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CRM Solutions for Your Industry

by Stefan Haenisch | SAPinsider

January 1, 2004

by Stefan Haenisch, SAP AG SAPinsider - 2004 (Volume 5), January (Issue 1)
 

In its simplest terms, customer relationship management (CRM) is a business strategy to optimize your customer-facing activities for the greatest impact on business success. CRM processes are some of the most business-specific of any in your enterprise, given that the most basic elements — customers, products, services — have to be defined from an industry perspective.

Consider just one example of the customer dynamics at work in an industry ecosystem. In the pharmaceuticals marketplace, the patient who picks up the prescription is the end-customer, but the doctor is actually the decision-maker for the buy. Meanwhile, the pharmacy has purchased the product from resellers, and a health insurer is likely to be involved in paying for the consumer’s transaction. Here, “customer” has many definitions, with many and various touch points.

Compare this to the municipality providing services to its citizens, the consulting firm touting its people, the coffee chain selling you a latte, or the high-tech manufacturer developing custom-designed semiconductors, and you gain some sense of how the peculiarities of an industry impact the solutions, processes, and channels that make up a CRM strategy. Do resellers or other partner channels need to be incorporated into your processes? Are you offering end-consumers an individualized experience through high-volume channels, such as the Internet and call centers, that require sophisticated personalization, empowered by analytical engines? Or does your long sales cycle demand an individual sales plan with face-to-face interactions, where sales-related solutions for opportunity management could come into play? To deliver bottom-line results — and to do so quickly — the software solution that enables your CRM strategy must adapt to your industry’s environment.

With this in mind, mySAP Customer Relationship Management (mySAP CRM) was developed along with industry-leading companies to take an end-to-end, process-based approach and address the unique needs of enterprises in all major industries. What’s more, it provides an incremental approach to implementation, for easy deployment of the processes that meet your highest-priority business needs to help you gain a fast return on investment (ROI).

SAP’s Unique Way of Addressing Industry-Specific CRM

Achieving an industry-specific CRM solution requires more than offering a little extra functionality, enhancing underlying master data structures, or adapting some fields on the user interface — changing the Customer field on the screen to Citizen for public sector operations, or to Physician, Hospital, or Pharmacy for pharmaceuticals, for example. Some CRM vendors have included such changes and therefore brand their solutions as industry-specific, and this is a first step; but as long as this only sits on top of rather rigid, isolated front-office tools, the value potential is limited.

After all, CRM processes are not just limited to the front office; if a customer calls to place an order, the interaction doesn’t end there. CRM processes span the entire enterprise, across departmental boundaries and systems into fulfillment, shipping, invoicing, and collections. Successful CRM strategies seamlessly incorporate the tasks in supply chain management, financials, human resources, and analytics that are often needed to accomplish customer-facing processes, and position CRM as an integral part of a company’s overall business strategy. End-to-end solutions that support industry best practices are what are required.

“Buyers of CRM applications ... are focusing less on features and functions and more on the most valuable processes that get work done... In many cases these processes are extremely industry-specific... Those implementing CRM have learned over the last three years that the integration of end-to-end processes delivers bottom-line results more quickly, particularly when unlocking the value of existing technology investments.”

— Ed Thompson, Vice President and Research Director, Gartner Inc.

To address these needs, SAP brings a powerful, open integration architecture based on SAP NetWeaver1 to enable seamless end-to-end processes. Then mySAP CRM combines these integration capabilities with SAP’s unmatched industry expertise. Driven by SAP’s 23 Industry Business Units, SAP has identified the most important business needs when it comes to customers — and those that bring the greatest returns for companies in each industry. mySAP CRM offers these consolidated and prioritized CRM processes, leveraging SAP’s years of experience with the largest customer base in the software industry.

“SAP has begun to reestablish within CRM the deep advantage it enjoys in ERP.”

