These Are the Times of CRM Vindication and Validation – Part 1

Some previous TEC blog posts have discussed the benefits (but also the inevitable caveats) of white papers, including the all-too-common vendors’ self-serving marketing fluff and buzzword verbiage, and about their (un)intended audiences. As part of my daily routine of doing research on vendors and their strategies and offerings, I’ve read a ton of white papers in the last decade or so.

And yes, these have ranged from blatant and flamboyant bragging about a vendor’s capabilities (a la the “Every man thinks his own geese are swans” proverb) to some exceptional ones that were quite educational and established someone’s expertise in something. Other latter examples (in addition to my previous post on Arena Solutions’ white paper on the pitfalls of manufacturing outsourcing) would be the following two white papers:

1. “Customer Relationship Management: The Winning Strategy in a Challenging Economy,” authored by Microsoft Dynamics CRM, and
2. “Maximizing CRM Effectiveness During Lean Times,” authored by Oracle CRM

Why? Well, when I read them, many things therein rang true to me from my own research and findings (e.g., the ongoing success of Salesforce.com, Oracle CRM, NetSuite, Microsoft Dynamics CRM, RightNow, Sage CRM, SugarCRM, and SAP CRM as well as ongoing TEC’s end-users’ inquiries), even though I was cognizant of Microsoft and Oracle intentionally touting their “astute CRM features” in respective documents. The fact remains that in 2009 customer relationship management (CRM) became a recession-proof enterprise application category as organizations scrambled to retain and mine existing clients for new opportunities, while superior customer service remains a differentiator in these times when lower prices and higher quality are a given.

In an ever-increasing competitive environment, the window between product conception and innovation on one hand, and commoditization on the other hand, is getting ever smaller. This phenomenon increases the need to differentiate around customer service to distinguish any organization from its competition. And, as a matter of course, customer experience can transcend every touch-point on the company’s front line including its sales, marketing, and service teams. The customer-facing front line also includes the company’s programs, campaigns, and promotions in all these areas, as well as its Web-based service channels and storefronts.

Not the Time to Be a Shrinking Violet

In a growth economy, everything seems straightforward: businesses typically work hard to expand their customer base and spend aggressively to fire up the growth engine. But as soon as revenues begin to dwindle during challenging times, many companies respond by aggressively cutting staff and budgets, particularly those in the IT department.

The conventional wisdom is that in the face of an economic downturn, rationalization, consolidation, cost-cutting, hiring freezes, etc. become the name of the game. Everyone tends to spend less on IT and only invest in those technologies that enable the organization to meet its most basic operational requirements.

In other words, companies tend to cut the IT budget to the bare bones needed to support building and delivering their products and/or services. But while this knee-jerk response is understandable, is it necessarily the wisest one?

Unfortunately, when it comes to managing customer relationships, this behavior could be both a short- and long-term detriment to business success. In fact, an article in The McKinsey Quarterly from September 2008 entitled “Managing IT in a downturn: Beyond cost cutting” cites the risk of making wholesale reductions in IT spending:

“Simplistic cuts, applied across the board, may endanger critical business priorities from sales support to customer service.”

McKinsey has also found that investments in “technology-enabled business processes” deliver far more impact than reducing costs. While the natural reaction for many companies in challenging times is to become inwardly focused and concentrate on conserving working capital, history has shown that it is in these critical times that savvy organizations have a significant opportunity to outflank their competition.

“A downturn is a terrible thing to waste.” This quote in The Wall Street Journal (WSJ) article from mid-2008 came from one Home Depot supplier, and it reinforces the bold premise of investing for growth when times turn tough. In fact, a March 2008 study conducted by Bain & Company found that during the last recession more than a fifth of the companies in the bottom quartile jumped to the top quartile in their industry and more than a fifth of “leadership companies” fell to the bottom quartile.

Review: Profits with Principles

Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.” – Margaret Mead

Many years have passed since corporate social responsibility (CSR) made its entrance as a major issue for companies. Performance on social and environmental levels has also become important for organizations to consider. Since CSR’s inception, many initiatives have arisen.

Businesses around the world have sought to take account of sustainable development to conform to the general trend across industries toward better management of global regulatory requirements and a reduction of environmental impact. On the other hand, since globalization has become a crucial aspect of organizations economically, organizationally, politically, technologically, and culturally, it has pushed them towards making adjustments in order to incorporate these new requirements into existing processes.

“Business leaders face complex economic challenges, political uncertainty, and changing societal expectations. Regardless of their industry sector, they are under growing pressure to demonstrate outstanding performance in corporate competitiveness, governance, and responsibility.”[i] – Kofi Annan

The book I’ve chosen to review, Profits with Principles: Seven Strategies for Delivering Value with Values, helps clarify the definition of CSR. The volume (which presents more than 60 case studies on corporate social responsibility) follows a pattern of six projected main values, and focuses mainly on how practicing CSR can help organizations accomplish sustainable development—that is, to fulfill the needs of our current generation without compromising those of future ones. It was put together by Ira A. Jackson (a fellow at the Center for Public Leadership at Harvard University) and Jane Nelson (a senior fellow and director of the Corporate Social Responsibility Initiative at Harvard’s Kennedy School of Government, and director of Business Leadership and Strategy at the Prince of Wales’ International Business Leaders Forum).[ii]

The book is organized in two sections: “Doing Business in a Turbulent World” and “Putting Principles into Practice.”

