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Blockchain: CRM's Next Frontier

By Denis Pombriant CRM Buyer ECT News Network
Mar 22, 2017 3:11 PM PT
blockchain-technology

We've seen a parade of technologies coming into the front office since 2000, including browser-based cloud computing, social media, mobile technology, workflow, journey mapping, and big data and analytics. It's typical that at first there's only a tenuous relationship between the technology and CRM's original mission, but over a short time innovators adopt and commercialize the innovation -- often by rethinking or inventing from whole cloth business processes that leverage the technology's attributes.

I think the next invasion of CRM will be blockchain technology, which slowly has been making its way around the back office. It's still early days for the technology, even there, so you may not have heard of it yet. In this article I'll delve into what blockchain is and how it might be used in CRM -- but remember, blockchain isn't in CRM yet, and it might never be. This is all my hypothesis.

What Is Blockchain?

Blockchain is an approach to data management that enables disparate organizations -- none of which has absolute control of the data -- to trace data through long processes involving multiple computer systems owned by different parties, whose goals and requirements can be vastly different.

Blockchain provides a common denominator for just the data these disparate entities need to collaborate on, and a pedigree of the data that's hard to fake.

The technology potentially can help manufacturers track not only goods, but also associated attributes like quality control, by providing the provenance of everything in the supply chain, according to a recent article in Harvard Business Review by Michael J. Casey and Pindar Wong.

Manufacturers can use it to prove to the end consumer (either a business or an individual) that the component meets contractual standards, for example.

Contracts are an area where blockchain has strong roots. It "allows users to attach digital tokens -- a unique, negotiable form of digital asset, modeled on bitcoin -- to intermediate goods as they progress along the production, shipping, and delivery phases of a supply chain and as title to them passes between different players," noted Casey and Wong in the HBR piece.

I suspect -- but do not know for certain, because I am not a security expert -- that some form of blockchain technology could be useful for improving security regimens in many applications.

Blockchain would be useful to "transfer title and record permissions and activity logs so as to track the flow of goods and services between businesses and across borders," Casey and Wong suggested, so why can't it be used to do the same with enterprise data?

Current security approaches typically call for spending a lot of effort building taller walls to keep invaders out, but that's a recipe for an arms race: For every 16-foot wall, there's an 18-foot ladder. What might happen if once those invaders gained access they were stymied because they didn't have the right permissions -- because authorizations were scattered across many data centers and servers, or because they couldn't provide accurate pedigrees for their requests?

What About CRM?

Blockchain would be useful especially to help understand demand, and thus figure out where to deploy resources. The current state of our thinking about customers is that we need to get 360-degree views of everything they are about. Yet very often, even in this advanced CRM age, that's prevented.

There are a couple of reasons for that. First, data is siloed in different departments. Like it or not, the marketing view of customers is department-centric, as are the service and sales views. Second, our customer outlook is largely supply driven. In other words, even with analytics and machine learning to coax and prod users to do things with or for customers, actors still need to interrogate data themselves.

In effect, CRM users are boxed into a position where they are supplying things -- either information, service or product -- to customers. However, if the effort of CRM is to be available to customers at all times to supply a need, then the most cost-effective approach is not in trying to supply but in managing demand.

Since demand is capricious and ephemeral, something like blockchain technology, probably coupled with analytics, would be the optimal approach to meeting that demand. For instance, in the Internet of Things, where machines communicate with machines, it becomes vital to provide not only data, but also its bulletproof provenance.

We're rapidly moving into an era when fragmentation means that no single entity controls all of the data that we depend on for modern life. The alternatives are to withdraw from interaction, or to find approaches that continue to leverage existing structures while securing our processes so we can have high confidence in the data we use.

Withdrawal is a fool's errand, and history is littered with attempts that worked for a time but ultimately collapsed. The current anti-globalism and populism movements provide an example.

I do not wish to make this a political argument, though. Another example includes the Luddites, who fought automation and lost. Perhaps the most interesting example of failed withdrawal is the Shaker sect. The Shakers set up their own communities and were successful at withdrawal, but their dedication to celibacy kept their movement from growing.

My point is that after several decades of innovation in a variety of technologies, blockchain might be one of those useful tools that occasionally arise to tie everything together.

As Casey and Wong point out, "the sophisticated, decentralized, Internet of things-driven economy that many are projecting might well be impossible" without it.


Denis Pombriant is a well-known CRM industry researcher, strategist, writer and speaker. His new book, You Can't Buy Customer Loyalty, But You Can Earn It, is now available on Amazon. His 2015 book, Solve for the Customer, is also available there. He can be reached at denis.pombriant@beagleresearch.com.


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Which form of smartphone security do you rely on most?
Face ID or Fingerprint
Strong Password
App Locks
Storage Encryption
VPN with Public WiFi
I don't use any smartphone security tech.