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Should companies scrap their CRM?

Prahalad: CRM investments did only one thing, and that was to pull everything together into one database. Okay, that cleaned up the underlying legacy systems and put everything in a file structure that looks good. But now everybody competes the same way because the information infrastructure determines how you compete, your theory of competition.

Once we move to an event-based, experience-based view of thinking about IT, then you have to construct your own IT capabilities so that you start looking at managers as consumers—not as managers who use IT. You need to create for them the same visceral understanding of experience. You have to start by saying, "How do managers want to get consumer information to co-create?" Companies need to look at all the touchpoints where value can be created, as Disney might, using a sensor-equipped Pal Mickey doll to "tell" a park goer who likes pirates that a pirate parade is about to happen around the corner. These touchpoints are where the firm and the consumers can come together, either for a conversation or for a complaint or for service. So our view of line managers is they can create value at the intersection.

We need a way of creating a mechanism for sharing that knowledge and rapidly creating new knowledge. In order to do that, we need the information backbone that understands contextual events rather than a transaction-processing view of IT. And that's basically where we are.

That's not to say we don't need CRM databases, but databases aren't enough. Up until now, people have focused on information, not on insights. So much of the thinking in IT involves crunching more information to do standard analytics, rather than to search for insights. I believe that the next big round of development is not more information-processing capabilities, but more ability to creatively combine human intuition with information.

This article was originally published on 12-01-2003
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