A Joint Salesforce.com and Glovia Services Whitepaper

Transcription

1 Manufacturers Boost SaaS CRM Utility with an Integrated ERP A Joint Salesforce.com and Glovia Services Whitepaper

2 Manufacturers Boost SaaS CRM Utility with an Integrated ERP Manufacturers realize gains in SaaS CRM business value when seamlessly integrated with SaaS ERP At a high level, manufacturing is really a simple business. Regardless of its size or vertical industry, the core mission of a manufacturer is to produce products that customers want at a price they are willing to pay. But every manufacturer knows that the reality of their business is anything but simple and straightforward. On the contrary, manufacturing is one of the toughest businesses in today s global economy. A Joint Salesforce.com and Glovia Services Whitepaper 2 of 7

3 Although manufacturers face enormous challenges in many areas, one problem that is almost universal is the existence of an IT infrastructure out of synch with current business requirements. The problems come in many scenarios. For start ups, it may be the lack of an IT infrastructure and the lack of time and money to invest in one. At divisions of large companies, the problems often can be traced to legacy systems that can t meet the business needs at hand. And for fast-growing, independent companies it s quite often a matter of systems that can t scale to keep pace with business growth. Research suggests that addressing IT deficiencies is a top priority for manufacturers from the most sophisticated high tech and electronics manufacturer to the producer of low-cost, commodity products. In an April 2008 presentation, research firm IDC reported that IT spending growth in discrete manufacturing was expected to hold steady at 8 percent, more than 1 percent greater than the cross-industry average. This commitment to IT investment at a time of limited business growth sends a clear message: manufacturers faced with pressure on their margins know they must continue to invest in IT and get the best possible return from that investment. For many manufacturers, leveraging software as a service (SaaS) cay be the simplest, fastest and most cost-effective way out of what is a difficult situation. Manufacturers exploring SaaS are clearly taking part in a major business trend. According to Forrester Research, Inc., a survey of 1,017 software IT decision-makers in North America and Europe revealed that SaaS adoption is growing at double-digit rates. In this whitepaper, the knowledge of two leaders in SaaS Glovia Services and Salesforce.com have been combined to produce an analysis of how software as a service can provide discrete and other manufacturers with low-cost, low risk access to the specific capabilities they need. The paper focuses, in part, on how a coordinated SaaS approach to customer relationship management (CRM) and enterprise resource planning (ERP) processes can produce a higher level of value for manufacturers. Manufacturers Face Extraordinary Business Challenges Manufacturers face a long list of challenges and each carries with it the potential for profound impacts on their near-term and long-term success. Manufacturers must find ways to improve how they relate to customers, the efficiency of their production and the efficiency with which they take on the competition. At a more granular level, some of the common challenges affecting the performance of manufacturers are: Lack of access to information that drives business decisions. Manufacturers in all industries struggle to overcome poor information sharing across the enterprise, from the sales side to the manufacturing side, and everything in between. Many manufacturing sales managers are unable to keep track of the wins and losses of an individual salesperson or the company as a whole. Sales organizations often face equally daunting challenges trying to get better visibility into finished goods inventory, work in process and production plans. For production managers, it s common to have problems getting better visibility into the status of sales so they can develop accurate demand forecasts and production plans. Lack of visibility into raw materials is yet another problem impeding production efficiency. Difficulty in meeting demands from customers. With competition the way it is, no manufacturer can afford lapses in customer relationships. But the legacy systems at many manufacturers fall short in this area. For example, a manufacturer s sales staff frequently lacks timely access to the quoting, order management and delivery information that is critical to keeping customers satisfied and revenues Manufacturers in all industries struggle to overcome poor information sharing across the enterprise, from the sales side to the manufacturing side, and everything in between. growing. Difficulty operating efficiently in a global supply chain. The need to operate efficiently in a global supply chain is an imperative, regardless of product line or revenue level. There are great distances between the established North American market for goods and regions like Asia Pacific and parts of Europe where manufacturing operations are growing the fastest. This globalization presents challenges in many parts of a manufacturer s business. For example, a manufacturer s HR team often is challenged because employees are dispersed in many geographies and existing business systems can t accommodate multiple cultures, A Joint Salesforce.com and Glovia Services Whitepaper 3 of 7

