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2016: The Year in Review

By Denis Pombriant
Dec 6, 2016 11:45 AM PT

This year will go down as an important turning point in CRM. For the last decade and a half, we've been simultaneously building and destroying CRM -- first by linking all of the disparate databases to get that 360-degree view, and then by adding important accessories like social and analytics, to name just two. At the same time, we've been busy tearing down conventional client-server architectures and spinning up the cloud.

This year marked the point when most vendors were most of the way to the cloud. Some still might be selling and supporting conventional on-premises systems, but they're at least leading with the cloud and its many benefits. As a result, many of the old disagreements among vendors have dried up, to be replaced by discussions of whose cloud is better.

For example, Salesforce and Microsoft have learned to cooperate competitively in areas where it suits their interests, and Oracle has posted significant gains in cloud sales. Equally important, enterprise resource planning has become a cloud app, with companies like Financial Force doing significant business.

Also, you can't forget NetSuite, which is hovering at about a billion dollars in revenue after Oracle bought it for more than US$9 billion.

The cloud has forced ERP forward and into the front office, as back-office data has become essential to front-office operations that happen in the moment. Other traditional back-office systems also are much closer to the front office today, with companies like Xactly leveraging HR data to motivate sales people and other employees.

The Demands of Innovation

Innovation continues to move ahead briskly, but I see two kinds of innovators out there. The first batch is trying to re-invent CRM by doing something the majors don't do -- or more realistically, they're trying to do it better, faster and cheaper. The second group is innovating exotic solutions for business processes that only a few people so far have identified as important.

The second group often does not reach the market, though. Instead, members of that group are being bought for huge sums and being folded into larger CRM vendors' expanding solution sets. In the last few weeks, I've been briefed under nondisclosure agreements about several amazing such solutions, and I'll be writing about them in the new year.

As for the first group, there's a lesson for entrepreneurs in this, and it's the same as its always been: Make sure you have a real need to fill before you invest your time and money. Doing something a few percentage points faster than a leading company can do it is not a sustainable situation -- but doing something never before contemplated might be. It's scary to be on the bleeding edge, but that's where the big bucks are.

The March of Automation

There's been a great deal of talk, most of it pessimistic, about automation taking over blue and white collar jobs, leaving many of us jobless and potentially homeless -- a downer of Dickensian proportions.

As I have written many times this year, this pessimism seems to run in 50- to 60-year economic cycles, called "K-waves" after the Russian economist Nicolai Kondratiev, whose job was to explain capitalism to communists early in the revolution. It turned out that the communists didn't really want to know, and Kondratiev ultimately was shot for his troubles.

My point is that trends don't run in straight lines. If you see a straight-line trend, you need to back away from your object and gain perspective. One soul who's done this is my pal Vinnie Mirchandani, author of Silicon Collar: an optimistic perspective on humans, machines and jobs.

Mirchandani went to the trouble of surveying more than 50 companies to get an understanding of where the new jobs will come from, and he hit pay dirt.

Certainly automation is eliminating some jobs -- but as Mirchandani says, they're best described by the "3Ds." That is, they're dull, dirty and dangerous. What's coming are jobs that tap more of our creative and intuitive skills, which can be scary for someone accustomed to something else. It creates uncertainty -- and in uncertain times, humans look for cover both metaphorical and physical.

The Next New CRM

Maybe that's why I still see "new" CRM that's promised to be a Salesforce killer and the like. The fact is that you can't go back, and while the path forward is uncertain, it also is where opportunity is -- mixed with myriad possibilities.

I can't wait until next year in CRM. I am not going to hazard a guess in this piece about what's in store -- that'll be next time -- but I am sure it will be interesting. Some new ideas will fall flat, but others will make perfect sense and will drive the next cycle of this adventure we're on together.


Denis Pombriant is a well-known CRM industry researcher, strategist, writer and speaker. His new book, You Can't Buy Customer Loyalty, But You Can Earn It, is now available on Amazon. His 2015 book, Solve for the Customer, is also available there. He can be reached at denis.pombriant@beagleresearch.com.


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