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Business Solutions with SAP

CRM, ERP, BI, and IT investment, where is the business benefit?

Retool, retool quickly!

Most companies want to use CRM applications as a way to “supercharge” their sales forces.  They want to gain some advantage with customer retention and acquisition, to manage the sales pipeline and to have better market insight.  But few companies realize these goals. 

After going through some of the academic studies and literature about CRM implementation there is evidence to suggest that some companies see some limited benefit from their CRM implementations, but overall they are not happy.  These anecdotal accounts show the primary reasons companies benefit from their CRM implementations at all is because the project itself causes the company to look more closely at their customers.  Even then, with few exceptions, the way the CRM software is often implemented does little to provide significant market-focused benefits.

It doesn’t have to be that way, and you as a customer can change it. It’s not the SAP CRM application that is the problem.  Between CRM, ERP, and BI, the tools are all there, but an instrument in the hands of a journeyman musician sounds far different than the same instrument handled by the journeyman’s apprentice, or a novice.

Where Things Get Off Track on CRM projects – Why CRM Projects Go Bad

Most SAP CRM implementations relied on retooled, post-Y2K HTML and Java consultants who flocked to the CRM space. Because the SAP “New Dimension” products were new the screening was not sophisticated and the experience requirements were low.

These web techies had little or no business experience and certainly little (if any) understanding of competitive pressures, value propositions, business strategies to retain or acquire customers, or a whole host of key issues that a good CRM consultant must know.  They were (and still are) completely clueless about marketing, customer / sales conversions, product development cycles, solution databases, improving service cycle times, etc.  They might know how to set some switches, or make some coding changes, but they have little ability to help transform your business or in how to move you forward in the marketplace.  Basically they had little, if any business experience.  

These consultants learn to talk the application talk, and they can spout some of the tools available, but when you drill down deep into their experience you find they are an empty shell.  They are like apprentice “musicians” who can read a few notes on a page of sheet music but they lack the years of practice and do not have the musician’s “soul” to understand and appreciate business.  These application technicians lack the critical transformational understanding your business needs.  True CRM success stories require consultants who have some measure of business or marketing background, not just an IT background. 

If you’re running a Formula 1 race team you don’t go to your nearest garage with a great tune-up special and hire them to do your tune-up before a race.  They MIGHT be able to keep the car running but you have no chance of winning the race with their expertise.  Their garage serves an important purpose, and it fills a particular niche, but if you are looking for race winning results they are not the right folks for the job.

Do CRM Consultants or CRM Vendors Know What You Need? 

What are your goals, your reasons, or your business triggers for doing CRM, ERP, or BI applications?  Did your implementation vendor assessment or consultant review include a detailed exploration of exactly how they would help you achieve those goals? 

Does the vendor or their consultants have any real business change management experience to help focus the company on a commitment to the customer experience?  Do they have the critical communication skills to support a communication program to the larger organization about the crucial role the new CRM application will fill?  Can they help guide the business in understanding how each person’s job or responsibility affects the marketplace, how the ERP system extends into the supply chain, or how the BI system supports the key data for reporting on various goals and performance metrics?  Do they even have strong enough communication or language skills to have actually done the things they claim to have done before?

At the start of the CRM project, did they explore where you might gain value in customer retention?  Do they even understand general sales, marketing, business, or operations concepts around customer retention?  Did they ask the critical questions showing they know how to define what you need to improve the quality of your customer touch points? Does your CRM implementation vendor or their consultants have a clue? 

I find it funny that to this day I frequently receive calls from recruiters and companies who are interested in me helping them do a CRM project.  This is even though I make it clear that I have no SAP CRM experience and my resume does not list any SAP CRM experience.  However many customers are beginning to realize that the SAP Sales and Distribution background (SD), with its sales and marketing implementation focus helps to ensure good integration between the CRM application and the ERP product, as well as the business experience that a good SAP SD consultant has.  On top of that, many highly experienced SD consultants have developed customer focused reports and tools to address some of the customer issues.  As a result a solid SD consultant has a fair understanding of the types of data points and BI reports that are necessary to report on.  An SAP SD consultant who is skilled and diligent has also encountered many of the issues related to customer retention and customer acquisition.

First Things First – Basic Business Strategy 

The difference between an application technician and a business consultant who knows the application is in knowing what questions to ask to determine what the true underlying business need is.  Even when technicians learn the business need they often have no idea how to convert that into a solution outside of their very narrow focus.  For example, if you have service or repair requests that seem high, do you focus on solving a quality problem, or on shipping processes, or packaging, or other reasons? And to resolve these issues, do you have or need a solution database?  Do you need some form of Engineering Change Management process integrated within the Customer Service processes?  Do you need Quality Management (QM)?  Is full blown SAP style QM overkill?  Is there a way to promote customer self-service with solving some of their own problems, both to empower them and to reduce your own internal costs?  Did the ERP or CRM consultant have basic business and troubleshooting skills to ask such questions? If you want ROI for IT expenditures, if you want SAP ERP, CRM, BI, or SOA to deliver business related results, start asking business questions about why you are looking at any technology spend to begin with: 

  • How do you determine customer needs and wants?
  • How do you track changing dynamics in customer needs and wants?
  • How do you convince your customer base to execute a purchase based on their needs or wants? 
  • How do you anticipate new products or services your customers may need or want next? 
  • How do you track market spend to new customer or enhanced existing customer product spend? 
  • Do you measure, or need to measure cost per lead and then lead conversion rates? 
  • How do you compare to your competitors? 
  • Is, or should, opportunity tracking be embedded into the customer service process? 
  • Do you know what opportunities can be converted into new customers or into new (or enhanced) products or services? 
  • How do you track opportunity costs? 
  • Do you link complaints / repairs / service / opportunity reporting back to customer attrition? 