— Rod Johnson, AMR Research Alert
(June 20, 2003)

mySAP CRM industry processes were developed in close collaboration with SAP customers. In designing mySAP CRM, SAP has gathered best practices and requirements from market-leading companies, thought leaders, and analysts in every sector SAP serves, addressing tangible business process needs as well as technical requirements. As a result, mySAP CRM now enables more than 280 unique industry-specific end-to-end processes for a range of industries, from Aerospace & Defense to Utilities.

Industries Served by mySAP CRM

mySAP CRM processes have been designed to meet the business needs of industries like:

  • Aerospace & Defense
  • Automotive
  • Chemicals
  • Engineering, Construction,
    & Operations
  • Consumer Products
  • High Tech
  • Industrial Machinery &
    Components
  • Leasing, Banking, & Insurance
  • Media & Entertainment
  • Mill Products
  • Oil & Gas
  • Pharmaceuticals
  • Professional Services
  • Public Sector
  • Retail
  • Telecommunications
  • Utilities

Take mySAP CRM processes for the Consumer Products arena, for example, where companies are typically investing as much as 17% of their annual revenues in trade promotions, which may add up to hundreds of millions a year, in many cases even billions. At the same time, studies have found that as many as 91% of manufacturers feel trade promotions dollars are inefficient, 85% find they are ineffective, and only 19% feel they get good value. (Imagine the returns on a solution that enables increased efficiency by as much as 2%-10% of these expenditures!)

“By integrating trade promotion management with our core processes and systems such as supply chain, financials, and business analytics, mySAP CRM provides an unmatched end-to-end solution for managing our trade promotions.”

— Ed Toben, CIO, Colgate-Palmolive

SAP customers have indicated they need to better plan and track where these trade spends go and utilize them for greatest impact, as well as systematically integrate the complete value chain. Otherwise, the potential for loss is huge. In many cases, missing links in demand planning lead to significant out-of-stocks, undermining promotion success.

Imagine that account executives in different regions unknowingly schedule the same promotion for the same week without considering the supply side: 10 million boxes of laundry detergent might be sold, but only 2 million will be ready to ship. Or consider the costs of incorrect invoices if front-office rebate negotiations are disconnected from backend settlement processes. So with mySAP CRM’s Trade Promotion Management (TPM) capabilities, consumer goods companies can effectively launch and monitor these promotions and address the challenges of budgeting as well as brand and demand planning and execution.

In Consumer Products and across the business spectrum, a growing list of global customers — including among them Adobe, AstraZeneca, International Paper, Nestlé, Siemens, Tetra Pak, and Volkswagen Financial Services AG — are implementing the latest industry capabilities in mySAP CRM. With more than 2,500 mySAP CRM customers, there are also several hundred that have already started to implement the latest mySAP CRM release (SAP CRM 4.0, released to customers in June 2003).

Examples of Industry-Specific Processes from mySAP CRM

mySAP CRM business processes are designed specifically to meet the needs of particular industries, including:

  Automotive
mySAP CRM now offers Customer and Vehicle Relationship Management, allowing automotive companies to track and monitor essential information about customers, business transactions, the configuration of vehicles, and the vehicle life cycle from the customer’s perspective for the duration of customer ownership. By tracking an automobile’s history across several owners, organizations can institute fraud protection, market to used-car buyers, and manage spare-parts planning, creating new individualized sales, service, and marketing strategies.

  Professional Services
To help consulting firms and other organizations manage sophisticated account requirements and make the most effective use of human resources and knowledge assets, mySAP CRM offers complete service process management, including Opportunity Management, Project Management, Resource Planning, and Engagement Management.

  Media
For media companies to effectively lower the cost of creating and managing new content to drive revenue, mySAP CRM provides Intellectual Property Management functionality for the entire media and entertainment value chain, including acquisition of intellectual property, development of new media products, sales of rights and licenses, and management of royalty payments.

  Pharmaceuticals
Value-Based Detailing processes for pharmaceutical companies address complex market ecosystems and the resulting requirements in areas like territory management, activity management (including sample management), as well as sales and marketing analytics to help optimize sales representatives’ limited time with physicians.

