Category Archives: CMR
When it comes to making money with technology a key is knowing who your customers are, what they buy (and why they buy it) — so that you can then offer them the products and services that they need. It is much easier to sell new products and services to existing customers than to attract a new customer — and a great new technology that allows you to discover unique customer segments one that does micro-segmentation.
Recently Microsoft acquired YaData, a company with a software tool that provides advertisers with richer targeting capabilities than they could otherwise have — CRM business intelligence. This software makes money for its users by more pinpoint targeting of what sells and how to offer complimentary offers.
Marketers for years worked with anecdotal information (a successful sale here being exploited in ads, or marketing what the competitors are selling. With micro-segmentation science is now clearly identifying what sells.
One great thing about YaData is that it includes segment discovery. Normally data mining (being able to make “what if I did this?” type of questions based on existing data) requires us humans to make the initial assumption. The problem with this is that our assumptions may be wrong and we waste a lot of time going down a path that is not fruitful.
YaData has behavioral targeting tools within its online advertising platform, which lets marketers provide more focused and relevant advertising. The benefit includes better ROI for advertisers, higher yields for publishers and more on target advertising for consumers. The software discovers and managemes market segments (rather than having people identify the segments as with traditional data mining). YaData uses a search engine, and the system is designed to discover consumer behavior patterns and then sort them into segments. This actually has a name all its own: segmentation relationship management (SRM). The YaData engine can analyze companies’ quantitative databases on the basis of hundreds of variables, in order to create clusters.
Interesting enough, YaData originally received much of its funding from Oracle, only to be sold to Microsoft! Strange world!
Hal Howard has been promoted to corporate vice president of Microsoft Dynamics ERP Research and Development, from general manager. Hal is an amazing person, who has overseen the four ERP solutions Microsoft acquired years ago Dynamics AX was Axapta, Dynamics GP was Great Plains · Dynamics NAV was Navision, and Dynamics SL was Solomon. . . and the terrific Microsoft Dynamics CRM which is modeled after Microsoft’s email product, Outlook.
I’m very late on my congrats — as this happened in January. Oops, sorry it took me so long to notice, Hal! Still, no one deserves it more.
Speaking of the Dynamics family, there is news on that front from Convergence 2010 Europe. Both the ERP products and the CRM offer have done very well, and the CRM product has penetrated the Fortune 500 — not its initial target. It was initially aimed at small and medium sized businesses. Unlike many CRM platforms, Dynamics does not cost a fortune to implement. The “big boy” CRM suites cost at least $1 in professional services to integrate it and customize it for every $1 spent on the purchase.
Microsoft Dynamics CRM integrates with Outlook so most people can be productive on day one — it is not a huge learning or integration curve — although it can be customized and integrated if need be. Now at Convergence 2010 Europe the long awaited cloud (SaaS — software as a service) version is said to be available very soon.
This aims Microsoft Dynamics CRM squarely at Salesforce.com — the leader in SaaS CRM. Microsoft Dynamics CRM 2011 and Microsoft Dynamics CRM Online will have launch events sometime in January 2011. The beta of Dynamics CRM 2011 is currently available, having been released in September. If you want to check it out, now is a perfect opportunity!
Since this blog is about making money (or saving money) with technology — which is the goal of good customer relations facilitated by CRM — definitely take a look at the beta of CRM 2011 and also consider the very attractive promotional price for Dynamics CRM Online of $34 (31 Euros) per user per month for the first year of service. This price is available to new customers and will start when Dynamics CRM Online is launched in January. The offer will end on June 30, 2011.
Again, congratulations Hal!
Years ago, I ran product management for several industry specific CRM data warehouses (in other words, business intelligence) for Teradata . My team worked with large Teradata customers including Wal-Mart, Bell South (now AT&T), Delta and Continental Airlines and other household names who were using Teradata to locate all their customer data and compile it in a system capable of analyzing customer buying trends. The goal was to increase cross selling and up-selling to existing customers as well as to retain them (at least the profitable ones!). Data mining (“what if I did X instead of Y”) type analysis could help target new customers as well.
It was interesting, and profitable. The customers targeted in different market segments (like Retail, Banking, Telecom, Travel, Hospitality and Healthcare) saved money because they did not have to “tweak” generic systems to their industry variances. It was profitable for Teradata, because a good chunk of development could be spread over multiple customers instead of starting from “scratch” each time.
