CRM Drives the Real-Time Enterprise : What Lies Ahead?
A new business model is poised to emerge among companies that recognize the value of true customer loyalty and guaranteed long-term profitability: the real-time enterprise (RTE). This represents a fundamental paradigm shift in the way companies conduct business. Call it "business in an instant." It will be a world in which the words "please hold while I check on that" and "let me get back to you with that information" will virtually disappear.
In a RTE all company departments, customers, suppliers and partners are electronically connected via internal and Internet applications (i.e., the e-enablement of all business functions). This allows the company's information systems to function like a 24-hour live video cam on its operations, instantly alerting managers to changes in customer demand, competitive situations, inventory, availability of supplies, and profitability. It is through real-time computing and e-business technologies that this strategy will lead to sustainable gains in productivity and profitability, as well as a reduction in costs. There will be a permanent economic change within companies that transforms themselves into RTEs.
Consider the following scenarios:
- All employees within an organization will have access to the same, comprehensive information on each and every customer in real-time, because all functions and departments are linked electronically. In this scenario a customer purchases a widget online. At the moment she/he places that order, accounting is notified to send a bill, manufacturing is notified of the change in inventory, and shipping is notified to send the product. In another scenario, a customer lodges a complaint with customer service and at that same moment the sales account executive is notified of both the problem and the resolution.
CRM plays a key role as the foundation for developing a RTE strategy so comprehensive that every function and department within the company will have one view of customers and operations. A strategy so irresistible to customers that it will cement their loyalty by allowing them to communicate and conduct business deep within companies however and whenever they want.
In a RTE, the majority of software applications move to the Internet. Internet technology advancements mean that regardless of the computer devise (i.e., PC, palm, television), comprehensive, complete and personalized software applications are accessible from anywhere. Software application clients are reserved for an increasingly shrinking number of remote users who conduct a large portion of their business in an off-line mode.
Internet software applications will contain browsers that offer individual users personalized processes backed up by applications in support of these processes. Each Internet application knows who you are when you log on, knows what your preferences are, knows which business processes and information needs are, and optimizes your Internet experience each time you log on.
To support the vision, there will be new, real-time processing architectures designed and built by the early adapters. These architectures will contain new software components including personalization, entitlement, change notification, multi-tier supply chain integration, performance management, multi-level partner relationship applications, global synchronization/integration, and wireless communications.
In the RTE, every piece of information is current. Whether you are the customer, the distributor, the internal order taker, a member of your finance department or a tier 1, tier 2 or tier 3 supplier, you will immediately know of shifts in demand because of new opportunities or competitive situations that will automatically trigger new supply, billing, etc.
While this RTE vision may seem grand, what impresses me most is the number of companies that have already either achieved near RTE status or are well on their way to becoming RTEs. Private sector RTE leaders include companies such as Cisco, Dell, WalMart, FedEx, UPS and GE. Look carefully at this list for a moment. Each of them is the number one or two player in their respective industry. Their dominant position is not by chance, but rather as a result of an executive management team that has understood the RTE's powerful value proposition.
The RTE value proposition is based on two key components:
1) Significant Execution Efficiency
- Noteworthy reduced cost per transaction, as information is readily available to facilitate purchase and to streamline customer [self] support.
- Lower stock levels. With accurate information concerning inventory levels at your company as well as at your tier 1, 2 and 3 suppliers, and just-in-time manufacturing in place, RTEs have less need to carry stocks which in turn lowers inventory carrying costs.
- Less need for personnel to perform unnecessary work, ultimately improving revenues per employee.
- Customers of RTEs receive increased responsiveness in many areas including order information, support issues, financial information, all of which drives customer delight/loyalty.
2) Powerful structural Efficiency
- Companies that successfully become RTEs achieve sustainable, competitive leadership. RTEs apply "disruptive," real-time technologies to help solidify or enhance market leadership as well as solidify or increase market dominance. Once a company has achieved RTE status, they tend to make better decisions more quickly and more cost-effectively than their competition. It is not unreasonable for RTEs to achieve oligopoly or even monopoly positioning.
I believe that leading business press will refer to the RTE as the "greatest business accomplishment of the decade." Look for an incubation period in 2002/2003 with considerable RTE awareness building. Anticipate more companies moving towards real enterprise status, more RTE vendors, more RTE case studies, etc.
By 2004/2005, expect to see a hot new market. There will be many RTEs, and many more RTE case studies that document the RTE value proposition. Those companies that proactively became RTEs earlier in the decade will have begun to 'pull away from the pack'; their market leadership accomplishments will become regular stories in leading business press. Competitors will begin to wonder what happened.
By 2009/2010, the RTE marketplace will be roaring full blast. Anticipate an increasing number of new real-time technology vendors, consultants and analysts entering the industry. Look for RTE case studies appearing across multiple industries. Expect RTEs to sustain and enhance their leadership position, and secure customers that really enjoy working with them.
Three sets of vendors will play a prominent role in the growth of the RTE:
1) The existing players, such as Siebel, PeopleSoft, Oracle, SAP, and TIBCO. These players have already identified the RTE as a component of their future direction.
2) The new guard, which includes vendors like Asera (the current evangelist), Pumatech, KnowNow, Bang Networks, SeeCommerce, and Antenna Software. These new kids on the block are offering exciting RTE systems or components.
3) Web services vendors including Microsoft .NET (the leader), BEA, and IBM. Microsoft has made a significant commitment to .NET, their platform for XML Web services, and is keen that .NET becomes the programming model for the RTE.
(*)This article contains excerpts from the Real-Time Enterprise chapter of ISM's Guide to CRM Automation
, 10th edition.
[Barton Goldenberg is the founder of ISM, Inc.(http://www.ismguide.com), a leading CRM consulting company headquartered in Bethesda, Md., and the author of CRM Automation (Prentice Hall 2002) and publisher of The Guide to CRM Automation (now in its 10th edition). He can be reached at firstname.lastname@example.org.]