For the last several years, we’ve spent a lot of time debating what CRM is and is not: It’s a strategy, not a software package. It’s a journey, not a destination. It’s a long-term investment, not a one-time purchase.

Now that we all know what it is, the next most pressing question is: Where is it?

You’ve got the strategy, you’ve embarked on the journey and you’ve committed ongoing budget dollars to CRM. Where’s the payoff? With CRM, we all expect more than just the meager gains that come with automation. Instead, we aspire to quantum improvements in profitability, to sustainable sources of competitive advantage.

As a consultant, people have stopped asking me, "How do I start my CRM initiative?" and started asking, "What do we do next? The last thing didn’t work."

My answer is of the good news/bad variety. First, the bad news: What comes next is achieving the ever-elusive channel integration. That’s where the big payoffs will arise, although almost no one is hearing the sweet music of integration just yet. Now for the good news: Integration is closer than anyone thinks.

How you should go about achieving channel integration, sooner rather than later, depends on who you are. This article, the first of a series, will help you plot where you’re going, based on where you’ve been.

What Kind of Stereo System are You Building?

Remember your first stereo? Chances are it was simple, a one-piece model that was ready to go right out of the box – speakers, tuner, tape player, radio and equalizer, all in one. You just plugged it in and turned it on, and you were listening to your favorite album, eight-track or cassette within minutes.

CRM investments are not so easy. The definition of a complete system is not as obvious as it is with a stereo system, and few vendors can really deliver the total solution.

Nonetheless, we want the same simplicity that we had with our first stereo. We want it to deliver personalized information across all channels; to deliver consistent messages across all customer interaction touchpoints; to offer the same view of the customer to all employees, partners and customers. This is why channel integration will be one of the key CRM trends for 2002. (Click here for our list and more detail on what other CRM trends we predict for 2002.

Why can’t your front office and your back office work like your first stereo? Because unlike with your first stereo, you’re no longer living in an all-in- one world. After three or more years of evaluating and installing point solutions for CRM, you’ve moved up the food chain (and some would say gone through the looking glass). Now, you’re dealing with what a Radio Shack salesman would call "a component system." That is, in order to get the best performance out of each individual function – the best sound out of your speakers, the best fidelity out of your tape deck (now CD player) – you’ve purchased each component separately.

Even companies that have standardized on a CRM package find that some channels are using different technologies. It’s very common for companies to use different technologies for call center, sales force, marketing and field service. But although each channel is using the products that best fulfill its requirements, miscommunication still reigns across the channels. We must stitch these channels together.

In the stereo world, the benefits of a component system are clear: Once everything is working together, you experience better sound. In the business world, it should work the same way: Stitch together your software and hardware then sit back, make better decisions and watch the pile of money grow. The music should sound better than ever.

Why is it so quiet? Maybe you haven’t taken the next step yet, to understand where your business wants to go with its customer strategy, to recognize the gaps in the systems that are hampering your ability to deliver on the strategy. Maybe you need to find the loose connections and start fixing them.

I suspect that many organizations will find that a lack of channel integration is impeding their customer strategies. Though some may still need to automate or upgrade the automation at various touchpoints, there’s clearly a difference between automating the channels and integrating them. And depending on where you are, multichannel integration may not be far off. I predict that 2002 will be the year of huge breakthroughs in organizations’ CRM infrastructure.

To help you take the next step, see if you can find yourself and your organization in the categories that follow. Based on who you are, you’ll find instructions on where to go next.

(The next few articles in this series will focus very specifically on multichannel integration "next steps" at the application, database and user layers.)

The One-Brand Band

For many companies, standardizing on a single platform such as Siebel, Oracle, PeopleSoft or E.piphany makes a lot of sense. This can take several different shapes:
  • Some organizations are in severe best-of-breed situations with multiple technologies, packages and suites supporting their infrastructure. A subset of them has decided to throw away their investment in their point solutions and to standardize on a platform. This decision is painful because it usually means throwing away millions of dollars in software and services. Often, this decision is made by a new CIO or other new CRM executives without emotional, financial or political investment in past implementations.
  • Other organizations have created some CRM point solutions but have purposefully not overinvested in their CRM applications; they’ve been waiting for their back-office vendor to add in adequate CRM functionality. (Vendors such as SAP and Oracle have always been savvy at freezing their client bases with press releases and news of upcoming software releases.) This year, back-office vendors are finally delivering reasonable CRM functionality. SAP has a sound solution with its next version of CRM, Oracle 11i is starting to gather references and PeopleSoft has released its first integrated version of the Vantive platform they acquired.
  • Finally, some organizations implemented a piece or pieces of a CRM platform as a point solution – for example, they implemented Clarify’s call center or Siebel’s sales force automation. Now, as they look to automate other channels, these organizations must weigh the benefits of a best- of-breed solution against the costs of application integration. Many will choose to standardize on a single platform.

