you need water to drink not more buzz.

So, I finally got around to powering through Paul Greenberg’s 4th edition (almost 700 pages!) of CRM At The Speed of Light. Its really a re-write from the earlier versions, not an update. So if you have the earlier version I highly recommend the new update. It complements nicely other recent works Enterprise 2.0, Experience Economy, Groundswell, to name few here. And my old time favorite… The Wealth of Networks.

The consulting on this industry shift seems to be taking off lately, likely due to this finally hard hitting the corporate agenda in a very unseemly “caught off guard” manner (Google Buzz, Toyota, United, etc.). The list of missteps can be updated almost everyday now. So, yea… now its finally on the “wide” agenda, but there remains little “wide” understanding on what exactly to do about it.

Perhaps the non-biased expert community needs to start gathering and publishing these cases to dissect exactly where a customer failure happened in the chain. Each case has its own dimensions and most are quick to jump to either a software, consulting solution pitch or blame the entire company as a side agenda. I watched a lot of the Toyota testimony today on CSPAN. Aside from the cross-cultural interplay, what was fascinating was that the CEO announced a series VOC programs, customer advisory board, customer engagement initiatives, etc… was not this in already place given their industry leadership in this area?

Again, without the details in this case, it’s hard for most outsiders to decipher, at a granular level, the true root causes. The public narrative is being written regardless.

Plenty of big software announced Social CRM components last year and many smaller players have been focusing on the sidelines in this area for years. But they too seem to working on a moving target, lots of real? “beta or alpha” initiatives… the sector feels a bit like 1999 again. Hopefully, without the repeats.

Each “social” tool (FB, Twitter, LinkedIn, etc.) is architected differently for a clear and different business and user need. For example, Twitter – 140 char limit, API architecture enabling a huge ecosystem to develop – was by design based on a business need and gap identified. FB is at least perceived by end users as “semi-closed” as I “think” I have user control on the platform, and assume no default actions impacting my data will be taken without prior consent and notification (although they too had find out the hard way with many missteps). But all this is past history and common knowledge and, moreover, both Twitter and FB are social platforms.

The email channel and platform is different. Emails (unlike blog posting, FB status update, Twitter, etc.) can be analogous to phone conversations, making it subject to even stricter scrutiny over control and privacy. Has Google not learned from their social competitors and frenemies?  Has it really become that much of a gBubble?

They truly messed up on the roll out of gBuzz last week by unnecessarily exposing this issue, and are correcting the trust issue with PR and updates now. We can now add them to the growing “loss of customer trust” list of United, Toyota, etc.  What’s unsettling is that this should have been so obvious from the start. With all the data Google manages, is it wrong to hold them to a higher standard than a typical start-up now? If gBuzz simply had been introduced like a standalone offering (e.g. like Gmail was slowly nurtured) that allowed the end user to walk through who to import/add, how to integrate with Gmail, what to set on content, etc. it would have completely changed the dynamic. Sneakily showing up as a Trojan Horse in Gmail, exposing email addresses, without any user notification or authorization was the easy road to take to gain immediate market share. However it was paid with a major hit to core of the Google brand – user trust. Trust takes years to develop, but can be destroyed in a nano-second.

The implied assumption is that I trust Google to manage my data in a way that ensures all PII data is masked. This has been the standard Google has set internally and externally since day one. In return for this handover of trust, Google generates a very profitable keyword advertising business, along with side products that further create vendor lock in and revenue. That trust assumption was heavily challenged by the errors last week and it just served to re-trigger further debates raging now over Google (and the internet in general) on ownership control and privacy concerns.

I agree, gBuzz will not fade as its embedded in the mighty Google twin pillars of Search and Email. Maybe this issue will fade fast as everyone turns the page (“nothing to see here, move along”) and I give kudos in that senior management recognized almost immediately, albeit retroactively. There is clearly plenty of time to recover, and I imagine this will fade, but something was definitely malfunctioning in Mountain View last week. Oh yea… and “never waste a crises”.

One way to view how this shift impacts business strategies is seeing how they impact the “Touch vs. Scale” matrix.

Current models in place today are either B2B/Enterprise Sales (High Touch, Low Scale, F2F Sales Teams, Med-Long Cycles) or B2C/Consumer Sales (Low Touch, High Scale, Marketing, Call Center, Fast Cycles). And the SME space has been (often awkwardly) in the middle between these points.

Recent shifts in technology are further moving into the High Touch / High Scale “fourth quadrant”, an area often targeted, but rarely reached until recently.

I think most already understand (or “feel”) this, but have a hard time figuring out the ramifications to their current business models. There is already a large number of technology solutions, but many are without a business focused decision-making framework to help align and guide the Business/IT planing  processes.