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Chapter 3. The CRM Landscape: Why Now? > Change Management and Market Strategy

Change Management and Market Strategy

Change management is one of the first influences to adopt the enterprise-wide point of view that characterizes CRM applications in today's business landscape. Focusing on managing corporate resources across the organization, change management harnesses those resources and shepherds them into productive channels.

Whether those channels are productive depends on the strength of your market strategy. The iterative process of developing market strategy and testing it out in the real world has undergone significant changes in recent years because of factors such as the following:

  • Introduction of new channels such as the Internet and wireless devices

  • Business process integration

  • Business to business exchange

Taken together, change management and market strategy have influenced the evolution of CRM by raising the bar—taking the focus from case-by-case customer management to providing the enterprise information needed for driving the corporation as well as getting beyond the corporation's boundaries.

Introduction of New Channels

Internet hype might be subdued since the collapse of the dot com revolution, but the introduction of the Internet as a business channel is not only here to stay—it's just getting started. And, in today's market, a rival force is the wireless revolution, also in its infancy and also with far-reaching consequences for business and consumer alike.

One thing the Internet has done for business, in combination with other forces, is to blur the boundaries. In the early nineties, with the advent of business process reengineering, companies saw the boundaries between themselves and their customers begin to soften. One of the strategies of reengineering is to push work formerly done by the company over to the customer in self-serve arrangements. Suppliers also began to take work off the hands of the acquiring company—their customer, for example, by checking their own inventory levels at the customer's site, monitoring stock levels of their own items, and then replenishing inventory automatically when needed. In these ways, the boundaries between a company and its customers and suppliers had already begun to blur.

The Internet introduced a much more profound blurring, which indeed amounted to a restructuring of customer (and many other) relationships. From the user groups and customer interest groups of the past, buyers have moved into a much more tightly coupled relationship with sellers. Now, customer consortiums can design products, and one-to-one marketing schemes provide individually tailored products that customers can assemble for themselves. Experts talk of user experience and customer intimacy, as the fabric of the customer relationship becomes stickier, and at the same time, more amorphous.

As broadband makes the Internet into the “always on” connection, with the bandwidth for interactive applications, wireless makes it ubiquitous, providing anywhere, anytime, anyone access to your business resources.

Business Process Integration (BPI)

Business process integration, how companies get all their computer systems talking to one another seamlessly, is an increasing priority as companies get more and more of their processes automated and on the Web. CRM benefits from this process integration because it needs data from all the different systems to complete the 360-degree picture of the customer.

BPI gives companies a process for defining how various business systems overlap and relate to each other so that these systems can better share information, processing rules, and platforms. As business process integration methods improve and evolve, new generations of CRM systems are positioned to access more and more of a company's information resources.

Business to Business Exchange

The other really big new influence is .NET, Web services, and all the new standards currently under development for business exchange online. The point of all that is to make services offered over the Web more interoperable (apples to apples), and to make it easy for businesses to exchange information electronically.


A Web service is defined as an application that adheres to new connectivity standards (SOAP, WSDL, and UDDI) that are based on more mature Internet standards (HTTP and XML). This standards-based connectivity automatically enables a Web service implementation to dynamically discover and interact with other Web services.

On the new technology horizon, methods for business to business (B2B) exchange are evolving. Technology industry initiatives have resulted in the development of the .NET and Sun ONE platforms, industry standards for connectivity, such as WSDL, and the Web services concept for business exchange.


WSDL (Web Services Description Language) is an XML-based language for documenting what a Web service does, where to find it, and how to access it.

A recent article in the Harvard Business Review was titled “Have Your Objects Call My Objects,” and that's what Web services are all about. Whereas a few years ago, people would facilitate schedules, purchases, and so on. Today, computers are taking on that role—ideally, almost without human intervention.

A common example illustrating the Web services vision is the travel agent service:

You sign up online for a conference or a training class and one click sets off a chain of Internet transactions that would take care of a whole series of steps:

Register you for the class

Book airline reservations for the specified dates of the conference

Reserve a hotel room in the destination city

Reserve a rental car for your visit

Make dinner reservations for the first night

Synch all these reservations up and deliver an itinerary

In the Web services world, companies collaborate electronically to automatically deliver a series of transactions, such as the travel agent service, with a minimum of human intervention.

.NET is the architecture framework for Web services. It's the latest and greatest platform definition from Microsoft for component development. Application components are self-contained units of functionality—chunks of code—you can mix and match to put together specific solutions.

What are the implications of .NET and Web services for the average business? New applications that are increasingly plug and play. A director of technology at a Web-enabled insurance company told me recently: “We are an insurance company. We don't need 500 people in systems development (which we currently have because of acquisition and merger activity). We need to consolidate our systems and get back to the business of selling insurance.”

That's the sentiment in a lot of quarters. We want technology to be easier, to be something a businessperson can deal with without thousands of developers. That's the vision. It's not here yet by any means, but it's definitely on the horizon.

Information Technology as Enabling Partner

As information technology has matured, the expectations for technology have changed from carrying out tactical plans defined by the business strategist to enabling strategic advantage. The pursuit of new technologies such as CRM for the promise of strategic advantage has resulted in companies incorporating IT strategies into the overall corporate strategy, rather than permitting the corporate strategy to dictate IT strategy. This change represents a fundamental shift in the relationship between IT and business—from IT as subordinate to business to IT as enabling partner to business.

The paradigm shift is evident in business today, where technology is no longer just a supporter, but has become a central priority. The emerging role of IT is that of influencing while the business generates demand, illustrated in Figure 3.2.

Figure 3.2. The emerging role of IT is to influence the business application of new technologies.

The more a company has adopted the new paradigm, the greater the demand will be for systems that are

  • Faster, in terms of both the development cycle and the performance delivered, because speed to market is as crucial as high-performance

  • Stronger, for handling multiple concurrent transactions via multiple channels

  • More strategic in their objectives

This all adds up to more integrated CRM systems as the new standard.

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