Technology of innovation


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Explains how businesses can use CRM to foster and implement customer-centric innovation, enhancing the customer experience and creating internal efficiencies to establish a clear competitive edge.

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Technology of innovation

  1. 1. W H I T E P A P E RThe Technology of InnovationUsing CRM to Enable Customer-Centric Innovation Executive Summary As companies struggle to do more with less, innovation has become a critical factor in business success. Organizations must innovate not only to improve efficiency and productivity, but also to differentiate their company and create a competitive advantage. This white paper highlights the important role technology can play in the innovation process and looks at how a customer-focused approach to innovation can be supported by flexible customer relationship management tools. It explains how businesses can use CRM to foster and implement customer-centric innovation, enhancing the customer experience and creating internal efficiencies to establish a clear competitive edge.
  2. 2. The Time for Innovation commitment to innovation. Said founder Jeff Bezos, “My view is there’s no bad time to innovate. You Current economic conditions have created both challenges should be doing it when times are good and when times and opportunities for today’s businesses—the yin and are tough—and you want to be doing it around things that the yang of market change. Most companies face a your customers care about.”2 This continued commitment combination of fewer employees, reduced budgets, higher to innovation and to the things its customers care about expenses, and scarcer resources—and a subsequent helped the company regain its leadership position and the greater need for productivity—which demands that market’s trust. businesses get smarter. How can companies accomplish more while working with so much less? It’s clear that Innovation can provide organizations with a competitive doing things the same way they always have won’t work. edge that helps avoid the slide toward commoditization, Innovation is the only answer. especially in today’s economy. According to Jeffrey Immelt, Chairman and CEO of General Electric, “The only In spite of the challenging enviroment, many view source of profit, the only reason to invest in companies economic downturns as an opportune time to seize in the future is their ability to innovate and their ability to market share, and innovation is an excellent means of differentiate.” In other words, it’s not so much a specific achieving this. According to innovation that sets a company apart, but the company’s Bill Gates, founder of Microsoft ability to innovate and differentiate. The concepts ofInnovation can provide Corporation, “Never before in innovation and differentiation are indeed closely related:organizations with a history has innovation offered an organization stays ahead of the curve by doing promise of so much, to so what it does better—and differently—than competitors.competitive edge that helps many, in so short a time.”1 Differentiation is the key to attracting customers,avoid the slide toward cementing relationships, and fostering loyalty, because it Although economic challengescommoditization are still putting the squeeze on gives customers and prospects a compelling reason to many industries, tough times choose one organization over another. can actually act as a catalyst to growth. Smart companies recognize this and look for opportunities to innovate their way to market leadership. But how do they accomplish Fostering Innovation this, and where do they start? Is innovation the product of independent genius, or is it something that can be fostered and taught? Many leading This white paper explores innovation as a kick start to commentators believe that innovation is not so much a business growth and enterprise technology as an enabler mysterious alchemical art as a natural product of the right of innovation. More specifically, it examines the advantages kind of environment and conditions. But what are these of a customer-focused approach to innovation and how conditions and how can they be created? customer relationship management offers a way for companies to implement customer-centric innovation and A Culture of Innovation differentiate their offerings through a focus on customers. First and foremost among pre-requisites for business innovation is a culture of innovation. A corporate culture Exploring Innovation that encourages independent thought, values new ideas, doesn’t stand too much on ceremony and hierarchy, No matter how smart and savvy a business is, eventually and provides opportunities for experimentation—and its products or services become a commodity. When even failure—is certainly much more likely than a rigid began selling books online many years ago, and inflexible top-down structure to invite innovation. the concept was considered revolutionary. Today, books Companies that recognize that continuous improvement are available for sale online from, is not just possible, but necessary, even if the company’s, and hundreds of smaller online venues. current processes and offerings have been proven to Several years ago, the mighty Amazon watched its stock be effective, are much less likely to stagnate and cling fall to record lows, even when other Web companies to outdated ideas. Not surprisingly, many business rebounded. However, what helped Amazon become management theorists emphasize the value of innovation one of the world’s top e-commerce companies was a within organizations today and suggest specific means to create an innovation-friendly corporate culture. While 1. Frazer, Gordon. “How to Nurture Innovation in Your Business.”, December 6, 2007. URL: http://www. 2. Burrows, Peter. “Bezos on Innovation.” BusinessWeek, nurture-innovation-in-your-business.htm. April 17, 2008. URL: http://www.businessweek. com/magazine/content/08_17/b4081064880218. htm?chan=magazine+channel_special+report. Pivotal CRM | White Paper 1