Process-Based Solution Planning and Implementation

With mySAP CRM, you receive the solution’s full range of industry-specific processes, all based on a single codebase encompassing all industry capabilities — not just some functions added on top of solution capabilities for your industry. Why take this approach, if your real concern is your own business environment?

With a broad-based mySAP CRM solution as your starting point, you can best leverage the full set of core functionality and engines, as well as pick and choose from the offerings designed for your industry. You also gain the flexibility to “borrow” processes developed for other industries, for example:

  • Trade Promotion Management capabilities are not the exclusive domain of the consumer goods industry; they can also be used to great advantage in managing the over-the-counter (OTC) business of pharmaceutical companies.

  • New CRM-specific Individual Objects, primarily designed to manage vehicle data in the automotive industry, can also be used to optimize service processes in machinery-related environments.

  • High-tech companies with embedded services organizations can benefit from functions designed for the Professional Services industry.

Meeting a company’s full set of business needs while still providing a high ROI requires a process-based and incremental approach to implementation. With SAP Solution Manager, mySAP CRM enables you to deploy the industry processes and core functionality you need in small, manageable steps based on your top priorities. SAP Solution Manager allows you to select only the processes that have the greatest impact on your business. It then guides you throughout the software life cycle, from initial scoping and blueprinting to implementation and ongoing support. Predefined business processes are built into SAP Solution Manager, so you can profit from proven industry best practices, giving you a jump-start for fast ROI with lower total cost of ownership (TCO).2

Succeeding in Tough Economic Times

In the present global economy, most enterprises need to initiate significant cost containment measures to remain profitable. While budgets for marketing, sales, and customer service are either flat or being reduced, enterprises need to fight that much harder not just to acquire and retain customers, but also to get their share of decreasing customer spending. CRM solutions can help to resolve the do-more-with-less dilemma, but they need to provide tangible value quickly.

Value only comes by solving the real business challenges of your respective industry, so CRM solutions must provide end-to-end processes adapted to specific business environments. mySAP CRM not only provides support for customer-centric processes spanning the entire enterprise, it also has been designed to meet industry-specific demands.

Process-based solution planning and implementation enable modular deployment that empowers companies from all branches of industry to tackle strategic priorities first. Implement mySAP CRM and take stock of the full range of core and industry-specific functionality offered in order to realize fast, measurable results at each step along the way.

For more information on industry-specific mySAP CRM offerings, visit www.sap.com/solutions/crm/industryspecific.asp.


1 See "mySAP CRM, Based on SAP NetWeaver, Provides a Complete Solution for Integrating Your Customer-Focused Processes" by Rodiger Buck-Emden in this issue of SAP Insider (www.SAPinsider.com).

2 See "Focus on Your Customers More Effectively and Cost-Efficiently with CRM Business Scenarios and SAP Solution Manager" by Hans-Heinrich Siemers and Andreas Schuh in this issue of SAP Insider (www.SAPinsider.com) for more on the SAP Solution Manager for mySAP CRM.


Stefan Haenisch is Director of Global Field Services & Roll-Out CRM at SAP AG. Stefan’s experience with industry-specific CRM goes back to 1995, when he joined Kiefer & Veittinger (K&V), at that time the leading European CRM solution provider. In addition to managing implementation projects for pharmaceutical clients, Stefan designed numerous industry-specific CRM processes, such as Activity Management for Hospital Sales, Promotion Budget Management, and Pharma Sales Analytics, together with some of the world’s leading pharmaceutical companies. Joining SAP in 1998, Stefan took on responsibility for managing development and roll-out of the first mySAP CRM training program, and later for field roll-out in Southwestern Europe. Since early 2001 he has been responsible for rolling out new releases of mySAP CRM globally. Prior to joining the software industry, Stefan gained experience in corporate procurement at a global chemical company and in retail logistics reengineering at a well-known strategy consulting firm. He holds a masters degree in Business and Engineering from the University of Karlsruhe, Germany.

 

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