A discussion that I've noticed growing in strength amongst CIOs is all about keeping legacy systems ring-fenced, and using Web2.0 solutions to get little projects moving by quickly proving the value that can be gained from innovative solutions. However, the idea of integrating legacy systems with newer Web 2.0 approaches is not figuring in many IT plans for 2012.
This is perhaps unsurprising given the extent of current economic uncertainty and little sign of increased IT budgets. Systems integration is generally viewed by IT decision-makers as a way to spend money without getting a lot in return for the business. Indeed, there is a growing anxiety that the pace of technology change is creating a bigger future legacy problem for enterprise IT than currently exists. And that is saying something, given that 70-80% of IT budget is typically spent on maintaining existing systems. As with consumer IT, the way forward may well be to find ways to switch off more legacy systems, rather than prop them up via "hybrid" computing models that consume a lot of time and money to develop.
The big question for each IT department is deciding which workloads, if any, merit system integration spend, which can be left to run in steady state for the foreseeable future, which need to be migrated to new models and which can be switched off altogether. CIOs are adopting a variety of different strategies to answer this question. To quickly find out how your approach compares, you can swap tactics over coffee with your peers at Business Cloud Summit by registering for this Executive Leadership Briefing on the topic click here.
An example: should social CRM solutions run as stand-alone services?
At the moment most companies use CRM software to keep track of their customers in a database and log the communications they have with them using a client-server records-based system. The idea behind Social CRM, however, is that your customers become part of your marketing and customer service teams via social media forms of communication. The most successful examples of Social CRM put the customer in the centre of the support processes, embracing help and commentary from other customers. Such customer engagement is enabled by building dialogue on social media sites such as Twitter and Facebook.
Social CRM is all about monitoring and managing key indicators, such as customer likelihood of recommending and sharing with friends, their tendency to purchase and their overall customer satisfaction. These indicators offer opportunities for marketing and branding teams to build strategies on: in this context Facebook fans are not an abstract number, but have value and market reach.
However, the majority of vendors selling Social CRM solutions tend to be small start-up, new entrants. To date this has not mattered because buyers have been experimenting with solutions, running in stand-alone mode. It is easy to trial such solutions at low cost and risk because of the ease of access provided by Cloud computing. But, as social data becomes a more mainstream part of sales, marketing and customer service functions, will it need to be integrated with other aspects of customer data?
In the end, Social CRM won't just be about monitoring discussion forums, but will become connected to the highest value business activities involving the customer experience. So, yes, in another two to three years it probably will need to be integrated with other operations. I think this means that enterprise IT budget will go to vendors that can provide pre- integrated or easily integrated SaaS solutions. In other words, I don't think the market will continue buy into the old ERP model of providing a one-stop shop for functionality which requires an accompanying set of proprietary development tools and a list of system integration partners to connect SaaS and client-server. Conceptually Salesforce.com is probably heading in the right direction with Force.com, its acquisition of Radian6 and the development of its Service Cloud.
