I stopped short in my recent blog post about Open SaaS of expressing what I thought may be the next logical evolution of enterprise software, which is the hosting of free open source business applications with a subscription for expert services and on-demand consulting; ie Service-as-a-Service.

Phillip Lay, from the Chasm Group Advisors, does a great job of articulating this need in a recent newsletter:

"Why has no one until recently been talking about the continuing need that customers have for services to accompany their SaaS investments?  After all, complex problems in business and governmental organizations haven't disappeared, particularly those that require IT in some form or another.  All the emphasis to date on the product delivered as a "service" (i.e., by subscription as opposed to a perpetual license plus maintenance) merely shows how little the software itself "matters" today as the be-all and end-all.  And even if the price of the software portion of the overall "service" goes to zero, customers will still pay for actual services that help them to solve important business and other problems.  The difference will be in the way that services are delivered."

"What is likely to no longer work is the conventional time and materials model of expensive "manual" services, now seen to be highly inefficient unless enabled by increasing use of automation.  What must be made to work is to have virtually every service substantially automated and deliverable online once the service in question has been transformed from a custom, never-done-before, thing to a repeatable and relatively routine activity."

This is akin to HP giving away printers to sell the ink or Gillette giving away razors to sell the blades. Eventually we'll see on-demand organizations giving away hosted applications to sell their systems integration, configuration, or management services.

Complex problems and concepts must be broken down into smaller problems in order to manage them. The Customer Experience Management Maturity Model, or CEM³ (based on the Capability Maturity Model), provides a framework for understanding and improving processes implemented to manage the customer experience.

I'll be expanding on this model over the course of several articles, but here's a high level description of each maturity level.

Initial
Customer experience is typically limited to static HTML or a basic web site describing products or services. Processes are ad-hoc. Success is dependent on the heroics of individuals.

Repeatable
Basic project and content management processes are put into place to make customer interactions repeatable. Customer experience workflows and processes are documented. Management has visibility into major milestone accomplishments and project status.

Repeatable customer experience processes may be limited to a single group within an organization, such as Marketing. Different processes may be implemented for different projects.

Defined
CEM processes are tailored from organization wide, cross-functional standards and processes. Standard processes are used to establish consistency across all customer touchpoints.

Managed
All interactions are measured within the customer life cycle. Dashboards are created to monitor CEM Key Performance Indicators (KPIs). Management can identify ways to adjust and adapt the process to particular projects without measurable losses of quality or deviations from specifications. Organizations at this level set quantitative goals for customer experiences.

Optimizing
Maturity level 5 focuses on continually improving process performance through both incremental and innovative technological improvements. Quantitative process-improvement objectives for the organization are established, continually revised to reflect changing business objectives, and used as criteria in managing process improvement.

Great blog post here by Dimano Marketing that emphasizes the need to implement a lead nurturing process with closed loop integration to measure results.

I know better than to even remotely acknowledge rumors, but the Google-Salesforce merger speculation is too much to resist. A partnership between Google and Salesforce makes perfect sense, but merging? I just don't see the value of that for a few key reasons:

Google Brand Dilution: Google has had a winning strategy so far by offering applications that are equally applicable to both consumers and businesses, what insiders refer to as the "Big Google". There are Millions of Google consumers that will never care about business specific applications, and there are Millions of business application users that will never buy into an ad-based application model or You-Tube consumer driven videos.

Distributing energy and resources over 2 vastly different markets would ultimately dilute the Google brand and leave room for a new player to emerge with a sincere focus on "We're just search".

It's Just SOA: The vision of integrating disparate, on-demand apps via web services has now become a reality. The Gestalt effect that Google and Salesforce can now leverage by integrating their applications proves that the SOA model works, but merging these companies would just take SOA back to square one; as if to say the synergies could not be sustained without physically bringing these companies together.

Culture Clash: Google hires Developers. Salesforce recruits them as partners. Google does little to no marketing. Salesforce is all about Sales and Marketing. Google is ad-based. Salesforce is subscription-based. Google has no email/phone support. You can actually get someone from Salesforce on the phone if you have an issue. Google scales out. Salesforce scales up.

On a positive note, they're both in the bay area. They both want to eat into Microsoft's market. They both deliver their services via the web.

Don't get me wrong. We currently use Google premier apps for email, calendar, and document management plus we use Salesforce for CRM and support/operations. No matter what announcements are made in the coming weeks, I'm convinced we can only benefit.

"Is Customer Experience Management (CEM) a replacement for CRM?" This is a very good question, and from my perspective the answer is "No".

Most CRM systems today were designed for call-center phone interactions and therefore the software itself was only used by employees. The "customer experience" in call-center environments are actually initially managed by IVR (Interactive Voice Response) systems, or what are commonly referred to as "phone trees" (you know... "Press 1 for English, 2 for Espanol").

But in the Internet era, online customer interactions can be highly personalized, relevant, and tightly integrated with CRM. I always tell people that CEM is "IVR for the Web".

Hence, Customer Experience Management is a logical extension to CRM that incorporates technologies and best practices that ensure each customer interaction is relevant and personalized.

My Google Docs for Salesforce project is now sufficiently obsolete with the announcement of Salesforce SOA.

(Update: Well, perhaps I spoke too soon. This demo effectively synchronizes SForce records with a Google Spreadsheet, but I still need a Google Docs related list on SForce records)

Wow. I anticipated some level of technical difficulty when integrating with Microsoft CRM (support for which we recently announced) but didn't anticipate any significant legal issues. Apparently, Microsoft CRM 3.0 requires the licensing of something called an External Connector for each web server integrated with Microsoft CRM and I'm not the first to be confused about the applicability of this license in a Web-to-Lead, customer portal, or partner portal context.

The connector is about $15,000 USD, and amortized over 5 years comes to $250 per month. I *really* hope Microsoft CRM Live modifies this license to be more inline with current subscription-based expectations. Just getting SMB customers to try on-demand, loss leading features for $95 per month can be difficult enough. Don't make partners start that far in the red. They'll never adopt the platform.

Will the partner/ISV absorb the cost of externally integrating with MS CRM Live? Will the end customer? Answers to these questions are still not clear as we enter the 11th hour prior to Microsoft launching their on-demand CRM Live solution.

My suggestions:
* Implement a variable, value-based external integration licensing model. Not a "one size fits all" license.
* It still remains to be seen if Salesforce.com's 10% referral program is the right model to attract and retain partners, but it is more closely tied to value on a per customer basis.
* License the XML web service gateway separately from the core CRM application per external end-point. Implement a SOA friendly model that encourages Microsoft CRM customers to purchase additional web service connectors for multiple end-points at $750 per year (This is where I think Salesforce has missed a tremendous opportunity to license their API to Professional Edition customers and is the most griped about integration topic).

(Off Topic) Somehow I never envisioned this CD I recorded several years ago would be described as a "Rare - Out of Print - Mint CD" on eBay.

I'd like to thank all 5 of my fans for hanging on to their copies for so long. I have 750 more copies in my attic if anyone is interested