CRM 1.0 has been a series of processes, technologies, and methodologies organized around the operational tasks that were designed to institutionalize a way of managing customer-company interaction.

CRM 2.0, while incorporating what CRM 1.0 does, also incorporates the personalization of those customer-company interactions and the integration of the customer into the planning, strategies and direction of the company through use of tools, products, services, and experiences so that the customer feels that they are participating in the companies that they choose to do business with.

CRM 1.0 concerned itself with the customer as the object of a satisfactory sale. CRM 2.0 concerns itself with the customer as the subject of a satisfactory experience.

In their own ways, they both attempt to institutionalize practices that allow better customer-company interaction. Their respective visions are driven by the expectations of the social forces in command of the contemporary business ecosystem of its era (we are narrowing this conversation to just business here regardless of the broader social implications). In the CRM 1.0 days that would be the company and the enterprise value chain associated with it. In the CRM 2.0 days a.k.a. right-this-2008-second that would be the very empowered customer and the peer-to-peer social networks associated with it.

But there is one other facet that can't be ignored for CRM 2.0 - and that is that we're not just talking about personalization, but we're talking about humanization.

Humanization? Huh?

What that means is that because the contemporary empowered customer is enmeshed in some way with a network of peers, their expectations are dramatically changed. They are straightforward changes, though. They expect that they can interact with a company the same way that they interact with a friend or a peer who they can trust. That means that they expect a personal relationship to the company, not just to a person in the company, though that may be how the relationship manifests itself a larger number of times. That also means that they expect that the attributes, the characteristics of that deeply personal connection they have to a peer is part of the way that the company interacts with them. That means that trust and transparency have to permeate the company's DNA. That means that the company has to have something distinct about them. That means that the customer is expecting the company to converse with them, not push corporate hype at them. It's why you see contemporary marketing so geared toward buzz and word of mouth and engaging customers in conversation through use of social media like blogs, or engaging internal customers in a valued conversation through a wiki.

Its also why coolness and style are now factors in that conversation between customer and company - because they are intimate parts of the conversation between friends.

This level of humanization is fundamental, but not necessary defining for all companies. While customers have a much more demanding level of expectation, they still simply purchase things in a utilitarian fashion from a plurality of companies they deal with, and they don't have that level of expectation from any particular company that they interact with like that. They treat the company as the (the shoe is on the other foot) object of a purchase. But the state devoutly to be desired by the company is not just the repeat purchaser, though that's certainly good, but the advocate who is going to say, "this company loves me the way I love it." So they have to gear their strategies toward getting that kind of customer (whether B2C or B2B, dammit) and settle for the customer who merely returns to buy.

Why I'm Even Writing This

This is my usual long winded highly conceptual way of talking about something that is important to me. But first a little longer, higher speed wind (take that any way you want). As y'all know, I'm not exactly unopinionated. I tend to be pretty passionate about what I write and I make it REAL clear whether I like what a company is doing or dislike what a company is doing. If I sense injustice, I go after it. If I think a company has done something good, despite my prior dislike of their actions, I say it and I make the necessary turn. I have no gripe against individuals unless they act in a mean spirited way and then I'll go after them. But all in all, I have no particular love or hatred of a company per se - just their actions get me hot - either in a good way or a bad way.

Edelman Trust Index

Some of you may have heard of the Edelman Trust Index - a measure of what kind of characteristics govern whom and how you trust. The most common trusted source for the contemporary soul is "someone like me." I trust those who are most similar to me. That would ideally suit a company that does it right too. Not only has the company provided me with what I need to sculpt my version of a relationship with it, but I actually see that the company's culture is "like me" and that they are able to institutionally reproduce that state - meaning if someone at the company who I've been dealing with who I feel a kinship to, leaves, though I would miss that person and perhaps continue my relationship to them outside the company, I would still not have a diminished relationship with or feeling about that company.

The True Subject: Neighborhood America

All right. All that said, I'm now going to get on with it, because, even with my vendor-agnosticism a constant suit of emotional armor for me and my willingness to judge vendor companies, not by only their culture, but their actions - and to do that both universally and discretely, I have to admit there is one company that has reached that exalted state of piercing my armor - that I actually have that peer-to-peer institutional relationship as well as a number of personal friendships and warm acquaintances. That would be Neighborhood America. But I'm going to make you wait until later this week for the why that company fits this concept, because I REALLY want to post this blog entry and that's gonna take me some time. Consider this part 1.

Found out that SAP has a deeper commitment to communities than I thought. They have a community called BPx that has 350,000 members consisting of business analysts and application consultants, IT project managers, and process developers on the techie side and BPM guys, UI experts, change management gurus on the functional side. Run by a really forward thinking dude named Marco ten Vaanholt. A "social-smart" guy. Title is Global Head, Business Process Expert (BPX) Community (see Marco's comment below that led to this correction). They also have a 1.2 million member developers community called SDN....