Part One: Doing Business in a Turbulent World

This section of the book focuses mainly on the fact that the way we do business has changed tremendously over the past years. Indeed, globalization can be used by companies for the better of humanity, that is, to make a more equitable society and undo the deterioration of the environment we are to leave for future generations. Because of that, there is a rising need for companies to associate with governments and other stakeholders in order to look for the best means to achieve these objectives.[iii]

The authors note several issues currently affecting free market conditions that are prompting that new rules be created within capitalism, since expectations are rising and new challenges appearing. These issues can be summarized as follows:

the current global economic downturn, and the previous bursting of the dot-com bubble (the crash of dot-com companies after 2001)

• the failure of corporate governance and ethics
• growing geopolitical uncertainty—war against terrorism, international trade tensions and anti-globalization campaigns
• ongoing environmental degradation—global climate change, loss of biodiversity, and water insecurity

These situations are creating new challenges for enterprises, which nowadays are facing new crises (e.g., trust, inequality, and sustainability). Unfortunately, after scandals such as Enron and Andersen, trust has become one of the main concerns for companies searching for long-term positioning in the market. Furthermore, there is now without a doubt a global crisis regarding inequality. According to a survey conducted in 2000, the general trend for options distribution in companies is as follows: 75 percent are top five company executives; 15 percent are the next 50 executives; and 10 percent, all other employees.[iv] Furthermore, sustainability is indeed a central concern not only for companies but for our entire civilization, as humanity’s ecological footprint continues to grow. Therefore, the roles of businesses, as well as governments and non-governmental organizations (NGOs), have to be adapted to confront these new realities.

Part Two: Putting Principles into Action

These principles, identified by the authors, serve as a framework for building CSR and long-term value for any companies. Each of the seven principles is illustrated with case studies throughout the book.

Principle #1: Harness Innovation for Public Good

In a business framework as globalized as today’s is, corporate competitiveness is central to achieving sustainable growth. Many companies have come to understand that incorporating ethical and environmental innovation has indeed helped create a distinctive advantage. Companies examined throughout this chapter are amongst those that, through sustainable innovation, have become leaders in many industries.

One example that caught my attention is DuPont, a leader in the chemical industry. Going back to the late 1980s, when concerns about chlorofluorocarbons (CFCs) and the ozone layer were rising, DuPont strategically decided to invest in finding an alternative to using substances that deplete the ozone layer. After the 1990s, some of these tactics, formerly seen as expensive and not worthwhile, have now become comparative advantages (win-win approaches) which have given enterprises a distinct advantage over their competitors.[v]

CRM Buzzwords and Trends for 2009

ustomer relationship management (CRM) is more than a technology. It’s a business strategy that aims at identifying customers and their needs and then creating sales and service strategies that are unique to them.

Here is a quick look at CRM—from buzzwords to trends, to some recommended solutions.

CRM Buzzwords

• CRM ecosystem - the changing landscape of customer relationship management
• Customer experience – a purchasing experience provided to a consumer by a retailer aimed at retaining customer loyalty
• Mobile CRM – a solution that provides remote access to the sales force in the field to important customer data, such as quotes, contracts, etc.
• CRM 2.0 – like Web 2.0, CRM 2.0 allows users to communicate through various platforms and forums on a variety of customer-related topics (such as products, purchasing, service, etc.)

Hot and Trendy in CRM
To be successful, there are certain things your business can’t—or shouldn’t—be without. One of those things is CRM. Why wait until one of your competitors gets the latest and greatest in CRM technology—leaving your business in the dust? Do your CRM shopping today by finding out what’s new, hot, and trendy in CRM for 2009. At the same time you’ll learn about the different ways your organization can retain customers in these hard economic times.

#1- Going Mobile
Many organizations have already adopted mobile CRM to help improve productivity and enhance the customer experience. In the service sector, mobile CRM has become a big priority, as it provides the ability for sales people in the field to access and update CRM information anywhere they can use a mobile device (PDA, Blackberry, etc.)

With instant access to customer information, sales reps can easily update records, respond to leads, as well as customer’s requests. Mobile CRM helps businesses and their sales force improve its customer service; it provides greater visibility to real-time data, and helps to shorten the sales cycle.

#2 - Analytics and Forecasting
Today, more and more companies are investing in understanding customer value and modeling customer behavior. As such, through the use of analytics, businesses now have a comprehensive way of capturing data and learning more about the customer, their spending habits, and much more. Here are some examples of what analytics can provide.

Sales

• customer sales analysis
• sales analysis by salesperson
• sales analysis by sales region
• sales analysis by product group
• statistics of all customer visits
• creation of sales forecasts

Marketing and Service

• reports on how well your marketing programs are doing
• multichannel campaign tracking
• statistics of all telephone calls made
• customer service response times

#3 - Social Networking/Social Computing
Everywhere you go these days, people are connected in one way or another. I don’t mean in the “six degrees of separation” kind of way, but literally connected—through their computers, laptops, pagers, cells phones, SmartPhones, iPhones, or Blackberries. And through forums like MSN Messenger, wikis, podcasts, Facebook, LinkedIn, Classmates, MySpace, Reunion.com, personal blogs—just to name a few. The list is endless. This is what is known as social networking, social computing, or Web 2.0 (in this case CRM 2.0).

While social networking is certainly not a new technology, it seems to be gaining momentum. For the über-shopper, new technologies like StoreXperience now allows consumers to communicate with stores through a simple application download to their cell phone through text message. Not only can consumers check prices by scanning the price tags with the phone’s camera while shopping, they can also receive detailed product information instantly on their phone from the retailer.

In addition to communicating through many different forums, users can communicate about many different topics—including what products they’ve purchased and how they rate them. You might be thinking that for manufacturers and retailers this might be a bad thing. On the contrary, these organizations are welcoming Web 2.0 as a means of helping them to improve their product and ultimately their brand. By using social networking tools, companies can test new ideas with the consumer and get their feedback.

5 Quick Ways to Help Your Company Go Green While Cutting Costs

With all the recent talk of the economy and the environment, I thought it would be relevant to look at some of the small things we, as individuals, can do to help our companies battle the economic downturn while saving our planet. Today, social responsibility is not only good PR, it makes good business sense. Here are some simple steps you can take to help your company go green while still keeping extra “green” in its pockets:

1. Unplug that printer. The average American uses approximately 700 pounds of paper a year. Imagine the cost savings of reducing paper consumption at the office, or even better, implementing a paperless office strategy. Simple strategies like replacing a traditional fax machine with a fax server and moving clients to electronic invoicing can cut operational costs and are better for the environment.

