Next-generation CRM
Manufacturers' B2B strategies will drive new CRM software sales
By Sidney Hill Jr., executive editor -- Manufacturing Business Technology, 2/1/2003 12:00:00 AM
Customer relationship management (CRM) software ranges from off-the-shelf contact management and sales force automation packages to larger CRM suites that offer functions ranging from call-center to field service management. Product and sales configuration tools remain an important CRM function for manufacturers, especially makers of complex products adopting build-to-order strategies. Many manufacturers turn to their enterprise suite vendors for CRM, making CRM one of the key battlegrounds in the "suite versus best-of-breed" debate.
If the customer relationship management (CRM) software market experiences an upswing this year, as some industry analysts predict it will, manufacturers will play a major role in making that happen.
"The CRM market essentially was flat in 2002, with software license revenue actually declining by 5 percent," says David O'Brien, a research analyst with Boston-based AMR Research. "But we expect this market to get back on track in 2003, and we have not changed our long-term growth projections, which call for compound annual growth rates of 19 percent through 2006, resulting in a $26.3-billion market."
O'Brien says companies that use CRM software in B2B settings, as most manufacturers do, will join public sector organizations as the primary drivers of that growth.
When compared with other types of businesses, manufacturing companies have been slow to adopt CRM software, primarily because CRM software vendors were slow to make systems that met manufacturers' specific needs. But that is changing.
Siebel Systems, San Mateo, Calif., the CRM market leader, says its high-tech and industrial manufacturing organization is its largest business unit. It also says that the most recent version of its software suite, Siebel 7.5, contains numerous features that cater specifically to manufacturers. Blue Martini Software, San Mateo, Calif., which started out building sell-side e-commerce applications for retailers, also offers a manufacturing-centric CRM package. Meanwhile, enterprise resources planning (ERP) software suppliers—including industry heavyweights SAP, Walldorf, Germany; Oracle, Redwood Shores, Calif.; PeopleSoft, Pleasanton, Calif.; and Denver-based J.D. Edwards—have added CRM modules to their product suites.
Beyond sales force tools
This new generation of CRM systems reflects a realization that manufacturers need a CRM package to do more than automate routine tasks performed by salespeople. "Before purchasing a CRM system, we analyzed how we interact with our customers," notes Chris Meyer, director of e-Business strategies for Lanier Worldwide, an Atlanta-based manufacturer of photocopiers and equipment that has adopted the Blue Martini CRM package. "We found that only 3 percent of our daily transactions with customers actually involved product sales; the other 97 percent involved post-sales activities such as taking orders for supplies or handling service calls."
That analysis inspired the search for a CRM package that could drive LanierDirect.com, a Web site through which Lanier now handles all of those post-sales customer interactions. "We didn't see a simple sales force automation package serving as an e-Business platform," Meyer says.
SKF USA, Culpsville, Pa., a global supplier of industrial bearings and other components, also was looking for a system to support the service side of its business when it selected the Siebel CRM package. "We needed an infrastructure to help us manage service requests, mobilize and dispatch service teams, and track our parts inventories—all of those things that are associated with running a full-fledged service operation," says Rick Farris, SKF's director of e-Business.
At Gems Sensors, a Plainville, Conn.-based manufacturer of sensors that regulate the levels of fluid, flow, and pressure in various industrial products, the use of CRM software started with the deployment of a product configuration package in the engineering department. According to Scott Hurlburt, Gems' manager of marketing and channel development, desire to save time and improve accuracy in the process of building products to customer specifications was the reason for adopting this system, which is part of the CS-Enterprise software suite from Configuration Solutions, Portage, Mich.
After installing this package, Gems, which custom-builds most of its products, reduced the time it took to get an order through engineering from three weeks to one day. Those orders were error-free, which meant the end of rework in the manufacturing process, faster delivery of products, and happier customers.
Ultimately, Gems moved the system into its order-entry department, which meant that custom-configured orders no longer had to go through engineering. Today, the CS-Enterprise package powers a B2B Web site through which Gems' customers can order and configure products for themselves. Says Hurlburt, "Our distributors like our new site because they can buy products on-line. They also can use it as a quoting tool."
Essential integration
A connection between the Blue Martini CRM engine and Lanier's back-end business systems—accomplished via an enterprise application integration package from SeeBeyond, Monrovia, Calif.—gives Lanier a number of valuable customer service tools. "Our Web site is integrated to our back-end service and dispatch system, which means our customers can see the status of any service calls on their machines," says Meyer, Lanier's e-Business director.
This link also has eliminated some potentially volatile customer service issues. "When one of our products gets connected on a customer's network, that automatically raises the question of who owns any service calls," Meyer explains. "Users at a customer site automatically call their internal helpdesk when a problem arises." If the helpdesk determines that Lanier has to resolve the problem, a helpdesk representative typically telephones Lanier to report the problem and then conveys the status of the service request back to the user.
With LanierDirect.com's integration to Lanier's back-end systems, helpdesk representatives immediately notify Lanier of any problems needing attention by clicking a button on their computer screen. "That transfers the service call directly to our service and dispatch system," Meyer says, "and we automatically send updates on the status of the call back to the helpdesk—which allows the helpdesk representative to keep the user informed—until the situation is resolved. And all this happens without the helpdesk representative having to leave their own corporate system."
| Customer Management* | ||
| Access Commerce | ADAPT Software | Astea International |
| Best Software CRM Division | Blue Martini | Clear Technologies |
| Compex Integrated Systems | Critical Reach | E.piphany |
| Firepond | Fullscope | Onyx Software |
| Pivotal | Primus | Prophet 21 |
| Selectica | Selltis | Siebel Systems |
| Triology Software | ||
| * Enterprise suite vendors also offer CRM. | ||
| For more info, visit: www.manufacturingsystems.com/software_finder | ||
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