Future-Proof CRM Solutions to Support Digital Business

April 30, 2019

Contributor: Laurence Goasduff

Application leaders must evolve CRM applications to support new business models.

Pursuing customer-centricity as part of a digital transformation often results in changes to customer relationship management (CRM) applications. This poses a challenge for most CRM and customer experience (CX) leaders, as they need to deliver a 360-degree view of the customer and architect future-proof CRM solutions.  

“ In 2019, the priorities of 40% of organizations will be speed first, then cost and then scope”

Olive Huang, VP Analyst and speaker at the upcoming 2019 Gartner Customer Experience & Technologies Summits in London and Sydney, outlines three key CRM application directions and trends for the next five years.

Trend 1: CRM applications will be faster to implement

The debate about on time, on budget or within scope used to be answered by prioritizing just scope and cost. In 2019, the priorities of 40% of organizations will be speed first, then cost and then scope. Back in 2004, CRM projects took, on average, more than three years to deploy. The average in 2018 was closer to 18 months.

While averages don’t tell the whole story, the pattern is clear — CRM projects are being delivered more quickly.

For many organizations, the original uptake in software as a service (SaaS) CRM started with application needs within departments requiring a quick deployment, faster innovation cycles, attractive user interfaces and easy integration. Speed was a strong trigger, and the need for speed has not dissipated. Organizations are now putting even more focus on it.

In the next five years, Gartner expects organizations will intensify their investments in capabilities to improve the speed to change. This will involve investment in software with prebuilt industry components, high-productivity application platform as a service (aPaaS), intelligent business process management (iBPM), augmented analytics, DevOps tools and agile deployment approaches, all of which favor speed and offer faster delivery.

Trend 2: CRM projects will focus more on delivering benefits to customers and employees

CRM projects can have a wide range of objectives. They focus on reducing the cost of service, sales or marketing, and on revenue growth. Other projects concentrate on improving margins by focusing on pricing and discounting processes. Most CRM projects have a combination of both business goals, benefiting customers and employees. However in 2018, more than 65% of CRM investments were justified on the basis of the benefit to the organization, without taking into consideration any benefit to customers and employees.

“ Organizations are turning their focus toward improving CX”

Today, things are changing. With customer power increasing and a lack of customer trust in large organizations and institutions, organizations are turning their focus toward improving CX. Modern privacy regulations such as the EU’s General Data Protection Regulation (GDPR) make executives rethink how they treat customers’ data. The voice and expectations of the millennial and Gen Z workforce also provide additional drivers for change.

Therefore, organizations are being forced to establish a more balanced set of CRM objectives. While improved business performance is critical to justify spending, today, a better CX and more engaged employees are of greater importance.

Trend 3: CRM applications will be designed to flex to support new digital business models

Although most digital transformations are optimizations of existing business models, CEOs expect substantive true business model transformation during the next five years.

Unfortunately, most CRM software vendors are not directly supporting the digital business model change. This forces end-user organizations to go for a consulting and industry ISV (independent software vendor) partner-run approach that often leads to expensive consulting and implementation projects.

When organizations start pursuing new digital business models, they often have to build, rather than buy, a larger proportion of their CRM solutions — a trend highlighted by Airbnb, Alibaba, Amazon, Baidu, Facebook, Netflix and Uber.

In the next five years, Gartner expects the emergence of a new type of CRM vendor that will focus on one industry, with functionalities supporting digital transformation objectives.

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