CRM 3.0: How Mobile will transform CRM
Date: Friday , November 30, 2012
Headquartered in San Francisco, CA, Helpshif Inc, offers software-as-a-service that companies can use to manage their customer service needs on mobile. The firm recently raised $3.2 million in seed funding from True Ventures and Nexus Venture Partners
Customer Relationship Management (CRM) is one of the key categories in enterprise software that continues to grow at 13 percent on a yearly basis and is one of the leading areas where companies are investing a lot of time and resources. According to Gartner, spending on enterprise CRM software will grow from $12.9 billion in 2012 to $18.4billion in 2016.The major tectonic shift in the technology industry today is mobility and this will affect every major industry vertical segment.
To understand how mobility will affect the CRM industry, let us look back in time and see how this industry evolved. In 1994, when I started my career as an intern working for Oracle, the project that was assigned to me was to build a revenue forecasting system for internal use to help the sales leadership team be able to forecast revenue accurately. Even a mature company in the software industry did not have systems in place to do this and the fact that this "super critical" project was assigned to an intern can only tell you how important this was in the grand scheme of things.
Not to be the case! The only reason Oracle was doing this was because they had missed a few quarters and the CFO was under pressure to be able to accurately forecast the company’s revenues to the street. Around the same time the sales team at Oracle was issued with Sales Force Automation (SFA) laptops and the web was just getting created by Tim Berners Lee and his team at CERN.
These two changes had such a huge impact on the work that I had started out to do. Oracle was a very large company with thousands of sales reps and it was becoming a nightmare for a team of interns to support the distribution of a client-server application that ran on windows laptops. Around the same time as a graduate student, I had started a company of my own building a web based collaboration product for teams which was similar to a lot of what we do today with web based email and calendars. I had managed to sell the product successfully to a few trades / lobby groups in Washington, DC where I went to school. I could see the future right in front of me that the web would eat the world of client-server software which is what everyone was doing then.
I quickly pitched the idea to my bosses at Oracle who were skeptical at first mostly because the web was just so new but gave me the opportunity to experiment. In 1995, me and a team of two other interns built the first web based Revenue Forecasting System (first generation of CRM) which Oracle aggressively rolled out to the sales teams.
Around the same time, Tom Siebel who used to run a very large sales team inside of Oracle left to found Siebel Systems as Oracle was not really focused on CRM. CRM 1.0 was mostly client-server and was focused around Sales Force Automation and getting sales information into large ERP systems that was used by large companies. Siebel surpassed the $1 billion in revenue mark in the year 2000 just five years after it had shipped its first product and Oracle acquired Siebel in 2006 for $5.8billion.
In 1999, another Oracle product veteran Marc Benioff went on to found Salesforce.com which really started CRM 2.0 and was taking CRM to the cloud. The biggest barrier to smaller companies from adopting business applications was the requirement of a data centre and IT operations required to deploy and manage these solutions. Marc was one of the first to realize that the future of applications is the Cloud as it enabled smaller companies to simply rent and use business applications without requiring an IT team or the infrastructure to run these applications. VP of Sales could order the product using their credit cards and enable their entire team in a matter of a few hours.
This opened up the CRM market to smaller companies and brought CRM to the SMB / SME segments. Salesforce.com is valued at $20 billion today.
The CRM industry is undergoing massive transformation driven primarily by Social Networking and Mobile. Mobile will transform the CRM industry from being very company centric to being very customer centric. Previous generations of CRM were designed to primarily help companies get a good view of the sales / revenue funnel for companies. They were simply tracking tools used to record business transactions with customers. As App stores become large and centralized, distributors of future software applications where any developer can upload an app and distribute it widely around the world the sales model is evolving to zero sales.
One of the top mobile messaging app vendors serving over 500 million customers monthly only has 30 employees of which 20 are engineers and 10 are focused on Customer Service and Zero sales. Instagram went from 0 to 7 million customers in just nine months and with 13 employees and zero sales and was sold to Facebook for $1billion.
Cloud computing is also reducing the role of sales significantly as companies can go online and instantiate any business application and start using these applications almost instantly on-demand. In a world where the sales process is getting dis-intermediated, if we are to imagine the role of CRM, it is easy to see that CRM will be more focused around customer service and the lifecycle of a customer.
CRM 3.0 will largely be about enhancing the customer experience and serving customers who will mostly access software and services from mobile devices i.e. Smartphones and tablets.