Here’s a myth that’s been doing the rounds: companies such as yours, that yearn for technology to help you better manage links with customers and suppliers, will experience outright disappointment if you go down the route of buying a powerful but obscure technology called customer relationship management (CRM).
Even if there have been some “expectation” issues surrounding CRM at the enterprise level, the technology has enormous promise and usefulness to your company. This is because, behind the buzzwords, the heart of customer management is not only appealingly simple; in reality, it’s actually firms such as yours that can realise the greatest potential out of it.
Even suppliers endorse these views. “Fortunately, a lot of puff has come out of the CRM message,” says Tim Osman, head of small to medium business at SAP UK and Ireland. “It’s not philosophy; it’s about pragmatic things like how I can sell more to my existing customers.”
“Small companies are the ones that can get the most out of CRM; they are nearer the core processes that need to be looked at. A lot of the problems reported on bigger CRM deployments centre on the organisational acceptance issues of driving change across a big company, which smaller companies normally can avoid,” says Merlin Stone, IBM’s business resource leader in the subject and a business school academic.
It seems logical that customer management could be the tool to help a smaller business become a bigger business. “As smaller companies grow their internal processes can get more complex, and there’s the whole phenomenon of growth pains. Getting CRM in early could help focus on the processes that will always matter – selling more to the best customers and getting the most out of your best suppliers,” says Mick Hegarty, general manager ICT BT Retail/BT Business.
It’s probably worth reviewing what is being debated here. What is customer management for? A pragmatic definition comes from Alan Hartwell, VP of marketing for Oracle in the UK and Ireland: “Every business of every size wants to manage the relationship with the customer better, and wants to do it more and more efficiently for less and less cost.”
Sounds fine, but what do you need to do this? For a moment, forget about any IT marketing terminology. Even the smallest company will have a sales ledger – something that records what has been sold and what money has been paid in. Now imagine extending that system to add information about which customers are most valuable. Wouldn’t it be nice to know exactly where you are with that relationship at any time?
Meanwhile, there’s the issue of customer acquisition. While it’s much easier (and cheaper) to work with customers you already have, sometimes you’ll want to expand sales and get new customers. You would want to track and monitor your efforts to acquire such customers and see which techniques are working.
Finally, there’s the issue of your face to the world. It’s always nice to be greeted in a friendly fashion by the local butcher; he knows how you are and what you like. Wouldn’t it be nice to offer the same kind of greeting to a customer when he contacts you?
Put all this together and you have the underpinnings of a CRM requirement. But up until recently, that’s all you’d have had – the industry was not geared up to selling CRM to companies such as yours. “Until two years ago, yes, getting into CRM for the smaller company usually meant paying an arm and a leg and often getting a sawn-off version of the system designed really for the larger player,” says IBM’s Stone.
But that’s changed. Options have expanded if you are looking to better manage your customer relationships. On the one hand, accounting package supplier Sage, whose software is frequently found in the smaller back office, has expanded its offerings through a link with account management supplier Act. On the other, large players like Oracle and SAP have set up dedicated value added reseller (VAR) channels to better target small users, with what they claim are modular versions of their heavy-duty customer management systems. There is also a choice of putting together a technology solution by combining the best systems that perform a particular function in each aspect of customer and supplier management. You could look to your existing enterprise resource planning (ERP) provider to add CRM functionality onto your existing package.
Also, there appears some revival in the hosted or application service provider route of ‘renting’ software remotely rather than committing to any big server deployment. And now Microsoft is ready to weigh into the CRM market with a product due out in the UK in December, with a number of VARs already waiting to sell the system. “We’ve focused on ease of use, usability, and integration,” says Simon Edwards, Microsoft UK’s general manager for business solutions. “We see a big market opportunity and a big need for this kind of product.”
The key message is that there is now going to be some kind of technology that will suit you no matter what your size of company (or ambitions). So how should you approach buying into CRM? “These projects never work if they’re just about technology,” says Oracle’s Hartwell. “Set your business goals at the outset. Are you doing this because you want to achieve growth or reduce cost, or are you trying to do both at the same time? Know which one it is as that is crucial in making the technology work for you.”
Plainly, if you add something like CRM without looking at how your company is currently handling things like customer complaints or cross-selling opportunities, you’re missing a big part of the picture. “You use CRM to not waste your time and resources,” says John Owens, an IT and e-business advisor for UK Online for Business in Lincolnshire.
To do that, says SAP’s Osman, look at your people and the job they do. Do they need to be spending more time with customers? How can that be achieved? “Sales, marketing and shipping may all have different views of the customer. Do you have islands of people instead of a consistent view of the customer and what they need? Some people re-organisation may need to happen before you do any software implementation?”
A factor here worth noting is outlined by Gayna Hart, founder and MD of CRM systems integrator Quicksilva. “Depending on your company’s age you may have an issue of legacy systems around these processes. You need to decide if they should be replaced or integrated into the new world.”
Does it seem like you need to go out and hire lots of CRM experts? Not necessarily, but a little knowledge might not be a dangerous thing. “You don’t need a lot of CRM experts, but we recommend [conducting workshops] with everyone involved on what the new system should do for them, as company culture is a big factor here. What can work in one sort of call centre geared to rapid call processing, say, won’t work in one where the focus is on selling the company brand, “ adds Hart.
So the message is clear – it is an ideal time to look at technology that’s been thoroughly tested by large enterprises and is now coming to a company like yours. But there’s no getting away from the fact that just loading the CD-ROM isn’t the right way to get the best out of it. The crucial part is looking at what you want to do; either better manage existing customers or find efficient ways of adding new ones.
If you can do both, there is no reason to hold back any longer.
Case study – Hillarys Blinds
Hillarys Blinds (www.hillarys.co.uk) is an £80m company recently formed through a management buyout. The largest manufacturer of made-to-measure blinds in the UK, it has used an upgrade of its existing SAP R/3 ERP system as an opportunity to add CRM capability, according to director of ICT David Lewis.
“For us, CRM isn’t about software but about us being an exceptional place to buy from,” says Lewis.
He says that the company had to restructure some of its processes and operations to make the most of the software – but that “we needed to do that anyway”.
“The software change gave us the impetus to make those necessary changes in a controlled and structured way.”
Hillarys expects full return on investment from the system within a year, with a 25% projected boost in capacity of staff to handle orders as a major bonus.