  3. 3. an in-depth examination of these means and theories is yet still be implemented quickly. The benefit is twofold: beyond the scope of this paper, it is nonetheless critical first, the initial implementation process is completed to highlight that organizational culture can be a key factor before the initial requirements become stale, and second, in a company’s ability to innovate effectively. By creating follow-on changes can also typically be implemented conditions that encourage new thinking and promoting quickly, enabling the company to seize the opportunity to a continual reassessment of business processes with experiment and innovate. an eye to ongoing improvement, companies can foster innovation. The next step is taking this innovation from Flexibility and Customizability idea into practice. Although it is important to choose technologies that are quick to implement, speed is not the only factor The Technology of Innovation to consider. Some software, for example, can be While the right corporate culture is vital to nurturing implemented quickly, but if its tools cannot solve the innovation, at a certain point, more tangible considerations business problems for which they are needed, then come into play, not the least of which is the ability of the speed of implementation becomes a moot point. One organization’s infrastructure to accommodate innovation. of the most valuable technology traits with regard to A company’s technological supporting innovation is an innate flexibility to model underpinnings are a vital specific processes and business needs. Cookie-cutterA company’s technology part of this infrastructure, applications that force a business to conform to thetools and systems can as many companies today application’s specifications, rather than the other way around, can foil a company’s attempts to innovate andbecome either great are heavily dependent upon technology to support their differentiate, because they may constrain or dictate thefacilitators of innovation— manner in which data or business processes can be businesses processes. So whator great impediments managed. This does not mean that pre-built solutions happens when they want to introduce innovation into these necessarily impede innovation—in fact, they may in business processes? In such circumstances, a company’s themselves offer innovative solutions—as long as the technology tools and systems can become either great application framework gives an organization the flexibility facilitators of innovation—or great impediments. to embed its own solutions and ideas as well. The most successful companies map their innovative processes It is thus important for companies that want to be ongoing into flexible technology solutions to support efficient and innovators to recognize several key attributes that make differentiated business processes. enterprise technologies and applications more amenable to supporting innovation. These attributes include the Interoperability and Ease of Integration ability to be implemented quickly, high customizability, In addition to a flexible architecture, innovative technology flexibility, ease of integration, and adaptability. must “play well with others.” No single technology will fulfill every need for any organization, and most Speed of Implementation organizations find the need to select a number of best- No matter how impressive a technology promises to of-breed solutions to satisfy their enterprise application be, years spent implementing it will rob an organization needs. But systems that operate in silos obscure an of the opportunity to innovate. Many companies that organization’s ability to obtain a 360-degree view of the are large or have complex needs fall into this trap, business and create the onerous need to switch back and selecting megalithic enterprise systems that are highly forth between multiple systems and databases to try to capable but very slow and cumbersome to implement, complete a process or reconcile a comprehensive view of requiring specialized knowledge, extensive consulting, the organization. At the same time, integration can prove proprietary coding, and significant time and resources. costly, time-consuming, and challenging. For technology Unfortunately, the requirements and processes this type to promote innovation, it needs to integrate easily with of system is implemented to support may grow outdated other technologies and build upon them. Proprietary and ineffective by the time it is actually up and running. languages and impediments to integration stifle the In many cases, completing the implementation project creative process and detract from innovation. becomes the