2. Shut down your desktop before heading out. Many companies have policies to leave personal computers (PCs) running all the time with no real justification. In fact, shutting down PCs overnight can reduce a company’s energy consumption by 10 percent—impacting its utility bill. Obviously, energy reduction strategies can go beyond the four walls of the office and have a real impact when strategically applied to the shop floor and other areas of production and distribution.

3. Cut back on traveling. One of the easiest ways to keep expenses down is to cut traveling to a minimum. Encouraging teleconferencing and Web conferencing is a cost-effective way to reduce your carbon footprint. Furthermore, applying similar cost-cutting measures to optimizing transportation and shipping methods is also a great way to reduce carbon emissions and bring your company’s costs down.

4. Bring your recycling habits from home to work. Social responsibility often gets lost when you leave your home and enter your place of work—evolving from something personal to a corporate obligation. The good news is that implementing and promoting regular habits of recycling and reuse in the workplace actually makes good business sense. In fact many organizations already have extensive strategies in incorporating recycled materials in the production of their goods.

5. Cut redundancies in your work. Oftentimes, we print multiple copies of reports that are reviewed and modified by multiple parties. Creating shared folders or a wiki can reduce the waste in redundant hard copies that are typically produced by e-mail attachments. Streamlining business processes and implementing lean principles are not only good business practices, but if implemented correctly, can help your company with its green initiatives.

In response to our readers’ thirst to understand how technology can address their green initiatives while still cutting costs, Technology Evaluation Centers (TEC) has developed a Lean and Green Software Buyer’s Guide. In this guide, we’ll discuss some of the challenges that companies are facing in light of the changes to the economy, as well as the pressures of “going green.” We’ll talk about some of the high-level changes your business can make, with a focus on operational efficiency, and on how lean and green practices can both lead to the same result: efficient and sustainable business.

PLM Road Map 2009: What to Expect?

I went through the agenda of the PLM Road Map 2009 (September 22 and 23, in Detroit, Michigan [US]) when I submitted my attendance preferences to conference organizer Collaborative Product Development Associates (CPDA). Looking at the agenda, I’m convinced that the two-day event is well structured to cover critical issues in the product lifecycle management (PLM) field and to apprehend the future of PLM. Below are what look to me like the conference highlights:

The Future of the North American Automotive Industry

There’s no other place better than Detroit for this topic. I can imagine that instead of talking about weather and the like during the conference breaks, attendees may naturally start talking about the automotive industry due to the location, timing, and the sturdy relationship between PLM and the automotive industry. After the recent hardships, it is time for people to hear what Glenn Mercer has to share in his speech Outlook for the North American Automotive Industry at the heart of the automobile capital of the world.

Management of Complex Systems

The world is getting more complex; so are today’s products. Product development management needs to not only facilitate collaboration among different product lifecycle stages but also coordinate between multidisciplinary design and engineering activities. That explains why CPDA has scheduled an entire afternoon on the topic Supporting Effective Collaboration Across Mechanical, Electrical, and Software Development Teams in breakout sessions.

CAD Visibility and Interoperability

Managing and controlling product data is an important aspect of PLM, but it is not enough to lock the information (especially computer-aided design [CAD] data) in a vault. A key value in PLM, however, is the ability to extend this data beyond the desktop to other engineers, other departments, and other stakeholders–primarily customers and suppliers. I’m expecting that Dr. Ken Versprille’s session CAD/Visualization Trends: Dealing with Product Complexity & Variation will navigate attendees through the complicated landscape of today’s CAD/visualization market.

Social Product Development

When PLM systems (as innovation platforms) are strengthened by embracing Web 2.0 capabilities, activities related to sharing and exchanging product knowledge may surge. Following the discussions on the “people dimension” of a PLM system or the concept of “people-centric PLM,” social networking is expected to be more tightly included in the PLM loop. The session Collaborative Product Information Networks: Extending the Use of PLM Data to the Enterprise through Social Networking presented by three software vendors (Microsoft, PTC, and Aras) together will demonstrate what Microsoft SharePoint has to do with PLM.

The above topics are what I feel are going to be the most interesting to me–but there’s a lot more you’ll be uncovering on your own. If you’re planning to attend the conference, see you soon in Detroit!

PLM (Vendors) and Lean Product Development—Part 4: PTC

If you have followed my previous posts of this blog series (Part 1, Part 2, and Part 3), I guess you may have an idea about who will be the third vendor I’m going to discuss concerning the relevance between its product lifecycle management (PLM) offerings and the lean product development (LPD) concept. Yes, it is PTC. Like Dassault Systèmes and Siemens PLM Software, PTC is also located in the CAD-PLM camp (read this article if you want to know more about how I categorized major PLM vendors into two categories) that provides both PLM tools and PLM as the management platform.

Recently, I had a close look at PTC’s PLM solutions during the certification process for PTC Windchill. My overall impression is that Windchill is a well-built PLM solution for discrete manufacturing industries. It is one of the most comprehensive PLM solutions that I have ever seen. Besides its longevity within the core PLM area (i.e., the base foundation of PLM covering design and product-related aspects of PLM such as management of material specifications, product structures, documents, classifications, design collaboration, etc.), Windchill’s advancements on product development, portfolio management, and project management are also impressive.

Besides my overall impression, the following two elements are what I will use to relate PTC to LPD.

Product Sustainability

Being “lean” requires companies to reduce unnecessary use of resources and non-value-added activities, but within product development, the efforts in developing compliant and environment-friendly products can’t be treated as something unnecessary. Without regulatory and compliance capabilities embedded into product development processes, an organization can’t meet the increasing product sustainability requirements from customers.

PTC was able to strengthen its capability in helping develop more sustainable products through acquisitions:

• In December 2008, PTC announced its acquisition of Synapsis Technology, Inc., a vendor focusing on environmental regulatory compliance solutions.
• In June 2009, PTC acquired Relex Software Corporation, another specialized software and service provider for product reliability and safety.

In my opinion, material compliance, product reliability, and product safety all lead to one direction—product sustainability.

Social Product Development

Social product development is not a new concept within the PLM domain but it can’t reach the prosperity unless social computing technologies are widely adopted. Generally speaking, having a broader range of product stakeholders’ (including customers’ and end-users’) opinions as the input in the earliest possible stage of product development is an exemplary approach to making downstream processes leaner.

