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?

Yet the compelling case remains elusive still. This situation does amaze me, as it seems clear that collaborative management processes, and the software that powers these processes, will drive the next great wave of business productivity. As my nGenera colleague Tammy Erickson likes to point out, the way corporations have organized and managed, and set up processes to get work done has not changed much in over 100 years … yet, the costs of communicating and collaborating have accelerated toward zero and the next generation of workers have grown up on these new collaborative technologies and processes … the train has left the station and it is not coming back. Also, John Chambers of Cisco tends to agree with this statement.

The compelling case for adopting collaborative management and supporting technologies is that they will power the biggest productivity wave since the re-engineering / ERP software / Web 1.0 revolution. However, rather than automating transactional processes, we are now “stimulating and influencing discretionary effort” to drive productivity (hat tip to Tammy Erickson for codifying this concept).

In the old way of work, employees were locked into specific roles and in specific departments, even though they may have had skills and value to offer outside of their strictly defined role. In a company that has adopted collaborative management, the talent is networked and peer reviewed, much like we review products on Amazon or restaurants on Yelp. An employee with available ‘discretionary effort’ (including the skills, and references and ratings to support the claim) can easily be matched brought into the fold by project teams to contribute in a meaningful way for the individual, team and company. Their work becomes unbundled from the task-oriented role of the past, and more woven into the fabric of the company’s operations (e.g. an engineer not only designs products, but has a role in engaging with customers and supporting the products he or she has designed in the past).

In the past, this employee may have had an effective utilization of 60% of their capability … under collaborative management, it is likely to be closer to 100% if not above it, and the employee is more fulfilled and engaged in his/her job.

This is not a theoretical example or exercise. From May 2007 to November 2008, I led the corporate development effort at nGenera where we raised two significant equity financings, one debt financing, closed and integrated six acquisitions, and divested one business unit. Throughout this period, I was the only full-time headcount in corporate development. Other than attorneys, we did not use any outside consultants or advisors. The entire effort was run on relatively large teams made up of employees from functions across the company, each applying discretionary effort away from their full-time ‘role’ to be part of the team. We accomplished an incredible amount operating in a collaborative management process, all without hiring full-time individuals.

Furthermore, take the role and process of customer support as another case example. In the past, a company would have a role defined for a customer support rep. The number of reps, and the management overhead needed to operate customer support overall could be sized by the expected call/contact volume, and the software would be purchased to help automate these transactional roles so each rep could handle more and more contacts. A well run company would have no involvement in customer support by the people who were designing and making / delivering the products or services, and the company would do a decent job of pattern matching similar issues from across the customer base and publishing solutions to common problems. nGenera has solved this exact problem with our Customer Interaction Management, or CIM, software – including, chat, email, phone, knowledgebase applications.

The acceleration of the cost of communication and collaboration to zero presents a new opportunity, almost 180 degrees opposite of what the ideal customer support organization was trained to do in the past. With the simple addition of a customer community, the pivoting of the CIM software suite to a Social CIM (or Social CRM) suite, and the investment in the complexity of fostering and operating the community effectively (no small task), a new collaborative customer management process is possible, with significant productivity and other benefits as an output.

With collaborative customer management, customers can connect with each other to provide support and solutions to common problems, even providing better outcomes than the best synthesis the company itself could provide. Moreover, the employees that are designing and making / delivering the products and services (i.e. the engineers, product managers, marketers) will apply some percentage of their discretionary effort in the community – seeing and helping with real customer issues, and incorporating this real-time interaction into product and service improvements immediately and new product and services offerings that are in demand. Again, this productive use of discretionary effort is likely to also lead to higher job satisfaction and engagement for the designers and engineers, fewer customer support people and overhead, and better results for customers. Lastly, the senior executive team now has a direct line of sight into who are their most engaged employees and what are their key customer, product and services issues.

Now, apply this similar line of thinking on unbundling work across the enterprise to other processes, such as team selling, talent management, citizen engagement, mergers & acquisitions integration, investor relations, and others, and the productivity improvements are compelling. Moreover, the overall competitive velocity and agility of the enterprise will increase dramatically.