Does this sound familiar?

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• "The line between departments will disappear"

• "There's a lack of established success metrics"

• "Too much IT involvement"

• "Companies with point solutions have difficulty integrating those to look at the entire solution"

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It should. They could be quotes about our industry but are actually CRM industry quotes from nearly a decade ago. So, if history repeats itself it might be helpful for the “Web 2.0,” “Enterprise 2.0” and “Social Networking” players to take a quick look back at how other industries have evolved as we speculate our future. For example, quite recently, the term Customer Relationship Management (CRM) didn’t exist. That industry evolved over 20 years from “database marketing” to “relationship marketing” and settled on CRM around the year 2000. That&rsquo;s when the market became energized by intensified competition and easier to use, more cost effective and valuable software solutions.

Houston, we have a framing problem

Similar to our current market, the CRM industry started out very fragmented with lots of players focused on many component parts. These pieces ultimately connected--both in terms of the software solutions and with respect to the concept and value in business people’s minds. Now, CRM is a multi-billion dollar, growing industry with a few big players and innovative challengers. As soon as the CRM market started to frame the problem and solution in a holistic way, and accompanied it with solutions that tied the pieces together and connected them to business value, CRM finally began to make sense for businesses.

Larva, cocoon or butterfly?

I’d argue that our multi-monikered industry is 20 years old. It began with “personal productivity software” and then “groupware,” and “knowledge management.” It now searches for a salient concept and a higher value for connecting the pieces into a networked whole. We refer to this next evolution as “Social Productivity” and frame the opportunity as the next evolution of productivity software. But that concept will take time to grow. As an example of where we are now, today I had a conversation at the Web 2.0 Berlin conference with a multinational company that told me that their executive management resisted their “collaboration project” until they reframed it as simply “an Intranet solution.”

Seeing past the 2.0 hype

CRM had its own hype cycle, too. It was going to “forever change the way businesses connected with their customers.” The reality is that it provided positive, but incremental improvement in efficiency and visibility. CRM is now a required element to be competitive with the top players in a market. Social Productivity is also part of the “2.0” hype cycle. A lot of our industry’s messaging is focused on social technology forever changing cultures and the way people work together. I think that promise is similarly over-inflated but I can understand why presenting this polar extreme is important in the short term. Longer term, Social Productivity Systems, will be a required element and part the set of mission critical systems like CRM, ERP, and PLM.

Navel contemplation vs the windshield

As our industry’s echo-chamber continues to examine the Petri dish of alternative technology tools, potential customers wait for us to start making sense. If we can’t look down the road and make sense of how we’re adding value, how can the rest of the market? They simply want to know, “what can I do with this stuff I couldn’t do before?” and “how can this add enough business value that it becomes a need-to-have?” The CRM market used to suffer the same malady. Those industry discussions were focused on “the power of contact optimizers” or “which campaign-management player was going to win.” Pushing toolboxes at companies gets us nowhere.

Bursting the bubble

Another problem that plagued the CRM industry in the beginning was that all the assets were being stored in lots of solutions all over the company. Newer CRM solutions only added to the problem. Although they may have been easier to use or more powerful, they still became CRM asset bubbles disconnected to the rest of the company and their systems. As long as the customer market sees what we do as “aliens from another planet,” we won’t be able to gain serious traction. Our solutions must connect in smart ways with our customer’s asset and technology investments.

IT needs viable alternatives, not blame

Yes, there is friction between lines of business, executive management and IT. This isn’t new. IT has been living with this type of friction for decades. It was true for the CRM market, too. Sales and Marketing did what they wanted because IT wouldn’t help or IT forced a solution on Sales and Marketing they wouldn’t use. It’s always easy to paint IT as the bad guys. I do agree that IT has the opportunity to reshape their value but they need viable options, first. Right now, there’s not much choice for IT to help beyond solutions that are either too small or ones that lines of business don’t want. This will change soon.

The potential industry impact

It’s interesting to chart the revenue opportunity and market size if you believe there is a relational pattern between the last 20 years of CRM and the last 20 years of productivity software. When you look at the market growth of CRM, you can clearly see the value of connecting the dots. I couldn't find Gartner's database or relationship marketing market size for the 1980s-1990s but did find nearly 10 years of Gartner predictive market sizing starting in the optimistic .com mania in 1999 (hopefully we don't have a similar bubble). CRM is now a $7.4 billion sized market growing at 13% a year. When you think about a value that’s realized across all departments within companies, my sense is that the Social Productivity market can be even bigger.