No CRM solution can be 100% “off the shelf” — even for small businesses. There are certain things that are unique to the way a company does business. Yet, the more that can be “out of the box” and functional, the faster the rewards and the easier to get it up and running.
The reason I’m traveling down memory lane is because last week I received an email from Lauren Carlson, a CRM Market Analyst. She wondered if I’d be interested in blogging on the topic of industry specific CRM applications built around Microsoft Dynamics CRM.
If you’ve read my blog for awhile you may know I am a big fan of Dynamics CRM. My curiosity was raised so I check out her blog, “Microsoft Dynamics CRM Industry Solutions: Our 15 Favorites.” Since there are over 750 industry solutions built around Dynamics CRM this was quite an undertaking!
For easy navigation, the article links each industry to its corresponding solution:
If you take a look at any of these solutions for your industry segment heed these warnings: check out the vendor’s track record for keeping up to date with Dynamics CRM. Any time you have a third party “adding value” to another vendor’s product they can begin to slip behind in updates. Suddenly your third party application may not work with newer releases. Also, in your contract with the third party ask what happens if they go out of business. Any customer / vendor relationship is a bit like a marriage — so go into your relationship with your eyes wide open, and a pre-nup in hand!
It also behooves you to check some happy users who have been with the third party independent software vendor (ISV) for a few years, to make sure the customer support and “bug fixes” are fast and relatively painless. Keep in mind that you are paying a premium for the value add of the industry specific application (although you may get a discount on the CRM software) — do your due diligence to determine if the value you will get makes the additional cost of the third party application cost effective for your business.
One of the things I love most about the high tech industry is that it is never boring! There is always some new kid on the block trying to dethrone the current champ.
Once upon a time IBM was king and they decided to get into the then mom and pop business of the personal computer. They wanted to do this quickly and cheaply and since, thought IBM, the personal computer business was one reserved for geeks and nerds it would never be that big — what they hey, just partner your way into the space.
So IBM made a deal with a young guy who hadn’t even finished college. They bought some programming languages from him, and when the deal for an operating system fell through they let this guy scramble to find one to sell to them. The “guy” of course was Bill Gates, and the little operating system (Microsoft Disk Operating System, aka MS-DOS) was sellable by Gates to others and so soon Microsoft was a major force to behold.
One thing that has always appealed to be about Bill Gates (and I come out of the AT&T UNIX open systems model, so this is almost heresy to say) is his paranoia. Bill Gates realized what he had done to IBM and that someone could come along and do it to him. Thus when Xerox invented the GUI (graphical user interface) but did not exploit it, along came Steve Jobs and he introduced the Lisa — a little proprietary PC with a graphical interface.
Bill Gates took notice of the Lisa, and what came next — the Mac! Before you knew it along comes Microsoft Windows. Yeah, Windows was clunky and bug ridden, but here we are now at Windows 7 and Bill Gates’ paranoia was right.
Gates was almost always right!
It was Gates’ paranoia that got Microsoft to embed an Internet web browser into the operating system. They got sued by various governments for monopolistic tendencies for bundling the browser in the operating system — but Gates knew that long term if Microsoft did not have a huge share of the browser world they would eventually lose the operating system business as well. The Internet would put applications and information in the network (which AT&T foresaw back in 1985 — I was with AT&T Computer Systems back then and the vision their is reality now, but alas not with AT&T in the game).
So what is the latest salvo in the war? The two behemoths now are Microsoft and Google — and dare we say that Google is already winning the war? Google has an operating system on cell phones (the Android) which is giving the Apple iPhone a run for it’s money. Many pundits say that within a few years most of us will be cruising the Internet with our cell phones not our PCs. With the advent of the iPad (awesome, if you haven’t seen them) your books, keyboards, browsing, etc. can all be done on a little tablet. For Apple, still proprietary after all these years, the OS (operating system) is the iPhone OS, not the PC OS. Google’s Android will soon be on iPad clones coming in from China.
Oh yes, the major victors are about to change again.
So why mention Salesforce.com in the headline? Salesforce.com is a leading CRM (customer relationship management) software vendor. They use a SaaS (software as a service, not a CD you buy) model and have done very, very well. Microsoft recently sued Salesforce.com for nine patent infringements.
Now the rumor is that Google may buy Salesforce.com! Read this article in InfoWorld.
