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What's In A Name?
The latest phrase to dance on industry lips is Demand Chain Management, a term which is, depending on your needs, either the next round of meaningless marketing jargon or a futuristic, well-thought-out approach to business.
Posted Aug 14, 2001
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For those of us in the media who cover CRM, an ongoing and sometimes daunting challenge we face is keeping on top of the industry's ever-evolving vernacular. As I write this column, ambitious analysts, marketers and VPs are dreaming up an entirely new vocabulary of acronyms and names to describe some technological gadget or business process. While many of these brave new words will die unspoken deaths, others will go on to become catch phrases, and, in the rare event that they actually describe something substantial, may even become standards in everyday CRM-speak.

The latest phrase to dance on industry lips is Demand Chain Management, a term which is, depending on your needs, either the next round of meaningless marketing jargon or a futuristic, well-thought-out approach to business. Having survived the usual difficult birthing process of white paper references and second-tier press releases, DCM is turning up everywhere, from analyst studies to Siebel speeches to Pivotal's latest marketing push.

Is there any substance behind the hype? Yes and no. Simply defined, demand chain management is the full utilization of CRM tools and techniques--specifically personalization--at every customer touch point. With personalization tools generating highly specific customer data, businesses can apply that data at every point in the business cycle--or throughout the demand chain--to better serve the customer.

In a recent brief from Forrester Research, analyst Paul Hagen writes that the demand chain approach to serving customers "pulls together new and existing tools based on customer behavior models and identified intervention points." In other words, personalized customer data can be used effectively at each point in a customer's interaction with your company. When the customer surfs your Web site, you can push items or services you think that customer might want. When the customer calls with a problem, the contact center can review data on previous interactions and purchases. Hagen writes, "the intersection of personalization and CRM will be demand chain coordination, which applies the concepts that exist in the supply chain to customer-facing processes."

Hagen's reference to the supply chain is important. The word "chain" means the entire process is interconnected or operates seamlessly as a whole. While industry thinkers have for many years foreseen all customer-facing processes working together as the ultimate promise of CRM, few vendors have to date actually delivered cutting-edge demand chain solutions that live up to this promise. Seamlessness has been, for many vendors--and those using their solutions--a bridge too far.

This is where the hype meets reality. Vendors large and small are heartily embracing demand chain management as the next great step in CRM. Over the next year or so, we are going to hear lots of spin on this small phrase that is on the verge of redefining CRM theory and the industry behind it. The logic behind the phrase is solid; the spin is impressive. But whether the CRM industry can deliver tools that elevate DCM beyond spin remains to be seen.

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