- Where Insurance & Technology Meet

CRM: Old Technology At The Eye of the Perfect New Technology Storm

Some of you have commented that we’ve been harping on Customer Relationship Management (CRM) for sometime now, without a whole lot of solid reasoning. Fair comment.

What we’d like to do on this almost perfect summer’s afternoon is to take a weather reporter’s view of CRM. We’ll look to the past for evidence of incorrect forecasts, look to the present to see how a perfect storm could be forming, and then make fearless projections about the future. In the calm eye, you might see tried and true CRM moving inexorably forward, in spite of the crazy winds around it.

As usual, we’d like to ask you, our expert prognosticators, to offer your own forecasts.

It sounded good at the time …

In the early days of this century, there was a surge in interest in the implementation of CRM systems for large and not-so-large organizations.  There had been a technology stall for a few years prior to the turn of the century to handle the nasty Year 2000 Bug, but with that out of the way, there was interest in getting ahead with the new internet driven business models.

In 2002, Steve Butler from eMarketer stated:

Multiple surveys from early 2002 confirm that e-business managers are continuing to prioritize the deployment of customer relationship management (CRM) solutions, as well as make enhancements to the customer-facing features of their websites. These trends serve as confirmation that businesses continue to see the value of building upon their earlier CRM implementations.

In 2005, Cathy Lone-Dawson, a recognized expert in CRM, wrote:

Many insurance companies now consider the development of a customer-centric focus crucial to building and retaining market share. Without a clear, articulated customer value proposition, each insurance company will be measured by its customers on lowest price.

This dire warning turned out to be true.  Hindsight being 20-20, there were obvious barriers.  First, and foremost in our minds, many insurers had a technical debt to pay.

In a post in this space last week, Patrick Vice noted that after the Year 2000 passed, many companies had ancient technology that had been patched just enough to print policies for the new century.  In order to accommodate new product, regulatory changes, broker demands, etc. there was a lot of work to do.  CRM just wasn’t a priority.

And CRM wasn’t that easy to do.  Clarence Smith, Assistant Vice President of Conning & Company, and author of a 2002 study of CRM in personal insurance, noted: “When CRM fails, most of the time it’s not because of the technology; rather it’s because of corporate culture, a failure to identify customers’ needs up front, and lack of a rigorous organizational assessment.”

Fast forward to now, plus a bit

CRM has progressed, and Gartner estimates that it will continue to grow steadily, but its use will be driven by different factors that are top of mind for the C-Suite inhabitants: “seek the ability to improve overall customer experience, profitability and sales.”  Moreover, it will be marketing, as much or more than IT, which will drive the use of CRM in the enterprise.

And what will the drivers be for the CMO?  The other technologies that Marketing has to adopt: cloud, social, mobile, big data, and the Internet of Things (IoT).  Joanne Correia, research vice president at Gartner, says, “These drivers are spurring a critical need for more traditional operational CRM … This further validates businesses’ focus on enhancing customer experience and consistent investment in CRM software.”

Gartner notes this is an opportunity for IT to prove its worth, using proven technology (CRM), to ‘tame the dragon’ of the new technologies.  Of course, if CRM fails, this level of risk could cause irreparable damage to IT.

What do you think?

Will the High Pressure of CRM create the calm centre of the wild winds of social, mobile, cloud, big data, and IoT?  Give us your best look at the future below.

And  join us at the Executive Forum (ICEF2014) on October 7.  There will be a concrete examples of the dynamic mix of technologies which will define the next decade.