The End of CRM as (Microsoft) Software

Soon you won't be able to buy a product called "CRM" from Microsoft anymore. Once Dynamics 365 is launched in the beginning of November, the old SKUs sold under the CRM Online name will be replace with new Apps (Sales, Customer Service etc.) and Plans (Enterprise P1, P2). There will be more business applications on offer from the Microsoft cloud than ever before, but none of them will claim to be a CRM application in the product description. Existing customers will be upgraded from their current CRM Online subscriptions into the new Dynamics 365 service and one fine day their app launcher in Office 365 won't have anything that says "CRM". It will be gone for good, never to be seen again. It's the end of CRM. (*)

Don't worry, all of the Dynamics CRM functionality will of course still remain available. The launch of Dynamics 365 is just one step in Satya Nadella's plan to mainstream the Dynamics product offering that Microsoft had previously kept under a separate Business Solutions unit. The "365" strategy is similar to what already happened with Office, when the previously separate products were bundled into a single Office 365 suite. This time around it means that the CRM and ERP products will be made available via a single subscription, together with other components of the new cloud business application platform, like PowerApps and Flow. The familiar Dynamics CRM platform will be found from underneath the new Apps in the Dynamics 365 suite (aside from Operations that runs on AX), but it will be only be one part of the new platform. And, as mentioned, it won't be called "CRM".

I personally believe this change makes a whole lot of sense. Not just from a product marketing perspective, but in terms of making the terminology used with these products to more closely reflect the reality. The thing is, I'm not convinced that many of the Dynamics CRM deployments I've seen during the past decade of working with the product have actually been true customer relationship management systems at all. Instead, many of them have been used as customer address databases, sales pipeline tracking tools, email newsletter launchpads, customer support ticketing systems and so on. 

"Isn't that what you typically do with CRM systems?" Yes, it is, but that doesn't mean it should qualify as CRM. Nor is the existence of this type of a CRM system any indication that the organization has an actual CRM strategy in place. They are simply examples of operational business applications that most companies out there can't survive without these days. They also deal with data related to customers on several levels, which means they A) require access to the central customer identity records managed by the organization, and B) can contribute a lot of valuable transaction data back to the central customer database. But does that make them all "CRM"? In practice, yes, but in theory, no.

Tools are one thing, strategy is another. I'm not saying that the concept of customer relationship management should be treated as some type of mysterious art form that cannot possibly manifest itself in software orchestrated operational processes. The CRM strategy execution most definitely should result in very tangible changes in the way how companies engage with their customers. Unfortunately, sometimes it simply results in changes of software applications being used. When CRM is perceived as a software project it will most of the time end up in failure to meet the high expectations that have been set out by the sometimes grandiose visions from the CRM strategy work. The new tools deployed in such a project may well end up improving internal business process efficiency, but there's a big chance that nothing much changes in how the company interacts with the outside world - where its customers are.

The language we use for describing concepts ends up directing our train of thought far more than we'd probably like to admit. Therefore I welcome the new direction that Microsoft is taking, where we stop calling the software product as "CRM" and instead talk about what the Dynamics 365 offering really is about: business applications designed for specific processes and a platform to connect these processes and customer data together - to enable the execution of the CRM strategies that companies wish to pursue.

Yes, technically Dynamics 365 is "just" a change in product branding and how the products are packaged as a cloud service that you subscribe to. Let's hope that it will also shake things up in how such applications are perceived by organizations looking to deploy them, at least in the following two ways:

1. Understanding that you can't simply buy a CRM software package to gain a CRM solution for your business.
2. Realizing the breadth and potential that these modern business application platforms have for improving and automating your business processes, beyond just the traditional sales, marketing, service scenarios once covered by software that used to be called "CRM".

(*) OK, so Dynamics CRM as an SKU won't be completely gone by November. Microsoft will likely continue shipping the on-premises version by using the old terminology, since Dynamics 365 is cloud only. Just because you can buy a legacy edition of a product doesn't make it any less legacy, though.