The 2005 CRM Elite, Part 1

Designing tightly sealed containers is how Thermos LLC makes money, but it's not how the company builds its data repositories. By converting to a hosted business suite application, the manufacturer--one of the world's most widely known vacuum containers and related products maker--attained a 222 percent ROI, and also increased warehouse productivity 29 percent. Thermos positioned itself to meet new retail-industry standards for RFID tracking, as well, and the company was named the winner of CRM magazine's CRM Elite, in the Enterprise Suite CRM category. Thermos had been operating its enterprise resource planning and related applications on an AS/400, but had customized the software so much that IBM wouldn't support further upgrades of the software applications, according to Rick Dias, Thermos vice president of marketing. In February 2002 it was apparent that Thermos had to upgrade its technology to stay competitive, according to Dias. The AS/400 required different databases for each different application, which meant reentering or reconciling information when there were discrepancies. This signaled not only inefficiency, but also less responsiveness to customers. Firms that supply customers like Wal-Mart and Target, the nation's top two retailers, cannot offer less-than-optimal customer service.

The company looked at a few potential vendors, and the Oracle E-Business Suite financials and warehouse management applications offered Thermos more complete strategic implementations, values, and returns than did competitors, according to Dias. The decision was made in mid-2003; Thermos chose the hosted service, rather than an in-house application, because the latter would have required significantly more initial IT investment. New hardware and facilities would have cost an estimated $665,000. IT operating expenses would have been 47 percent higher, according to Dias, who attributes most of those expenses to internal database-management costs.

Thermos took 11 months to migrate to the new platform, which runs Oracle applications for managing finance and accounting, product ordering, and warehouse operations. One of the difficulties of using so many different applications, prior to the Oracle platform, is the additional and unnecessary business flows that they create. Thermos chose Oracle's built-in business flows, and developed more streamlined business processes, according to Dias. There may have been some personnel who wanted to continue to do business the old way, but after getting so involved in the customization of the AS/400, the company didn't want to go that route again, Dias says. "To reengineer our processes and then implement an ERP system customized to those flows would have been lengthy and costly, while limiting our future migration path." Thermos has also benefited from moving to the Oracle-driven business processes. For example, rather than simply entering chargebacks as negative numbers, chargebacks are now credited against the specific customer account. This provides better tracking of the chargebacks.

The company has moved to a perpetual inventory method that eliminates physical stock-counting altogether. The move saves two weeks of intensive labor, or about $20,000 annually, according to Dias. The warehouse management system enables Thermos to track inventory on an ongoing basis, so there's no need for the year-end physical count that used to take Thermos away from its primary business, according to Controller Ken Brons. "We used to have to shut down for a week for inventory--with Oracle it took only three hours." Tighter inventory control also meant about $300,000 in savings in the first full year of operation, because the company reduced the amount of excess inventory (safety stock) it kept in reserve: Thermos was more confident about actual, real-time inventory, according to the company. It's also more efficient in pulling inventory for shipping. Rather than having one person pull all items for a particular order, now workers are assigned to certain areas of the warehouse and pull only certain items, which then go to a staging area for full order assembly. This means more efficiency in gathering customer orders. That's particularly important for Thermos' customers during peak seasons like back-to-school shopping, Dias says. "The scalability of the solution enables us to serve our customers better."

Thermos plans to roll out RFID technology no later than 2007 to meet deadlines set by major customers like Target and Wal-Mart. To aid this effort the Oracle technology supports electronic data exchange and supply-chain synchronization with retailers. The company hopes to garner additional value by rolling out more modules from the Oracle suite, including applications for strengthening financial controls and compliance programs (Oracle Internal Control Manager), streamlining manufacturing operations, and integrating marketing programs worldwide. Another initiative will install an integrated communication platform (Oracle Collaboration Suite) to handle email, voicemail, scheduling, and file sharing on a single database. --P.B.

MIDMARKET SUITE CRM SecureWorks
Real Results

SecureWorks is a prime example of a company that understands the value of customer relationships--and has the results to prove it. The Internet security company has enjoyed more than 200 percent growth in its client base for three straight years--and that's just for starters. Its overall return on technology investment has earned the company substantial savings and a CRM Elite award for the midmarket suite CRM category. Prior to its Pivotal implementation, the Atlanta-based company used homegrown tools comprising an open source database and Web applications that it wrote to access that database. At the time, the company handled many of its customer relationship undertakings on a more off-the-cuff basis. As interest in the Internet progressively inclined, however, so did the market's demand for the company's security services. To help handle the uptake the company sought to automate the entire customer life cycle, according to Craig Bray, director of operations for SecureWorks. "We have a security operations center where security analysts respond not only to clients' requests, but to an event that happened from things that we monitor," he says. "So, we needed a ticketing system, and we needed something to service the needs of our sales and marketing team." For accurate inventory management SecureWorks' front-end system of choice also had to integrate with its back-end systems. The company also needed a system that works with its iSensor information security product.

To ensure that its staff was armed with customer history including data registered from iSensor installed at customer locations, the company needed a solution that would be compatible with its existing solutions, while outfitted with an open architecture. In search of a system capable of fitting its needs, SecureWorks tapped the expertise of another Atlanta-based company, Red Clay Consulting. "To have somebody locally that we could count on," Bray says, "and actually lay our fingers on whenever we need them, that was a big plus." The company worked with the consultancy to evaluate several options, eventually deciding on the Pivotal CRM software suite. "We were looking at several CRM tools and ticketing systems. We decided on Pivotal because it had the functionality that would've required two separate commercial systems to buy," Bray says. The first step in the implementation comprised automating its lead generation, pipeline management, and forecast reporting practices. Additional pieces to the deployment included Red Clay and SecureWorks customizing and integrating applications to support new customer acquisitions, customer support, and product registration procedures, according to Pivotal.

The implementation allows the company to automate its entire business cycle, craft targeted cross- and upsell campaigns that it can offer to the appropriate customers at the proper time, and track which marketing campaigns are successful. "We're able to modulate the amount of times you're going to a cross-sell opportunity so we don't saturate them with opportunities, but we're able to start talking to them about cross sell when we determine the right business time to do it," Bray says. The application accomplishes this by identifying customers that meet the criteria for cross-sell opportunities and for how long. "It saves the reps a tremendous amount of time and it shows a lot of respect for the client. It means that we are not contacting them at an inappropriate time," says Marilynn Mobley, former vice president of client advocacy. The company also created a service model allowing for incident escalation. When a lead is converted to an order, for instance, products are shipped automatically, and service representatives are alerted of the shipment and informed to followup for an installation appointment.

Once the installation is complete, the customer activates the product online, and the system tracks the production location and contact information, updating contact information when it changes. Having a central place for information makes every employee smarter when interacting with a client, Bray says. "Even before they are a prospect, when we start marketing material to them, from the time that they're a name on a list, to when they're a client, that's all inside Pivotal. That has made us extremely nimble and responsive as a company." The company's initial Pivotal deployment went live in the spring of 2001, but SecureWorks upgraded to Pivotal's 5.0 platform in 2004. After the upgrade SecureWorks decreased analysis time of each alert by 90 seconds, saving more than $342,000 annually. The upgrade also saved SecureWorks $350,000 in salaries by making existing employees more productive, and the company enjoyed a 96 percent client retention rate in 2004, up from 92 percent in 2003. As part of its overall Pivotal deployment, however, SecureWorks has been able to process more than 300 million network security alerts. Bray credits much of the company's success to the positive attitude of the employees, but notes, "Pivotal drives all of that retention workflow, as well as the service delivery workflow." --C.B.

End of Part 1. Click here to read Part 2.