Social CRM or Social Business?

Anthony Nemelka, today’s guest blogger, is a long-time veteran of the CRM industry, having previously served as a senior executive at both Epiphany and Peoplesoft and most recently co-founder and CEO at Helpstream.

When the CRM community first started talking about the potential for using social technologies to improve customer relationship management, the biggest debate was over what we should call it. Kudos to Paul Greenberg for putting that debate to rest and declaring it “Social CRM”. Since then, the Social CRM community has done a great job defining and legitimizing SCRM as a valid business concept–building a robust community of customers, experts, and practitioners along the way.

The debate within our community has since shifted to issues of execution. One of the more interesting debates is whether or not SCRM tools and technologies represent an extension of existing systems and processes or a completely new approach to doing business—a.k.a. a paradigm shift.

Paradigm shifts are tricky things because, by definition, most people don’t see them coming and only recognize them in hindsight. But this question of whether or not SCRM represents a paradigm shift is a critical one, both for the companies developing SCRM related products and solutions and for the companies attempting to deploy them. The wrong bet can mean the difference between dramatic success and complete and total failure.

Software vendors and solution consultants are aligning themselves on both sides of this debate, along fairly predictable lines. Those who have been around for a while tend to see SCRM as an extension to CRM. Those who haven’t been around as long tend to see it as an opportunity to redefine what we mean by CRM. And some of us simply like change and will vote for anything that causes the greatest disruption—you know who you are!

As the co-founder and former CEO of Helpstream, it should come as no surprise that I am a strong advocate for disruptive innovation. Just as the ubiquity of WANs and distributed computing presented a whole new paradigm for business process innovation in the 1990s, the integration of people-process-technology enabled by the Web increasingly requires that companies re-invent how they operate. Those companies that merely extend and modify what they do will be defeated by those that figure out a new and better way. Think Southwest vs. United.

Though customer-facing processes are a great place to start figuring out how to leverage social technologies, I think it’s important to consider what being social means to a much broader set of business challenges. Will there ever be Social ERP, Social HCM, Social SCM, Social BI, etc.?  I continue to be amazed at how many high tech entrepreneurs are figuring out how to leverage Web-based social collaboration and data aggregation to improve just about everything a business does. Will these innovations simply extend and improve existing processes or do they represent a new paradigm that requires a complete re-thinking of how a business should operate?  I suspect it’s the latter.

So what do you think?  Will Social CRM eventually be viewed as an extension of existing CRM or as just one critical component in adapting to the realities of a Web-connected world? Will companies deploy SCRM as a result of thinking “how can we improve customer relationship management?” or will they deploy SCRM as a result of thinking “how can we transform ourselves into a socially-driven business?” The only thing I know for certain is that it will be a very fun ride.

Join Anthony Nemelka, Lyle Fong, Anthony Lye, and Christopher Carfi in a panel discussion moderated by me, Esteban Kolsky, to discuss the future of Social CRM.  Details can be found here: http://www.meetup.com/CIO-IT-Executives/calendar/11218780/

24 thoughts on “Social CRM or Social Business?”

  1. Anthony,

    Good post. I’m glad we all have a chance to debate this.

    I really don’t see anything disruptive about a support community on steroids. The offerings (technology) out there today are parts of a whole. For any one of them to call themselves Social CRM is misleading at a minimum. But as @ekolsky points out, it implies there is a new market, which there is not (by definition).

    Understanding the term CRM was hijacked by software companies (when in fact it was related directly to business strategies and philosphies) gives me pause when I see software companies repeating history.

    If business has always been about engaging customers the way the customer wants, and needs, to be engaged, then we’ve always had this. If the first term coined was CRM, there is no reason to change it. Delivering new capabilities of engagement certainly have to happen. But, a paradigm shift? Yes, let’s be very careful with that.

    Suggesting that CRM has been “anti-social”, or should I say businesses have been “anti-social” is false. As @CRMStrategies mentioned, we’ve been doing this since medieval bazaars in one form or another (yes, form).

    Yes, I’ve been around for awhile and it’s predictable where I’m putting my stake in the ground. Would you rather trust the “new” guys that Jill Dyche described, meeting with an executive committee, wearing T-shirts, claiming that CRM will fail without social, and twittering during their meeting….are the ones that will transform the world?

    What customers want will drive what businesses deliver on the social side. It’s an addition to their strategy (if necessary) and the software is merely the tool to support that extension. Nothing more.

    It’s only disruptive if the customer has no control. And guess what, they do.
    .-= Mike Boysen´s last blog ..Sep 16, The Social Employee and CRM Incentive Plans =-.

