Are vendors truly enabling businesses to operate in real time? Or is there still a long way to go?
For the rest of the March 2003 issue of CRM magazine please click here
It's a familiar story by now: Dell Computer Corp.'s real-time order and fulfillment system has resulted in customer satisfaction in excess of 97 percent and has helped to propel Dell to the number one slot in the computer industry. This approach was not created by some magic spell that Michael Dell conjured; it is simply one step to becoming a real-time enterprise (RTE)--and it is possible at your company, too.
A real-time enterprise is able to share information with employees, customers, and partners in real time, anytime. This allows the company to instantly alert appropriate individuals, whether it be the company president, sales or marketing directors, or product managers, to changes in customer demand, inventory, competitive actions, and profitability.
The RTE is the stuff a CFO's dreams are made of: being able to view a company's books in a moment's notice and instantly see a full range of financial results for the day, week, month, year, etc. It makes call center managers salivate when they imagine never putting a customer on hold, and their agents having immediate and simultaneous access to a caller's history and analytical information that can aid in cross-selling and upselling. Sales executives thrill at the idea that they can anytime, in real time, know what is happening in their sales pipeline.
All these scenarios are possible, and will be, according to pundits of the real-time enterprise.
"The real-time enterprise is the single most exciting movement in IT in the past decade," says George Schussel, chairman of DCI Inc. And with so many vendors offering at least some type of real-time component in their product offerings, it is not hard to see why Schussel feels so strongly about the real-time enterprise.
According to Barton Goldenberg, president of ISM Inc., a CRM consulting firm, real-time operations have hit several key business areas, including sales and marketing, service, support, back-office financials, purchasing, and corporate decision making. The results are impressive.
One customer of U.S. Steel's Straightline Source subsidiary--which provides real-time, online information visibility to manage supply and to reduce inventory management costs aimed at optimizing steel procurement--realized a 15 percent decrease in inventory levels, 10 percent decrease in procurement costs, and a 90 percent cut in communications time.
During the first year of its RTE system DaimlerChysler's Mopar Parts Group was able to increase its average four-day fill rate from 96.5 percent to 98.5 percent, which resulted in a
$20 million savings in reduced safety stock and a $10 million savings in excess transport charges.
At Tyco Adhesives' Franklin, KY, warehouse/distribution center, within the first month of implementing its RTE system Tyco realized a greater than 100 percent productivity increase: from 2,350 line items picked and shipped on a good day to today's average of 5,800 line items.
Pieces of the Puzzle
These results were not built on technology alone. As with any successful CRM initiative, people and process changes were an integral part of the success. In fact, Goldenberg warns companies trying to go real-time not to rely too much on technology to make real-time happen. "Technology is only a miniscule part of a plan's success," he says, calling the advance into real-time a process, not an event.
"Right now, there are so many different parts of an enterprise that can be brought up to real-time speed," Goldenberg says. "And no single vendor can perform all of these tasks."
A pundit of the real-time enterprise for years, Goldenberg insists that companies take a long, hard look at their business and decide what they want to achieve with a real-time strategy before a lengthy, costly technology implementation that may not create value in the end.
Regardless of the obstacles, Goldenberg, like other observers, says the real-time enterprise is not a trend, but rather the simple evolution of business. "Sixty percent of all businesses today will operate in real time by 2010, and 90 percent will have made the jump into real time by 2015," Goldenberg says.
But companies must be on a timeline to achieve real-time operation similar to Goldenberg's predictions, says Janice Chaffin, vice president of enterprise marketing and solutions at Hewlett-Packard. "Real time is imperative to survival," Chaffin says. "And the early adopters of real-time have the opportunity to monopolize their respective industries due to the greater efficiencies and other advantages held by real-time operators."
Enterprise CRM vendors recognize this as well, and have taken steps to capture their corner of the real-time market. Tom Siebel, chairman and CEO of Siebel Systems Inc., announced at a recent DCI RTE conference that enabling the real-time enterprise will be his company's primary initiative for the next year and a half.
Oracle Corp., which says it has been embedding real-time applications in its CRM product for some time, claims it walks the walk in addition to talking the talk. "We use our own solutions internally to get a 360-degree view of our customers to cross-sell and upsell," says Andrew Kaas, vice president of CRM development at Oracle. "And we are also using real-time data access to help customers do more self-service, which has helped to cut costs and retain customers."
Though it remains to be seen how fast companies will jump on the real-time bandwagon, one thing is certain: Web services like .Net and J2EE will be a driving force in enabling the real-time enterprise.