In December 2008, PTC started offering Windchill ProductPoint (a PLM solution built on top of Microsoft SharePoint) with social product development as one of the main selling points. This approach shows PTC’s efforts of using SharePoint’s Web 2.0 features for internal socialization among product designers and developers. I hope PTC will go further and include more participants in product socialization, and incorporate the social product development features into its other Windchill offerings.

On PTC’s Web site—categorized under business initiatives—there is a page dedicated to LPD. Personally, I’d like to see more information than it currently provides, but at least it shows the company’s belief that LPD is one of the top business initiatives related to PLM adoption.

Can Your Product Development Move Closer to Consumers Now?

Half a year ago, I wrote about the need to include customer input in the design process in What Brings Customers Closer to Your Product Development? Recently, two pieces of Web content caught my attention and made me revisit this topic.

The first one, The Path to Successful New Products, from the recent issue of McKinsey Quarterly, outlined three principles of making product development more successful, amongst which the degree of “[talking] to the customer” is one of the differentiators that separate top performers from the rest. The second one, a press release from First Insight on January 10, 2010, announced the availability of a software-as-a-service (SaaS) solution that allows retailers and brands to have better visibility of consumers’ voices through social media marketing and sales channels.

Although Virtual Customer Viewpoint (VCV) (name of First Insight’s solution) mainly targets retailers in helping them “know better which products are going to be popular with consumers before they make their purchasing decisions”, I feel that there’s a possibility to use this approach in product development for manufacturers as well. Here are two cases:

1) Manufacturers use social media channels to capture customers/consumers’ opinions and ideas directly.

2) By building connections between manufacturers and retailers, consumers’ voices captured by retailers can be routed (or even sold in some cases) to manufacturers.

While noticing the opportunity for manufacturers to get closer to consumers through social media channels, I also realized that it might be more difficult for manufacturers to do so than retailers.

Firstly, there is more information to be exchanged between manufacturers and customers than between retailers and consumers. Retailers mainly care about which products to carry. Manufacturers, on the other hand, want to know more details about customer opinions toward product design. Textual communication with consumer communities may suffice the purposes for retailers to capture consumer preference but for manufacturers, communications need to be conducted in a richer and a more immersible way. No doubt, three-dimensional (3D) product models is an ideal vehicle for better communication but it requires the capability of accessing and modifying 3D content on the consumer side. As I discussed in the blog post mentioned above, I’m hoping for the democratization of 3D visibility, and I know that there are vendors working on making 3D more approachable.

Secondly, compared with retailers, it is probably more difficult for manufactures to react according to consumer opinions. When a prominent voice from the crowd is heard, retailers may adjust their buying, pricing, or promotion decisions promptly. But for manufacturers, product changes may not be as flexible due to limitations on the availability of technology, manufacturing facilities, sourcing capabilities, and such. One thing I can think of in order to relieve the pain in product changes is to listen to customers as early as possible—if a change is determined and initiated earlier, the cost required to implement the change is lower.

Lastly, how can a manufacturer protect its product’s intellectual property (IP) while maximizing the communication with a wide range of product stakeholders as early as possible? Usually, the question “what do you think about the product (or idea) that I’m presenting to you?” receives more valuable feedback from customers than a question like “what product do you think I should develop?” While the former is more effective in gathering customer opinions, it also asks for more efforts in protecting your IP.

With that being said, social media channels are opening a new door for product development to move closer to the consumer side but there is work to be done to help manufacturers fully realize the potential. I welcome your experiences and thoughts on this topic.

Outlook for 2010

As 2009 comes to a close, we look forward to the New Year and everything trendy that it will bring. Today, TEC’s Research Analyst Round Table discusses the outlook in technology for 2010. We will touch on:

• Social Networking
• Social Product Development
• Business Intelligence (BI) for the Masses
• Enterprise Resource Planning (ERP) and Software-as-a-Service (SaaS)
• Software Integration vs. Niche Players
• Mobile Commerce (M-commerce)

Social Networking – Sherry Fox
Over the last five years, social networking—in the form of intranets, wikis, messaging centers, blogs, and more—has changed the way many organizations handle many of their day-to-day operations. Some of the more popular social networking sites organizations are using include LinkedIn, Facebook, MySpace, and Twitter—to name a few. Social networking has become such a hot trend that many vendors have now begun offering enterprise social networking as part of their product functionality.

But social networking is not a new concept by any stretch of the imagination. Knowledge sharing and collaboration have been around for years in the world of learning management. Long before LinkedIn and Twitter hit the scene, learning management system (LMS) vendors were bringing people and knowledge together through the use of discussion boards, live chats, etc.

Today’s collaboration networks help provide businesses with instant and continuous feedback from employees (whether they are in management or not) in the areas that are important to the employee personally as well as to the organization. While these sites are useful for sourcing job applicants, reaching out to potential customers, and fostering a feeling of community within the company, they can also decrease productivity and increase security risks. As such, there has been an increased need for companies to create or “beef up” their internal HR policies.

For some more trends for 2010 in the HR space, please see my article Top 5 Trends in HR Technology.

Social Product Development – Kurt Chen
Having collective wisdom from the crowd in shaping new products isn’t a new idea within the product lifecycle management (PLM) approach. However, technological limitations have hindered the theory of social product development to be put into practice—until the prosperity of social computing tools. Generally speaking, Web 2.0 technology is the major enabler of social product development. More specifically, in 2010, I would like to see the following advancements:

• Better product information visibility and interoperability, especially for three-dimensional (3D) content. For many products, the 3D model is an intuitive and efficient vehicle for two-way communication during the product development process. More people (including consumers) should be able to access 3D content at a very low cost or even for free.
• Finer granularity in collaborative content and knowledge generation. The current granularity level of product definition information and process documentations has kept many users away from more convenient and effective product collaboration. The ability to see through the “black box” of content and related processes is expected to be improved.
• More efficient ways to hear the major voices from the crowd. Voices are countless when a company opens its door to the public during the product development phase. Analytical tools (e.g. sentiment analysis as Jorge Garcia discussed) are needed in order to navigate through the many inputs and filter the most valuable ones.

