Is this knowledge power?

Customer relationship management has something of an image problem, but really getting to grips with what your customers want can...

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

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