Does your BI consultant know what to ask or do they just ask you what reports you need?  In other words, what are you paying them for?  To make a few system settings or for some business benefit?  How often does a completely accurate order get to the customer on time?  How quickly are orders processed through to delivery, and then how long does delivery take?  Are order to receipt to cash cycle-times in line with your competitors, and can you beat your competitors without additional costs?

In other words, if you want ROI it is going to take a genuine focus on the business drivers for why you are even considering some IT application to begin with.  And if you want the greatest return, and the best competitive posture in the market it will take some effort in finding consultants who not only know the application but who understand business as well.  Without them all you get is another IT application when what you need is business transformation.

Even if your consultant or vendor did some homework and started asking you some of these questions, do they have the depth of experience or business insight to help you understand how to convert your answers into real solutions? Do they know how to help you bridge the entire supply chain process all the way to the customer whether it is in the “back office” ERP application and its direct or indirect connections to the CRM system?

Until you as a customer begin to demand that consultants and implementation vendors come to the table with real business experience nothing will change.  It’s time that IT decision makers started demanding that their short list vendors demonstrate an ability to SOLVE real market based problems that you are facing as a company.  SAP’s ERP products are mature, the consultants to implement and support them have been around for some time, start insisting that vendors present “A” list players to even be considered for a short list. 

Start asking the tough questions from a business perspective and be more proactive in managing the vendor resources you select.  You might finally see the results you’ve been looking for.  And in case you think you can ignore this, not only are you facing economic and global competition pressures, there are new pressures emerging as well with technology itself.

A Technology Change that will Force You to Work More Closely with Customers 

Recently Google announced the availability of “SideWiki,” it is a web browser add-on to Internet Explorer or FireFox that allows users to comment on any page, of any site, anywhere. It also allows others to see the comments that are left.  So if you think you can hide from the Internet or from your end customers any longer, perish the thought. 

If you don’t already have some type of online “customer community” you had better develop one right now.  You can no longer control the message and your PR or marketing departments can no longer cover for inadequate customer focus.

At least gain some ability to understand and address your customers before there is more widespread adoption of these kinds of customer feedback tools over which you have no control.  Do you need an online “customer community” to be able to more directly and more carefully address customer concerns before they get reported to some of the rating and complaint services?  Or, outside of the CPG (Consumer Package Goods) space do you need to move further into the value stream to find a way to get close to the end customer of your product or service?  Should this online community also support gathering marketing intelligence, new product or service ideas, and generally engaging customers?

Are there areas of your customer experience where you must rely on third parties who are not as focused on customer experience as you are?  How do you measure and track that interaction and then how do you change it?

Even if these consultants manage to ask the right questions, do they know how to convert the answers to those questions into real solutions that meet business needs?  After all, there is lots of great source material right here in this article, and much more on my web site.  But asking the right questions and converting the answers to those questions into business solutions, generating solution scope, determining the right technologies and then understanding what is needed to bring the organization along behind this type of strategic initiative is an entirely different matter.

In other words we’re back to the same issue as I’ve written about in doing ERP implementations, what is the business reason for the IT investment?  Why are you putting CRM in?  Do you need CRM at all?  Do you need a different solution?  Are you better off investing in BI or would you be better at working through process issues and using SOA to embed yourself further into the extended value chain? 

This and many other articles point out the importance of having a focus on business needs, market forces, and competitive pressures for finally realizing business benefit and ROI from your implementation.  This type of focus can’t be achieved by technicians, even skilled technicians who might be talented at setting up a particular application.  A system alone only processes information and no system will change your position in the market.  However, done properly, and with the right strategy focused direction, a well-deployed ERP, CRM, and / or BI system can empower your company to more aggressively and more effectively compete in the marketplace.

Additional Resources on ROI, TCO, Business Benefit, Revenue and Profitability with ERP Projects:

Tactics, Strategy, ROI, TCO and Realizing Business Benefit from SAP

http://www.r3now.com/tactics-strategy-roi-tco-and-realizing-business-benefit-from-sap

Using SAP to improve Revenue and Profitability

http://www.r3now.com/using-sap-to-improve-revenue-and-profitability

 

Technology Evaluation Centers Listing:

http://whitepapers.technologyevaluation.com/view_document/20088/CRM-ERP-BI-and-IT-Investment-Where-Do-You-Find-the-Business-Benefit.html

 

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Contact me today through our site contact form ( http://www.r3now.com/contact ), phone, or e-mail.

Bill Wood
+1 (704) 905 – 5175
Bill Wood contact

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One Response to “CRM, ERP, BI, and IT Investment — Where Do You Find the Business Benefit?”

  1. Enterprise Resource Planning says:

    For improving the business and for doing management work easily ERP is one of the best toll. but for maintaining the customers relationship the CRM helps a lot… so according to requirement of the organization you can use them effectively with the help of planning you can archive the goal…

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