According to research from Computer Weekly in association with BT, more than half of the UK’s SMEs do not have a formal IT strategy. This number does not include Daryl Industries. As Joe O’Halloran discovers, a rigorous, well-thought-out strategy was the foundation of a very successful CRM implementation.
Thanks mainly to the national obsession for home improvement, the home products market is enjoying a boom. After doing about just about everything possible to gardens, living rooms, kitchens and other rooms, consumers are now turning their attention to the bathroom. According to a report from Market and Business Development, the shower sector alone in 2002 enjoyed a year-on-year growth of 37%, creating a market worth £500 million.
Among the companies fighting to capture a share of this pot of gold is Daryl Industries, a 177-person-strong privately owned manufacturer of showering systems, enclosures and bath screens. The company, which captured £16m worth of sales in 2002, operates at the high end of the market, selling through independent retail showrooms. These firms compete against what are known as the ‘sheds’, that is the huge home product retail operators.
To compete effectively with such giants, Daryl’s strategy is to make products of the highest quality and to satisfy ever-increasing customer demand. To fulfil this strategy required Daryl to successfully implement a customer relationship management (CRM) solution that allowed it to control its business processes to the degree where quality production and customer satisfaction were guaranteed. Yet the key to this success story is not CRM technology per se. Daryl found that an existing CRM system could not take the business where it needed to go. Instead, Daryl is benefiting from installing a system that supports a rigorous, disciplined programme of business processing.
Within the Daryl portfolio are different types of design encompassing traditional styled products, through to modern functional showers with a contemporary industrial design and minimalist frameless shower enclosures, plus a bespoke shower product range.
Daryl products are designed and manufactured in two-purpose built sites in Merseyside and Lancashire, namely an assembly plant in Wallasey and a processing/warehouse site in Skelmersdale.
Offering such a broad range of products has profound implications on capacity and procurement requirements. Daryl has to source and stock a very large number of component parts to meet high levels of demand – without oversupply – and to ensure full customer satisfaction in terms of delivery times. Daryl’s business system director, Heather Devlin, recalls how the company came to decide on a new way or working. “Any business is faced with making sure it gives customers what they want. To be able to do this you need tools.
It’s a control thing: it’s understanding the demand that is on the business and being able to reflect that in what type of products you hold in stock,“ she says.
As orders began to mount up, Daryl’s old customer order processing system, says Devlin, was struggling to keep up with pace of expansion that Daryl was experiencing. She recalls: “It just didn’t have the scope, the tools and the functionality to allow the company to progress. Customer service operators had to remember part numbers, so that if you had a lot of products – as Daryl does – having to remember part numbers was quite difficult. Our part numbers were something in the region of 15 characters.” Given the high volume of orders placed from retailers using telephone, fax and email, all with long, complex numbers, placed great demands on Daryl’s staff and contributed to a laborious process where errors were easy to make.
Devlin was appointed as project leader for the task of finding a system that would allow the company to fulfil its expansion schemes. She describes the system selection process she put in place: “I spent a great deal of time identifying what we actually needed and I created a detailed Invitation to Tender document. I also talked to suppliers and customers. I saw what they were looking for when they went to Daryl and what customer issues people had with us. With suppliers I wanted to know if we were not giving them enough information, especially forecast information, so that they could respond quickly and hold the right stock levels. Some customers and suppliers have been with Daryl for a long time; I had to try to understand what their needs were as much as ours.”
Key technical criteria included a product configurator. Because of the volume of component parts that Daryl had, it had to have a system that could control the order intake and could manage procurement and capacity planning. The successful candidate also had to be a totally integrated set of solutions in order to minimise data transfer problems when dealing with external contractors. After three months of full-time working on the tender document – a big undertaking in a company with an IT department of only three people – Daryl was ready, in the summer of 1999, to present its requirements to 10 CRM system suppliers.
As much detail spent on constructing the tender document was given to assessing the replies. Daryl had great expectations from the system that would in any case, good or bad, have major impact on the business as a whole, and the Daryl board decided that any deal would not hinge on budget alone. The preparation work was done to ensure that Daryl got exactly what it needed, not just wanted.
