As the Web 2.0 movement began to penetrate into the enterprise several years ago, customer engagement immediately became an interesting application point of this new technology. In recent weeks, starting with Paul Greenberg moving the debate on Web 2.0 and customer engagement forward by putting a stake in the ground on the name – Social CRM (and a tactical win for Oracle), the discussion on Social CRM has really lit up.

Perhaps this is because customer engagement appears to be the quickest path to value for the enterprise with Web 2.0 technologies … a point we at nGenera believe in given our investment in the Customer Interaction Management (CIM) space with our Talisma acquisition, a CIM application suite we have been transforming to a Social CIM suite.

I have always felt that the term Customer Relationship Management (CRM) was hi-jacked in the client/server days of enterprise software – where the value proposition was focused on internal efficiencies and automating transactional processes. Paul Greenberg highlights the evolution of CRM in his post, which also highlights the fact that the influential Enterprise Irregular group is also now fueling the Social CRM discussion.

In Ross Mayfield’s post, he highlights the fact that the tip of the iceberg is about all we’ve seen so far on Social CRM. Notably, he shares data from the Consortium for Service Innovation (CSI) which highlights that 90% of customer conversations never touch the enterprise. These “unknown unknowns” are now possible to know. Why? While the customer always had a voice, the customer’s distribution capability was limited … she could tell her friends, family and colleagues, and if daring enough try to navigate the labyrinth of the company contact center. Today, with Twitter, Facebook and other communities and social networks, the customer’s voice is amplified in a massive way … to hundreds or thousands at once, and then exponentiated by friends amplifying to their friend networks, and so on. Customers are now demanding that their voices be heard and companies can no longer ignore this desire / need for engagement.

The Social CRM movement has the potential to re-claim the term CRM for its real purpose – engaging customers and driving a virtuous cycle of value for the customers, company and shareholders. In fact, in my recent post Unbundling the 20th Century Mindset, I refer to this Social CRM/CIM movement as a case example of the opportunity for enterprises that embrace collaborative business processes and the supporting Web 2.0 technologies for these processes.

Social CRM is not a transaction automation effort, and it does not throw away the investment companies already have made in Transactional CRM; rather it builds on top of it. The contact center does not go away, but it and its infrastructure gets leveraged. As Vinnie Mirchandani notes here, it’s more about engaging customers quickly when they need / want it, and proactively handling situations before they get out of control. Effective integration of collaborative management processes with the contact center and the important workflow capabilities that exist there today is key.

For example, while a sales team manages a sales cycle effort in a Transactional CRM system, many others participate in bring a deal to fruition and a lot of effort and collaboration goes into the effort. Social CRM would bring a collaborative capability on top of Transactional CRM to allow the legal team, partners and even the prospect to collaborate on the sales cycle to bring the deal to a close. At nGenera, we have an application called Wikiforce that does this connected to Salesforce.com.

More critically, Social CRM is proactive and it does drive productivity improvements for the enterprise. It is proactive, in that it enables the people within the company (not just the support staff, but also the marketers, engineers, product managers, etc.) to proactively find and engage customers where they are engaging on the web about the company. This may be on Facebook, Twitter, Industry communities, or other social networks.

nGenera bet over a year ago that Social CRM would be a key beachhead in the effort for enterprises to transform themselves into the era of collaborative management. I’m glad to see the discussion and interest in this area heating up. What are your thoughts … is Social CRM real, and a true catalyst in the collaborative management movement, or is it just another overhyped technology movement?