Social product development is still in the early stages but it will make progress steadily, and companies will be able to include more stakeholders in their product life cycle loop.

BI for the Masses – Jorge Garcia
In 2009, the BI industry—despite the search for better, more suitable, and more advanced technology for BI applications—had special interest in finding the “true usability” of BI applications. Users want BI to be not only faster and better, but also easier to use. The vendors want its use to be extended to more people—the search is on for a real mass use.

In 2010, this search will be encouraged extensively. Many software providers have already launched specific products like Microsoft with PowerPivot or the MicroStrategy free reporting tool. Some are tackling the midmarket segment with specific products like Cognos Express by IBM, or SAP Business Objects Edge BI.

Due to the economic crisis in 2009, open source providers like Pentaho and Jaspersoft had the option of expanding in the BI space. In 2010, these BI solutions will take advantage of the opportunity to expand.

ERP and SaaS – Aleksey Osintsev
The economy fell into a recession in 2009. This new reality forced companies to save as much money as it could by reviewing its spending, including IT expenses.

I believe this was a major reason why the public interest in the software-as-a-service (SaaS) concept of business software delivery became so evident. In many business areas, SaaS seems to be a strong alternative to the traditional on-premise way of software deployment. However, in the ERP systems market, I don’t see many alternatives to traditional on-premise manufacturing ERP systems among vendors who offer SaaS ERP products. Even the leader–SAP– is still struggling with their Business ByDesign product, even though it is lighter in functionality compared to SAP ERP.

Let’s be optimistic, though. Hopefully, in the upcoming year we will have an opportunity to see and review great SaaS-based ERP products with commensurable levels of available functionality, flexibility, and security. In turn, I welcome ERP software vendors with their SaaS ERP products to contact us and we will definitely inform our readers of any news on the promising SaaS ERP market segment.

Do Your Customers Really Trust You? Well, That Depends …

Crises such as the one we’re currently going through seriously damage the trust bestowed by individuals upon corporations. This is more likely to result in the development of new corporate techniques to change these perceptions, which will most probably translate into new pressures from individuals, pressure groups, societies, or governments. Most likely, companies will be requested to strictly adhere to (if not go beyond) strict legal frameworks regulating their overall activities, aiming to protect consumers and other stakeholders.

Many companies have already begun to implement social and environmental initiatives within their business framework. One of the major incentives has been regulatory compliance. These regulations originate mainly from local, regional, or national regulations, aiming at achieving a particular environmental objective.

However, motivations for complying with these regulations vary largely. According to research conducted by AMR (Crossing the Great Divide: Sustainability as Corporate Strategy [registration required]), the major motivations for companies who actually implement green projects are

• business opportunities (30%)
• corporate brand (21%)
• competitive advantage (14%)
• moral imperative (11%)
• compliance (10%)
• strategic risk mitigation (7%)
• product innovation (4%)
• customer request (3%)

There is no doubt that the general trend is to move towards sustainability practices, regardless of whether the motivations are sustainability, savings on materials, or both. Unquestionably, companies adopting reactive strategies (based on compliance) may fall behind on long-term competitiveness. On the other hand, we can expect proactive initiatives, based on long-term sustainability objectives (win–win scenarios) and strategically integrated practices, to allow companies to move beyond compliance and achieve competitive advantage over competitors.

Due to their multidisciplinary nature, environmental issues in organizations can be addressed in many ways, according to the motivations mentioned above, and through a combination of initiatives. As each company has different motivations, environmental strategies are never the same. Nevertheless, there is one thing all companies embarking on these initiatives have in common: responsibility. In essence, companies are challenged to be accountable for the impacts of their actions. This concept is usually known as corporate social responsibility (CSR).

Unfortunately, there is a lack of consensus as to what constitutes CSR. Some companies talk about “corporate governance.” Others talk about “sustainability” or “corporate citizenship.” In fact, some companies’ definitions don’t even mention the environment at all. It is thus important to state the difference between all these concepts and the ones that are truly linked to sustainability.

Corporate Governance
As Sir Adrian Cadbury explained in a 1992 Report on Financial Aspects of Corporate Governance (Global Corporate Governance Forum, International Finance Corporation):

Corporate governance is the system by which companies are directed and controlled… Boards of directors are responsible for the governance of their companies. The shareholders’ role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place. The responsibilities of the board include setting the company’s strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to shareholders on their stewardship. The board’s actions are subject to laws, regulations and the shareholders in general meeting.

Hence, the concept of corporate governance is strictly linked to shareholders and the maximizing of share value in a responsible way.

Corporate Social Responsibility
One of the most common definitions for CSR is the one from the World Business Council on Sustainable Development (Corporate Social Responsibility: Making Good Business Sense): Corporate social responsibility is the commitment of business to contribute to sustainable economic development, working with employees, their families, the local community and society at large to improve their quality of life.

Furthermore, the UN Global Compact states that definitions of CSR may differ depending on the field where they arise. For example, from an ethics standpoint, companies are expected to practice CSR in order to “do good” to society. From an economic point of view, CSR will only be practiced as long as it’s profitable for companies.

According to the UN Global Compact, CSR has three dimensions: voluntarism, stakeholder management, and networking. Voluntarism is opposed to punishment, and allows companies to find best practices themselves and not through regulations. Stakeholder management incorporates the idea that companies should be held accountable not only to shareholders, but also to stakeholders, as they are directly influenced by the company’s activities. And third, relating to the importance of networking: best practices need to be communicated.

In Concepts and Definitions on CSR and Corporate Sustainability (pp. 107-119), Van Marrewijk concludes that “one solution fits all” approach to CSR and corporate governance should be abandoned, and that you should adopt more specific definitions that match the development, awareness, and ambition levels of your organization.

