Various sister companies of the Beretta Holding Group have been experimenting with CRM initiatives for about a decade. We started with the limited functionality of our ERP, then with custom solutions, until more recently we selected one of the CRM platform leaders and that became the global standard in the US and EU.
Nowadays, at least seven companies of the group have implemented a formal CRM process, and more are considering the opportunity. Sales force automation, digital marketing, customer service, business intelligence, and B2B and B2C e-commerce are examples of processes digitalized using the same CRM and digital platform.
Recently, we have developed pilot projects to apply generative AI technology to the CRM process. It seems that, especially in customer service, a trained, smart chatbot can greatly facilitate and accelerate interactions with customers.
In hindsight, the technological advancement in CRM is just a single component of a larger Enterprise Digital Transformation that is advocated directly by the very top of our organization, and facilitated by the long-term, visionary strategy of our own board/shareholders.
As CIOs, we recognize the amazing potential of all new technology but, at the same time, we need to be aware of the risks of possible hypes, the increasing cost of complexity due to a proliferation of systems, and the creation of an enterprise architecture overcomplicated and out of control.
If one looks at the evolution of the technology in CRM and other areas of Enterprise Applications, one can better understand its nature, current potential, and future development.
CRM, the Past
The roots of the first computer applications used to support business processes can be traced back to the 1970s and 1980s when businesses started to realize the value of computer software to manage their complex data and processes. The first embryonal form of enterprise application was born around the need to digitalize accounting journal entries. From there, the first appearance of simple manufacturing (MRP) and order management applications rapidly created a set of digital tools mapping the main business processes, such as order to cash, design to manufacture, and procure to pay. All different applications were integrated with a monolithic enterprise application, generally referred to as ERP (Enterprise Requirements Planning).
Due to the operational complexity of managing a wide customer base, the increased competition in the progressively saturated markets, and the consequent focus on marketing and customer satisfaction, the need of digital tools to manage Customer Relationship was strong.
The focus moved from simple order collection to the creation of a database for marketing, where businesses stored customer data in physical files or spreadsheets to tailor marketing strategies. As competition increased and customer expectations grew, companies recognized the need for a more structured approach to managing relationships.
In the late 1980s, the first digital CRM systems emerged, thanks to advancements in technology, particularly with the development of sales force automation (SFA). The early CRM systems primarily focused on automating sales tasks such as tracking leads, managing opportunities, and forecasting sales. Contact management systems were among the first CRM tools, and they provided the foundation for more sophisticated solutions that would emerge later.
The 1990s saw the formal birth of CRM systems as we know them today, coinciding with the rise of the internet and enterprise resource planning (ERP) systems. During this period, Siebel Systems became one of the pioneers in developing comprehensive CRM software. The rise of companies like Oracle and SAP also contributed to the growing demand for CRM solutions, which were now being used not only for sales but also for customer service and marketing automation.
In the 2000s, while Microsoft’s, Oracle’s, and SAP’s strategy was to simply enrich their ERP offer – at that time, gigantic applications host “on-premises” and with a rigid, monolithic architecture – with a CRM module, oppositely, other tech companies have made CRM the focus of their offerings and the core of their business. Platforms such as SalesForce, Hubspot, Zoho, and Act! were able to ride the wave of the exploding cloud trend and started offering CRM as a SaaS, with all the agility and flexibility of this business model and system architecture.
Besides the flexibility, scalability, and modularity typical of a SaaS application, one of the reasons for the rapid success of these modern CRM platforms, with respect to the legacy monolithic ERPs, was certainly the excellent GUI, which then developed in the concepts of the more general UI and the CX itself.
Customers and consumers, after decades of interacting with mobile devices and the ultra-streamlined interface of websites such as e-commerce and brand portals, are now used to an extremely user-friendly man-machine interface. One that is completely intuitive and does not require instruction or training. Webform-like screens, with simple logic, a few input fields, a reduced number of steps/clicks, simple and aesthetically pleasant, and a consistent brand experience become the standard and the expectations from all users, sometimes in opposition to the overcrowded screens, and grid-like forms with tens of fields of a traditional enterprise application, not suitable to create the expected CX webpages for your customers.
