VRM - the flipside of CRM breaks out (part 2)

Cath Everett Profile picture for user catheverett March 2, 2016
"Most individuals are still completely aware of the potential of what’s going on and it’s a long slow process of familiarity. " The road to VRM is being travelled.

Who's first?

In the first part of this two part article on Vendor Relationship Management (VRM), Doc Searls warned of:

a chicken-and-egg issue. Unless 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.

One such “breakout” is Australian start-up Meeco. It has just set up a London office and also opened Meeco Labs Europe in order to work with customers on developing new products and services that can be plugged into its “life management” platform.

The aim of this mobile phone-based app is to provide users with a common interface to securely manage and control their digital relationships. So rather than fill in forms, individuals could use their phones to send organisations specified personal information and even allow access to social media and other data if desired to provide a more holistic view of themselves.

Therefore, rather than simply be viewed as a ‘frequent flier’ by one particular airline, for instance, they could present themselves as a ‘traveller’ in the broadest sense. The airline could then either serve, or work with others to serve, their broader travelling needs without having to gather and store lots of information about them that could be open to potential abuse.

Meeco’s ultimate aim is, in fact, to create an easy-to-use personal “marketplace”, which includes an application programming that different organisations, when authorised, can plug their products and services into.

And Katryna Dow, Meeco’s founder and chief executive, is confident that VRM offerings of this type will lead to a “massive shift in society”, which despite the Project’s US roots will be kick-started in Europe – hence the decision to open for business there:

There’s a deeper respect for privacy and citizen’s rights in Europe and there’s legislation such as the General Data Protection Regulations Act, which makes the management of information more transparent than in the US. People also have a broader view of citizens, covering all the roles in their lives and not just consumption, which is where the US focus is. But European citizens are also very mobile too, which means a lot of information has to be shared across different jurisdictions – all of which makes Europe a rich opportunity for innovation.”

Consultancy Ctrl-Shift, meanwhile, is working with about 500 organisations ranging from established banks and car manufacturers to start-ups in order help them develop what it calls “Personal Information Management Services” (PIMS) based on VRM principles.

It forecasts that the market for such services, which would include decision support as well as personal data and life management, could be worth up to £16.5 billion in the UK alone when it matures at some unspecified point in the future. This would account for 1.2% of the overall economy, larger than either the pharmaceutical sector at 0.97% or the automotive industry at 0.7%. Mitchell says:

I’m beginning to think that the market structure might be rather cone or T-shaped – so a few very large organisations doing backbone infrastructure stuff, with highly vertical and specialised data services such as managing diabetes or helping people move home, layered on top. So you create a core data management layer as the enabling infrastructure rather than one big honeypot database.

The point of VRM is that everything’s distributed so everyone would have a personal data vault that’s encrypted, with the key held by the individual. So you could have a monstrous organisation in terms of technical infrastructure that sees zero data, although it could still have huge market power as a gatekeeper for providing organisations with access to individuals by charging a fee to connect.

Big barriers

As a result, such “giants” would need to be monitored closely “as they could become very dangerous,” he adds. Another challenge is ensuring providers develop infrastructure and services that actually interoperate with each other in the first place though rather than create “1001 mini-silos”.

The most significant issue of all, however, is simply the size of the change required to the “core infrastructure of data in our economy” to realise the vision.

This means that scaling it up is likely to be “quite slow”, although Mitchell expects to see a lot more activity over the coming three years than he did in the last three. Such activities include a number of PIMS initiatives that are currently being conducted under the mantle of the European Union’s Horizon 2020 framework programme for research and innovation.

Another slow process, meanwhile, will be that of market education. As Mitchell points out:

Most individuals are still completely unaware of the potential of what’s going on and it’s a long slow process of familiarity. Habits change very slowly and, at each step, there are lots of things that could go wrong. There are just so many interdependencies - and it’s also about proving you can make money at it. So there are lots of barriers to overcome.

But he believes that, ultimately, this approach will become the default way that individuals and organisations do business together in future.

What we’ll see is a number of services emerging over the next few years that provide demonstrable proof points and encourage others to pile in. Then we’ll probably get a period of chaos and confusion where opportunists appear and people make mistakes. But after that, users will say look at these great services and there’ll be a lot of excitement as more people pile in and things get more complicated. It’ll then be about trying to make it scale rather than it just being cool and sexy.

But it is the emergence of the Internet of Things (IoT) that is likely to truly force the issue, he believes. Mitchell says:

The IoT make all of this more inevitable as each device will collect data about our activity. So there’ll either be a massive outcry against privacy infringements or there’ll be a modus vivendi, where individuals will say ‘you can use our data, but we expect a beneficial service in return’. And that service will be a VRM one.

My Take

On the face of it, VRM appears to be a valuable initiative, albeit one with vast mountains to climb. Although impossible to say at this point whether difficulties at both the micro- and macro level will be surmounted, what does seem clear is that we’ll be hearing much more about its ideas over the coming years – whether they’re formally designated as “VRM” or not.


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