Unfortunately, we cannot provide a particular nor unified definition of standards or values for CSR. What is important to keep in mind is that CSR initiatives usually arise from a consensus of common values within a given company—a consensus which differs from company to company. It is important to note than these values are extremely subjective and cannot be compared from one organization to another. It is therefore difficult to evaluate or benchmark overall efficiency.

Enterprise Applications Vendors Going Viral and Social: Another Take

t would not be far off the mark to say that social media, user-generated content (UGC), and online collaboration all hit the mainstream in 2009, at least in the realm of business-to-consumers (B2C) commerce. According to Forrester, 63 percent of online retailers will make social e-commerce a top priority in 2010, with The Limited brands leading the way.

As consumers and individuals, most of us have been effectively using Facebook, Twitter, Yelp, Flickr, YouTube, and LinkedIn for various personal and professional purposes. The Web 2.0 tools and technologies have certainly leveled the playing field, similar to what the advent of the Internet and e-commerce did in the late 1990s (i.e., by further enlarging the so-called “global village”).

Consumers are increasingly turning to each other to harness the “wisdom of the crowd” to empower themselves with useful info and facts to keep sellers honest. “Consumers are so good at detecting when people are lying to us; we know very easily when people are telling the truth and when they’re not,” says Chris Brogan, co-author of the “Trust Agents” book.

“For some reason, companies feel that they can speak to us in a different way than they speak to their own colleagues around the water cooler,” Brogan concluded. In his recent blog post, TEC’s Jamal Rahal explores this continued phenomenon (autistic of a sort) when it comes to enterprise applications vendors’ messaging.

Most of us have heard about the recent “United breaks guitars” saga, where a few well-crafted YouTube videos created an overnight star and celebrity from a once obscure musician while bringing a large stodgy airline to its knees with public humiliation. The lesson that we all can learn from this experience is that social networks obviate the notion of “statistical (in)significance” (and arrogance) when it comes to customer service today. In this era of instant messaging (IM), podcasting, tweeting, and whatnot, every customer (or at least their opinions and experiences) matters.

As a corollary, we all realize that social networks have millions of users and that they offer an immense potential. But in a virtual world everyone has to earn trust, and the art is to increase the company’s so-called social capital while leveraging social networks. The word “whuffie” was originally Web 2.0 slang for the social capital people cultivated among their peers for being good Internet citizens. The concept is now becoming a potent force for valuing commercial products as customers communicate their opinions via tweets, blogs, and other online postings.

My colleague Jorge Garcia’s recent blog series talks about the available tools to measure the quantitative and qualitative aspects of this vast volume of data to gain better understanding and intelligence of social media. I have also become accustomed to the idea of searching Internet for reviews and advice from people similar to me before buying an appliance, for example.

What About B2B?

Logically, business leaders also want to know what Web 2.0 technologies could do for their organizations, especially in the business-to-business (B2B) commerce setup. The tools and technologies that make up Web 2.0 may be ubiquitous, but their impact on business is still unfolding.

Instead of viewing these social sites as a distraction (and some employees might indeed nefariously abuse the trust), the savvy enterprise should at least learn what makes these applications so “sticky.” They should also discern how those capabilities could be applied to the enterprise to drive knowledge worker productivity and accelerate innovation.

For example, some avant-garde companies are harnessing user feedback (via social networks) to design new improved products and services. As telecommuting becomes more common for knowledge workers, contributing to a wiki is replacing the tedious and time-consuming in-person conference room brainstorming sessions. Like consumers, “wired” employees too are increasingly turning to each other (rather than to their often unapproachable managers) for advice about their daily tasks.

Organizations often function with knowledge silos (so called “tribal knowledge”), in which certain employees are experts in certain types of knowledge, such as, e.g., the best suppliers for certain product categories. Web 2.0 tools such as wikis, blogs, and social networks can capture this unstructured interaction among the rank-and-file workforce and quickly convert it into institutional knowledge.

There might still be the misconception that micro-blogging (tweeting) is just to share mundane and unimportant (if not even asinine) statements. But using this tool in the enterprise context can be really useful, according to Noel Portugal, Oracle’s Senior Technical Analyst for CRM On Demand Operations.

Oracle’s OraTweet tool helps users to communicate and collaborate within their teams while reducing email overload. In case of sales force automation (SFA), so-called social customer relationship management (CRM) tools can integrate predictive analytics, company standards, best practices, and the “wisdom of the crowd” (i.e., the real-world experience of fellow sales reps captured with Web 2.0 tools) to increase productivity at every stage of the sales process.

What About Social (Viral) Marketing?

On a recent long plane ride I read the instant-classic book on social networks entitled “Groundswell” that really made me think. Namely, enterprise software vendors keep spending hefty money on traditional marketing channels such as press releases (PR’s), testimonials, case studies, white papers, analysts, etc., where they keep bragging about their offerings in a one-way-street manner. Ironically, according to the ex-Forrester’s analysts that wrote “Groundswell,” these freebee social networks can create more credible opinions of connected users of products.

In other words, ordinary folks do not much trust these (possibly staged) traditional marketing channels, but rather trust the voluntary opinions of both known and anonymous individuals that have similar needs and interests. As mentioned earlier on, savvy companies have been using these crowdsourcing tools to more effectively market themselves, provide two-way customer support, and solicit input on the product improvements.

Compare expenditures of these costly traditional channel campaigns to the simple approach of allowing people to discuss your product on your Web site, bundled with the ability of your site to then automatically broadcast these review feeds into social networks. By placing these pristine comments (only slightly moderated for abusive language) into social networks feeds, you might gain the trust of not only the regular visitors of your site, but also from these folks’ social connections even if these other folks have never heard of your firm or your product.

In tune with these findings come MarketingSherpa’s predictions that social marketing budgets will grow in 2010, in spite of lower overall marketing funds. The question then is: will this social/viral phenomenon make traditional marketing and PR methods obsolete, or perhaps complementary to each other?

Marketing Mix Will Change

I do not think digital (Web 2.0) channels will ever replace traditional marketing or make it obsolete, since face-to-face and voice-to-voice people contact, hard copies in hands for slowly reviewing and digesting at one’s leisure and in a contiguous whole, etc. remain critically important. I also think that TV advertising in forums like cable news, money/market watch business shows, sports broadcasts and shows, etc. will not be going away any time soon.

