6 posts from July 2009

The idea of CRM has always appealed to me. The concept that you could look at all your interactions with a customer and then discuss what has been happening with apparent authority does, I believe, enhance the customer relationship.

Of course the ability to mine the CRM system and locate prospects for new products and services is also incredibly useful.

My first experience of a CRM system (though it was called a ‘Customer follow up System’ then) was back in 1985 when I implemented it at a BMW car franchise. Of course back in those days the idea of a PC or terminal on every desk was fanciful because of the cost implications.

Moreover, it was not a particularly user friendly application. It was a green screen text based interface and asking a group of guys who were focussed on selling high speed motors to use (probably for the first time in their lives) a keyboard was a step too far.

The deployment was simply printing out reams of paper each day with their ‘to-do’ list activities and people to follow up, and then collecting the papers back, after much chiding, so the their scribbles could then be deciphered and manually input into the system.

The great thing was that the service and parts departments were also on the system so the salesman could talk about the last service or the new radio they had had fitted recently. Mind you, occasionally the customer would get upset because their car was in for service on the very day they were being called (and had just been presented with a huge bill) – but that was the only draw back of the system.

Remarkably this was a major step forward in terms of customer relationship management and certainly did produce an increase in sales because of improved customer loyalty. It was quite unusual for car salesman to call you to ask how you were!

Of course nowadays CRM is a great deal easier to use. For instance, Microsoft Dynamics CRM is so familiar with its ‘Outlook’ and ‘Office’ look and feel that the effort in training is minimal (relatively!).

I guess another significant difference is the ability to customise CRM to meet you precise needs. I think I would have given a used car salesman’s  right arm for the ability to easily add a few fields here and there rather than compromise and use fields that were ‘spare’ (at that time).

I suppose that the only thing that does surprise me is that almost 25 years after I completed my first implementation of a CRM system that there are quite so many companies who still don’t use one. Particularly considering the ability to start at a low cost through hosted services or even buy outright for a few users.

Interestingly, even the franchise that sold me my car doesn’t appear to use CRM. My warranty is about to expire and they haven’t been in touch to suggest a renewal. Or maybe, because it’s an Alfa Romeo, they have worked out, using Excel, that it’s not worth it!   

In some ERP implementations the company will build an internal team taken from different parts of the business to review and build the business processes for the ‘to-be’ model. For my thoughts on getting the right team see my paper ‘Simply the Best (ERP Project Team Members)’.

Often the people drawn into the project team will take specific responsibility for different areas of the business. For example someone will take care of Sales, reviewing and designing the appropriate sales order processes, sales contract set up use, commissions and rebates etc. Another person will be responsible for warehousing whilst someone will understand and design the use for product configuration.

The approach will be for these people to undertake training in the ERP product and they will then design, with the knowledge they have gained, the best business processes to suit the business.

Whilst they will have had to gain an insight as to how the entire business system works and will have an appreciation of how their areas of responsibility interacts with that of their colleagues it is vitally important that they are not allowed to continue without reference to the work their colleagues are undertaking. Why do I say this?

Well, I have seen on a number of projects where I have been brought in to review progress, the following issue: Good modern ERP systems have multiple parameters that allow for many different ways of doing business. These will cover engineer to order, make to order, make to stock and a number of other business topologies – each with their own nuances.  Some business types will and can make good use of more than one of these and this is where the challenge can potentially lie.

In one example I came across there was a mis-match  between business processes designed by different people which meant that the overall process wouldn’t work. This example was because the product design and configuration was based around project type customised items whilst the production planning and warehouse management processes were based purely around an anonymous product philosophy. Unfortunately, this wasn’t discovered until after several months work had been undertaken by the team members.

This is why I recommend the appointment of a BPD Tsar on such projects (BPD = Business Process Design). This doesn’t have to be a formal role but it is someone, either internally or externally, that ensures that the business process works from end to end, and in the event of dispute between the functional area experts, has the final say in how the business process will look. Clearly this person should have a full appreciation of how the business works and should be able to overlay this on the functionality of the business system.

Sometimes this can be the project manager but typically it is not.

However, it is an important responsibility and it can save you months of wasted effort.  

There is no doubt that ERP software such as Microsoft Dynamics AX and Infor Baan has become easier to use over the past few years. It is also true to say that CRM has also become a great deal more user friendly.

However, to suggest that there has been an equal reduction in the complexity of the underlying technology would probably be misleading.