The process was, says Devlin, akin to a beauty contest and initial scrutiny saw Daryl whittle down ten candidates to two. The next, pivotal step in selection was to see the two candidate systems used in real working environments. It was these visits that proved to Devlin exactly what the systems could offer and what she could rely on.
The winner was SAP; the other candidate just did not inspire confidence. In particular, SAP modules looked capable of being integrated easily across all of the functional divisions in Daryl.
Implementation began in April 2000, carried out by an eight-strong dedicated team from Daryl, assisted by consultants from system supplier Chelford SAP Solutions. The basis of the implementation and the key to Daryl’s subsequent success is still very clear to Devlin. “We didn’t deviate from what we intended to do. The temptation when you first get a system is to dive in and start playing around. We had the system installed and didn’t touch it. Before we started to use the SAP system we spent six weeks creating a blueprint of the business process. The consultants then came in and from our blueprint configured the SAP system to work to the process and not the other way round,” she says.
There was another vital spin-off from creating the blueprint: training material. Such documents were created for every single blueprint process and Daryl, interestingly, trained its personnel very close to go-live time. Training was carried out extensively with the hardest task of all being to train people, typically from the shop floor, who hadn’t used a computer before, let alone a CRM system.
The SAP system went live in October 2000 and, as one may expect, Daryl found the first three months of operations demanding. This was not due entirely to teething troubles – Daryl went live during its peak pre-Christmas period, not the perfect decision in retrospect, concedes Devlin, but a necessary one. “Maybe with hindsight it may have been better to put the system in [at another time]. But we had to put it in at that time because we were launching new products and we were winding up our product portfolio even more, and our existing [customer order management] product was struggling to cope . It may have been better to go live in April, but it was not possible to do that. Sometimes there’s never a good time to do it.”
Even after three years of usage, Daryl has not deviated from the blueprint. Changes in business process have been managed without any bespoke additions to the core CRM system. In this period the only problems have arisen from a warehousing system module that subsequently was found to be inappropriate: “We decided after a few months of going live that the function was bigger than we wanted,“ says Devlin.
Asked to point to popular features, Devlin points to the system’s ability to give full day-to-day financial cost visibility when running a production order. Daryl is able to discover exactly how the business is performing each day and when order tracking it can see how many dispatches are being sent and what exact cost this represents to the business. Another key element is the ease in which the SAP product adapts to the different business processes at the two different sites. This was something that was expected to be much more problematic.
Almost as important, particularly to customer service operatives, has been the capability of the SAP system to process orders without entering those long part numbers. Service operatives now enter in to the CRM system what model customers want, and in what colour etc – not part numbers – in order for the desired product’s components to be procured, assembled and delivered.
In assessing how the company implemented SAP, Devlin believes she was greatly helped in her task by the total buy-in from her board, and then from other key personnel from the shop floor to the general businesses environment. She says this vote of confidence made her job easy, even though she was very aware just how much the future success of the business depended on the implementation being successful.
Since implementation, 15 extra users have been introduced to the benefits of CRM, but as you would expect, Devlin has ignored the temptation to expand activities too fast. She says: “We’re going forward by making sure that the system progresses with the business.”
Devlin is aware of what developments have taken place with SAP technology and a major upgrade is planned at Daryl just after Christmas this year taking advantage of SAP product improvements. The upgrade will introduce features such as electronic selling and bar-coding to the retailers who will now be able to place orders using the Internet.
Daryl can claim many benefits from its SAP implementation, but Devlin modestly states her achievement by saying that CRM has provided a flexible infrastructure on which the business can grow. Undoubtedly, but only thanks to a precise, pragmatic, disciplined and committed approach to selecting the appropriate technology.
Key elements in Daryl’s CRM implementation:
- Understand fully your key business processes and design a blueprint for implementation based around them.
- Ensure buy-in from the board and key functional areas of your business.
- Talk to suppliers and customers to discover their opinions of your company.
- Undertake extremely thorough system evaluation; demand to see candidate systems in practice.
- Don’t rush; the future of your business may depend on what steps you take.