2006 Prediction Scorecard From an Accidental Analyst

Like many industry analysts and alumni, I find analytical concepts sexy. Add in creating strategies for serving customers more efficiently while being profitable at it, and the conditions are perfect for the creation of an Accidental Analyst.

The analytical side of CRM experienced explosive growth in 2006 because there are so many of us out there. The era of the Accidental Analyst has arrived.

A New Age

Sure, many of us have marketing, sales and even senior management titles, but our breed is a quiet majority, choosing to hunker down with our favorite analytical apps and crank out impressive scorecards that measure the key performance indicator of the moment (KPIOM) — a new acronym with the bonus fifth letter.

I am sure this is headed for instant obscurity, but it will amaze and confuse relatives at get-togethers this holiday season when dropped carelessly into conversations in response to “And what do you do?” It’s a sure conversation re-director for those uncomfortable interrogations from in-laws.

Analytics fever is quietly spreading through marketing, sales, operations, service and even senior managers who love numbers and find the connection with hosted analytical apps — from Salesforce.com’s AppExchange or the impressive advances SPSS is making in its PredictiveMarketing solutions — so powerful yet so simple to use.

My ephinany moment happened, however, with Cymfony, and its ability to monitor the impact of new product introductions, in addition to measuring the influence of all forms of consumer generated media — including blogging on a company’s reputation. The ability of Attensity to provide linguistic mapping is pure analytical sexiness as well. I was hooked.

Benchmarking My 2006 Predictions

Based on the excellent job Denis Pombriant did on his column this week and the great columns he’s delivered this year, I realized that I am truly the Accidental Analyst of CRM Buyer.

With that in mind, let’s take a look at the predictions I made for 2006 and how I did. If this could all be transformed into a correlation matrix, you would find the highest level of interrelationship deals not with some ground-shaking industry insight, but with beer.

Prediction: The beer quadrant will be downloaded at least 3,000 times in 2006.

Downloaded 3,756 times between Jan. 1 and Dec. 21, 2006, the beer quadrant has journeyed to 143 nations, spreading insightful guidance originally researched from a thorough sampling methodology in a fine southern bar in Charlotte, N.C.

Prediction: Selling services based on being a trusted advisor makes transaction selling obsolete.

This was a slam-dunk, as selling services has become the path to profitability for nearly every software company.

Transaction selling was prevalent at the low-end of the ERP market where prices plunged for core modules, and hosted ERP, including order management functions, gained momentum through the 3rd and 4th quarters.

Prediction: The biggest CRM spending category of the year will be integration and services.

This may have been too conservative of a prediction, as spending on services far outpaced licensed revenue this year in core ERP and CRM categories. This was too easy.

Software-as-a-service and managed services breaks out of CRM and into the rest of the enterprise.

Sterling Commerce (an AT&T subsidiary) is a case in point, as their acquisitions — including Comergent most recently, Tr2, Nistevo, and order management vendor Yantra — are collectively moving the company out of its EDI legacy and squarely into the managed services and SaaS arena.

Comergent was a great acquisition for them this year, as Bill York and his team there have done an outstanding job bringing order management and ERP integration to the company.

The service oriented architecture (SOA) proves to be ready for prime time.

From discussions with SAP Administrators at Disney and several other companies in the area, in addition to a quick trip to Australia this year to present on supply chain integration, SOAs are definitely ready for prime time.

One manufacturer who is U.S.-based but has subsidiaries throughout the Asia-Pacific region, has turned order management into a Web service using an SOA-based strategy. SOA, according to a purely informal sampling, has arrived.

Measuring marketing and voice of the customer programs using analytics and dashboards gain momentum globally.

Business intelligence applications available on hosted, SaaS and on-demand platforms became more available throughout 2006, including innovative approaches to sharing reports online as Crystalreports.com.

While dashboards are just a part of broader business intelligence strategy, marketing VPs I’ve spoken with in manufacturing companies looked at this as the first deliverable they needed to manage marketing and PR effectiveness.

Indian outsourcing companies start acquiring software companies.

There were plenty of rumors of Infosys acquiring Capco, a U.S.-based IT consulting firm. The most aggressive outsourcer in terms of acquisitions this year was WiPro, with five acquisitions including NewLogic for US$56 million, mPower ($28M), cMango ($20M), North-West Switches ($23M), and Hydrauto Group ($31M).

Google acquires at least four more companies, firmly establishes itself as an enterprise platform and buys its way into China.

I should have called this predication the Google acquisition-of-the-month club, because with the exception of May, June and July, Google made at least one acquisition a month in 2006.

The acquisitions started with dMarc Broadcasting, followed by Measure Map, Upstartle for word processing, @Last Software, a text searching algorithm from Ori Allon — a student from University of New South Wales in Australia, Neven Vision, JotSpot, and the celebrated acquisition of YouTube, followed by Endoxon for their mobile mapping technology.

Acquisitions supported the basic advertising model, yet also increased significantly the intellectual property Google has for mapping and geospatial analysis. In June, Google decided to sell all of its shares in Beijing-based Baidu (749,625 shares). The prediction of Google buying its way into China didn’t happen.

AdWords sparks an industry of optimization tools due to lead-generation successes.

The killer app for AdWords optimization has yet to arrive, and in the interim there are plenty of smaller search engine optimization vendors filling the void.

While marketing services firms position themselves as able to do AdWords optimization, the proof of this being a reality is lacking. Look for 2007 to have a constraint-based technology vendor emerge with the killer AdWords optimization solution.

Thanks for reading this column and may you and your family have a wonderful holiday season and happy New Year. I’m just so thankful I’ve had a chance to hopefully entertain and educate in these columns.