    1. Mike, I think you make some very valid points. From an application-specific perspective, I agree that a support community is not all that transformational. No more, let’s say, than putting a sales force automation application on the Web.

      Of course, what I’m referring to is salesforce.com, and with the benefit of hindsight we understand that the transformational aspect of what they did was not in the application itself but in the delivery and business models. And now they are a cloud computing platform company! So it’s really important to consider what innovations will enable rather than simply how they are currently being positioned and marketed.

      So let’s apply this to an online support community.

      If you have most of your customers regularly logging onto your community portal to interact with you, your partners, and other customers in order to maximize the value they receive from your products and services, what do you really have there? A support community? Well, yes, you have that. But what you really have is a hugely valuable asset that you didn’t have before–one that can be used in an infinite variety of ways to improve just about everything a company does–not just support. And it doesn’t take long for people outside support to figure that out.

      Sales reps can follow the activity streams of their customers to find out what’s on their minds. Product managers can interact with people in the community who have demonstrated deep insight and expertise in using their products. Marketing folks can analyze activity streams to spot trends in value creation and unmet needs. Top executives can pinpoint trouble spots without filtering through the management chain. The list goes on and on.

      Is that CRM? Is that SCRM? Is that part of being a socially-driven business? I think it’s all of the above.

  2. Anthony — The minute you asked your question about “Social ERP, Social HCM, Social SCM” etc., the answer was evident: social will become a part of all the existing business processes, rather than something separate. It’s just like electricity, or indeed the Web itself — it simply become embedded in everything else.

    Thanks for clearing that up.

    David
    .-= David Raab´s last blog ..Acxiom Uses Social Media Data to Segment Email Lists =-.

    1. Good points David. So the next question is, from a technology perspective, what are the ramification of “social” becoming an embedded component of all business processes? Do we really want each business system to maintain its own set of social profiles, activity streams, permissions, and so on? The answer is probably no. Organizations will want to maximize value and simplify administration by figuring out ways to share these things across systems and applications. We’ve seen this before with Security, BI, and even operating systems (think DOS vs. Windows). I won’t be at all surprised if someone starts talking about a Social OS. Oops, I guess I just did. Anyone up for a new startup?

  3. The Paradigm Shift is in the power & control that is now restored to the people, and their expectations (shaped by increased, more wide-reaching interaction) are becoming increasingly higher.

    Business needs to adapt to meet these expectations. Social CRM is a necessary step in helping companies learn to listen and exchange, and reorganise for Socially-driven Business. It will help bring structure to help us organise, further down the road it will become common-place and will be brought back into the fold of CRM.
    .-= Mark Tamis´s last blog ..The Paradigm Shift is in the People, Social CRM is a Response to it =-.

    1. Mark, I completely agree that the “people” component lies at the heart of what has changed.

      In prior generations of business process innovation, the technology innovators assumed that eliminating people was the primary objective. Fewer people involved meant lower cost and fewer errors. This has been a basic assumption of technology-driven business process optimization for a very long time.

      But that assumption is being challenged, if not proven completely wrong. Web-driven business process innovation is about the fusion of people, process, and technology. That’s what makes the Web unlike any prior generation of technology. People aren’t just a necessary evil, they are the most crucial element in the design of the system.

      This change is causing business innovators to go back and revisit many of the basic assumptions about why and how companies do things. Of course that’s why we call it a paradigm shift (though I know many of you hate the p word). Once you change the basic assumptions, all prior conclusions need to be revisited.

  4. I agree that, as a consequence of the paradigm shift in people (not only Customers), businesses will need to re-think the way they should operate. Also Governements, Non-profits and other institutions will have to think about how they will answer to their “Customers”. And all of those (for the avoidance of doubt: that includes businesses) will have to think about how to do “whatever” it is that they do, when designing the answer(s) to their workforce and (supplier) partners changing needs and desires.

    AND

    The paradigm shift goes beyond businesses, it touches all of us. It goes beyond “how did this organization meet my desired outcomes” (as a Customer, Employee or Partner). It is also about increased awareness of social (e.g. Health care reform) and ecological responsibility etc etc..

    BUT

    Social CRM is an extension of CRM and therefore deals with Customer Relations, not the entire world. Like CRM should have been, Social CRM should be about Customers, Customers and Customers.

    Social CRM is about meeting their needs and desires. In order to do that well, you need to understand who they are, listen to them and engage them, improve (innovate) the products/services/processes, i.e. experiences based on their feedback and your understanding of their changing needs and desire for (control over their own) individual experiences: Nothing more, nothing less, (nothing new?).