We probably know that the possibilities of CRM are endless. The promise of being able to see all of your customers’ detail in one place, including all their recent purchases, returns, inquiries etc is very appealing.

Most people will experience CRM in a B2C (Business to Consumer) context – you’ll probably know that one of your utility suppliers or insurance provider has an extensive  database about you which is also probably linked into your credit record from a credit reference agency so all your details are in one place when they speak to you. (I’m going to have a rant – but I’ll put it at the bottom of this blog so I don’t spoil the flow).

Of course there is a place for CRM in B2B too (Business to Business) and primarily this is the area we deal in.

Let’s get to the point of the blog. Typically a CRM implementation is made at a different time to an ERP one. And typically, it is not by the same vendor. But if you are looking for a single deployment most of the ERP vendors have a good element of CRM in their offerings now. The point is (and I am getting there, honestly) is that to get all the detail from the ERP to the CRM and any other systems , such as manufacturing execution software, so the person using the CRM can have useful information at their fingertips, is quite complex and does require a considerable amount of expertise.

Yes, CRM is relatively easy to implement and use but to get the real value out of it, where you have data from different sources, then don’t just listen to the sales person, dig deeper and understand what the associated costs are to get the ideal solution.

Mind you some people only want to hear about the great things that business systems will do and delight in ignoring, or just be plain oblivious to the underlying complexity.

When I was an IT Director for a large European business I was once called to a meeting with a vendor of a ‘mobility solution’. The pitch was that you could on the PDA he was selling present your ERP and CRM data and have access to that information out in the field.

This was music to the ears of the commercial director. He had always wanted this – and the price of a few pounds per month per device made it a no-brainer to him. The salesman of the product had said that this was entirely possible. The problem was that commercial director had taken this as a literal translation! He told me he was going to buy 50 of the devices because it would give him what he always wanted. The only reason I’d been invited was because he wanted me to confirm the spec of the PDA.

It took quite a while to explain that there would be quite a huge project, at some cost, to get the data he wanted from umpteen systems onto his magical PDA. I had torpedoed the project. I’m not sure he genuinely understood and I have a suspicion he thought I was being difficult so I could follow my own ‘complicated’ agenda.

Anyway, time for my rant as promised.

All those companies that have CRM in the B2C space – why do they only use it to sell insurance?

I’ll explain quickly. I’ve had two events in the past month that have required me to use or buy something I didn’t really want to. Firstly I had a tyre blow out on my car. At the tyre garage they took my phone number. Two days later I get a call asking  ”if I was happy with the service?”.  “Was I given a choice?”  “Was everything clearly explained to me? And “when is my car insurance due for renewal?”  And  “Your house insurance?”

A week later – a flat battery. Recovery service out and I was sorted. A day later a phone call. “Happy with the response?”, “Did the service guy explain the problem?” and “When is your home insurance due for renewal?”

CRM – sometimes I’m not so fond of it.

An important part of our business is providing a managed service to companies who use Microsoft AX (formally known as Axapta) and Infor ERP LN (formally known as Baan). This covers both technical support and functional consulting. We also, for a number of customers, provide support for all of their IT systems – we become the IT department.

Often businesses approach us because they are looking to save money on their internal resource, or realise that they are facing some risk in that the people that they employ could depart and leave them in a fix. It is not untypical to find that the people who work in IT, and who support the ERP system, have been around the business a long time. They have had the excitement of implementing the ERP system and are now lynchpins in the continued use of it.

There is a paper on our website ‘IT Support Options’ that discusses this in more detail – take a look and tell me what you think.

The challenge we always face when discussing our pricing with the potential customer is often centred around our estimates for the number of calls we believe we are likely to receive each month. We always suggest a higher number than the customer anticipates. For clarity we don’t just pick a number out the air – we will go on site and interview the users and look closely at how the systems are currently set up and used.

Why the disparity? Why do we always, in the eyes of the customer, overstate the number of calls (cases) that will be handled? We call it the ‘Not Jim Syndrome’.

‘Not Jim Syndrome’ is this: Where a long serving employee is in sole charge of IT and ERP the demand from the users decline in proportion to the user friendliness of Jim and how Jim feels valued by the organisation.