Mike de la Cruz, SVP of Mobility & Analytics (CRM related stuff) seems to be the guy who drove the execution of the SAP CRM Blackberry app and he did a GREAT job. What's funny here is that when I mentioned his name on Twitter, I heard from several of the Tweet-producers that they knew him or had gone to school with him. Amazing. He is REALLY known around the industry....

Eric Clapton did what turned out to be a great show because the second half of it was cranked up by Clapton considerably from the first half. He did all his old stuff in the second half and more acoustic, quieter blues in combination with some serious electric blues discharges the first half. But he left the crowd at the end roaring. He is a god. No doubt. I saw him in his last (until the 2007 revival) Cream concert in 1969 or 1970 whenever it was in Chicago with my brother. Their final U.S. tour....

One curious thing about SAP's thinking...they made a major effort to de-emphasize not just Business by Design but what they called the "By Design platform" at one point. In reference to Business by Design they kept saying they had "Business All in One" which, of course, is their on premise small business applications. Not a notable success either. Which is me saying its not a very good product in another way. That's upsetting. They may be having some development problems, which, Hennings Kagermann alluded to in one brief comment during one presentation (I forget which one) - delayed delivery. But the almost vehement shoving of Business By Design under the table (not the bus) was disconcerting, because to play, they are going to have to have it. This is not an option. I've heard too many different release dates from too many sources to speculate on which one is accurate. But SAP HAS TO RELEASE A SOLID ON DEMAND PRODUCT TO PARTICIPATE IN THE CRM AND ENTERPRISE APPLICATIONS WORLD. Their time is pretty short too. I hope they do. Because all the rest seems to be so on target.

• 24/7 availability of services
• want to be needed, recognized
• Dialogue, experience control
• Give them, show them you have domain expertise

The optimal enterprise here would not be the current one which he called the function driven enterprise, but instead the "Intent-driven Enterprise." That is a company that knows not just what I want, but knows my intent - what are the reasons I want what I want, and what WILL I be interested in down the road - the knowledge of which they got from me, senor, senorita, senora customer. He then identified the top "functionality" requirements for the Intent-driven Enterprise:

1. It is in sync with evolving needs (key here is evolving)
2. It engages community opinions
3. It is reliable & trustworthy
4. It allows independent ratings
and
5. It uses "like type" comparisons (similar here to the Edelman Trust Index findings - the most trusted person I know is someone like me).

He (almost) closed with what I would call a perceptual model for the future customer. He said the customer had to have the illusion of free will, of the availability of multiple paths for exploration and of the means to achieve several goals with the business. While the business is needed to provide it, the business reality is that the paths are probably pre-determined, that there is one process that is truly available and that one goal is there for the customer. Michael wasn't advocating this, he was saying that's what the business reality is and probably will be. This is very much the same concept in a somewhat different framework that Joe Pine 2 advocates in "Authenticity" which is fake real in a manner of speaking. My take on this has been more benign since I don't think that fake ANYTHING is what needs to happen but I do think that you don't need to own luxury, you need to "feel luxurious." You know the old saying, "whatever floats your boat?" That is what I mean, but the business has to see it from what it costs them to make the boat that the customer wants to float, and no one in their right mind can argue this is wrong. I do think there is an optimal state possible, though. I think that the engagement of the entire ecosystem of the company for the customer opens up options for the customer that give them increased degrees of freedom while at the same time allowing the enterprise to execute its business plan successfully. Meaning a "real real" collaboration. Primarily because there are a lot of forces involved in an ecosystem - not just one company and one customer but multiple value chains associated with either the customer or the enterprise. What Michael (though not in this presentation, more in discussions) and I make abundantly clear in our own inimitable styles is that business value and customer value while sharing the word "value" are two very different ideas that have to work in conjunction for both the customer to get what he/she wants & the business to get what it wants.

Pay attention to this "intent-driven enterprise" thing - its important and this is the first I've seen it. I hope that Gartner gets on board with Michael's thinking here. It would do them well to be more than cursory about it. This is really good stuff.

1. For those of you who don't know it. SAPPHIRE is SAP's annual conference, which for the last 3 (I think) years has been a joint effort of SAP and ASUG, their user group umbrella organization. This is a MASSIVE conference - with over 15,000 attendees - apparently stuck down here in Orlando FL for a few more years (too bad on that one) at the Orlando Convention Center. Which can handle the traffic. I just don't love Orlando.
2. My approach to figuring this all out is straightforward, I listen to the stuff said on the stage, then I go and talk to people and, ahem, eavesdrop on the more casual conversations that go on and watch and listen for the smaller things that indicate cultural and intellectual transformation. So, for example, if someone says, as Henning Kagermann, the CEO of SAP, did, that SAP is committed to a culture of co-development and co-innovation, then I go out and find the signs that they are by seeing what they are actually doing and hearing how people are talking

