Applying Lessons from CRM to Today's Data Journey
The other day I riffed a bit about the currently popular word “Modernization” in this blog post. In the data biz we also regularly talk about The Journey. There is the data journey, the journey to the cloud, even the journey to modernity. Every company has THEIR spin about the journey and it usually ends at THEIR destination! Of course companies selling a cloud solution want the journey to end in their cloud solution. But anyone selling a yellow brick road ending in THEIR Emerald City should have a credibility problem.
Twenty years ago the computer industry was selling their customers on a different journey. The journey to CRM. Salesforce.com ended up dominating that market and three of the things they did could apply to the data business today.
It turns out that the data journey now is just as difficult as the CRM journey was in the ‘90s. According to the NewVantage Big Data and AI Executive Survey 2019, 77% of the survey respondents say their data and AI initiatives are challenged, and fewer companies consider themselves more data-driven in 2019 than they did in 2017.
Most companies are still not data-driven, and won’t be anytime soon Business adoption of Big Data and AI initiatives must be viewed through a long-term lens – as a process and a journey. Only 31.0% of companies say they are data-driven. This number has declined from 37.1% in 2017 and 32.4% in 2018. We are headed the wrong direction. Firms need to adopt a long-term approach, focusing on the complex cultural challenges as a starting point.
The study also illuminated that fear of missing out is a big motivator for spending on data initiatives.
The motivation for further change is also quite high, suggesting more movement in the future. 75% fear disruption from new entrants, and 88% feel greater urgency to invest in big data and AI. 92% are driven by positive objectives—transformation, agility, or competition—and only 5% are driven by cost reduction.
In the late ‘90s companies were spending mountains of money on customer relationship management (CRM) software systems. CRM software companies from large (Oracle, Microsoft) to small (Pivotal, Onyx) were each selling their journey. Large numbers of CRM initiatives failed because teaching organizations to share information turns out to be a hard thing to do. By 2003 firms had spent over $2 billion on CRM software that was not being used and less than 40 percent of CRM implementations were deemed successful.
Then, in 1999, Salesforce.com came along and became a smashing success despite the challenges everyone else faced. Here are three things those of us on the data journey can apply today from Salesforce’s success two decades ago:
Watch the Gain to Pain Ratio
Every high performance athlete knows that time in the gym contributes to better results. No pain, no gain as they say. Early CRM was heavy on the pain in terms of hardware and software cost, and long and complex implementations. Salesforce.com was a web based solution, no hardware, no software, no long implementations. A company could buy just a few seats and start using it that day. Much less pain, and the gains were evident much sooner. Make sure the data tools you implement today return gains fast and don’t inflict outsized pain on your organization.
Don’t Get Locked Into One Journey
A favorite gambit employed when selling enterprise system is to get the customer committed to the journey before they know the size of the overall commitment. Once reputations are invested and alternatives turned away, more and more dollars must follow. It is extremely hard to pull the plug on a project, even if it is a year overdue and three times the budget. Salesforce.com worked on day 1, could expand as fast or slow as the customer needed, and delivered confidence to the business decision maker. Confidence there would be no meetings about running behind or over budget. Make sure the entire data journey is visible from the beginning and the journey has a roadmap you control.
Make the Safe Choice
At the height of the CRM implementation failures, many CFOs were turning to Salesforce because it was so much cheaper and so much more flexible that it just saved money. I bet some of the CFOs didn’t even need to know it would work. Salesforce just needed to be cheaper to be the safe choice. Companies were paying a CRM tax, and when it comes to taxes, the less you pay the better. Make sure the data journey you select is safe choice. Low cost, flexible, and proven to deliver.
I have no vested interest in Salesforce.com, I don’t work there and don’t own their stock. In fact, I don’t attribute their success to the quality of their product at all. Salesforce.com recognized the market opportunity and did a great job jumping in with a solution. Someone is bound to do the same in the data business this time around.