Around the World In...Seconds
In Japan, PeopleSoft, pronounced "PiipuruSofuto," offers customers a "totaru soryuushon," (otherwise known as a "total solution"). On the company Web site, visitors can "Choose a Country" from more than 40 options. PeopleSoft sells its CRM software in six languages and has offices in over 20 countries, from Australia and Belgium to South Africa and Venezuela.
And it's not the only one. Most CRM vendors have gone global. The headlines prove it. A sampling of recent announcements reveals that Pivotal is continuing a major European expansion, Salesforce.com has tied up with Fujitsu, Firstwave has opened an office in Singapore, SalesLogix is available in a German-language version, Interactive Intelligence's predictive dialing solution is available in Hangul, and Aprimo and MarketFirst are targeting the global marketplace, just for starters. It's hard to name a vendor that's not expanding internationally.
The U.S. market is still only 20 percent penetrated, but with over 400 CRM vendors vying for customer attention, margins are squeezed and competition is fierce. "Vendors see green pastures in Europe," says Barton Goldenberg, publisher of the Bethesda, Md.-based Guide to CRM Automation
. Europe is more ready for CRM than Asia, he says, but analysts see Asia's long-term potential as promising, as well.
What about you? Is your global company ready to expand its use of CRM to countries outside the U.S. and Canada? Do CRM benefits, like better customer service and improved customer retention, accrue equally overseas? Or are differences in culture, language, laws and business practices hurdles too high to jump?
Those are questions that Datastream Systems, a Greenville, S.C., developer of maintenance and facility management software, didn't have to ask when it first implemented Onyx Customer Center in 1995. "When we first got Onyx, we didn't have any international offices," says Datastream's Camille Haggard, one of five people on the original CRM system selection team. But the company grew through acquisition, and has since rolled out the Onyx system to offices in Brazil, Argentina, China, Singapore, Australia, France, Germany, the U.K. and the Netherlands.
Onyx gives Datastream a unified view of the customer. "Everything is on it," says Haggard, "from marketing and sales to shipping, accounting and product management." Datastream has a 500-seat license, but over 750 employees have access to the system, 75 of them overseas.
Datastream has reaped many benefits from the Onyx system. Preparing reports and processing orders is faster. It is easier to fulfill literature requests. And the company no longer supports customers who haven't renewed their software license. Renewal status pops up on agents' screens as soon as a call from a customer comes in.
But, though the benefits seemed obvious, some of Datastream's overseas offices were skeptical. "It was hard to get the Europeans to use the system at first," says Haggard. "They were resistant to letting everyone see their data."
In Singapore and Latin America the reaction was, "Please bring in the Onyx system, in whatever language," but in Europe, translation was important. Datastream's American staff would prefer that all countries use the English version so that when data is rolled up to headquarters, everyone can easily understand. "But we're tolerant of other languages," says Haggard. French employees wanted to use the system in French, so the field menus were translated. "It's good that Onyx has the multilingual ability," Haggard says, "so it doesn't seem too American."
Datastream's example illustrates several important points about international CRM. First, according to Barton Goldenberg, no matter where you implement a CRM solution--at home or abroad--there are three main issues to consider: People, Process and Technology. "Your success depends 50 percent on people. Most of the rest comes from getting good processes in place. Technology just reinforces good people and good processes," he says.
Datastream had to first sell its overseas staff on the Onyx system. If that meant translating it into a language headquarters staff didn't understand, so be it. Datastream's French employees make notes in open-text areas in French, which Haggard doesn't speak. So she copies the French text and pastes it into an e-mail, which she runs through an Internet translation service, gotranslate.com. "The subject-verb order doesn't match, but otherwise the translations are pretty good," she says.
Some systems have built-in translation "black boxes," says Goldenberg. This software automatically translates between languages.
Getting processes in order was equally important to Datastream's CRM effort. When the company acquired its overseas offices, it had to re-design its business rules to fit what it did in the U.S. That sometimes meant changing the ways the overseas acquisitions did business. In fact, the Onyx system is so important to the functioning of the company that Datastream has instituted rules to force compliance. "We track inventory only through Onyx," says Haggard. "So when salespeople sell a package, they have to enter it in Onyx to get it out the door."
Several months ago, Datastream opened a European technical center headed by an American manager. "He won't talk to a customer unless that customer's Onyx file is up-to-date," says Haggard. This procedure is encouraging salespeople to enter renewal information into the central Onyx database, instead of keeping it on their personal computers.
