Open Source Strategies

A blog about open source software and business models, enterprise software, and the opentaps Open Source ERP + CRM Suite.

Wednesday, May 21, 2008

Evolution of Enterprise Software

A couple of months ago, I wrote about the hierarchy of enterprise software needs, and today I would like to share with you how I think those needs have changed.

A long, long time (say ten years) ago, a company might decide that it needs to manage its sales effort more effectively. It might decide that a CRM system is what it needed, then buy servers, license a package, and then train, or at least try to train, its salespeople to use the system. They are told that they need to enter all their account and contact information into the system, log all their calls and meetings with clients, and fill out forms to record the sales opportunities. They will also have to make periodic forecasts with the system.

Needless to say, some sales people might resist, but it's up to management to make sure that they use the system. Some of these measures might be draconian -- I once read about a company who would not pay sales commissions on orders which were not first created as opportunities in its CRM system! If the salespeople ultimately use the system, however, it could be very helpful, because with it management could see what's going on -- how many leads there are in the pipeline, what stage all the sales opportunities are, which customers have gone dormant, etc.

Today, we're in a different world. Thanks to the digital explosion of the past decade, important data such as accounts and contacts, not to mention e-mails and appointments, could be spread out over Blackberries, cellular phones, Facebook, LinkedIn, Google calendars, Gmail, Hotmail, Yahoo Mail, and a thousand other places. While there's still a core organization whose data is maintained in accounting, order entry, and warehouse management systems, data vital to the success of the organization is also increasingly spreading out like a web into other systems and devices.

This means that the enterprise software of the future could no longer meet an organization's needs by solely looking inward to the data that's available inside of the organization. Rather, it will need to fan out into this web of critical data, much like a search engine spider would, and connect with all the important online services and devices used by key employees. It must be able to bring all that information together with data from core systems like accounting, order entry, and warehouse management, to coordinate activities and provide analysis.

This is the next evolution of enterprise software, and it's where we will be taking opentaps Open Source ERP + CRM. We've got a good start already:
  • We can sync data with mobile devices and online service providers
  • We have a very robust, normalized, operational data model that could captured the true richness of business relationships and transactions.
  • Finally, we have some very strong open-source business intelligence tools bundled with opentaps that can make sense of it all.
Our next step is to tie all those pieces together, so that our users could see not only what is tracked by traditional business systems but what is happening in the entire web around their organization, perform detailed analysis, and take actions based on that information.

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Friday, May 09, 2008

Social Networking and Ecommerce

There's an article about social networking and online retailers in this month's Internet Retailer.

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Friday, May 02, 2008

Why CRM Fails Many Companies (and Can We Fix It?)

A study just released by the Chief Marketing Officer Council showed that a large percentage of marketers are unhappy with their CRM systems. Specifically:
  • 45% believe CRM systems are not effective enough
  • 85% do not think they can integrate disparate customer data sources well
  • 94% do not believe they have an excellent knowledge of customer demographics or transaction histories
As a result, even though nearly a third of the companies surveyed have customer churn rates of over 10%, two thirds have no system in place to go after these lost customers. In effect, most companies' marketing efforts resemble a "leaking bucket" -- a lot of effort is spent getting customers in, but not much is done to keep them.

Part of the problem may be cultural. Perhaps we think of "growth" as adding new customers rather than serving existing ones better. A big part of the problem, though, is surely technological. It is harder to figure out how to generate additional revenues from our existing customers than to go after new ones. For example, there's not much involved in renting mailing lists, putting out more advertisements, or paying more for online clicks. But how many companies could really pull together all their transactional data from their retail stores, online stores, and other sales channels, and use that data to figure out what they should be doing?

This is exactly the problem we will try to solve with opentaps analytics, where we're building a set of standard tools to help you better understand your customers. We have just gotten started with this effort and made some good progress, and I will make more posts as we go along.

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