Growing profits with CRM and ERP? Yes you can!

By Patrick Pando, SVP sales and marketing, Scala Business Solutions.

Placing customers at the heart of the business has been a long-held desire but in many cases technology has not matched aspirations. Patrick Pando argues that with the ERP market rapidly maturing, the systems are now truly in place to enable a customer-centric evolution to take place.

The difficulty facing anyone trying to sell an innovative approach to using software is that so many of the buyers had their mindsets firmly entrenched ten years ago and have yet to really move on. This isnt to say the ideas of ten years ago were bad as such, but current technology offers so much more.

This is nowhere truer than in the customer management arena. AMR published a report last year that said 48 per cent of companies were by that time using some sort of customer relationship management programme, but that only a handful were reaping any genuine return on their investment. Among the reasons, you could speculate, were that the buyers werent asking the right questions at the point of implementation. Issues people tend to raise would, for example, include how much money will this save me, will it cut out repeated data entry (a particular favourite), and will we be able to work more quickly.

Nothing is actually wrong with these questions except that you could say yes to most of them if you were selling pocket calculators rather than IT implementations worth thousands. More appropriate queries at the moment might include will this transform my business, will we be able to enter areas in a competitive way that might have been closed to us before now and above all will this put the customer at the heart of our enterprise.

Its surprising how many organisations regard the customer almost as an inconvenience. They dont think this consciously of course; the regional bus company who, a few years ago, declined to stop for passengers because it would have made their timetable impossible to keep to are fortunately in the minority. But true customer-centricity, once an organisation is beyond a certain size, is often more talked about than actually achieved.

Increasingly, the ability exists for businesses to build a strategy around their customers instead of just talk about it. ERP systems have become the backbone for the majority of medium to large organizations today and the ability of these systems to integrate with other key business applications continues to grow. For example, take Scala Business Solutions latest offering iScala CRM, this builds additional functionality onto Microsofts CRM product such as multi-currency capability, international tax calculations (VAT) and business intelligence that enables organisations to use it with the iScala ERP system or other vendors offerings. This type of development is allowing firms to extract the full value from their existing ERP investments. Traditionally, too few individuals within the business have been able to use these sophisticated tools. Today, that is rapidly changing but apparently not fast enough.

Take the element of the AMR report that covers the sort of customer management system a business is likely to put in. The most common is Sales Force Automation, which is arguably an odd choice since it generally has the most implementation issues out of all of the options. The report suggests that the issues arise from the sales staff becoming the first people to enter the information, thus becoming information providers rather than information users. Put it another way, they wont want to spend time entering data when they could be selling stuff. So if they have been less than attentive about this then next time they are away and a customer picks up the phone, the information available will be incomplete. Call centre automation is also reasonably widespread and web self-service is taking on this is a good one because the customer enters his or her own data and has vested interests in getting it right.

The central weakness behind all of the above, though, has to be the fact that the sources of data entry remain so disparate. An organisation decides to use sales force automation fine, but even if the salespeople do enter the data accurately and regularly there can be issues surrounding keeping it up-to-date as well as the dreaded different versions of the data syndrome around an organization. Duplication of data entry can mean inaccuracy but also, since the customer (or indeed supplier) will be asked for their information on more than one occasion when they call up, it means the customer becomes subservient to your companys internal systems. This will not be a deliberate policy your business has adopted, but it will be a fact.

This is precisely why the new generation of integrated customer relationship management and ERP systems are doing more than simply speeding up existing processes. Take a likely scenario when one of these is in place. A customer calls in or has a visit from a salesperson for the first time. Their details are entered onto a system and from that minute they are on a central database. This can be part of the accounting system, part of order processing, it doesnt matter their details are visible to everyone from that moment forward. Furthermore when they change they change for every department, automatically. So your sales force gets on with selling, your accounts department gets on with accounting and your customer gets on with spending only productive time with you rather than frustrating themselves over your internal inconsistencies. Everybodys revenue increases as a result, because the technology is moving the business into new areas.

Any doubters should bear in mind another finding of the AMR report, which suggests that over half of the money spent on CRM systems is in people costs. By reducing the people involvement to a single entry point, these costs plummet and the return on investment can be seen more clearly. Indeed, AMR cites a lot of companies being very positive about return on investment (ROI) but then when asked to quantify this only 25 per cent of the businesses involved could do so. Presumably this gets back to their not having specified sufficiently clear questions for their IT suppliers to answer with a CRM system its easy, under those circumstances, to feel vaguely good about a system doing a vaguely positive job.

The IT industry as a whole is often compared to the motor industry. The metaphor stands up here. Yes, you can get from A to B more comfortably with an old mind-set and technology in the same way you could when you had to have a man with a flag walking in front of your car. But nobody these days would seriously consider buying a modern car and using it in this way they want to get to places and they couldnt possibly do without it.

Its the same for businesses adopting integrated CRM and other enterprise applications. There is so much to be gained from moving beyond the this goes a bit faster and might save a bit of cash mentality and instead transforming your organisation completely into one which serves your customers above all else. In doing so it will make each customer more profitable and become an asset in the truest sense of the word a tool that allows your company to build its revenue and to make that turnover work harder and generate more profits.