The 10-Year Itch

“Call rewrite!”

That’s what they said in the olden days on movie sets when the script needed doctoring. It’s also what the technology industry metaphorically does about every 10 years.

We rewrite much of what we’ve been relying on for information processing because the accumulation of new technologies over the previous decade has made our current batch of gear and applications uncompetitive and relatively expensive. So say Larry Ellison, Marc Benioff and many others. So the cycle begins again, though when exactly is a tricky thing.

By the looks of this economy, the new cycle couldn’t arrive soon enough, and thoughtful people are asking what the new world might look like. Some of us may have been lulled into believing that the 10-year replacement itch applied to other departments, but not CRM. After all, haven’t we been steadily accumulating changes all along? And haven’t new technologies like SaaS pretty much eliminated this cycle? Well, yes and no.

3 Technologies

On-demand, SaaS or cloud computing — call it what you will — has done a lot to flatten the technology replacement curve, but the reality is that new stuff finds a way to creep into the world, and our existing infrastructures don’t always handle the newbies smoothly. The case in point is Cloud 2.

Cloud 2 is as significant a departure from the norm as CRM or SaaS computing were when they were first introduced. Driving Cloud 2 are three technologies that we are all very well-versed in but which, taken together, add up to the call to rewrite. Let me explain.

The three technologies aren’t even new. They include mobility, social media and analytics, and they’ve been around for decades in some cases. The convergence of these three technologies within the CRM suite is driving us to rethink CRM, and they have the potential to drive the next economic cycle. Social media is transforming CRM, but so is analytics, though we are earlier in that deployment curve, and while mobility has been a factor for a long time, the convergence of these factors is something special. It reminds me of the 1990s.

The ’90’s saw a wave of productivity enhancement and a long period of growth with low inflation, and the two are rarely seen together. It caused Alan Greenspan, chairman of the Federal Reserve, to speculate that we had entered a new economic era of permanently lower inflation and higher productivity. With so much evidence around him, Greenspan could be forgiven for this thinking, but the laws of economics had not changed and, in fact, they were working as advertised.

Blossoming Into a Boom

Under normal economic conditions, increased productivity — i.e. getting more output from workers — required more input. More production translated into more people, more machines and more raw materials. But that didn’t happen in the 1990s, as knowledge workers leveraged technology to increase their output.

The computer automation boom of the previous decade — the 1980s — was largely responsible for the aggregate productivity improvement. While individual companies might have been hard-pressed to provide a valid ROI calculation for their technology investments, many decision makers knew that without those technology investments, they would surely be left behind. It wasn’t until the 1990s that this infrastructure buying spree aggregated forming the productivity boom.

The same kind of situation may be forming right now as three new drivers — social media, mobility and analytics — converge, especially in front-office business processes. As in the prior example, these technologies have been accumulating in our culture, and they have become more robust in each passing year. Social media may be new, but its adoption has been significant. With half a billion Facebook users alone, social technologies have become ubiquitous, a key requirement in deploying any new networking technology.

Today, mobility benefits from investments in infrastructure by the carriers and in devices by individuals that provide the essentials for using social media. Finally, analytics have existed for decades, but their coupling with social media is a critical turning point. Social media generate mountains of data that must be analyzed to be useful, and studies show that analytics adoption is shadowing social media adoption in business.

So here is the critical point for me — your investment in mobility will be enhanced and your investment in social media will be justified by how well you adopt social analytics. That’s right, analytics is the last mile in this journey, and analytics, if implemented appropriately, will make the other investments look shrewd because analytics alone will give you insight into the data churned up by the other technologies. Analytics, along with the other drivers, provide the essentials for Cloud 2 and for a new round of prosperity. Most importantly, analytics and Cloud 2 move the discussion from the hardware and software to the business process, which is where we’ve been trying to get for decades.

Denis Pombriant is the managing principal of the Beagle Research Group, a CRM market research firm and consultancy. Pombriant’s research concentrates on evolving product ideas and emerging companies in the sales, marketing and call center disciplines. His research is freely distributed through a blog and Web site. He is the author of Hello, Ladies! Dispatches from the Social CRM Frontier and can be reached at [email protected].

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