Let’s take a look at some of the recent news surrounding the world of CRM, to gather evidence of where we might be heading towards.

Takeways from #SFDC #DF11

On the last week of July, Salesforce.com held their annual Dreamforce conference in San Francisco. As a person working with Dynamics CRM for a living, it’s a good idea to keep an eye on where the other CRM solution providers are focusing their development efforts on, and SFDC certainly is one of, if not the main competitor that Microsoft has their eyes on. In his opening keynote, Marc Benioff made it very clear where his team’s focus is on, and that is the concept of a social enterprise. I’ll spare you from the marketing flare and instead present a few screenshots captured from the presentation, highlighting the new feature announcements.

So, what’s in the pipeline for Salesforce.com during the winter 2011/2012 then?

• Contact profiles will be “social enabled” by default, showing public feeds from networks were your customers are present
• Data.com, previously known as Jigsaw, will power the social data discovery and data import, in combination with D&B’s database
• Chatter Now extends the functionality from microblogging to instant messaging with presence information
• You can invite your key customer contacts to specific Chatter networks, or even publish Chatter on the web as a customer service channel
• Radian6′s technology will monitor those customer complaints that are not targeted at your helpdesk, enabling you to jump in on the conversation
• All of this follows you everywhere you go, as touch.salesforce.com promises to deliver a HTML5 client that’ll make your iPad or smartphone a full-fledged social CRM control panel

Even if you leave away some of the over-the-top scenarios presented, like friending the Coke machine or having network routers tweet you on social networks, it’s still clear that with all the promised functionality at your fingertips (once it’s available and working in a reliable manner), the possibilities for you to design and implement new business processes will be dramatically expanded. Whether companies are able to make use of and, more importantly, make money out of these new possibilities is a different question, but it surely does push the boundaries of CRM as we know it.

Social CRM is where it’s at

“Social” certainly is an attractive attribute to include in your product description these days. Gartner, for example, has predicted that the market for Social CRM would reach a total value of one billion dollars by the end of next year. Predicting the future with concrete figures is always a challenge, but it’s even more difficult when people don’t even agree on the definition of the market to be predicted. Several analysts have commented on Gartner’s reports, starting from reminders that an SCRM market may not really exist yet, or they have questioned Gartner’s choice of products included in their SCRM Magic Quadrants as including applications aimed at other functions than what CRM systems traditionally are about – managing customer information, that is.

Aside from the numbers, an important prediction that Gartner made is that the Social CRM market (however you define it) would begin to see a shift towards more integrated platforms over the initial point solutions that have emerged during the first wave of the social business boom. In the age of the cloud, both developing as well as buying and deploying new applications designed for addressing a specific business need can be lightning fast, compared to what the corporate IT projects were like a decade ago. This can easily lead to a situation where individual departments have gone and acquired “shadow” solutions to help them get started on participating in social media, monitoring the buzz around topics and measuring results of their actions. Now, the next step of tying all this back to the customer records in the company’s operational IT systems will often be much more complicated than signing up for the new service initially. A quote from Gartner describes the situation further:

The need for integration will favor more-traditional CRM vendors that add social capabilities. Integration did not matter much when enterprises were just experimenting with social CRM,” Mr. Sarner said. “However, companies are asking for the integration of social data with other customer data within sales, marketing and customer service processes, which will require the integration of social CRM with applications such as a knowledgebase for customer service, multichannel campaign management, sales force automation or e-commerce, Web content and Web analytic applications, master data management, and even back-office applications.

Sounds convincing to me. The first mover advantage is unlikely to be such that it would overshadow all “oldskool” CRM functionality and allow the new players to start building an empire from a clean slate. Gradually we will see everyone adopting the new social paradigm into their product offering, in one form or another.

Upcoming social features for Microsoft Dynamics CRM

We’ve already seen Microsoft lay out their roadmap for new features in the Statement of Direction whitepaper released in May 2011. “Microblogging, business activity feeds and social intelligence” is what we’ve been promised. During the WPC 2011 keynote we saw pieces of this type of functionality utilized in the CRM demo and now we have what appears to be the first official screenshot of the activity feeds leaked out into the open.