    Their maybe SocialHRM, SocialGov, SocialABC; all important too. I like the scope of Social CRM narrowed down to Customers (if only because I can handle just about so much reading and writing ;-)

    Wim Rampen’s latest blog you’ve just read :-)
    .-= Wim Rampen´s last blog ..What A Social CRM Strategy is all about.. =-.

    1. Hi Wim, thanks for the comments. I always learn a ton.

      I’m often refer exclusively to “businesses”, but you’re absolutely right–we’re really talking about every type of organization, not just businesses.

      I, too, like to narrow the scope of problems we’re trying to solve. It tends to be the best way to solve them well. That’s one of the reasons I focused Helpstream on the customer service problem within social CRM, which perhaps is part of being a socially-driven business. I thought that would be the best place to both create compelling business value AND deliver the greatest cross-business impact.

      But having worked directly with big corporate IT departments for most of my career, I think they are right in being concerned about the proliferation of disparate social systems. I sense the need for an underlying social technology platform that can be shared across multiple narrowly-focused processes. A Social OS if you will. What do you and others think about this concept?

      1. This just might turn out in a rant. Before I start, it is not against you Anthony..

        Maybe what you describe as a need you sense above is at the core of the CRM-problem. Not the fact that you sense a need, but the fact that it is the need from the corporate IT-departments. What one should really ask: what are the needs of the business, or better: what are the needs of the business Customer’s.

        From my own experience I can say, most corporate IT departments have needs that are not in line with business needs, let alone Customer’s needs. They have their own agenda, their own priorities and their own desires.

        My advice for any company that wants to sell technology that enables a Social CRM strategy: focus on the needs of your Customer’s Customers, not on the needs of your Customer’s IT department. And: you should be enabled to listen to, engage & collaborate with Customers to better understand those needs. If they won’t allow you, you know how successful their Social CRM Strategy will be.

        Thx for “listening”
        .-= Wim Rampen´s last blog ..What A Social CRM Strategy is all about.. =-.

  5. But Wim, here’s where you have a problem, or at least a decision to consider when you say Social CRM should only be about Customers.

    Many times companies will decide their Customer Service communities have to be gated, and will strictly be for Customers. They fear a lot of things which we won’t go into here.

    What they miss by doing that is the opportunity to get their customers helping to influence the influencers, prospects, partners, and the rest of the ecosystem. BTW, CRM deals with all of those constituents today anyway, but now we’re talking about being Social. Private clubs are a two edged sword in terms of how they’re perceived: great if you’re invited, annoying if you’re not.

    You don’t want to create too many communities either–each one is hard to build and hard to keep vibrant. Your customers won’t go to too many communities.

    The answer, if you want to move beyond just using social for customer service is you want finer granularity of visibility, process, and operation in the Social CRM software so that these different roles can be realized in the fabric of the community.

    It’s essential to the overall user experience.

    To David Raab’s point, this controlled comingling eventually extends to every business function, and to linkages between internal and external communities. The interface between each has to be definable so that the right nutrients can pass the membrane and the toxins are minimized. That’s part technology (many tools lack the requisite permissioning subtleties) and a lot strategy and forethought about how you set things up and integrate.

    Cheers,

    Bob Warfield

    PS Great post, BTW, Tony.
    .-= Bob Warfield´s last blog ..The Experience Portfolio: Thinking about Customer Experience Strategy =-.

    1. Hi Bob,

      I couldn’t agree with you more that (Customer service) communities should not be closed shop. No argument there. Customer services is also just a part of the Social CRM cake.

      What I’m saying is that I would like to keep the focus of Social CRM on the Customer cake, just to prevent the cake from getting to big to digest. This most certainly does not mean that others can’t have part of the cake. To the contrary: listening, engaging and collaboration between (Potential) Customers, Employees and Partners is at the core of a Social CRM Strategy. They need to join in!

      Thx for your comment on my comment on.. ;-)
      .-= Wim Rampen´s last blog ..What A Social CRM Strategy is all about.. =-.

  6. Tony, nice to see you hanging out with Esteban!

    When we met a few months ago, we talked about the term “Social Business.” I liked it then, and I still do, because it’s not a TLA and doesn’t immediately lead people to think only of software.

    In fact, last year we settled on Social Business as one of our key editorial themes (http://www.customerthink.com/editor_topics/social_business) and defined it to mean, “Social media and customer co-creation strategies and technologies.”

