A new way of thinking
Latest CRM objectives hone in on customer-centric models, self-help tools
By Karen Abramic Dilger, Contributing Editor -- Manufacturing Business Technology, 2/1/2002 12:00:00 AM
Customer relationship management (CRM) ranges from off-the-shelf contact management solutions to high-end interactive selling suites that combine sales, marketing, and executive information tools. These include product configuration, quote and proposal management, and marketing encyclopedias. Some systems include functions for complex pricing, promotions, commission plans, team selling, and campaign management. Enterprise solutions for large companies with hundreds or even thousands of users have capabilities for call center/help desks, field service, forecasting, and spend and profit analysis.
Looking to improve customer management, Milwaukee-based Rockwell Automation, a $4.3-billion manufacturer of industrial automation systems and other industrial products, faced a unique set of circumstances. Rockwell wanted to give users of its DODGE Quantis power transmission products and Rockwell Electric motors an easy-to-use method to configure products on-line. The company also hoped to overcome lost revenue from errors in pricing, discounting, and order configurations; and prevent missed opportunities from incomplete customer information.
The challenge lay in deploying an on-line selling system that could deal with the complexity of certain Rockwell product lines: assemble-to-order transmission and motor systems that could have as many as two million valid part numbers and almost infinite permutations. The solution was to implement a customer relationship management (CRM) application with sales configuration tools that could guide customers through the quotation process, generate a valid bill of material, and turn a quote into an order with concrete pricing.
Since implementing the Interactive Selling System from San Jose, Calif.-based Selectica last August, Rockwell has streamlined its sales cycle, decreased its order error rate, and significantly improved quote turnaround times. Salespeople have been able to capture orders faster, while customers are on the phone. And by creating a single data repository to capture, store, and manage customer information, users have been able to make more informed pricing and product development decisions.
CRM suites address a number of functions—from sales force automation and sales configuration to field service management—with the overall goal of making an enterprise more responsive to its customers. "Many organizations must shift their focus to a customer perspective instead of a product perspective," says Joseph McGee, managing director of CRM strategy for KPMG Consulting, a New York-based consulting firm. "Installing the latest technology is not enough. Companies may need to undergo a total philosophy change and learn to think in a customer-centric manner."
This shift toward focusing on customer needs has CRM growing at a healthy clip, says McGee. The CRM market is expected to triple to nearly $80 billion by 2005—up from $22 billion last year, says McGee. Although the sales force automation segment of the CRM space had an early lead, all areas of functionality are prospering, including partner relationship and channel management, which some view as a subset of the CRM arena.
In addition to helping manufacturers with sales configuration, CRM solutions also assist marketing efforts, with some solutions capable of generating feedback on specific marketing campaigns. "Systems used to measure customer response in general terms only, but now they can show, for example, how many customers responded to a PDF file placed on a Web site," says Ron Reed, chairman of CRM supplier Fullscope, Ann Arbor, Mich.
Web-based CRM solutions also allow external users to find answers on their own, says Reed. "Issue management gives users the troubleshooting tools they need to solve problems on-line. A full-diagnostics solution can be used, or even a frequently-asked-questions database can provide assistance. A memo could pop up that tells the user about a document or software code that can fix a problem, and they might be able to download the new code right from the site."
Both customers and distributors benefit from using Fullscope's CRM system at Komatsu Mining, a Peoria, Ill.-based manufacturer of construction and mining machinery, and industrial products. When implementation is complete, customers will be able to view products and use the system's search capabilities to determine the type of products they need. The system captures the information, which can then be accessed by distributors. "A distributor can log onto a company Intranet to see new leads for backhoes and track the data to help determine the customer's exact needs," says Reed.
Sales configuration tools within CRM solutions typically contain rules engines or object-oriented data models that delineate how products can be configured. Such technology can help manufacturers service products after the sale. "Configurators can diagnose problems, guide users through the decision process, or point them to the right replacement part," says Kurt Haller, an executive vice president with Chicago-based CRM vendor Access Commerce. Configurators also are being integrated with a number of other systems, including CAD and product data management. "This integration is important for very complex products, where there is a significant amount of front-end involvement with engineers," says Haller. "Even companies without complex products want to offer customization and options to their customers as a way to improve their competitive position."
Access Commerce is one of a handful of best-of-breed CRM vendors that focus on manufacturing with functionality such as sales configuration. CRM is a big market, and one challenge manufacturers face is sorting out CRM solutions that focus on service industries such as health care or financial services, to those with a strong manufacturing bent.
Over the last several years, vendors of enterprise resources planning (ERP) systems have acquired, built, or partnered for CRM functionality. In fact, nearly every major ERP vendor offers some form of CRM. It's this expansion into CRM—as well as applications for e-commerce, business intelligence, and supply chain planning—that led to the term extended enterprise systems. Today, extended enterprise system vendors are a major force in the market for CRM solutions.
Epicor Software, an Irvine, Calif.-based vendor of extended enterprise solutions, supports a Microsoft backbone for its CRM and ERP applications, and is incorporating the latest .NET technology from Microsoft. "With the .NET platform, we can tightly integrate systems and trading partners using new standards for collaborative commerce," says John Hiraoka, an Epicor company vice president.
Low cost-of-ownership for CRM is a crucial factor in Epicor's target middle-market space, Hiraoka adds. "Users need software that can adapt with them as they grow, and it can't cost $500,000 to upgrade a system because they want to make a change in their business," he says. "Companies not only are looking for ways to manage costs, but to manage revenue and better sell to existing customers."
| Customer management* | ||
| Access Commerce: www.access-commerce.com | Astea International: www.astea.com | Blue Martini: www.bluemartini.com |
| Compex Integrated Systems: www.compex-software.com | Critical Reach: www.criticalreach.com/us | E.piphany: www.epiphany.com |
| Firepond: www.firepond.com | FrontRange Solutions: www.frontrange.com | Fullscope: www.fullscope.com |
| IBS (International Business Systems): www.ibsus.com | Interact Commerce Corp.: www.interactcommerce.com | Onyx Software: www.onyx.com |
| Pivotal: www.pivotal.com | Primus: www.primus.com | Prophet 21: www.p21.com |
| Selectica: www.selectica.com | Siebel Systems: www.siebel.com | Trilogy Software: www.trilogy.com |
