Knowing and Making

All the recent news in software has been about putting established categories of application software online. Online CRM software - salesforce.com. Online project management software - Basecamp. Online accounting software - Xero, Freshbooks, FreeAgent. Online ERP software - SAP Business One and Netsuite. Office productivity software - Google Apps. Email software - GMail. Even Photoshop has online competitors - Picnik (among others). This will continue, and I think most observers agree that desktop and client-server software in these categories will gradually be overtaken by the online/SaaS alternatives - though Microsoft Office will probably hold out longer than most. But when was the last time a genuinely new category of software became prominent? Think of the main categories of software: - CRM - ERP - Office suites (which used to be several separate categories: word processors, spreadsheets, presentation software) - Project management - Drawing and graphics - Email clients - W...

A fair bit of the economic research I do is speculative and it's gratifying when it ends up in a useful commercial output. This is one good example. The work I've done on how people evaluate prospective utility and make decisions has led to the concept of structured value modelling. This in turn allows us to consider how people influence each other's models of value. And the outcome of that is that we have created a new category of software: Client Value Management or CVM software. Traditional CRM systems are good for high-volume marketing - especially to consumers. They are not very popular amongst business-to-business services providers - for instance professional services firms. The reason being that CRM is a reductionist tool - its concept is to allow the simultaneous management of large numbers of people by making simplifying assumptions. If we assume that people fall into one of four demographic groups then we can send them messages at a cost of 4p each and hit a mill...