Follow the Yellow Brick Road

• Co-innovation - That was specifically discussed with the recent RIM/SAP alliance to provide all of SAP's applications, starting with what might be a brilliant execution from what I saw of SAP CRM for the Blackberry. Driven by SVP of Mobility and Analytics Michael De La Cruz on the SAP side and a variety of folks on the RIM side including my good bud, Paul Briggs as the marketing guy for RIM in this effort, the application I saw was easily the most comprehensive and user friendly CRM application for the Blackberry bar none. I saw it in pre-production so I don't know how its going to play but even in that state it was fully integrated with the RIM alarm and calendar and contacts and accounts. In other words, the native Blackberry apps - which makes sense given that in the spirit of co-innovation, RIM actually developed the app for SAP - which is a marked departure, by the way, for BOTH companies in how they do things. That alone for those of us into the arcane machinations of company politics and culture - is important. But the idea of SAP doing it alone is seemingly not entirely a thing of the past but has become simply one of the approaches. While coopetition is not new, as old as 1990 or 1994 or something (a Novell guy wrote a book by that name), the idea of collaboration and co-development was never something that was culturally comfortable - apparently until now.
• Web 2.0 - what made this particularly interesting was not just the new use interface of SAP CRM 2007 which was I think the best looking interface and perhaps the most functionally useful and simple one I've ever seen in a large enterprise CRM application, but also the fact that SAP claimed that they were "living the Web 2.0" - which is the harbinger of their cultural change. Now, I treated that as a marketing claim until I had the ability to speak with some of the senior management at the conference (from CEO Hennings Kagermann - a really nice guy - to SVPS of varying title to VPs to some of the less senior) and I had the ability to listen in on some "ordinary" organic conversations - and I think they are being authentic. Or as we say on the street (yeah, Paulie, you're quite the street guy aren't you? Right.), they're real. Keep in mind, I'm a skeptic not by nature but by profession to some degree. But the level of interest and activity among a decidedly younger management and staff than I expected (given that I'd talked with several of them in the past) around Web 2.0 tools and the freedom to innovate which seems to have seized control over the last year or so or some more recent time period is amazing. They don't seem to always move as glacially as they did in the past though they still (as I can personally attest) have their icebergian moments. (yes, I made that word up. But you know what it means don't you?). They seem able to take an idea and incorporate it quickly into their thinking. For example, I had a meeting with one SVP who was pointing out to me (proving it, really) what they were going to do in future generations of their products around the social applications - which was on a more significant scale then I expected. I mentioned something that I thought they needed to consider, a lightbulb seemed to go off in his head and he then made serious note of it and I do think he'll follow up. None of that "traditional" SAP "we'll do it and you'll like it" approach that characterized the past. In multiple discussions with analysts from Gartner, Forrester, AMR and IDC, there was a universal agreement amongst them that there is something different about SAP as a company and all really like the new SAP CRM 2007 and the Blackberry implementation of SAP CRM out there besides. I'd like to think that while I certainly am naive enough to be made a fool of on occasion, these folks (about 6-8 of them) are far more seasoned and "foolproof" than me and they saw what I saw. SAP is living the Web 2.0 "philosophy" or whatever you call it and they are different than they were even a year ago. What's amazing is that I'm not sure what triggered it at all. But it's good.
• Analytics and Insight - Insight in particular was a word that was thrown out there a hundred times. Now, this is maybe the one glitch in the soft message. This is now a pillar of the trio of pillars because they acquired Business Objects and they have to do SOMETHING with it. Actually it seems to be a good acquisition but this is the one part that smacked a bit of self-aggrandizement. Its forgivable. Its their conference, for godssakes. What they emphasized here, though, was still a plus - the idea of providing real time analytics embedded across applications so that dynamic insights could be provided in real time.

  There is one piece of advice that I hope they take. I noticed that there was almost far too much consistency to the conversations about SAP product releases. So for example, in every discussion I heard or had, without exception, when it came to the discussion about the Blackberry CRM product, whether in a speech or on in a conversation, they all began the discussion with how people use the alarm on the Blackberry to wake up. EVERY-LAST-ONE-OF-THEM. Obviously everyone is well schooled in what the messages need to be around product, but it comes across as plastic which isn't good. A little messaging freedom might be nice.

  That's a niggling thing though by comparison to the sea change that SAP seems to have undergone. Look, maybe over the next several months, they'll break my heart and turn out to be what they used to but I don't think so. This one is here to stay.

  If I had to venture a guess as 2008 keeps moving inexorably to its end - I'd say that salesforce.com is going to be challenged by SAP and Oracle for CRM 2.0 leadership. Not expected at all, but welcomed. I'm not sure I'm right because my big caveat is that I haven't seen either Oracle or SAP new products in live customer environments over time and THAT is the final arbiter of success, culture change or not.

  As far as SAP goes, they've revitalized themselves and it seems unanimous among those I spoke with here - analysts, some customers, SAP staff members - that the change is deep and real.This is a far cry from what Microsoft did at Convergence at month ago to itself at this location and a far cry from what SAP did to itself a year ago in Orlando. But this time, SAP did good. Real good.

  Good for them.