Which brings us to technology. When shopping for CRM software for use on the global level, the first question you have to ask is "Is the system globally enabled?" The technical term for this, according to Donald DePalma, vice president at Idiom, a global e-business consultant, is "Internationalization," or I18N for short (where the 18 represents the number of letters between I and N). Over the last five to ten years, most software companies have been working on this, says DePalma, and most can say their product is internationalized, which means it can handle multiple character fonts, languages, currencies, time zones and hundreds of other trappings of globalization.
The easiest way to handle multiple currencies and languages is to store the information in data tables, from which it can be pulled as necessary. "The same method is used in Microsoft Word, for example, when at the beginning you specify British or American spelling," says Goldenberg. Although some vendors still make the different languages part of the code, called "hard coding," that means that when you buy the French version, you're stuck with French forever. With the more flexible data table method, you can change languages on the fly. According to Goldenberg, within a year, all vendors will use tables.
Internationalization is actually not all that significant or new, says Goldenberg. At this point, he says, either a vendor is international or it's not. "You can assume this work is done," he says. "Don't choose vendors who aren't international."
In the Web world, however, internationalization is not a given, cautions DePalma. "Vignette, for example, still can't handle Japanese," he says, "so they have partnered with us."
Once you've determined the software is international, the next step is localization. "It's flawed to think one system will work in many countries," says Warren Tobin, executive vice president of stayinFront (formerly New Zealand-based Great Elk). Tobin, who claims a long experience helping customers with multi-country implementations, emphasizes that you've got to know your territory. "You have to spend time there," he says, "not just fly in on a sales call." Tobin recommends partnering with local companies who know the customs and laws.
Tobin says that typically 60 to 75 percent of a multi-country solution is common. The rest is tailored to each country, with added fields and changed workflow that match things like local customs, address formats and salutations. "In Korea, for example, it's vital to know the wedding anniversary date of your customer so you can send a card," says Tobin. "That would never come up in North America." (Goldenberg, on the other hand, promotes an 80 percent global core. "It's a fatal error to customize more than 20 percent," he says. Keeping customization down makes it easier to roll information up to corporate and keeps the cost of upgrades down, he explains.)
"In point of fact, Louisiana is different from New York," says Tobin. "But differences become more pronounced as you move out of North America." Either the vendor or an implementation partner in the country you're entering can customize the software to fit the local customs and business practices.
Differences range from subtle to significant. Take these, for example:
Privacy regulations: Although regulations for CRM are less strict than for ERP systems like accounting, certain differences have to be considered. In Europe, for example, it is illegal to transmit personal data across borders. In Germany, outbound cold calling is against the law.
Import/Export laws: The United states does not allow the import of certain raw food items, for example, so fromages.com, a Web site that sells French cheese, can't ship non-pasteurized cheese to an American address. France keeps a tight control on cultural imports and made a fuss when a Web site based in the U.S. allowed French citizens to buy Nazi propaganda.
Business practices: Differences in business practices can include data collection methods. According to David Reed of the European Centre for Customer strategies, in America, the assumption is that every piece of data you need on a customer is commercially available. In Europe that data may be absent or impossible to capture. And "if you can't capture the information, you can't get insights from the CRM system," points out DePalma. In another example, in Japan, direct mail doesn't work; it's best to be introduced to a prospect by an intermediary. So contact databases have to be expanded to include all data on the go-between, as well as that of the potential client.
Computer literacy: Your employees' familiarity with technology may vary from country to country. System design and training should take this into account.
Integration: The system needs to be flexible to integrate with many types of legacy systems. "The software needs to support various database and e-mail systems, for example," says Tobin. "You need flexibility to the nth degree."
Data scrubbing: Greg Horton, director of Epicor's product marketing, points out the importance of putting clean data in the new international system. Epicor didn't do enough data scrubbing when it implemented its Clientele system to its own international offices, according to Horton. "You may have the same customer in two databases," he says. "De-duplication is an important step."
When the customization is complete, don't assume all will run smoothly ever after. It is necessary to have a mechanism for maintaining the software at the international sites, according to Horton. "We have IT people in each location," he says.
Datastream has a group in its IT department whose job it is to adjust the Onyx system continuously to fit local customs. "For example, in the U.S., we offer 30 days of free support with our software," says Haggard. "In Europe, we have to offer three to six months, depending on the country." Other differences such as assigning territories by ZIP code rather than area code had to be built into the European versions. "But those were easy SQL code changes we could make in-house," says Haggard.