The benefits of an integrated, one-brand platform are many. They include:

  • Standardized application look and feel for knowledge workers, customers and front-office employees, alike.
  • Consolidated information technology skill sets.
  • Simplified database consolidation (which may eliminate the need for an operational data store).
  • An integrated enterprise-wide, CRM rules engine that can enforce business rules, personalize the experience and execute multichannel marketing programs
  • Decreased time to market for new channels/applications, due to less systems integration

Despite these benefits, it’s unrealistic to assume that any CRM infrastructure will be entirely homogenous. Many companies will not use the same vendor for back and front office. They’ll more likely identify gaps in their vendor’s suite (especially the Web and portal channels); identify best-in-class, nonstandard modules that will give them competitive advantage; or discover, to their dismay (before or after implementation) that a standard module simply does not meet their requirements. Suite vendors will win deals by opening the architecture, so that campaign management applications, workforce management software, analytical applications and other necessary functions can plug into their infrastructure. Without standard CRM interfaces, point solutions must be able to integrate into the top suite vendors as these monolithic applications become more prevalent.
These challenges will be similar to the ones facing data warehouse vendors as ERP installations become a major source of data. Vendors such as Business Objects, Informatica and Ascential have started writing canned applications for SAP, Oracle and PeopleSoft. Now, the functionality must expand to include pushing data into these applications (customer value scores, campaigns, personalization, etc.) in real time as well as extracting data from the applications.

Vendors moving towards standards-based, messaging-based architectures will give organizations the flexibility they desire. E.piphany will be coming out with a J2EE-compliant engine for its campaign management application, thereby allowing other applications to use its functionality. Already, Informatica interoperates with middleware and EAI vendors to use its business rules and meta data engine for data transformations. Xchange Real-Time leverages enterprise application integration (EAI) software in order drive campaigns into the common front- office platforms. And as Siebel moves towards a Web-based architecture, it too becomes easier to integrate.

Standardizing on a platform is the closest approximation of the out-of-the- box, ready-to-go, all-in-one stereo system of your past. But sooner or later, you’ll want a subwoofer; you’ll lust after a multidisc CD player; or your new widescreen TV will seem to be calling out for a surround-sound receiver. That’s why you may already be in the midst of an entirely different strategy. I call it "The Greatest Hits Collection."

The Greatest Hits Collection

At the other end of the spectrum is the company that has multiple technologies implemented at various touchpoints. In these cases, the users are extremely happy with their applications, strategies may be just starting to bear fruit, the learning curve has been overcome, processes have been changed and installing a platform to replace a point application may be out of the question.

Best-of- breed, "greatest hits" scenarios do offer several advantages:

  • No compromises on functionality and ease of use.
  • Upgrades and modifications are less likely to have dependencies and create a ripple effect across an entire ecosystem.
  • Point-solution vendors tend to stay ahead of the curve in future functionality and vision.
  • Choice can become a motivating factor for use and acceptance of the application.
  • Application independence enables faster time to market for new applications.
The major downside of the best-of-breed scenario is interoperability. The burden is placed on the organization to integrate the various applications and to mimic some platform-like functionality via an enterprise rules engine, a consolidated customer database or an operational data store. Though the initiative may sound unwieldy at first, once the data flow through is mapped through the organization, a messaging or batch architecture can be chosen and the integration performed. In many cases, multichannel integration can start to occur even faster than with a platform, since the integration can be phased by channel or touchpoint.

Conclusion: Do you know where you’re going …?

No matter who you are, the rest of your journey hinges on how you address three major aspects of your business:
  • Database (or operational data store)
  • Applications (and their integration) and business process
  • User (and how they interact with access your data)

These areas will be critical in integrating your channels. As you make the choice to go platform or best of breed, each of these areas must be addressed in a different manner, with a different priority. Though an integrated database may be a lower priority in platform deployments, application integration and user access will become a higher priority.
In my next article, I’ll outline the appropriate next steps for you, starting with database, whether you’re a one-brand shop or a "greatest hits" enterprise. No matter who you are, the song remains the same: Channel integration is one of the last stops on your journey to CRM success. And you’re almost there.



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