3.3 CRM roots 39
3.3
The last type of "analyst" is both the most common and the most often
forgotten in terms of its importance to IT market development. Through pre-
dictions in both financial markets and company stock ratings, stock analysts
influence a great deal of the public's psyche with respect to IT sectors. They
are not only very public influencers, but most analysts are also very well
informed about the sectors and companies that they cover, understanding not
only the underlying technology but also the companies from a cost accounting
standpoint.
It is important to note that all of the major groups of influencers men-
tioned have been influenced by and have their beginnings in academia. In fact,
Materials Resource Planning (MRP), which was invented within the halls of
academia, was the first enterprise-class software package to be implemented
within major corporations. It spawned the need not only for mainstream ana-
lysts, but for management consultants as well. Similarly, marketing research
continued to draw from the academic field. Most if not all of the techniques
used in this field were first created in marketing departments throughout the
world's major universities. So, academics too have influenced the develop-
ment of CRM.
In fact, CRM had a varied beginning. While Siebel and Brock Control
Systems would each have the world believe that they invented the category,
the concept of"putting the customer first" predates the advent of the software
industry. The roots of CRM as a term and as an application category are
varied.
CRM roots
Have you ever wondered where the term "CRM" actually came from? After
all, on one level, the idea that one can manage a relationship is a bit obtuse.
When I'm in serious trouble with my wife, I bring her flowers. If I were to
describe this as relationship management, I might find myself on the way to
the florist once again.
Regardless of one's personal feelings about the term, there must be an
industry analyst somewhere who is very proud of coining the phrase~or is
there? In fact, the term itself has a somewhat murky history. According to
the Aberdeen Group, Hugh Bishop "created the concept of CRM, which
describes a new class of software designed to enhance the competitive position
of forward-looking organizations by forging more effective customer-supplier
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40 3.3 CRM roots
relationships. ''~ His mother must be proud. So, indeed must the mothers of
Gartner analysts, who are widely attributed with the creation of the term; 2
Dick Lee, who claims that his use of the term "relationship management" in
his book
The Sales Automation Survival Guide
won a contest at a DCI trade
show in 1988; 3 and the people at Innovative Systems, who have ostensibly
been using the term for ten years. 4 While many experts lay claim to the phrase,
one of the earliest and most credible references to it is attributed to Professor
Jagdish N. Sheth of Emory University, who began using the phrase in the
early 1980s. 5 Why is there so much ambiguity about the source of the term?
Fred Berkamp of Inteliant Corporation states it best:
While the CRM term is fairly recent, it grew from a combination of
terms help desk, customer support, ERP, data mining. It evolved
because none of the previous terms could cover the topic well enough
and because some of the terms (ERP) have grown to be met with a
great deal of distaste in the mouths of the business world. I have read
and heard conflicting stories concerning who was the first person to
wrap the phrase customer relationship management into its present
form and make it sound appealing. I am not sure that we may ever
know who was first. I can say that the term has been derived from a
number of trial and error approaches to being more receptive to the
customer's needs. We haven't completely finished the task of build-
ing the perfect answer for the world, but we are working on it. 6
Regardless of the origins of the term itself, generally people accept the fol-
lowing timeline in terms of the development of CRM as a software category
(although CRM is, as noted in Chapter 1, not solely about technology at all)"
9 Late 1970s: Marketing research firms begin to study customer satisfac-
tion as a subdiscipline.
9
Mid-1980s: Materials resource planning (MRP) is first introduced.
MRP allows companies to make more accurate purchasing forecasts by
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www.aberdeen.com/ab_company/bios/bishop.htm.
Bob Thompson, CRMGuru.com.
Dick Lee, High Yield Marketing.
Jim Willson, MarklT Information Services, Ltd.
Chris Davies, Chairman, Relationship Marketing International.
Fred Oberkamp, Intelliant Corporation, posting on CRM Guru, www.crmguru.com.
3.3 CRM roots 41
projecting consumer demand to the amount of materials that are
required to meet it. Companies also begin to make widely used cus-
tomer databases, replacing paper with easily accessible data.
1988: Telesales and telemarketing technology are first introduced to
the call-center, making it far easier to conduct consumer satisfaction
studies.
1990:
Customer service and support applications are introduced into
the call-center.
9 1992:
SAP releases R/3, which integrates a traditional MRP framework
with accounting modules. MRP thus evolves into enterprise resource
planning (ERP). One of the primary benefits for ERP implementers is a
more centralized control over data. Disparate databases are replaced by
fewer, master databases. One of the primary centralized databases is the
master customer database. Large ERP practices develop in most man-
agement consulting firms. Existing analyst firms add ERP practices
and new analyst firms are founded (e.g., Benchmarking Partners and
Advanced Manufacturing Research, now AMR Research) that deal
exclusively with ERP and supply chain issues.
9 1993: Siebel Systems is founded and releases a sales force automation
package to compete with the market leader, Brock Control Systems.
9 1994:
The World Wide Web is introduced, effectively changing the
rules for customer interaction.
9 1996: Electronic commerce is first introduced. Most of the "com-
merce" comes from downloads of software.
9 1998:
The term "CRM" comes into popular
use 7 as
analyst firms and
management consultants begin searching for the next ERP.
9 1999: The last of the ERP implementations designed to fix the Year
2000 bug are implemented, causing the market for ERP applications
to slow.
9 2000: CRM is seen as the next growth area as an application category.
A quick perusal of this history reveals several important themes that one
must keep in mind as we look at analysts' views of CRM:
~
Much of today's CRM experience came from outside of the analyst
community.
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m
7. KCG MarketView: CRM Redefined beyond the Front Office and out to the customer, Page 17.
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