So is the marketing mix changing? Absolutely yes, it is, a big time. But go on any airplane in first class and you will still find executives ripping out the Wall Street Journal (WSJ) pages and carrying their BusinessWeek, Fortune, and other in-flight magazines.

Also, you will still have them reviewing hard copy proposals because it is hard to digest information digitally (such documents require slow digestion and continual flipping back and forth for comparison and attention to detail). I too am “guilty as charged” for occasionally printing out some articles for more attentive reading, although I try to at least use recycled paper.

It makes sense that the largest enterprise resource planning (ERP) companies like SAP, Oracle, or Microsoft Dynamics, who have literally armies of marketers in their employ, are moving forward with all kinds of different marketing tools. This is what they have always done, because they have the budget and employee bandwidth to support it.

In fact, SAP Retail, SAP Business One, Oracle Retail, Oracle CRM, Salesforce.com, Taleo, SuccessFactors, Epicor, etc. all have their fan pages on Facebook and LinkedIn, as well as related Twitter feeds. In fact, I’ve even registered for some local vendor events and downloaded some analyst reports based on the social media feeds from these established public vendors.

Infor’s Example

A good example of a hybrid marketing strategy would be Infor, whose recent virtual Inforum conference I followed in part (one shortcoming of virtual events is that they cannot ensure analysts’ undivided attention like the actual ones in person). I at least heard the points Infor’s CEO Jim Schaper made in his keynote speech:

“Infor’s Critical Distinctions are the following: Interoperability, Choice, and Customer Intimacy.”

The vendor has established a new Infor Manifesto – a public declaration of its intentions – as the driver behind all that the company does and how it communicates:

“At Infor, we work with a core belief. We believe in the customer. We believe that the customer is seeking a better, more collaborative relationship with its business software provider. And a new breed of business software: created for evolution, not revolution. Software that’s simple to buy, easy to deploy and convenient to manage. Our 70,000 customers in more than 100 countries and 8,000+ employees stand with us. We look forward to your sharing in the results of our belief. There is a better way.”

The enablers of Infor’s Critical Distinctions and the Infor Manifesto are the vendor’s Open SOA and ‘Three E’s (Extend, Enrich & Evolve)” strategies that were explained in my previous blog series. More pertinent here is the ad campaign that Infor launched in early November 2009 entitled “There Is A Better Way (Down With Big ERP).” Infor is running a US $20 million global ad campaign to significantly raise awareness and build its reputation within its target market.

Media will include major airports and a mix of print and online publications targeting general business and manufacturing audiences. For example, the North America campaign is running in many major airports, and in both print and online publications including BusinessWeek, Fortune, Forbes, the WSJ, Managing Automation, and Manufacturing Business Technology (MBT). Along with a bold creative campaign that hopes to stand out from the crowd, the vendor is using distinct ad placements to grab people’s attention.

The campaign is being extended to many other countries across Europe, Latin America, and Asia-Pacific over the course of the next six months. As one would expect, Infor has tested the creative ads and messaging in its key markets and will be measuring the impact of the campaign very diligently.

Social CRM is Dead, Long Live Social Media Flavored CRM

Customer relationship management (CRM) is not and cannot really be social, since social means “of, relating to, or occupied with matters affecting human welfare” (definition taken from The Free Dictionary). In my opinion, CRM does not really affect human welfare, since it brings advantages only to its users and to the customers of the companies using it.

In this blog post, I will explain why CRM is not social and why social CRM (SCRM) is nothing more than CRM using social media tools.

Does Social Media Affect Human Welfare?

Yes, it does, and in many ways. Of course, different people have different views on the use of social media but I think it has a great impact on human welfare for the following reasons:

• It is accessible to everyone having an Internet connection (the Internet is the widest network on the planet with 1,733,993,741 users – according to Internet World Stats).

• It allows people to freely communicate, interact, and collaborate, eliminates borders (you can connect from anywhere in the world), technical issues (you just need a Web browser, which can be installed on any computer), and censorship (with the exception of a few countries, but this is a totally different story).

• It gives people access to knowledge that otherwise can be hard to obtain (and I’m not talking about torrents and illegal download Web sites). The fact that people can share experiences they had in their personal or professional lives will surely benefit others.

If used wisely, social media can bring huge benefits to its users and does not require important investments from them. It is true that all social media networks require registrations, therefore users need to provide personal information and free access usually comes with a price (either limited access or aggressive marketing campaigns). Despite these obvious disadvantages of social media, the advantages mentioned above make it a social phenomenon.

What Does SCRM Do?

If a CRM product integrates with social media tools, is it SCRM? What about tools that can be used to monitor blogs, social media Web sites, etc?

In my opinion, SCRM takes advantage of social media to make CRM more efficient. In other words, instead of taking the phone book and calling people to market your services, now you can search people on Facebook and Twitter, to see who might be interested in your products. Or, instead of using door-to-door sales people, you can send newsletters, e-mail blasts, etc. to thousands of people all at the same time.

Social media can also help you
• communicate with your existing or potential customers;
• market you products to a wider category of people; and
• address your customers’ need quickly and more efficiently.

Why CRM Cannot be Social?

Traditional CRM (both as a tool and strategy) is used in order to increase a company’s profits and to increase customer retention and satisfaction. This means that CRM addresses the needs of a very limited category of people, not to mention that it does not have the advantages of the social media described above.

Indeed, CRM is only accessible to users that work for a company buying the solution and their business partners (customers, suppliers, etc.). The freedom that users have to communicate, interact, and collaborate is often limited by denied access rights, depending on the importance the user has for the company offering access to its CRM solution. Finally, knowledge is usually available for employees and paying customers only.

Social Media Flavored CRM?

If we go back to the definition of “social”, it is obvious that CRM cannot be called “social” and SCRM is nothing more than social media flavored CRM. My impression is that SCRM is just a buzz word used to set some CRM products apart from their competitors, without being different from regular CRM.

