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CRM Lessons in Revenue, Profitability, and Customer Satisfaction

by Dietmar Saddei | SAPinsider

January 1, 2004

by Dietmar Saddei, Senior Vice President CRM, SAP SAPinsider - 2004 (Volume 5), January (Issue 1)
 

 
 
Dietmar Saddei,
Senior Vice President CRM, SAP

 

Q. Everyone looks to achieve greater revenue, profitability, and customer satisfaction with a CRM solution, but the results are widely varied. What advice can you offer for higher returns in all three categories?

Don’t fall prey to a piecemeal approach. You will impede your ability to achieve sound returns in all three areas. I see it time and time again: an organization experiences a revenue problem and looks to a CRM application, perhaps a Sales Force Automation tool or a Web shop, to help chip away at the problem. They implement the point solution but don’t consider the implications for the overall end-to-end process as experienced by the customer. It’s one thing to take an order. It’s another to deliver on it, particularly if you’re talking about scenarios that involve complex industry-specific production and delivery scenarios.

A disconnect between order and supply chain processes clearly compromises profitability and, by extension, customer satisfaction as well. I’d much prefer to deal with an organization that can give a firm commitment for an expedited delivery on the spot than one that can’t. Now multiply that sentiment across hundreds or thousands or even millions of customers. There is no debate — integrated demand and supply chain processes are far more efficient, profitable, and appealing to customers. Organizations with customer-facing activities that are integrated with backend processes stand to reap much greater returns across the board. So my advice is simple: Don’t operate your CRM activities in a vacuum. Make sure they are fully integrated with the right enabling processes and information sources. This is extremely important for successful interactions with customers and partners.

Q. But integration doesn’t come cheap. Every IT organization knows that process integration is a complicated, expensive, and time-consuming endeavor. Yet you suggest they tackle a big integration exercise with every CRM activity?

I am suggesting that every CRM function be integrated with the activities they impact and that impact them. I am not suggesting that customers do the heavy lifting. Integration should be delivered with the CRM application. It should come right out of the box so that you shoulder a relatively small amount of integration and configuration, and instead focus your efforts on just the things that are wholly unique to your business.

That is certainly the case with mySAP CRM. It comes with hundreds of pre-configured, pre-integrated, end-to-end business processes designed to address a CRM activity in its entirety. Take e-selling, for example. We don’t simply offer a Web shop for accepting an order. With mySAP CRM, this activity includes the shipping, billing, and payment processes as well. Our call center function offers another good example. This scenario begins with a caller posing a query to an agent, ends with that caller confirming that his or her inquiry or problem has been fully and satisfactorily resolved, and encompasses all the escalation activities in between.

If you had to achieve this end-to-end integration for CRM activities on your own, the cost would soon be prohibitive. Even if you did find the time, resources, and budget to establish this integration today, what happens when the various elements along the integration path need to be upgraded or resized? The long-term TCO would become untenable.

The critical thing to note about CRM is that it is not a single, simple, self-contained application suite. CRM is the focal point for disparate business processes, data, and organizations. You need to align yourself with a vendor that treats it as such and can effect the necessary integration with the systems that are pertinent to your business.

At the end of the day, it is how a CRM solution marries its features and functions with industry-specific knowledge and process integration capabilities that determines its value to your business.

Readers of SAP Insider run SAP systems. I can tell you right now that no vendor integrates CRM with SAP systems better than SAP!

And no vendor offers more industry-specific CRM capability. Industry-specific considerations are critical for determining the ROI of a CRM solution, and I encourage your readers to take a hard and fast look at this because, at the end of the day, it is how a CRM solution marries its features and functions with industry-specific knowledge and process integration capabilities that determines its value to your business.

Vanilla CRM is limited because the value chain activities that drive higher revenue, profitability, and customer satisfaction are not identical. The call center processes for auto manufacturers, for example, are quite different than those for public service organizations. Your CRM solution — at both the feature and process-integration levels — needs to account for these differences.1

Q. In addition to deep industry-specific knowledge and end-to-end integration capabilities, are there any other criteria that customers should factor into a CRM decision?

1. Don’t predicate your evaluation on feature-by-feature comparisons. SAP has literally thousands of features, and frankly so do others. This might weed out the lesser players in this space, but it won’t get you too far. You need to fully understand the context in which those features operate. How are they integrated with pertinent backend processes? How do they support the factors that shape your specific industry?

2. Test the solution with a pilot project. Can the vendor get a viable pilot up and running in a short period of time? If the vendor can’t establish something meaningful in three to four months, that should raise a red flag.

3. Evaluate the efficacy of the integration and technology platform on which the CRM solution is delivered. No vendor is going to address 100% of your requirements. You will have to do some work at your end. What will it take to do that? How easily will it integrate with your existing systems? Obviously, if you’re talking about mySAP CRM, integration with your SAP systems comes right out of the box.

4. Evaluate the short-term and long-term TCO.

5. Does the solution cater to multiple constituencies? Remember, CRM is a focal point for varied business activities. Your marketing executives need access to all sorts of analytics. Sales executives need to monitor and manage commission and incentive plans. Supply chain planners and manufacturing schedulers need to factor sales and marketing activities into their forecasts. Sales people need support for the full breadth of a sales cycle. Customer service agents need customer histories. Suppliers and partners may need access to various processes and data. Customers may avail themselves of a Web shop. The list is extensive. Is the solution able to enrich the activities of all these parties?

6. Insist on reference accounts!

Let me conclude with this thought for SAP Insider readers, since you are all running SAP systems today: For you, there is no better CRM solution. With all the feedback we get from our customers, it’s clear that there is a fundamental change in the way companies look at CRM — it’s all about finding tightly integrated enterprise solutions that support the respective industry-specific business pain points and can be implemented at a reasonable cost. As most CRM features and functions are commodities right now, customers are asking for a holistic approach to their needs. More than 30 years of intense cooperation with our customers across 23 industries put SAP in a unique position to deliver leading solutions for next-generation CRM.


1 See "CRM Solutions for Your Industry" by Stefan Haenisch in this issue of SAP Insider (www.SAPinsider.com).

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