The Order Stands Alone

To understand why many companies' CRM initiatives have delivered less-than-stellar returns, one has only to follow the path of a sales lead in a typical sales force automation process. It is a short one. The lead comes in. If the sales rep has done her job well that lead turns into a prospect that commits to make a purchase. And that is the end--at least as far as the CRM process goes. To complete the sale the transaction must leave the CRM system entirely. But, the one thing you can't do in today's sales systems is actually sell something. For too many companies CRM operations and applications are stand-alone implementations, with the key customer transaction--the order--captured in a separate system. The fallout from this disconnect quickly spreads from sales, where it is most apparent. If you want to know, for example, what is the cost per conversion--an important element of measuring a marketing campaign's ROI--you have to know what you have sold, and which lead drove that sale; in other words, data not native to the CRM system. And with service, the connection to the order is obvious: How can you answer a customer's question if you don't have the details about his order in front of you? The bottom line is, the order defines your relationship with the customer--what you sold him, what can you sell to him in the future, what his terms were, and how was it shipped. If the order is not captured natively in the CRM system, get ready for you and your customers to be disappointed. What most companies do is rely on integration to seed the CRM system with the essential order management data. But here's the crux of the problem: Rarely is complete data input into these other systems. For example, a clerk entering data into the accounting system is unlikely to include data about a lead source, if indeed there is even a field for it. Once it is obvious to the CRM side of the house that that data is missing, someone adds it. Now, however, multiple records exist for the same client. Integration after the fact is not the answer. Instead, companies must focus their CRM operations on and around the order. This best practice is obvious to firms struggling with their CRM implementations today. And the good news is that vendors are finally catching on. In the next generation of CRM order management by necessity will be included in the CRM application itself--alongside sales, service, and marketing--thus allowing for native capture of customer data. Such a construct is a radical realignment of today's standard CRM suite. But then again, since its arrival on the business scene CRM has been regarded as a disruptive technology. And there's nothing to say new technologies and best practices shouldn't disrupt the status quo again. About the Author Zach Nelson is president and CEO of NetSuite. He came to NetSuite in 2002 with extensive leadership experience spanning 15 years in high-tech marketing, sales, product development, and business strategy with such leading companies Oracle, Sun Microsystems, Network Associates, and Motorola. As a result of his leadership NetSuite's revenues have grown five-fold; its workforce has doubled; and the company has reached the 7,000-customer milestone. Prior to NetSuite Nelson helped transform McAfee Associates into Network Associates, leading the company's expansion into the network management arena with the $1.4 billion acquisition of Network General. Later, as CEO of NAI subsidiary, myCIO, he created a B2B security application services provider. Nelson holds a patent in the field of application integration, and has several others pending approval. He holds BS and MA degrees from Stanford University.