So, what we will definitely get is an activity feed of different events taking place inside the CRM database, combined with the ability to post updates and reply to posts. If you’ve used Twitter, Yammer, Chatter or any other microblogging app, you should know the drill by now.

How about the social world outside the firewall? Traditionally Microsoft has preferred steering clear from committing to any specific 3rd party networks. For example, the Outlook Social Connector does not integrate with Facebook or LinkedIn out-of-the-box, instead you have to download a separate provider per each network (there’s not too many of them, btw). With the release of Windows Phone 7.5 (Mango), Microsoft now appears to feel comfortable enough with the top 3 networks of Facebook, Twitter and LinkedIn, by integrating them right into the core of their product: the People Hub. Check out the picture on the left and tell me if you spot a slight resemblance in the two feed UI’s… If this is anything to go by, I’m expecting to see the same three brands bundled into Dynamics CRM’s default integration points.

As for the rest of Microsoft’s social CRM plans, we’ll need to wait and see if there will be any deeper integration to services such as social media monitoring or whether the Redmond folks simply decide to support and promote some of their partners’ solutions more heavily. In the age of cloud & social, it’s still all about developers, developers and developers, which is why a healthy ISV ecosystem remains a crucial asset to cherish.

My feed is your feed and your feed is mine

Not too long ago, Yammer was accusing Salesforce.com for being a copycat when releasing their Chatter product. Now at Dreamforce ’11, the mascots for both companies were holding hands under the “Friends With Benefits” slogan of the campaign that announced integration between Yammer and Chatter. Well, you know what they say: keep your friends close and your enemies even closer.

Yammer does already integrate with SharePoint. By the time Microsoft incorporates the Activity Feeds into the core product of Dynamics CRM, I assume there will be a full API available for 3rd parties to tap into the event data of the feeds. Therefore I’m expecting that we’ll also see Yammer providing a solution for Dynamics CRM integration.

Where does this feed actually belong to?

Looking at Microsoft’s big stack of software products, it’s not so very obvious where all this new type of social activity functionality should be built into. SharePoint is the collaboration platform, Lync is for unified communications and, well, CRM could be considered as the solution for managing interactions and processes related to customers. So, tell me then, what specific application will the Microsoft end-user be using when he engages in the types of activities that a Yammer user has already grown accustomed to? “All of them” is not a very good answer, because that leaves you without a name to assign to the activity. Without a name, you don’t have a brand, and unless you have a brand, it’s very difficult to make anything stick. Just like with CRM implementation projects, user adoption is the golden key which you will need for unlocking the door that leads to ROI from your social business initiatives.

Much of the functionality needed as the building blocks for a social enterprise is already included in Microsoft’s portfolio today. The thing that is missing is the super glue to attach all the pieces together and make them really stick, i.e. work effortlessly in real life business scenarios. I’m not tallking about the “regular” glue, which in IT terms would mean configuration, customization, development and integration work. With enough skills available you can do great things with the stack already today and build the solutions needed. What the new, cloud-based players on the field of social business are promising is however a different value proposition: products built for the exact scenarios that companies encounter when dealing with their customer base in this world gone social. A solution you can just grab and start using.

It has taken Microsoft a massive effort to work its way into the current position, where their crown jewel productivity tools are available as cloud services you can subscribe to. The next shift that will need to take place is the integration of these services into a whole that is greater than the sum of its parts. Instead of just using traditional business applications like SharePoint or CRM, the new business processes for the social enterprise need a technical foundation that effortlessly extends beyond the corporate firewall and reaches the conversation that is taking place “out there”. Not so easy to achieve with on-premises building blocks alone, but hey, that’s when you gotta go “all in” to you know where…

If the cloud computing movement is about the shift in technology, then the social web revolution is all about the people and their new forms of behaviour. Sure, it’s powered by some tech innovations from Web 2.0, but it would be a stretch to claim that the source code behind services like Facebook or Foursquare contains the magic ingredients that have caused the eruption of the social media volcano. To prove my point, just take a look at the following slide:

This “social customer stack” is taken from the Deriving Value from Social Networks session by Nikhil Hasija and Paul Greenberg. It was the best 60 minutes spent during Convergence 2010, hands down (even better than The Return at Tabernackle or The Geeks Band at Hard Rock Café). One particularly great thing about it was that there were absolutely no sceenshots of Microsoft applications, like in all other Convergence presentations. No attempts to push products like the Social Media Accelerator or anything else MS branded. Everything was built around the core message: what has changed since the invention of traditional CRM and why the customer is now in charge.

