VRM – the flipside of CRM breaks out (part 1)


According to its advocates, Vendor Relationship Management (VRM) has the potential to shake-up the very foundations of the information economy by giving back control of their personal data to individuals. But it is only very early days and there are still huge barriers to surmount.

Doc Searls
Doc Searls

This is just  the very start of a huge shake-up of the information economy that will see individuals gain more control over their personal data and organisations create a range of exciting new services as a result.

This is the vision of members of the Vendor Relationship Management (VRM) community, which although initially composed mainly of privacy campaigners, has evolved over the last decade to become much more eclectic in outlook. Alan Mitchell, strategy director at VRM consultancy Ctrl-shift, explains:

In its early days, a lot of people who were attracted to VRM wanted to empower individuals as they felt that organisations were becoming too powerful. Which was understandable, but the effect was to make things quite adversarial. The more you look at it though, the more you can see that it’s an opportunity for all – it’s a way to grow the data economy.

As to what VRM actually is, it takes its most recognisable form as an umbrella project started at Harvard University in January 2007 by Doc Searls, an author, writer and alumnus fellow of the Berkman Center for Internet and Society there. “ProjectVRM” positions itself as advocating the “customer-side counterpart of CRM” and has acted as a networking and information hub for like-minded product and service developers to come together. Its goals are to:

  • Provide tools for individuals to manage their relationships with organisations as well as control how those organisations use their data and for how long. This includes providing third parties with personal terms of service rather than signing up to terms and conditions that no one ever reads anyway
  • Enable people to collect their personal data ranging from transaction histories to health records rather than have it all scattered around organisational silos. This scenario enables them to share personal information on a selective basis
  • Make individuals themselves “platforms for business” as well as provide them with the means of expressing their product or service requirements without disclosing any personal information beyond the necessary
  • Base tools on open standards and APIs to enable interoperability between them.

Mitchell explains the rationale:

Over the last 50 years, organisations realised that data could be transformational – it could help them make better decisions, streamline processes and add value. But it’s almost exclusively been the domain of organisations rather than people. The entire infrastructure of the data economy is based on a series of parallel silos or railway tracks, none of which connect around the individual. So that’s what VRM’s doing – it’s asking ‘is no one challenging the assumptions around how data is for organisations, not people?’ And it’s saying ‘the entire infrastructure of the information economy has to be redesigned and reorganized’.

Early days

But it is still very early days. As Doc Searls himself says of the initiative, which he still runs and coordinates:

ProjectVRM is a long-term project that seeks to fix market problems which, in some cases, have been around since the dawn of the Industrial Age. So we take a long view…..I see ProjectVRM as something of a penny stock game in which I, and other advocates, invest our time encouraging as much development as possible, in faith that one or more of the many development efforts will take off. Success has been mixed, but encouraging.

While the initiative has made great strides in terms of spreading its ideas and encouraging developers to build prototypes based on its principles, for instance, commercial success and adoption has been more muted. Searls says:

The key inhibitor is the status quo. Bodies at rest tend to stay at rest. Worse, defence of entrenched positions is also natural for companies and even for societies.

Graham Hill, a partner at customer value management consultancy Optima Partners, agrees. But he is sceptical about VRM’s focus on individuals owning and using their own data, which, as he suggests, is a complex thing to do. He says:

I don’t think data is where it’s at as most people can’t deal with it – it’s too complex and they don’t have the knowledge or tools to make sense of it, which is why they rely on third parties to do so on their behalf. So we say it’s not so much about the data, which is a technical issue or consequence of good business practice. It’s about value and control – control over interactions and the value provided.

As for other inhibitors, Searls points to a lack of co-ordination among rival developers in areas such as Intentcasting and Personal Information Management (PIM) Systems, even though co-operation could benefit everyone.

Yet another challenge is the lack of available recognition and funding from venture capitalists (VC). Searls explains:

This is a bit of a chicken-and-egg issue. Unless either [Intentcasting or PIM Systems] becomes a hot topic for VCs, they won’t be part of the VC conversation, which is a huge contributor to tech buzz. That said, I don’t believe we need big VC attention. Lots of breakouts have happened without it.

In part two of this article, Cath Everett looks at some of those breakout firms.