Web services, a standard method of communication between systems that allows them to communicate without lengthy translation, can be used to link internal and external online and offline business operations. And Web services can do all of this instantly. Say, for example, a manager wants her sales agents to have access to five databases stored in separate locations and access to a CRM component, but without having to open several interfaces. Using Web services, a single interface can run a variety of disparate applications and instantly pull information from many areas.
Behind all the hype and ballyhoo, many companies are employing real-time strategies that are translating into real savings. The following are five real-time enterprise success stories.
Bell Mobility Turns Its Call Center into a Profit Center
One of the great promises of real-time technology is the ability for call center agents to instantly access all of a customer's information. Real-time technology can also generate opportunities to upsell and cross-sell customers based on the customers' previous interactions with the company.
Bell Mobility, a division of Bell Canada Inc., the country's largest communications firm, uses E.piphany Inc.'s real-time solution to generate upsell and cross-sell offers when customers access the Web site or the call center.
"We have been using the solution among 550 call center agents for some time with great success, so we decided to roll out the solution to Bell Canada's 15 call centers, with more than 2,200 agents," says Derek Pollitt, Bell Mobility's director of marketing. "When the call center agent has real-time customer info, it allows us to offer services [customers] may not already have, like wireless, Internet service, or satellite cable. It allows us to integrate sales across our different divisions, and really drive incremental sales from our existing customer base."
Pollitt says that following the implementation of E.piphany's real-time platform, the company saw a 16 percent lift in total revenue. He says the positive results seen in the call centers drove Bell Mobility to the decision to integrate all its systems using E.piphany. "We are a data-heavy company, and we have been able to integrate several large legacy systems to move towards being completely real time," Pollitt says.
Amica Spreads the Word in Real Time
When Amica Insurance Co. realized it needed to train its adjusters in new policy changes and technology upgrades more quickly and cost-effectively, the company turned to Centra Software to streamline its training process.
Rather than send many adjusters in different states to a centralized training class, using Centra's CentraOne platform, Amica is now able to instruct adjusters right at their desks at any time via a Web-based training module. "The implementation of Centra paid for itself in the first year in travel cost reductions alone," says Christina Jensen, senior training supervisor at Amica.
Getting employees up to speed on new business processes and technology upgrades used to take weeks or months, Jensen says. "Now, if we need to educate our adjusters of a change in flood insurance policy, for example, we can put together a tutorial and schedule and perform a training session in a day," she says.
Jensen adds that all past training sessions using Centra are stored on Centra's servers, so adjusters have instant access to training sessions if they missed a course or simply want to refresh. "This has also helped us save money, since we have cut down on the instructor costs, because we don't need to run as many classes," Jensen says.
Real-Time Pricing Delivers Pacific International Marketing Cost Savings
Instant messaging software has been around for ages it seems, but creating a closed IM system so companies can communicate internally in real-time to react to sudden market changes is something new. Using WiredRed Software's E/pop messaging product, Pacific International Marketing, a wholesale produce company, now has the ability to link its 25-person sales staff situated in five remote offices in the southwestern U.S.
"Our sales staff located all over California and Arizona can instantly tell each other of inventory and price changes," says Bryan Searcy, director of IT at Pacific. "These areas in the produce industry are very dynamic, and the need to communicate with each other in real time is an absolute must. I wouldn't dare touch E/pop on our sales' PCs. It's their bread and butter and quite frankly not only saves time, but has given us tremendous cost savings in not having to call long distance to our remote sites. By far, E/pop is the preferred method of communication in our organization."
Davis Controls Integrates in Real Time
As database systems have improved over the years, the old concept of batch reporting has evolved into real-time data access, with the premise that employees can access up-to-date company data anytime, anywhere. These evolutions, combined with real-time integration, can help make an enterprise move toward complete real-time operation.
Neil Montgomery, president of Davis Controls Ltd., a distributor of industrial instruments, says that his sales force and much of his organization operates in real time thanks to Exact Software's E-synergy product. "We have five sales offices and more than 7,000 active accounts," Montgomery says. "We originally integrated our ERP system with E-synergy, so anyone can access our internal information anywhere, as long as they have MS Internet Explorer, then integrated our CRM, HRM, and supply chain management components."
Montgomery says that moving towards real time has helped his sales force immensely, and has cut costs. "Sales agents can get real-time data right from their Web browser, which saves time and money, since they don't have to call across the country to headquarters to get updated information," he explains.