focus, and innovation falls by the wayside. And once the system is finally implemented, the last thing Adaptability the company wants to think about is making changes to Innovation is a journey, not an event, so technology that it. In this manner, even a robust and capable system can enables innovation must be able to change and evolve. become a roadblock to innovation, stifling the will to try out Markets, customer needs, competitive landscapes, new ideas and hampering the momentum and timeliness and business strategies change over time, sometimes of innovations when they are pursued. very rapidly, so no set of software requirements can For these reasons, it is important to choose agile solutions ever be immutable or entirely complete. Truly innovative that can meet the company’s current complex needs technologies support an iterative approach to problem- Pivotal CRM | White Paper 2
  4. 4. solving and allow for continual change to accommodate with, provides solutions for, and offers service to its new ideas and needs. In addition, the technology must customers. allow for easy updates and seamless modifications—not just at implementation time, but throughout the company’s As the technology that supports these organizational evolution and growth. functions, a customer relationship management (CRM) solution can play an important role in helping an organization create and implement customer-centric A Customer-Centric Approach innovations. to Innovation Innovating with CRM Innovation and differentiation can take place on many different fronts within an organization, and there are Customer relationship management software is one of the thus many different approaches to fostering innovation. most valuable technologies to effect business change and Focus is important, however: a general commitment spur innovation. In addition to helping organizations more to innovation on all fronts sounds appealing, but may effectively identify and meet the needs of their customers, in practice be too vague and diffuse to be effective. CRM directly impacts business results by increasing Companies seeking to innovate often struggle with efficiency, improving focus, and streamlining customer- determining where to focus or begin. facing operations. Today’s customer-centric organizations must be able to quickly respond to customers’ needs, In recent years, the idea of a customer-centric approach and CRM acts as the enabler—helping companies create to innovation has gained many innovative customer-focused processes and efficiencies proponents. By developing a that will ultimately deliver a competitive edge.By developing a strong focus strong focus on customers,on customers, companies companies can gain insight Managing customer relationships using CRM tools helps into the needs and preferences firms grow organically by retaining valued customers andcan gain insight into the strategically deepening their relationships with them. Using of their valued customers andneeds and preferences of find innovative ways to serve CRM tools to deliver an innovative customer experience,their valued customers and them better, an approach that organizations can build strong differentiation and customerfind innovative ways to serve can refine and improve not just loyalty, locking in profitable customer relationships—athem better the customer experience, but strategic capability that adds value to a firm. In addition, also the internal processes and CRM can create internal innovation, automating processes, tools used to serve customers. embedding consistency and efficiency throughout the A customer-centric approach can also help an organization enterprise, and increasing overall productivity. pinpoint which types of innovation will prove most Not all CRM systems are created equal when it comes compelling to their potential and existing customers. to supporting innovation. As with any other technology, the fundamental attributes discussed above—the ability A Culture Focused on Customers to be implemented quickly, customizability and flexibility, Just as an innovation-friendly corporate culture is ease of integration, and adaptability—play a crucial role in a pre-requisite for innovation, a customer-focused determining the extent to which a CRM system will be able culture is essential to customer-centric innovation. A to support an organization’s innovation. customer-focused organization puts its customers’ needs and preferences first in business decision-making. There are two major interrelated focal points for innovation This does not mean that a customer-centric company with CRM: innovating the customer experience and cannot also be a profit-driven business; it simply means innovating the user experience. that the organization recognizes and has internalized institutionally the idea that truly sustainable profit and Innovating the Customer Experience growth is best achieved by satisfying customer needs better than the competition. One of the ripest opportunities for innovation lies in optimizing the customer experience. The most successful A customer-focused culture percolates throughout the CRM initiatives start with a strong commitment to a entire organization, finding particular concentration in the customer-centric vision, from which a sound strategy is functions that interface directly with customers: sales, developed for embodying this vision within a differentiated marketing, and customer service. These customer- customer experience. With this vision and strategy in facing departments offer the greatest opportunity for place, an organization must then determine how to fully customer-centric innovation, providing fertile ground for embed this approach within their processes and systems. improvements in the way an organization communicates Pivotal CRM | White Paper 3
