2016 In Review

CRM

In CRM at least, I think last year will go down as an important turning point. 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 just name two. At the same time we were busy tearing down conventional client-server architectures and spinning up the cloud.

I think last year marked the point where most vendors are most of the way to the cloud. Some might still be selling and supporting conventional on-premise systems but they’re at least leading with the cloud and its many benefits. Vendors like Microsoft and Oracle are talking up advanced ideas like containers as a refinement of virtual machines which will only enhance cloud’s desirability. 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 competitively cooperate where it suits their interests and Oracle is posting significant gains in cloud sales. Oracle is in a delicate balancing act trying to support existing customers while actively selling cloud but its success over the last year indicate it is winning that battle.

Equally important, ERP is a cloud app these days with companies like Financial Force doing significant business. Also, you can’t forget NetSuite hovering at about a billion dollars in revenue when they were bought by Oracle for over $9 billion. Will Oracle’s ownership of NetSuite cause some ERP seekers to consider other options so as to not place all their bets on one Oracle world? The new year will provide clues. Certainly the existence of other good cloud ERP solutions keeps the market open. Also, companies like Financial Force provide Salesforce with an important counter-balance to possible oracle dominance in cloud ERP. Ditto for Microsoft and its cadre of ERP offerings.

Cloud has forced ERP forward and into the front office as back office data has become essential to front office operations that now happen in the moment and not in batch mode. Along with that, other traditional back office systems are much closer to the front office today with companies like Xactly leveraging HR data to motivate sales people and other employees.

Innovation

Innovation continues to move ahead briskly but I see two kinds of innovators out there. The first batch are 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 have identified as important so far. I like the second group’s chances.

The second group is often not reaching the market though, instead they’re 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 NDA about several amazing such solutions and I’ll be writing about them in the new year when the NDAs expire.

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 percent faster than a leading company is not a sustainable situation, but doing something never before contemplated is. It’s scary to be on the bleeding edge but that’s where the big bucks are.

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 was ultimately shot for his troubles. But his research and writing are on target and found a home in the West.

One of my points has been 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 “3D’s,” 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 fact is that you can’t go back and while the path forward is uncertain, it is also where opportunity is—mixed with myriad possibility.

I can’t wait to see this year in CRM and I am not going to hazard a guess in this piece (that’ll be next time) about what’s in store 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.

 

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Well-known CRM analyst and thought leader, Denis has made contributions to our thinking about cloud computing, CRM, social media, analytics and mobility. He runs the Beagle Research Group, LLC and is co-founder and managing principal of The Bullpen Group. He frequently contributes to this and other outlets.