Montgomery says that customers can also easily access order data via the Web using E-synergy. A recent customer satisfaction survey conducted by Davis revealed that 99 percent of respondents reacted positively to the self-service implementations.
The biggest ROI, Montgomery says, comes from the competitive advantage afforded by going real time. "We differentiate ourselves over the competition by our advanced technology," he says. "And we are winning and retaining customers, because it is easier for them to do business with us since going real time."
ING Speeds Transactions
Financial services firms have always been data-heavy operations. From transaction data to customer information to fund policies, data management is key. As the concept of the real-time enterprise enters the financial services industry, companies like ING Groep N.V. are benefiting from real-time technology, offering better service for their clients.
Babu Kuttala, director of information management at ING, says that once the company started using Informatica's real time--enabling data management technologies, the speed of transactions greatly increased. "We saw an 80 percent decrease in transfer time," Kuttala says. "Everything becomes faster once you can move and capture data in real time."
ING uses more than 100 disparate operating and data warehouse systems, Kuttala says, and they can operate these systems in real time as one complete data warehouse now that they have integrated using Informatica. This not only makes for speedier transactions, but there are fewer data errors, because information can be more easily monitored and error reports are revealed more quickly.
Kuttala says the greatest benefit has been the creation of a unified view of all customers. "Most of our customers have many accounts with ING, with their information stored inside many different legacy systems," Kuttala says. "Now we can change pertinent information in a customer's accounts in all the systems with one entry, and do it in real time using Informatica." This not only saves time, but Kattala notes that consultants can, for example, now offer a customer with just a 401k plan with ING other investment plans and financial services.
Contact News Editor Martin Schneider at mschneider@destinationCRM.com
10 Steps to Becoming an RTE
There are many benefits to becoming a real-time enterprise (RTE), but without the proper preparation even the best-intentioned plans may fail. Barton Goldenberg, president of ISM Inc., offers 10 steps to becoming an RTE. Skip even one step, he says, and a company's RTE initiative will likely stall or fail completely.
1 Analyze your current CRM/SCM/ERP building blocks
Successful RTEs build off current investments in the area of CRM, SCM, and ERP, which already connect employees, customers, and partners. Analyze the systems and initiatives already in place, and how best to exploit these to become an RTE. For example, how can you leverage or expand the CRM processes and technologies currently in place to bring information or services into real time?
2 Create your RTE road map
Create a clear vision of how your company will function as an RTE. This road map will lay out which RTE processes need to be in place and how to accomplish them, what your RTE people issues are and how to overcome them, and which RTE technologies are needed and how to implement these technologies over time.
3 Prioritize processes and functions to automate
Prioritize the RTE processes and the RTE business functions to automate in order of priority and quick wins.
4 Secure strong supplier, partner, and customer buy-in
Determine and communicate RTE's benefits for employees, customers, and partners to them. Meet with them to explain the value proposition, and to discuss key benefits to participating in the RTE initiative.
5 Demonstrate RTE value/gain top management support
Build a value proposition based on both execution efficiencies (e.g., lower costs per transaction, higher revenues per employee) and structural efficiencies (e.g., securing sustainable, competitive advantage). Then deliver your RTE value proposition to upper management in a business case.
6 Launch change, training, and communications programs early on
In an RTE people's work is very visible--there are no private C drives. So talk to employees about what this will mean in terms of their day-to-day jobs, and train them on RTE processes and technologies. Launch an RTE communication program to support these efforts.
7 Use new, real-time technical architectures/applications
There is an explosion in new real-time technologies. Research them thoroughly, add them to your RTE strategy, and take advantage of the benefits they provide.
8 Execute your RTE road map in small, accomplishable steps
We have all learned from our ERP, CRM, and SCM experiences that tackling too large a technology project dooms its success from the outset. To implement a winning RTE, remember: Small bites and lots of quick wins--which will also help to secure continued buy-in from upper management.
9 Deliver strong RTE analytics/operational excellence
At each stage of implementing a road map, you must deliver to upper management comprehensive analytics, including documentation of quick wins and new operational excellence.
10 Measure, record, and communicate RTE success
Record and communicate benefits and successes on a monthly or quarterly basis to top management, to internal RTE users, and to suppliers, partners, and customers. Ongoing measurement, recording, and communicating must occur throughout your RTE lifetime.
|Learn more about the companies mentioned in this article in the destinationCRM Buyer's Guide: