Empowering Customer Service with CRM and ERP Integration. October 2012

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1 Empowering Customer Service with CRM and ERP Integration October 2012 Ziff Davis Research 2012 All Rights Reserved

2 Table of Contents Empowering Customer Service with CRM and ERP Integration Introduction Revenue Leakage A Real and Substantial Risk with Siloed CRM and ERP ERP and CRM Integration An Integrated Solution for an Integrated Unified Communications Guide: Staying On-Premise or Going to the Cloud Ziff Davis Research All Rights Reserved

3 Introduction Businesses rely on customer relationship management (CRM) solutions to drive revenues and deliver a positive customer experience. Manufacturers and distributors are increasingly turning to CRM software to help them automate, streamline, and provide intelligent business reporting on sales, marketing, and customer service-related processes. In June 2012, research firm IDC valued the 2011 CRM software and related services market at $19.1 (US) billion. In some respects, the CRM market is evolving in a best-of-breed manner, with many vendors marketing and selling their respective CRM software as a standalone application. Arguably, this market dynamic can largely be attributed to SaaS (software-as-a-service) architected CRM, which according to Gartner Research accounts for 35% of the global CRM software market. In that same research report, Gartner estimates that there are 3.8 million users of SaaS-based sales force automation software. Since SaaS is provisioned on-demand, vendors entice potential CRM customers by offering free or low-cost trial periods. A benefit of this type of model is that an organization s users can test-drive the software before making any meaningful commitment. The drawback is there is a real risk that a company s sales, marketing, and/or customer service departments commits to a particular software solution without considering the broader organizational implications. Unified Communications Guide: Staying On-Premise or Going to the Cloud Ziff Davis Research All Rights Reserved

4 Revenue Leakage - A Real and Substantial Risk With Siloed CRM and ERP Software Solutions When a company operates a CRM solution divorced from its ERP software system, it exposes itself to revenue leakage. Revenue leakage occurs whenever a company fails to maximize or consolidate sales opportunities. This can happen for any number of reasons at any point in a customer lifecycle, from a pre-order opportunity phase to an after-sales service phase. Common causes of revenue leakage include the following: Slow Quote-to-Order Process: Prospective customers want assurance that their suppliers can efficiently and effectively process their orders. An inability to generate timely and meaningful price quotes, product configurations, and delivery schedules casts doubt on a company s ability to deliver as promised. This may lead potential customers to look elsewhere or to split orders among multiple suppliers. Poor Visibility into Order Status: Customers with unfulfilled orders often want timely order status updates to satisfy both internal and customer demand requirements. A company that is incapable of providing immediate order status updates interferes with its customer s ability to satisfy its own informational requirements. This, in turn, may lead a customer to seek out a more responsive supplier. Unsatisfied Order Promises: Increasingly, customers employ sophisticated vendor rating systems that influence whether, the extent to which and the conditions under which, they will purchase from a particular manufacturer or distributor. Unmet order terms, including promise dates, full order shipment deliveries, and product quality standards can lead to lower ratings. This, in turn, may push a customer to purchase from its more highly rated manufacturers or distributors. To achieve and retain preferred vendor status, it is important for manufacturers and distributors to satisfy their customers key supplier performance requirements. Unified Communications Guide: Staying On-Premise or Going to the Cloud Ziff Davis Research All Rights Reserved

5 Insufficient Reporting: An inability to generate meaningful reports e.g. pricing trends, profitability by customer, and product units of measure for shipping quote purposes introduces significant risks of missing profitable sales opportunities. ERP and CRM Integration An Integrated Solution for an Integrated Enterprise Businesses can no longer afford to have their sales and customer service departments operate in a vacuum, divorced from the rest of the enterprise. To be effective, organizational structures, business processes, and systems need to be integrated such that transactions and data can flow seamlessly throughout an enterprise. For businesses already operating an ERP system, it is critical that whatever CRM system they choose is capable of integrating into their existing ERP system. For businesses assessing an integrated ERP and CRM solution, it is critical that they assess how well that solution provides sales and customer service personnel with the data and functionality they require to do their jobs effectively (among many other due diligence components). From a vendor selection best practices perspective, a company should consider applying the following four-stage methodology when assessing CRM capabilities in the context of ERP integration: 1. Define key sales and customer service goals and KPIs (key performance indicators) 2. Define key sales and customer service business process and data requirements 3. Identify critical departmental and software (ERP) integration requirements 4. Assess solution capabilities against actual business process, ERP integration, and data requirements In closing, a company can only position itself to improve sales and customer service performance once it commits to a vision of an integrated enterprise one with supporting organizational structures, business processes, and technologies. Only then will it be in a position to meaningfully shorten quote-to-order cycles, achieve full order traceability, improve its preferred supplier rating, and act on improved business intelligence reporting. Unified Communications Guide: Staying On-Premise or Going to the Cloud Ziff Davis Research All Rights Reserved

6 Conclusion About the Expert Jonathan Gross, LL.B., M.B.A, Vice President and General Counsel, Pemeco Consulting, Pemeco (www.pemeco.com) is a leading vendor agnostic consulting firm that specializes in ERP strategy, selection, implementation, and optimization. Jonathan helps manufacturing and distribution clients leverage enterprise software technologies to optimize their business operations. Jonathan is also a part-time MBA professor of systems analysis and design at the Schulich School of Business at York University, the world s 9th ranked MBA program according to The Economist Magazine. IDC: CRM Market Grows as Apps Get Social, EnterpriseAppsToday, June 14, 2012, online: Hype Cycle for CRM Sales, 2012, Gartner Inc., 2012, online: https://www.gartner. com/login/logininitaction.do?method=initialize&resume=/idp/resumesaml20/idp/ SSO.ping&spentity=gartnersp About Ziff Davis Ziff Davis, Inc. is a leading digital media company specializing in the technology market, reaching over 40 million highly engaged in-market buyers and influencers every month. Ziff Davis sites, which feature trusted and comprehensive evaluations of the newest, hottest products, and the most advanced ad targeting platform. Ziff Davis B2B is a leading provider of online research to enterprise buyers and high-quality leads to IT vendors. More information on Ziff Davis can be found at ziffdavis.com. Unified Communications Guide: Staying On-Premise or Going to the Cloud Ziff Davis Research All Rights Reserved

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