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A Common View of the Customer: ERP, Best-of-Breed or eCRM?
By Sunil Ciszewski, Application Development Manager, The Alexander Group, Inc.
There are several technologies that are helping make true customer relationship management (CRM) a reality. Leading companies in the United States, and elsewhere, are already taking full advantage of them to provide their customers with a richer support experience. This article is intended to educate you, at a high level, about CRM, and eliminate some of the mystery around CRM.
Let’s start by describing how technology and CRM interact. Technology allows businesses to capture, manage, share, and utilize a single view of a customer across disparate business units within an organization. For example, people in customer service can access all the same data (minus confidential financial data) about a customer as people in order processing, or the sales people, or the marketing department. This single view of the customer across business units is the Holy Grail of CRM, and every vendor claims to offer it.
The common view of the customer can be achieved in one of three ways:
- The ERP approach
- The best-of-breed approach
- The eCRM approach
ERP
The ERP approach says that the customer is an entity like any other entity, such as an invoice or a sales order. Most, if not all, ERP suites now have CRM modules that allow you to pull up and manipulate customer data at will. The view of the customer may contain summarizations of activities conducted elsewhere in the system that relate to that customer.
For example, if a customer places an order with your company, a sales person that is looking at that customer in the hopes of penetrating the account more deeply can see that there is already an outstanding order. This may trigger him/her to offer an appropriate discount on another product or offer add-on product to the one just sold. The ERP approach is, in most cases, the most seamless solution.
ERP companies like PowerCerv (serving small- and medium-sized businesses) and Peoplesoft (serving large companies) have either developed or acquired CRM modules and integrated them into the larger suite. The downside to this approach is that their CRM modules may not have all the functionality you need in areas like marketing and decision analysis. This approach may require you to spend money extending their baseline functionality to meet your specific business needs.
Best-of-Breed
The best of breed approach aims to integrate a feature-rich CRM system, such as Siebel, Vantive, or Clarify on top of your legacy business systems. These solutions offer advanced functionality in different areas such as customer service, customer support, order entry, and marketing.
In most cases these systems are traditional client-server applications, but offer extensive Web-enabled features. The vendors of these applications often provide out-of-the-box connectors to popular ERP systems to ease the pain of integration. The upside to using these systems includes extensive front-office functionality. Often you can provide most, if not all, your customer-facing units with the functionality that they need. The user interfaces to these systems are often very easy to use, and there are a multitude of vendors providing training, installation, and customization services.
The integration of systems, however, is always a crapshoot. There’s always some piece of data not included in the integration routines, or some piece of middleware (the software connecting the systems) that breaks. This approach will always require you to spend money on integration services, unless you have the staff to do it yourself (not something I would advise unless you have experience).
eCRM
The eCRM approach is the newest of the three approaches. It takes the same view as the best-of-breed approach, but from an e-business perspective. The eCRM vendors provide customer information data sharing available to your e-business units. In addition, they have introduced many “mass customization” features into their products. These features allow you to better target your customers and offer them the products and services they are most likely to buy based on history and demographics.
The eCRM approach definitely has the most analytical capability built into it. It provides you with the ability to recognize when you should shift you company focus to suit your customers’ changing needs, since eCRM’s strong suit is being able to sift through customer data and identify trends or shifts in your customer preferences.
Of the three approaches discussed in this article, eCRM is probably the most difficult to implement. Just setting up the analytical capability is a daunting task, requiring data warehouses (summarized and aggregated customer databases), or several datamarts (a datawarehouse for a single business unit), integration with back-end systems (ERP/MRP/order entry), and a deep understanding of your target markets. Fortunately, there is no dearth of vendors, both in software and service, which will help you do all of this.
So, the most obvious question is: Which one is best? And the answer depends on your requirements. They are all good solutions, but differ in their approach to specific problems.
To give you some food for thought, I’ve listed some of the criteria for choosing between the three approaches.
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Consider the ERP approach if you:
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Have an ERP system already installed, or are considering implementing one.
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Willing to take 80 percent capability and build/buy the rest.
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Want seamless integration with fewer setup issues.
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Want a single vendor to contact for all issues (defects).
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Want to standardize all your customer-facing business units on one system.
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Have a mobile and spread out sales force.
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Have supply chain management issues.
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Have partner management issues.
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Consider the best-of-breed approach if you:
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Have a significant direct sales force.
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Have a significant tele-sales presence.
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Have significant field-based customer service requirements.
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Looking for significant automated marketing functionality.
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Have a mobile and spread out sales force.
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Have supply chain management issues.
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Have partner management issues.
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Consider the eCRM approach if you:
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Have a significant Web sales presence.
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Want to start switching customers to Web for self-service buying and online support services.
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Want to use mass customization to build closer customer relationships.
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Want to integrate your partners with your systems using the Web.
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Are willing to pay significant integration fees to your back-end systems.
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Sunil Ciszewski, sciszewski@saleslobby.com, is the Application Development Manager for The Alexander Group, Inc. Sunil has worked in CRM and ERP systems as a designer, developer, and consultant.
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