Social CRM is of course not a brand new concept. Having said that, it’s still far from an established or clearly defined concept. The following presentation contains much of the content that Paul was presenting at Convergence, so flicking through these should give you a good idea of the what, why, how of SCRM:

Be sure to also read Paul’s blog post titled “Microsoft Convergence 2010. Finally Getting Rid of the But….?” on ZDNet.

Returning to the social customer stack, it was quite delightful to see that Microsoft has been able to grasp the fact that the future of applications needed for any company to adopt a holistic practice of SCRM activities is not something they alone can engineer by themselves at Redmond. Maybe this can be partially attributed to the phenomena uncovered by the recent study by NetProspex, which found that Microsoft employees were the most social media-savvy in the world. If the company is able to transform this savviness into products and services that encourage coexistence and integration of applications from outside the Microsoft stack, then all those hours wasted by MS employees in reading each other’s Facebook status updates may actually deliver a nice ROI in the long run. Heck, maybe they’ll even survive beyond the looming death of the desktop operating system.

What does it all mean for Dynamics CRM? Well, your guess is as good as mine, but I believe the business applications world will be moving towards the app store model that we’ve seen grow quite popular in the consumer mobile arena. In order to get there, it’s going to require a little bit of work from Microsoft to make this transformation possible, but I see them taking the steps into right direction. With the Solution Management features to be introduced in CRM 5.0 (edit: now branded as Dynamics CRM 2011), the possibilities for creating real application packages that a CRM using organization could easily consume will be at a whole new level. With its Azure platform, Microsoft has a natural expansion tank in place to facilitate the growth of its CRM customers’ solutions to become a network of applications.

Even though it is somewhat disappointing that there doesn’t appear to be any Chatter type of functionality built into the upcoming version of CRM (guess you’ll need to use SharePoint 2010 for that) to foster the social enterprise approach for transparency on CRM customer data, perhaps this isn’t the most important thing Microsoft to focus on. Social CRM will not be a module you can plug into your existing application, it’s about being able to support whatever new methods of communication and collaboration emerge “out there” between companies and their customers. Get the right pieces in there and the ecosystem may just invite you to be a part of the conversation.

As a final note from Convergence 2010 Atlanta, I want to touch one subject of far less importance than the cloud or the “SocialX” future, but something which relates to them quite closely. If there’s one thing that has changed in conference audience behaviour during the past couple of years, it has to be the explosion of mobile applications for social networks. Yeah, I’m talking about Twitter et al. The backchannel of tweets during the sessions is nowadays something you can expect to take place in any larger tech oriented event. Some people are even writing books about it and building applications targeted to amplify and leverage this phenomena.

I guess Convergence is nowhere near SXSWi in terms of mobile geek penetration rates (just watch this video), but it would have been awfully convenient if Microsoft had provided complimentary WiFi for all attendees, to facilitate the emergence of a proper backchannel. Perhaps the U.S. crowd didn’t have any problems utilizing their data plans, but for an overseas attendee the ridiculous WiFi rates charged by the Georgia World Congress Center for 24h access were a showstopper. Luckily there were plenty of CommNet terminals around, which weren’t locked to browsing only the Convergence site. Tweets thru SMS during the session and a quick review of updates with #CONV10 hashtag during the breaks managed to keep my social network addiction at bay.

Girish Raja showed a cool demo in his Azure themed session about using The Archivist to collect a database of tweets for analyzing trends and other kinds of data mining activities. Perhaps by Convergence 2011 we will hear how Microsoft has managed to make use of the backchannel analytics. I’ll see you in that session then!