See what I mean about how interesting this industry is? I swear it is better than watching soap operas!
Product management is a high wire act that requires two skills that seem opposed to each other. On the one had a product manager must be artistic and innovative — able to spot trends, articulate the value to the market and envision the marketing plan. On the other had the role is very focused on the minute — ensuring that engineering is day by day fulfilling the requirements.
From identifying problems to be solved by the new product (or solution), to competitive analysis, to product roadmaps and strategy there are definite touch points in product management that have to follow along a project management type timeline. Pragmatic Marketing has famously articulated the steps common to the process in their Framework.
The functions of the job are normally tracked with Microsoft Office applications including Project, Excel and even PowerPoint and Word. This means difficulty in keeping the various sources in sync and reinventing the templates for each new release and offer. The seeming answer to the problem was a new class of software called PLM (product lifecycle management). Just as ERP (Enterprise Resource Management) automated the back office functions including finances and CRM (customer relationship management) automate interfacing with customers, PLM seemed like a brilliant solution that was desperately in need.
In a nutshell, PLM helps manage the entire lifecycle of a product or service from idea, through market analysis and need analysis and into design and manufacture, then to service and disposal. PLM connects people responsible in each steps as well as tracking necessary data, processes and business systems. In other words PLM automates and provides a product information backbone for the product development and delivery process.
By helping to automate, streamline and track the process of product development costs are reduced, time to market shortened and over all over sight and tracking greatly improved. The cost to implement is paid back quickly (if PLM is implemented properly), so this seems like a holy grail for product management.
So why is IBM abandoning ship?
IBM jus sold its PLM offering to Dassault Systèmes (DS). Sure, IBM says this is a strategic move and that DS is a partner — but since IBM has been a market leader in PLM does IBM see the handwriting on the wall? Is PLM an idea that just did not make it?
CIMdata, a PLM Consulting firm, writes that the PLM market grew 6.7% in 2008. That was the good news. CIMdata repoted that in 2009 PLM experienced a 12% decline! Revenue went from $15.96 billion in 2008, to $14.03 billion in 2009. This decline was larger than originally forecasted.
I’m not heralding the death of PLM. I’m a big proponent. It helps to standardize the process across product managers and indeed the entire organization. It is very cost effective. Still, is the sale of the IBM offering the canary in the coal mine? (Miners used to bring canaries into the mine with them and if the bird died they knew the air quality was declining, and left before they died themselves).
CIMdata states that the 2009 information is preliminary and reflects currency exchange rates—primarily the euro versus the dollar rather than a real decline in sales. CIMdata’s preliminary estimates indicate that investments in all sectors experienced declines in 2009 over 2008.
Is that true or is it trying to cast a good light on a bad revenue stream? CIMdata report (in their press release):
“Comprehensive cPDm dropped to $2.7 billion, a 10.9% decrease. Investments with cPDm Systems Integrators/VARs/Resellers decreased 10.6% to $3.87 billion. Digital Manufacturing investments declined 12.7% to $445 million. Multi-Discipline MCAD dropped 12.4% to $2.57 billion, while investments in Design-Focused MCAD declined 20% to $1.83 billion. The Simulation and Analysis sector of the Mainstream PLM market experienced a more modest decline of 6.4% to reach $2.13 billion in 2009 while Non-Bundled NC had a 19.1% decline to $475 million. The distribution of these investments as components of the full Mainstream PLM market is illustrated in Figure 1.:
Figure 1—2009 Mainstream PLM Market Sector Distributions (Millions)
(Market information represents CIMdata’s estimates)
“Mr. Amann commented, “While 2009 reflected a downturn in new PLM investments, companies retained maintenance and continued to spend on services in support of PLM activities already underway. Continuation of PLM programs indicates that more companies recognize the value that PLM provides in helping them maintain their competitive position during difficult economic times. Hardest hit were small- to medium-sized businesses who tend to be more subject to credit and cash flow issues. Many small companies had to stop their PLM investments while larger enterprises had the resources to sustain programs that were already underway.”
“Ed Miller, CIMdata President stated, “Even in economic downturns, those companies that sustain investments in PLM can become more efficient both by reducing cost and better leveraging existing resources. Importantly, investing in PLM helps position companies to develop and deliver market-leading products as the global economy improves.””
I hope they are right. Perhaps this is a blip caused by the economic times, but it is something to be aware of if considering PLM.