Actually I am being particularly flippant here and I don’t want to offend unnecessarily any Jims out there. It is obvious though that an internally resourced IT department of one, or two, is going to be limited by a number of things. Mainly time – there are just not enough hours in the day to solve all the problems, or importantly, take advantage of the features of your IT and, more particularly, your ERP system. It is also likely that the person just won’t have the breadth of knowledge about your IT and ERP to be able maximise the use of it. And finally, there’s history. I’ll expand a little more on this if I may.

The chances are that the user requests came in thick and fast in the early days of the ERP implementation and on some days Jim could, under the pressure of work, become a little tetchy. After a while people stop asking. They either accept that something can’t be done or start working round ‘the problem’. (See my other blogs on using spreadsheets for reporting).

Another issue is that it is often easier to keep fixing the symptoms of an issue rather than dealing with the underlying cause. Each day Jim ‘fixes’ an error rather than investigating and changing the system to prevent the error occurring in the first place. This is sometimes done for one of three reasons; one, they just don’t have the time to do the investigation. Two, they just don’t have the knowledge on how to solve the problem or three, they prefer it that way as it makes then ‘indispensable’.

Anyway, to return to the main body of this blog: Eventually, after some haggling we agree a managed service contract with our customer and we offer our helpdesk service. The calls start at a trickle and then, when people realise they are getting answers to their questions, and solving some long term issues, the trickle becomes a stream and then a river. Importantly they begin to ask about the functionality they are not currently using in their ERP systems and we help them investigate the use of that.

So, what conclusions could you draw from this? Well I’d suggest these; If you’re a business that is relying on one or two people to run your IT and ERP then you may not save vast sums by outsourcing but you will probably make greater use of the IT and ERP you already own – get better value from it. Or, if you are a Jim – then you might do your business a favour by contracting with some external resource to help you get the best out of your systems.

Tell me what you think…..

Hey, and I know I like my syndromes!

I have to start this blog with an apology. I’m going to talk about a phenomenon I’m going to call ‘Property Ladder Syndrome’ and it’s based on a British television program – so if you don’t watch UK TV then you may not appreciate the parallel I’m drawing. However, I hope to explain what I mean anyway.

Property Ladder is a program on our Channel 4 that is presented by (a seemingly constantly pregnant) Sarah Beany. She has been a property developer for quite a long time and has been successful at it. The program format is that she follows some first time developers travails as they take a run-down property and convert it into a pristine, saleable property that is supposed to make them a considerable amount of money. It’s not a competition – it’s real people making real life decisions with their own money.

The format goes roughly like this: Introduction to a couple. Look at the house they have bought – either  1970’s décor or falling down. Talk of their budget for the development. Sarah telling them that the budget is too small and their target sales price too high.  Then her offering advice on how to not spend so much money or add value by changing the plans.

For instance a couple might decide to refurbish the house and have three huge bedrooms. Sarah suggests that you could get four bedrooms in the same amount of space and that would add a twenty percent premium to the sales price. The couple then look at each other and then almost in unison say that the original vision was to have three bedrooms and nothing will change their mind. They also suggest that Sarah ‘has got it wrong’. In effect they ignore all of Sarah’s knowledge and experience, suggest that she doesn’t know what she is talking about and then continue down the path they started with. Often they won’t even let Sarah explain how she has reached her conclusions.

So?

I’ve had a ‘Property Ladder’ encounter this week. It went like this.

“We are having a bespoke software package written because our business is very specific”

“Well, knowing what I do know about your business, I think you ought to look at Microsoft Dynamics CRM because it does most of what you want out of the box so you wouldn’t have to wait for your development, you can customise it to your precise requirements, you won’t be locked into one person to support your business application, it works like the software you are familiar with and in my experience you will find it will be very competitive in terms of price compared to a bespoke system”

“But we’ve decided on what we want we won’t consider anything else”

“Don’t you think it would be at least worth sparing an hour to look at CRM before discounting it?”

“Er, no”

At the end of the program, Property Ladder, not Microsoft Dynamics CRM, Sarah returns to the amateur developers. They are very tired and often vowing never to do it again. They have overspent on their budget and surprise, surprise, the target they set for the asking price is discounted by three estate agents. In short they’ve spent all their savings, lost 6 months of their lives, and ended up losing money. Sarah looks into the camera and says (with a lot less smugness than I could muster) “If only they had listened to me they …….”

Well, this week, when a customer I advised some months ago came back to me and said they would like to look at CRM because their bespoke development by their lone developer was taking too long, running over budget and wasn’t going to achieve what they wanted it to I turned to my imaginary camera and said……