Integration Rules to Live By
Consistent with many industry pundits that blame the process and not the technology for CRM failure, Inforte recently unveiled three key areas of focus for CRM success. And not surprisingly, the focus stems around integration.
"This comes as a result of conversations we're having over and over with clients. Now, we're pushing out the message," says Douglas Turk, executive vice president and general manager at Inforte, a consulting organization focusing on the CRM industry.
The three focus areas underscore the value of identifying the front and back-office issues and then melding them together.
The three stages a company must address to optimize revenue and profitability driven by CRM initiatives starts with "The Integrated Front-Office." The goal, Inforte executives say, is to achieve a comprehensive view of the customer, address indirect channels where applicable, improve forecasting capabilities and provide a means to optimize marketing activity and stimulate short-term revenue.
The next step focuses on the back-office -- a phase Inforte aptly names "The Intelligent Back-Office." Here, customers are encouraged to set different service level agreements (SLAs) based on customer value and segment supply chain planning activities by customer value.
The final phase is called "The Demand-Driven Enterprise." For this phase, Inforte suggests that organizations address planning and execution processes across various intertwined departments and business units to optimize profitability.
"A seamless flow of these three stages enables a company to become a demand driven enterprise that is efficient and differentiated, has generated tremendous customer loyalty, and optimized profitability," says Darius Vaskelis, vice president of research and solutions at Inforte.
The Chicago-based consultancy has tested its approach on large clients spanning several vertical markets, including media entertainment communication, financial services, industrial and consumer products, and life sciences. Some of its largest customers include Maytag, Home Depot, Hewlett-Packard, Toshiba and Pfizer.
Inforte executives maintain that most companies are still in the first stage, where they focus exclusively on the front office, have yet to tackle multi-channel issues, and put minimal emphasis on the role of forecasting or effective revenue management.
While Inforte offers consulting on integrating Siebel, SAP, and PeopleSoft, about 65 percent of its CRM consulting revenue comes from Siebel implementations. "SAP's portal strategy, is a brilliant play, but Siebel still is one of the best in managing sales and sales process and capabilities," Turk says.
Nonetheless, Turk says he is noticing SAP implementations are on the rise, which is consistent with recent published reports showing SAP's market share may climb to as much as 8 percent market share by the end of the year -- up six percent from two years ago.
Despite dropping from approximately $64 million in revenue last year to an expected $45 million this year, Inforte's focus on integration has enabled the company to maintained its 18-quarter streak of being cash flow positive, according to Turk.