Vertical Focus: Manufacturing

How do you get penetration in a market that is notoriously slow to accept new technologies and adapt to new things? Very carefully.

The manufacturing industry is far more conservative than markets like banking or retail, says Dr. Patric Timmermans, director of marketing and product management for Baan CRM. "The manufacturing industry has a strong focus on the efficiency of its operations," he says. "The main goal of most manufacturers implementing a CRM solution is to help cut costs and streamline processes. It's not about gaining market share."

In an industry in which some companies have had the same salespeople in place for quarter of a century or more, change does not come easy. And seemingly benign or helpful technology can be perceived as a threat to those salespeople. The Internet, which has been viewed as a fertile expanse by many businesses, initially gave manufacturers pause. Only now, Timmermans says, have companies begun to see the Internet and Web-based CRM solutions as something other than an unproven, immature risk. "With the increasing proliferation of Web-based business applications, particularly CRM solutions, and the acceptance of those solutions, you'll see Web-based solutions becoming the majority of what is used by manufacturing companies," he says.

As with many other verticals, many expect the arrival of Microsoft CRM to have a positive impact on CRM penetration in their industries--whether companies purchase MS CRM or its competitors' products.
Vendors may be happy to hear such pronouncements, but the desire for many manufacturing companies to keep things as simple as possible is still a very real factor in determining how successful CRM in this market will be. As manager of information systems for American Tank & Fabricating, Chris Smith is one of those in the industry who is glad that his company is using a CRM Solution. That doesn't mean that the decision was an easy one for the company. American Tank, founded in 1940, is a company that creates made-to-order heavy steel components for mining, heavy construction, and material handling. The process of finding a suitable CRM solution began more than two years ago for the Cleveland-based company, and its executives spent more than a year examining a number of solutions before deciding to implement a SalesLogix package bundled by Made2Manage.

"It took a lot for different people to buy in to the idea of a CRM solution here," Smith says. "For the sales department, the idea of double entry of information was a point of resistance, but once they realized that they would have the ability to cross-sell and see who's talked to whom, they were on board. For upper management, the ability to hold the sales department accountable for information that was lost or misused was a big selling point."

That challenge of getting buy-in is one reason Smith believes that for the manufacturing world, a simple solution will be the more appealing one.