Evolution of Business in the Research Paper
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The major benefits to using a SaaS platform for integrating social networking, CRM and marketing systems are the significantly lower costs of operation, the pay-as-you-go approach to leasing only the application areas used, and the flexibility of scaling the computing workload up or down based on the unique requirements of a given company's strategy. SaaS has become the platform of choice for managing social networks, as Facebook, Twitter, Friendfeed, millions of blogs hosted on WordPress, and Foursquare are all hosted on the Amazon Web Services (AWS) platform which is the most popular SaaS-based computing platform in use today (Lin, 73). The SaaS platform has rapidly emerged as a dominant platform for CRM systems as Salesforce.com today has over 60,000 implementations in place, each one numbering over 100 users or more (McKay, 15).
With the emergence of SaaS as a dominant platform for hosting social network applications, CRM systems and marketing applications, there continues to be a corresponding growth in the depth, breadth and complexity of integration across these applications (Shih, 12). The dominance of the Facebook Application Programmer Interface (API) is evidence of just how pervasive this integration strategy of using SaaS as the galvanizing point of integration of social networking data, CRM, and marketing systems (Langlois, Elmer, McKelvey, Devereaux, 415). The power of these integrations is seen in the proliferation of applications that are launched on Facebook on a nearly daily basis, the business model of Facebook selling their customer data for advertising, and the eventuality of Facebook becoming a CRM system (Shih, 12). What's emerging as a powerful platform for social commerce that is going to redefine what e-commerce is for the foreseeable future (Bernoff, Li, 36). This shift in commerce online is going to also redistribute the power within online communities and the role of online retailers over time. There is also the power of a very popular and pervasive API that acts as the unifying integration point across literally thousands of applications over the Web at any given time (Langlois, Elmer, McKelvey, Devereaux, 434). The power of this to redefine CRM is discussed in the following section. It is apparent however from evaluating how pervasive the Facebook API is being adopted that a network effect is occurring within just the e-commerce areas of social networks today, sometimes called social commerce by Constellation Research, Gartner Group and others (McKay, 12). The creation of the long-awaited private trading exchanges which have been discussed for decades by industry analysts including QAMR Research, Gartner, Forrester and many others could eventually happen not due to specialized transaction workflows as many believed but due to the ubiquity of APIs from social networks creating entirely new trading networks (Langlois, Elmer, McKelvey, Devereaux, 420). The power of these networks would eventually rival and in some industries replace traditional e-commerce over time.
The perils of a pervasive use of APIs and the creation of social commerce networks is that once the identity of a consumer is compromised, the entire network of sellers and any hackers who have broken into the systems have that data (Even, Shankaranarayanan, Berger, 152). The costs of security for these social commerce systems is going to be significant and continually grow over time as the complexity and integration options of APIs for social networks continually improve and gain greater flexibility and agility to respond to company's needs over time. The perils of security only at the browser level of a social commerce platform is where many of the integrations of social networking, CRM and marketing systems are today due to the focus more on Web programming languages over server-based, enterprise-wide security for social networks (Even, Shankaranarayanan, Berger, 152). This will have to shift to be more focused on the needs of the social networks to create more resilient and hardened security layers in the areas of social commerce.
The promise of these systems however far outweigh the risks and the potential for very high levels of transaction velocity also outweigh their apparent costs as consumers shift to social networks as the preferred platform for buying (Bernoff, Li, 42). Not only are the APIs from Facebook and other social networks combining more relationship data with transaction support, they are also supporting catalog management and pricing variables with increasing regularity over time (Langlois, Elmer, McKelvey, Devereaux, 431). What is emerging as the promise of these systems is the ability to have a complete distributed order management system that unifies the traditional CRM structured data from legacy
customer systems, insights from pricing and transactions from marketing systems, and the development of real-time personalization of the shopping experience. Social network data integration with CRM systems to support relationship-based selling could eventually become the next-generation Enterprise Resource Planning (ERP) system by quickly interpreting customer demand and reacting to it with perfect order performance over time (Columbus, 37). This in effect will completely redefine the value chain of a business. The ability to gain insights in real time from customers' and their orders while in a social network, interpret and act on the data using legacy CRM data and then use marketing systems for predictive analytics -- all taken together will re-order the value chain of any business (Chakravorti, 299). While the term disruptive innovation is often used to describe a new approach to doing business, this level of data integration across social networking, CRM, and marketing data is going to completely change what e-commerce is and where it is going as a selling and service strategy globally. This tight level of synchronization however will not occur there is a much stronger level of trust and focus on relationships instead of transactions in the businesses just now exploring these areas of modifying their value chains and business models as a result. The next section analyzes how the traditional definition of CRM is changing based on the integration of social networking-based data, which is often called Social CRM (McKay, 15).
Defining Social CRM
The traditional definition of CRM is centered on capturing customer data with the intention of creating strategies for attracting, selling, and serving customers. This transformation of CRM has been directly attributable to the change in CRM strategies over time, shifting from being purely a database extension of records management and customer data retrieval to the development of more role-based software that can more precisely align with the needs of customers. The shift in CRM based on social networking data integration has taken selling and service strategies out of being so myopic and focused only on the immediate to seeing a true 360-degree view of the customer over time so that trust can be more effectively earned and kept through consistent system and strategy execution
(Chakravorti, 299). Integrating social networking data into CRM applications has also led to an immediate level of feedback of the customer experience as well (Ku, 1085). The immediacy of feedback and ability to better manage the user experience based on having real-time social networking data, especially about brand and product preference and experience, is critical for the success of any system integration effort (Chakravorti, 299). Integrating social CRM data then leads to a much more experiential definition of CRM than had been the case in the past.
There is an abundance of CRM definitions yet the most pervasive is provided by Gartner Group as a series of eight modules shown in Figure 1 (Gartner 2001). These eight components of CRM are defined by the vision of uniting a company's unique value proposition and market position with the needs of the customers, delivering a valued customer experience in the process.
Figure 1: Gartner Conceptual Definition of CRM
The definition Gartner has created looks to unify the role of CRM metrics, technology, information, processes and valued customer experience, all synchronized through organizational collaboration. The role of social networking integration in the context of this diagram is in two areas. First, social networking data integration is completely defining the increasing the value of the customer experience, and also fueling the development of more effective strategies in the areas of organizational collaboration and internal performance. The point was made earlier of how pervasive SaaS-based integration has become in this area of the market. The use of platforms for social networking, CRM, and marketing systems integration include the Force.com platform, the Amazon Web Services (AWS) platform on which the majority of social networks are hosted on, and the use of the Google AppEngine platform each of which has API integration completed to Facebook (Langlois, Elmer, McKelvey, Devereaux, 443). What emerges from an analysis of the Social CRM market using the Gartner framework shown in Figure 1 is an ecosystem that can quickly take in data and contextualize it for use in defining a 360-degree view of customers in real-time. The role of real-time analytics is also proliferating throughout social networks as companies increasingly are looking to create linguistic models of the massive amounts of unstructured content that permeate social networks and platforms today.…
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