    Is it just me, or have we forgottent that people can be social and collaborate without technology?

    Technology vendors seem to be positioning as either Enterprise 2.0 (internal) or Social CRM (external). Some vendors have told me that requirements are different, but I’m not entirely sure about that. Jive, for example, seems to be positioned a bit more on the Enterprise 2.0 side (by their competitors, anyway), but I’ve talked to customers that use it for customer communities, too.

    Anyway, I think Social Business should include a company’s entire ecosystem of employees, customers, partners and suppliers. Maybe the term is an opportunity to bridge the E2.0/SCRM divide?

    1. Thanks for the reply Bob. You, me, and Esteban should do some hanging out sometime soon. Certain to get the creative juices flowing.

      As you can tell, our prior conversation about Social Business has had a big impact on my thinking. And I agree that the E20/SCRM divide is feeling more and more unnatural.

      I’ve been spending a good chunk of time recently on the other side of the fence — with my friends Eugene Lee and Ross Mayfield at Socialtext. Their transformation from being a best-of-breed enterprise-class wiki company to a best-of-breed enterprise-class social platform company is amazing. Kudos to Eugene and Ross for pulling that off. But when I compare what they are doing to what we were doing at Helpstram, it’s very clear that both sides of the E2.0/SCRM divide are slaying the same dragon.

      As for people being able to be social and collaborative without technology, you make an excellent point. It’s easy for us technology folks to think that this is all about technology, but of course it’s not.

      I think Lithium is a good example of delivering horse and cart in the correct order. Though they’ve built some very cool technology, what they’ve really mastered and figured out how to deliver to their customers is a deep understanding of how to create and maintain positive interaction and collaboration among members of a community. The underlying principles have nothing to do with technology–the technology is only an enabler, though a pretty powerful one. These social technologys are doing for community collaboration what the airplane did for overseas travel–make it a whole lot easier.

      1. Tony,

        I too have been “good chunk of time recently on the other side of the fence”. I am collaborating with Prem on something that we will talk about next week. But, the precursor is my post SocialCRM and Enterprise 2.0 and convergence model

        There is no doubt in my mind that Social CRM and E2.0 are absolutely slaying the same dragon (nice quote).

        Mitch
        .-= mitch lieberman´s last blog ..mjayliebs: .@JohnFMoore: Anyone have a dictionary? | Think that was hard, I dare you to read it out loud! (@prem_k, @CRMStrategies) =-.

        1. Bob Warfield made a remark on my last post (link below) that made me think: he said that in many of the companies he dealt with the departments were basically at war with each other, leading to low overall Customer Satisfaction because they were acting as disparate organisations.

          Maybe companies need to learn how to collaborate internally before trying to include the ‘outside world’. Implementing Enterprise 2.0 could be carried out in parallel (or in some cases could be a prerequisite) to implementing Social CRM tools. We could add to Paul definition something like “The company’s coherent response…”?
          .-= Mark Tamis´s last blog ..The Paradigm Shift is in the People, Social CRM is a Response to it =-.

            1. Nice :-)

              An alternate view is that the best context for teaching your kids table manners is to invite someone important over for dinner.

  7. Great post. I think there WILL be a Social BI – and that in fact it is likely to be disruptive, and not quite an outgrowth of CRM or BI purely.
    Just as in the 90s many apps vendors embedded reporting into their stacks (ie Peoplesoft reporting, SAP reporting, financial reporting) using oem Crystal Reports, home grown tools, Social CRM vendors will try to provide reporting on trends, sentiments, and topics, movers, issues from within their content sources.
    But just as most enterprises realized back in the 90s that ‘operational reporting’ was limited and began constructing data warehouses and deploying BI solutions to create an integrated view of the business and customer, companies now will see (and many early adopters are seeing this already) the need for creating ‘experience warehouses’ that bring together many social media sources and that apply a form of ‘Social BI’ that integrates the content and analytics from all the structured and unstructured sources.
    Today there are differences – most companies are using hosted/cloud environments, rather than deploying inside the firewall, and most are integrating internally as well as externally sourced social content. But the similarities to BI in the 90s are striking. As a BI veteran I see similarities every day with our Clarabridge customers.

    Sid

    1. Bingo! That’s it Sid, BI is just the example I was looking for. Everyone thought BI would be absorbed into the applications (ie ERP), but the cross-application drivers of BI business value is what made BI a separate prodct category instead of a functional add on. So too, I believe, with social technologies. The cross-application nature of the business value is simply too high. And the possibilities for Social BI are mind boggling.

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