As technologies and regulations change, you'll need to tweak the system to keep up. One of the more important international trends to monitor is the use of wireless devices. "Once you leave the U.S., there's an enormous trend toward wireless," says DePalma. "American CRM software is screen-oriented. Someone has to type data into a tube." CRM tools have to evolve to embrace new devices like Web TV and cell phones, he says. "You have to adapt to a 2 square-inch screen on a cell phone and 10 seconds to transmit."
How to Choose a Vendor
Out of the 400-odd CRM vendors, only about 30 U.S. and five non-U.S. vendors are global, according to Goldenberg. For many of the international projects he has consulted on, his short list has included only five companies. Among the U.S. companies, Goldenberg lists Applix, Saratoga, Clarify (part of Nortel), Siebel, Vantive (part of PeopleSoft), Firstwave, Onyx, Pivotal and SalesLogix. Foreign companies include Abalon from Sweden and POINT and Update.com from Germany. (It's hard to know in which category to put Great Elk. Originally based in New Zealand, it was acquired earlier this year and merged with Wind Soft to form stayinFront. The new company is headquartered in Fairfield, N.J.)
In addition to finding out whether you can buy the software overseas and whether it supports multiple currencies and languages, some other things to keep in mind when choosing a vendor are the following:
Does the vendor have an office in the country you're interested in? Some large vendors, like PeopleSoft, have offices all over the world. Smaller vendors partner or sell through distributors or resellers. Onyx, according to President Brent Frei, has a direct presence in the major markets and partners with integrators in smaller geographies.
Does the vendor offer local service in the countries in which it sells? This is referred to as "follow the sun" service, and means that a customer interaction center is always open. If you have a problem in the middle of the night, Japan time, an agent is available to answer your call, even though he may be located halfway around the world.
According to Brent Halverson, president of Multiactive Software, which makes Maximizer and Entice and is active in Asia, the two most important things a CRM vendor must do in order to succeed internationally are offer the software in the local language and have local customer service. (For questions to ask when choosing a vendor, see "Is Your CRM Software Vendor Really Global?" in this article.)
World Wide What?
All that said, in the end, as with all other aspects of business it seems, the Internet is changing everything. "If we think back five years to the client/server world, we could never have imagined how the Web would take off," says DePalma.
The statistics are staggering. Within three years, 14 percent of all transactions in Europe will take place online, says KPMG. IDC predicts that non-U.S. spending in e-commerce will grow to $609 billion in 2003. And more than half of Web users are estimated to be outside the U.S. When DePalma gives presentations, he shows one slide with a big red arrow pointing up, to show how the number of Internet users is rising. "There's no need to show the real numbers," he says. "They're going up all the time."
But 46 percent of Web sites turn away international orders because they can't fill them, according to Forrester Research. Clearly you can't just build an international Web site and assume they'll come. You have to figure out things like fulfillment, taxation and how to keep all those international sites in sync.
Vendors abound to help you conquer international complexities. Companies like international courier service DHL will help you figure out cross-border taxes. Clearcross, formerly named Syntra, can help you ship globally. To keep multiple Web sites in various countries synchronized, DePalma's company Idiom offers the World Server, which automatically tracks changes and updates foreign Web sites, because international users "don't want out-of-date information," says DePalma.
And not all international surfers speak English. Israel-based Slangsoft provides Web-based national language support, which enables input and display of non-English text in any Web-based user interface regardless of the user's operating system, browser or installed fonts. Slangsoft provides support for 42 languages, including Latin, double-byte (Chinese, Japanese, Korean), bi-directional (Arabic, Hebrew), Indian and Cyrillic languages.
DePalma predicts that very soon all technologies will run over Internet Protocol. "For the last four or five years, everyone has been planning on it," he says. Goldenberg says that the ASP model for CRM could make it easier for at least small to midsize companies to carry out a global CRM initiative. Vendors like Upshot.com and Salesforce.com can easily make their software available on the Internet anywhere. "Physical presence may not be as important," he says. Onyx's Frei concurs. "The Internet component is a big seller for us," he says. "A lot of our customers say 'We need to be online.'"
Globalization is not a choice anymore for most companies, says DePalma. "The fact that you're on the Internet has made that decision for you."