  5. 5. A flexible CRM solution provides the means to put this Intuitive CRM interfaces are essential to usability, as they plan into action, offering tools, data, and workflows that can offer familiarity and decrease the learning curve for enable a company to craft and deliver its unique customer new or reluctant users. Interface and navigation flexibility experience reliably and consistently. can also be extremely valuable, allowing a company to organize and present information in the way that Organizations that concentrate on the customer makes most sense for its structure and users, not just experience offer special value to customers and deliver a generic or arbitrary information architecture based on a hard-to-imitate advantage over competitors. This is the underlying database structure, as is the case with especially true in industries many CRM applications. Flexible CRM interfaces give where commoditization has companies the freedom to take creative and innovativeA flexible CRM system become a major issue, such approaches to the way information is accessed by,empowers organizations as in the financial services presented to, and used by end rethink the customer arena. If an industry is well established and customers The best CRM systems even put the power to innovateexperience and the way it view the products or services into the hands of each end user. By enabling users tois delivered and then put as too similar, differentiation personalize their views, create their own shortcuts, andinnovative new approaches becomes a challenge. In the assemble their most frequently used tools and informationinto action end, companies compete sources—even third-party applications and data feeds— mainly on price and face the into their own personal CRM portals, companies can let downward spiral of margin end users reinvent the application to suit their individual compression. Customers stand to lose the most, as they working styles and needs. Flexible and innovative CRM rarely receive any sense of added value from a relationship empowers flexible and innovative end users. with the company. Innovative companies realize that CRM can help add that “something more” that attracts One innovative approach to CRM that has worked for new customers and keeps older customers satisfied many companies is to view the CRM system not as a and loyal—perhaps a new method of delivery, a more single application, but as the portal to all of the different personalized service, or more tailored product features. applications users interact with on a daily basis, eliminating application-switching and centralizing their experience. The The right CRM tools enable companies to expand their aforementioned ease of integration becomes a particular horizons and take advantage of the latest technologies advantage when this approach is used: CRM solutions to enhance the customer experience. For example, an that make it easy to pull in other applications enable agile CRM system can be deployed on mobile devices companies to rapidly execute on this “hub” vision without to help company personnel interact with prospects and excessive delay or expense. The most innovative CRM customers effectively not just from the office, but wherever solutions even come with the applications employees they need to—on the road, at a tradeshow or conference, use most—Microsoft Outlook, SharePoint, and the Office even at the customer’s place of business. A flexible CRM suite—already embedded right within the CRM system, system empowers organizations to rethink the customer saving companies the integration work and delivering a experience and the way it is delivered and then put seamless experience to end users. innovative new approaches into action, and it can thus become a driving force of innovation. As companies devise innovative new products and ways of serving customers, these advances must be reflected in and supported by the CRM system. Highly Innovating the User Experience: flexible and customizable CRM workflow capabilities offer Working from the Inside Out a tremendous advantage in this area. The right CRM tool will enable a company to model any new business Innovating the customer experience using CRM may be process or need within the application, no matter how the foremost strategy in customer-focused innovation, but complex or innovative. It is precisely these innovative an important complementary strategy involves working processes, mirrored within the enterprise CRM system to from within an organization to innovate the CRM end-user ensure consistency, that enable organizations to deliver experience. Although it is often overlooked in the process innovative customer experiences. of CRM selection, user adoption can be one of the greatest stumbling blocks in realizing returns on a CRM By innovating the CRM user experience, organizations can investment. CRM systems that are too cumbersome or quickly realize new efficiencies and increase productivity. laborious to use are frequently abandoned before they Not only can this have a direct effect on the bottom line; can show a return on investment. In contrast, innovative it also supports a better customer experience. More CRM systems allow companies to deliver not just the effective, better-informed users who can access the unique customer experience they desire, but the unique information they need to serve customers with fewer clicks user experience required to deliver it as well. and step through streamlined processes to complete Pivotal CRM | White Paper 4