In a future blog post, I will describe how I see a true social CRM, but in the mean time I welcome your comments.

The Intelligence of Social Media (Part 1)

According to Wikipedia, “social media is online content created for people using highly accessible and scalable publishing technologies.” These days, networking is very different than it was in the past. A lot of social media services like Twitter, Facebook, LinkedIn, personal blogs, wikis, podcasts, and other types of media content generate big volumes of data. But more importantly, people contribute to the creation of this data by chatting, expressing ideas, or making personal and business relations online. They also contribute to the way social media information is organized and published on the Web. Today, these massive volumes of data are the objects of study and analysis. In a sense, there is already an effort to measure the quantitative and qualitative aspects of this kind of data.

The main issue here is that the information generated by social media is created by “common people” who affect trends, social tendencies, and business by influencing the popularity of demand for products. According to the Internet Usage Statistics chart, there are more than 1,668,870,408 Internet users worldwide. We can’t deny the fact that the social media phenomenon are huge for business and global markets, and it has to be measured, analyzed, and considered with a business intelligence ( BI) perspective. Many people will discuss topics (e.g., products, services, and companies) and express their opinions about them (good or bad). But how is this data going to be measured?

Companies can measure and analyze data generated on their sites using Web analytics tools like Google Analytics. But there is a bigger universe to explore, and a lot more information to deal with outside a company’s own corporate Web site. But how does a company measure and analyze data generated outside its own controlled space if it doesn’t have control over users? The answer is simple: interpret what people are expressing directly on the Web.

There are important advances already made in order to capture, measure, analyze, and understand what people are saying about a company’s products, services, etc. These advances are based on the concept that social media content was made by adding “metadata” as keywords. This metadata enables text to be categorized and shared through the Web in a process called “collaborative tagging.” Collaborative tagging has enabled people’s sentiments to be measured. The Structure of Collaborative Tagging Systems by Scott A. Golder and Bernard A. Huberman, provides a very interesting and accurate tagging classification system that helps clarify what sentiment analysis is based on. According to Golder and Huberman, tags can be useful to

• identify a theme;
• identify a subject;
• identify content ownership;
• refine categories;
• identify qualities and characteristics;
• self reference; and
• organize tasks.

These basic conclusions can support the idea that it is possible to measure and find regular patterns in Web content. This issue is by no means easy to address and the idea is to use “sentiment analysis” or “text mining.” The basic concept behind a sentiment analysis is to measure the polarity of opinion—positive, negative, or neutral—regarding a subject, a product, a service, etc. This is also known as opinion mining or opinion extraction, which helps extract, process, and analyze text in order to discover what people are expressing and thinking.

Currently, some companies are making significant efforts to perform sentiment analysis. Some of these organizations are not directly linked to the BI space, but already have tools important to performing these tasks. It will be interesting to know what traditional BI companies are doing to address this emerging functionality.

In part two of this blog, I will discuss the sentiment analysis definition further, and I will analyze what some vendors are doing regarding the sentiment analysis space.

I welcome your thoughts—leave a comment below, and I’ll respond as soon as I can.

Using Social Media Tools for Recruiting Talent

Boy, we have come a long way in the search for talent. Long gone are the days where company’s would place an advertisement in the classified ad section of their local newspaper’s and wait for the perfect candidate to call and request an interview—although some organizations today feel this is still a very effective recruiting method and often use it in conjunction with other channels.

Today, it’s more about what I like to call “cyber recruiting”—using social media tools for attracting and finding the right person to fill a job. Facebook, LinkedIn, YouTube, and Twitter are some of the main social media tools used by today’s forward-thinking organizations and allow recruiters to target the exact skill sets required for often difficult-to- fill positions. Candidates that were once far beyond the recruiter’s reach are now right there at their fingertips.

Originally designed as social networking sites, MySpace and Facebook provide a place where individuals could meet, exchange photos, videos, and stories, as well as chat. The amount of traffic that these social media sites bring has enabled recruiters and HR executives alike to use these tools to search for potential candidates—while promoting their company and leveraging relationships that may turn into placements down the road.

Social Networks That Boost Your Business

Most people are familiar with the term “Web 2.0,” which refers to a second generation of Web development and design that focuses on fostering social networking via the Web. Innovative companies are beginning to embrace Web 2.0 technology as a way to enhance communication, information sharing, and collaboration, thereby allowing them to work smarter rather than harder.

The use of Web 2.0 in business represents a new trend called “Business 2.0.” Aside from being the name of a defunct magazine, Business 2.0 is about using new Web-based social networking applications (many of which were originally created for personal use) in a way that fosters teamwork, customer touches, and internal and external collaboration in a low-cost seamless way.

Unfortunately, many businesses feel that Web 2.0 and social networking are for the younger generation and a waste of time when used by employees. However, once you understand the power of these applications and how to use them in your company, you’ll quickly find that they can be invaluable tools to boost your bottom line.

Following is an overview of the best Business 2.0 tools.

Personal Tools with Business Applicability

Facebook
Personal Use: Facebook enables you to connect and share with the people in your life. Users can join networks organized by city, workplace, school, and region to connect and interact with others. People can add friends, send them messages, and update their personal profiles to notify friends about themselves.

Business 2.0 Use: Large organizations can connect all of their employees, or members, with Facebook. Some are finding an added advantage of using an internal, secure version of Facebook. This has helped organizations to dramatically increase their internal networking and collaboration.

Ask Yourself: Could we use Facebook, or our own internal version to get people to collaborate at a higher level?

Twitter
Personal Use: Twitter is a micro-blogging service that allows friends, family, and co-workers to communicate and stay connected through the exchange of short, quick answers using no more than 140 characters per message. Senders can restrict delivery to those in their circle of friends or co-workers. Users can receive updates via the Twitter Web site or other social networking sights such as Facebook. Young people use Twitter for answering the question: What are you doing?

Business 2.0 Use: Business users could change this question to: What problem are you trying to solve? Several companies have used this as a fast way to solve problems. Hotels, airlines, and airports are using Twitter to pitch services, travel updates, and respond to travelers needs.