Customer relationship management has something of an image problem,
but really getting to grips with what your customers want can bring
tangible e-business benefits
Customer relationship management has not had such a good press
recently. Customer relationship management, which is a glorified
term for simply understanding your customers, has suffered because
e-procurement and supply chain management are flavour of the
month.
Even the whole concept of CRM has been accused of being
overhyped. Imet a Cable & Wireless customer from the direct
marketing industry recently who suggested that companies have
always tracked their customers' buying habits, and that adding a
CRM label does not make it a key e-business application.
Some companies, he suggested, would do better to keep their Web
sites as marketing promotion exercises, rather than trying to find
a fancy way of dissecting their data, just because there is
industry logic that says they should.
For others though, understanding customer data and using it to
competitive advantage has become critical.
In many cases, success will be down to how visionary the company
is, and what steps it can take to understand customer data. Some
specialists maintain that CRM can itself be dissected into
analytical CRM and operational CRM.
On the user side, it is sometimes the most surprising companies
that are getting ahead of the game. For example, in the
manufacturing sector, the US company Pillsbury has developed
software that will enable it to analyse chunks of data to best
understand consumer trends.
In Pillsbury's case, it is benefiting from customising a simple
$40,000 package, originally from Mathsoft, which specialises in
statistical analysis programs. Now rebadged inside Pillsbury as
"Netstat", the software operates like a Web site, residing on the
company's Web server, which means Pillsbury employees can easily
gain access to it, to progress sales calls or get plant
information. As the system is developed, inside the company the
concept is even being dubbed "the library card".
The information can be used to design new products, improve
relationships with customers, and improve production quality,
saving potentially millions of dollars in working capital. The
challenge is finding the killer data manipulation package that will
do the job, or having the skills within the organisation to be able
to best customise a package or manipulate data held in data
warehouses.
The challenge for IT is to find the ingenuity to work closely
with business units to isolate and develop solutions packages from
companies like Mathsoft which can yield tangible business benefits.
Or go further.
One of Business Objects' US customers, medical supplies company
Owens and Minor, even sends its IT director along to explain how
the company's customer relationship system gives it a competitive
advantage.
It opened up its data warehouse to trading partners, with the
immediate benefit that one hospital customer cited the warehouse as
the main reason for giving the company an extra £44m of
business.
If corporate IT systems seem like a pile of spaghetti at times,
spare a thought for someone with responsibility for corporate
intellectual property. It is an untapped resource, only 20% of
which is ever used. What better then, than a global online
marketplace for intellectual property.
Yet2.com is expected to tap into a marketplace worth $2.5bn -
and probably more. It already has support from organisations such
as 3M, Boeing, Du Pont, Ford, Proctor & Gamble, BT, Shell, and
Philips, who can see an opportunity to get hold of innovative ideas
involving coatings, optical recording, chemicals, and
communications solutions, and adopt them rather than develop them
themselves.
Eventually, IT companies are likely to take part, though how
keen they might be to provide technology such as software for their
equally fast-moving rivals remains to be seen.
David
Bicknell
On the user side, it is sometimes the most surprising companies
that are getting ahead of the game