CRM, the Present
As SaaS, micro-services architecture, and an excellent UI are now common features in any Big Tech offer, the market of CRM systems has become very busy: there are at least 6 leaders, and tens of competitive followers, according to the Gartner Magic Quadrant. Both traditional Enterprise Applications platforms (Oracle, MSFT, SAP) and specialized platforms (SalesForce, Hubspot, Zoho, SugarCRM, Act!) offer state-of-the-art CRM tools, encompassing all traditional dimensions of CRM: context, customization, collaboration, connection, and communication, customer service, and culture.
These leading platforms have enriched their offer with many functions, including sales force automation, leads and opportunity, digital marketing, customer service, identity management, business intelligence, social CRM, CX, and more. Most feature open marketplaces and architectures, where you can find pre-built connectors with other platforms, pre-built apps, an API and development environment, and a robust community of partners. Some platforms are clearly looking at more than just CRM with the acquisition of strategic partners (ex. Tableau, Slack, Clearbit, Magento, Mulesoft, etc.) or the release of advanced functionality typically not considered CRM: CMS, BI, eCommerce, etc.
As mobile devices and social networks are now critical to digital marketing, customer satisfaction, and brand management, a social CRM is a fundamental necessity. CRM must be on mobile and interact with all social networks out there, dealing with the unstructured Big Data (Voice of the Customer) and acting as one pane of glass to manage the complexity of an online world that is everchanging and accelerating at the speed of light.
An important effect of one integrated CRM system is that obliges the Marketing, Sales, and Customer Service depts to a tight collaboration. Most platforms have consequently developed collaboration tools, such as chats, libraries, file-sharing, and videoconferencing functionality.
More recently, the generative AI hype has not spared the CRM sector. All Big Tech firms are promising native AI embedded in their platforms. CRM can benefit from this technology, because of its ability to eliminate human errors, ability to personalize the customer experience in a natural and automated way, and its predictive ability. A particularly efficient application of LLM technology will certainly be in customer service, say, customer service agents, chatbots, and the like.
CRM, Lessons Learned
- Data – everything is about data and the old saying “garbage in, garbage out” was never more meaningful. The risk is that your internal data are dirty and your external data are not reliable. Another risk is being overwhelmed by data. The effort must be sustainable by the organization. The system should help you to summarize and prioritize with key metrics and to act by exception. As for any other type of digital technology, data management is key. Even before dreaming of a CRM implementation, find, map, and manage your data. Do you want to start your CRM project on the right foot? Clean up your master data, collect all customer and product information (CDP, PIM), define what type of data you want to manage, and define what is your business strategy in this area and your goals.
- Expenses – SaaS tools are exceptionally easy to implement with respect to the old traditional way of building the infrastructure (servers, networks, database), implementing and configuring the application layer, supporting, upgrading, and maintaining the entire stack of technology. You just pay per usage (number of users, storage, transactions, etc.) and someone else will take care of the rest (SaaS, IaaS, PaaS). However, the monthly and annual fees are adding up. You typically start with a minimal footprint, but then you become a captive customer, and any new development, module, functionality, and user adds up to the cost. The risk of uncontrolled cost is real. Make sure that you have a clear plan on how to deal with it. Make sure that you have a TCO (total or true cost of ownership).
- Architecture – As you add more and more processes and data to these front-end systems, the risk is that you will lose control of the overall architecture, with a proliferation of systems, data spread everywhere, overlapping sources of truth, and redundant IT capability on many underutilized platforms. As the Chief Enterprise Architect of your organization, you must design your long-term architecture before starting any CRM journey. Define what data are managed by what system. Define what is your single source of truth for the type of information. Particularly critical is the interaction and integration with your ERP. You don’t want to build an ERP outside of the ERP! Back-end systems are still your single source of truth, the main system of reference, and they are running your end-to-end business processes. Customer and product information might be spread across multiple systems, but it’s important they don’t overlap. For example, the official name and address of a B2B dealer should be stored in the ERP customer master table, a single source of truth system, however, the birthday of the owner of the store or the email thread with the customer, are more appropriately stored in the CRM system. If you break this integrity of data, processes, and architecture, you will get lost or at minimum, you will create a great inefficiency and a higher cost of complexity. Keep it simple.
CRM, the Future
From a technology point of view, IoT, AI, and AR/VR will deeply impact the future roadmap of CRM. The ChatGPT-like agents are so much better than FAQs and old chatbots, but still a bit inaccurate. Hallucinations are still concerning under certain scenarios. However, in a few years, the accuracy will be amazing. Not many people enjoy chatting online with a computer. The natural speaking interaction, such as the recently released “Advanced Voice Mode” GPT4 4o, is very promising. Volkswagen, for example, is deploying an experimental voice-based agent in all its cars, as I write this article.