  6. 6. tasks more swifly are capable of exceeding customerexpectations with every interaction. And as the company Conclusiontakes steps to refine and innovate its business processes, Innovation has become a business imperative—aan adaptable CRM system gives the organization the necessity for today’s organizations to differentiate andpower to act quickly and see faster results. compete. But innovation can be a tall order, requiring both a culture of innovation and the technology to support it.Using the right CRM system to innovate the userexperience leads naturally to improved productivity and Of the many different approaches a company canbetter service, yielding an all-around win: for customers, take to innovation, a customer-centric appoach offersusers, and the company overall. particular promise, as it helps ensure that the innovative ideas an organization pursues will be meaningful and valuable to those a company must satisfy above all toInnovation Beyond CRM succeed: its customers.Innovative companies need innovative CRM. But whatdoes innovative CRM look like? As the technology systems most fundamentally involved in customer-facing functions, customer relationshipMany of the required attributes for CRM innovation have management solutions can make or break a company’salready been mentioned: the ability to be implemented, efforts to introduce innovation. The right CRM system for acustomized, integrated, and adapted quickly and company that strives to be a true innovator must embodycost-effectively, as well as deep flexibility that allows the the key attributes of innovation-friendly technology: thesystem, its workflows, and its interface to be tailored ability to be implemented, customized, integrated, andprecisely to specific needs and processes of the adapted quickly and easily, and the fundamental flexibilitycompany, its departments, and its individual end users. to support unique and new approaches to the customer and user experience. The best CRM platforms will evenBut the most innovative CRM solutions offer even more: extend these capabilities beyond the sphere of CRM tothey offer the possibility of innovating beyond just CRM. become the enterprise-wide engine for innovation.Think about it: CRM is a vital system for any company, With a focus on customers, a commitment to innovation,and certainly the focal point for customer-centric and the right supporting CRM tools, any business caninnovation. But the opportunities to innovate don’t end become an innovator and highly differentiated marketwith the traditional CRM functions of sales, marketing, and leader, limited only by its imagination.customer service. Therefore, even the most innovativeCRM system will reach its limits in terms of its abilityto support a company’s innovation—unless it’s able toextend beyond the boundaries of traditional CRM.This is where some of the most exciting innovations inCRM are occurring today. A truly flexible and innovativeCRM platform offers the tools to support rapid andongoing application development, enabling a companyto continue to build upon its CRM solution and createworkflows and tools to support virtually any kind ofinnovative process they can imagine. The solutions theycreate benefit from the same invaluable attributes as theCRM solution itself: speed and ease of implementation,integration, customization, adaptation, and more. This cantruly make the CRM system an innovation engine acrossthe entire enterprise. Pivotal CRM | White Paper 5
  7. 7. Pivotal CRM: The CRM of InnovatorsCDC Software’s Pivotal CRM is a flexible, powerful customer relationship management solution for companies thatwant to use CRM strategically—to model, enhance, and streamline their unique sales, marketing, and customer serviceprocesses, not dictate them. Built with the user experience in mind, Pivotal CRM offers unparalleled flexibility andcustomizability, enabling companies to tailor the system precisely to their users’ needs. With a Microsoft-style interfaceand role- and task-based navigation, Pivotal CRM is a familiar and comfortable system for users, reducing the learningcurve and increasing the speed of user adoption. Pivotal CRM embeds Microsoft Outlook and SharePoint right withinthe CRM system and integrates closely with the Microsoft Office suite, bringing data to the user when and where theyneed it, for optimal efficiency. Pivotal CRM offers the unmatched combination of robust features and flexible platform tosupport companies in taking innovative approaches to customer relationship management—and beyond.Experience Truly Innovative CRMTo learn how Pivotal CRM can help your company innovate and differentiate, call us at +1-877-PIVOTAL or visit us © CDC Software 2009. All rights reserved. The CDC Software logo and Pivotal CRM logo are registered trademarks and/or trademarks of CDC Software