• November 1, 2007
  • By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

Market Focus: Technology -- The Simple Truth about Complex Manufacturing

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There's a long-standing (and wrong-headed) belief that CRM technology can be a cure-all for a company's operational woes. There's an equally long-standing (and equally wrong-headed) perception that high-tech manufacturers and vendors don't need CRM. Not only is the 360-degree view of customers, partners, and processes important in the technology vertical; it's made tricky by the complexity of the business models and by the roots of those misperceptions. In the first place, every business needs CRM, even if only to manage customers' account histories and communications -- CRM grew from contact management, after all. Why, then, the idea that tech businesses don't need it? "It's not as much a process vertical [as] financial services," says Tim Hickernell, senior research analyst, applications, Info-Tech Research Group. The focus is on the products themselves -- and since tech salespeople are often former engineers, they're less likely to be relationship-driven. This is a dangerous reduction of the situation. Even in the tech world, says Diane Albano, vice president of Americas operations at Progress Software, "People are still selling to people, trying to solve a problem." Progress promotes sales effectiveness of businesses across many verticals, and Albano says the key is communicating. "If you can get that message across to your team, you'll have happier customers and more motivated workers." Using and contributing to the CRM system, remembering that business is about the customer and not the product, are basic elements that haven't become as ingrained among tech firms as they have elsewhere. Fortunately, fixing issues around adoption and technique among techies requires largely the same effort as it does in other verticals. "You must make it mandatory -- it's not up for debate. But do it in a gentle, prodding way, not with yelling," Albano says. "Show how you're enabling salespeople in order to make them understand why it's necessary." Beyond adoption, Hickernell notes where tech companies are different from others in terms of CRM. "Selecting the right CRM components is more important," he says. "Channel management and knowledge management are important considerations. There's a very complex value chain -- relationships are at least B2B2C," he says, and often reflexive, where two manufacturers sell each other their products. "Work is spread across the value chain, involving original equipment manufacturers, original design manufacturers, and even different divisions of a single company selling to itself as an internal customer." This means careful tracking of channels, and a firm grasp on information at all stages with knowledge management. This becomes apparent in engineering-to-order processes. "We maintain virtually no finished goods in stock. Almost all orders we take require engineers to be involved before production begins," says Phil Shields, senior analyst at K&L Microwave, a manufacturer that uses CRM software from IFS. "They may be involved in the quoting process, determining if we can even build a product to the customer's specs, providing technical data or preliminary drawings. After we receive an order, engineers will design the new product; even for repeat orders, engineers many times need to check the documentation provided by the customer to make sure there are no changes since the last time." Prior to implementing sales-and-marketing functionality, K&L was generating quotes with the IFS ERP system. "This required us to create a customer, sales part, and inventory part just to create a quote," Shields says. "Integration with our ERP system was one of the big reasons we selected IFS's CRM system." Requiring zero programming or customization, all customers, sales parts, customer orders, and invoices are now available within the CRM system. "The IFS CRM system has given us one place to put information, both customer-furnished and K&L documents, so that everyone in the company can access it," Shields says. Knowledge management and dissemination also comes into its own in high technology. "The expectation for self-service, especially Web self-service, is much higher in this vertical," Hickernell says. "The customer is much more savvy, and more is expected of the vendor. If an error message is programmed into a piece of technology, the customer expects there to be a knowledgebase article for dealing with it." Top 3 Vendors in Technology: [Source: Forrester Research]
  • SAP
  • Oracle
  • Salesforce.com
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