Beyond LLM, other types of AI will rapidly develop resulting in phenomenal achievements in modeling, predicting, and the creation of virtual avatars indistinguishable from real people. The future of Customer Service is brilliant. Very rapidly we will achieve a situation of zero queue, zero wait. Immediately after contacting the Customer Service of your favorite brand, you will be welcomed by a live, artificial agent designed to fit your profile and to personalize your experience. Able not only to understand your spoken language but also your tone, facial expressions, and more. The agent will be able to make autonomous decisions to address your questions or complaints, including autonomously presenting options and solutions: negotiating with you, offering discounts, identifying, searching, and delivering spare parts, following up with you for resolution, and upselling and cross-selling products and services. You might interact with the virtual agent on a digital screen or wearing AR/VR goggles. The agent will have secured, immediate access to all information that is pertinent to the case, including information coming in real-time from the ubiquitous IoT and wearable devices.
From a system architecture point of view, modular, scalable, flexible, and agile will be the standard expectations. The level of customization/configurability and the ability to integrate with other platforms will increase.
More importantly, the consolidation and acquisition trends in this technology area are evident. The borders between the various front-end digital platforms will vanish. E-commerce, portals, digital marketing, and customer service will be part of the same process on the same platforms.
Moreover, why should one digitalize the relationship with our customers, and not with the other stakeholders? Suppliers, partners, board/shareholders, employees, local and global community at large. In our interconnected world, it’s all about RM, not only CRM. We will certainly need an SRM to deal with our supply chain, as well as a PRM for our partners. In conclusion, the CRM effort must be seen as part of a larger digitalization effort, often referred to as Digital Transformation. In my opinion, there might be only 2 categories of systems in the future. The back-end system (ERP, EPM, PLM, HRSM, etc.) that needs to deal with high complexity and is necessarily highly technical and less user-friendly – you still can’t run your company with just a CRM – and the front-end system that will effectively create a digital interface and excellent SX (stakeholder experience, opposed to just CX) with the entire outside world, ensuring a consistent representation of the brand and the culture of the organization.
Massimo Marchi’s Bio:
Massimo Marchi currently serves as the CIO/CISO North America for the Beretta Holding Group, a leader in the Outdoor and Firearms market, with 50 sister companies, +6,000 employees, and 1.7B$ revenue. The company offers best-in-class products across various divisions, including small arms, ammunition, optics, clothing, accessories, and electro-optics. Beretta’s internal processes cover the entire spectrum, from product design to multi-channel distribution and after-sales service.
Massimo completed a full degree in Computer Science at the University of Pisa, Italy, and a Master in Innovation Management at the prestigious Sant’Anna School of Advanced Studies, also in Italy. He then completed an Executive Certificate program at MIT/Sloan School of Management in Cambridge, MA. Massimo earned several technical certifications in cybersecurity, project management, IT operations, and governance.
Massimo spent half of his career in Europe and half in the USA. He currently lives with his family in Maryland.
Beretta Holding Description:
Beretta Holding S.A. encompasses more than 50 global subsidiaries, which feature over 15 manufacturing sites, and 20 renowned brands in the sector of light firearms, optics, ammunition as well as clothing & accessories. With a workforce of over 6,200 dedicated employees and generating EUR 1.58 billion in annual revenue, Beretta Holding Group headquartered in Luxembourg stands as a world-renowned leader with a distinguished reputation in the fields of hunting, sports shooting, and defense & law enforcement thanks to its wide selection of premium products.
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I currently serve as the CIO/CISO North America for the Beretta Holding Group, a leader in the Outdoor and Firearms market, with 50 sister companies, over 6,000 employees, and $1.7 billion in revenue. Our company offers best-in-class products across various divisions, including small arms, ammunition, optics, clothing, accessories, and electro-optics. Beretta’s internal processes cover the entire spectrum, from product design to multi-channel distribution and after-sales service.
I completed a full degree in Computer Science at the University of Pisa, Italy, and earned a Master in Innovation Management from the prestigious Sant’Anna School of Advanced Studies, also in Italy. Additionally, I completed an Executive Certificate program at MIT/Sloan School of Management in Cambridge, MA. I have also earned several technical certifications in cybersecurity, project management, IT operations, and governance.