4 multiple languages and, in some cases, follow the sun operations. The Finance team may be challenged because the growth of globally dispersed operations means they must manage multiple tax systems, currencies and regulatory frameworks with an existing IT infrastructure that lacks the necessary functionality. Greater distances inherent in a global supply chain and resulting increases in time and costs make it imperative that manufacturers improve their supply chain management. Many companies have legacy systems that lack the capabilities necessary to mitigate the time, distance and cost challenges of moving both raw materials and finished products. This can lead to a number of business problems, including out of stocks, poor customer service, late deliveries, and sub-optimal inventory management. These challenges can also have a significant financial and customer satisfaction impact Lack of scalability. Rapid changes in a manufacturer s economic situation are a given. Depending on their near-term business prospects, manufacturers may abruptly need to scale operations up or down. Unfortunately, most IT systems in place preclude the kind of agility that the business demands. Often existing customer relationship management (CRM) and enterprise resource management (ERP) systems can t scale despite the heavy investment that has already been made. So-called shelf-ware often plays a role because companies have purchased software they aren t using and, at the same time, lack some of the software capabilities they need to scale up, scale down or take their business in a new direction with new products, services or market focus. Lack of Visibility. Many manufacturers have difficulty monitoring the performance of their IT infrastructure. They lack a quick and reliable process for knowing when systems are down or when there are heightened phishing and malware attempts. While most manufacturers have a disaster Software-as-a-service can help discrete and other manufacturers address many of their most pressing business challenges. recovery plan, they still must guard against preventable disasters. In addition, many manufacturers lack adequate visibility into the maintenance requirements for their capital assets. This can lead to extra expenses caused by avoidable equipment failures and lost revenue caused by unplanned down time. A SaaS Solution Designed Specifically for Manufacturers Can Transform IT into a Competitive Advantage Software-as-a-service can help discrete and other manufacturers address many of their most pressing business challenges. But choosing the right SaaS provider and the right SaaS solution is a critical component to SaaS success. Because of the need for highly customized functionality, research firm Gartner, Inc. recommends that companies in high tech manufacturing ensure that their SaaS vendor s solution addresses their industry-specific functional requirements. Some of the specific capabilities that a manufacturer should look for in picking a SaaS partner: The ability to tailor solutions and business processes to specific business requirements Global leadership, experience and expertise in manufacturing A track record of delivering time to value The ability to respond flexibly to changing business needs A platform that will scale up or down, and evolve with the needs of the business. With the right SaaS partner, manufacturers can realize many tangible business benefits, including: Reduced investment in IT. By adopting a SaaS strategy, manufacturers can avoid in-house IT upgrades that consume large amounts of capital budget that could be better used elsewhere such as in product development, sales channel growth and marketing. In addition, leveraging a SaaS infrastructure enables manufacturers to retire outdated, home-grown systems and servers, reducing IT floor-space requirements and utility consumption. Improved employee productivity and collaboration. With Webbased, on-demand software, training and ramp-up time for endusers is shorter. Most SaaS providers offer easy tools for self training, enabling users to train at their own pace. Pre-production environments, so-called Sandboxes, enable users to train on the system without jeopardizing core business data. Faster speed to market. Provisioning a SaaS implementation can be completed in only a few weeks, compared to the six to 12 months it takes to implement a licensed solution. With SaaS, the solution is already running in a multitenant environment so provisioning for a new customer involves little A Joint Salesforce.com and Glovia Services Whitepaper 4 of 7

5 more than adding that customer s data to the system. Access to Lean Manufacturing and other specialized functionality. With SaaS, a manufacturer can leverage capabilities that are a perfect match for their business requirements. Some of the specialized manufacturing-specific functionality that may be more cost effectively accessible in a SaaS solution include shop floor control, pipeline management, defect tracking, case management and call center functionality. Pay only for the functionality you use. With a licensed software approach, manufacturers are usually forced to pay for functionality and scalability they will never use. With SaaS, it s possible to pay for only the functionality needed to meet specific business needs. And with a SaaS solution, a manufacturer can scale back when business gets soft or scale up when it business is growing. Access to new capabilities as they are developed. A manufacturer leveraging SaaS will have almost immediate access to new capabilities because SaaS providers generally adopt the latest improvements in functionality as soon as they are available. The value of Integrating CRM and ERP in a SaaS Approach Integrating CRM and ERP business processes via SaaS can deliver enhanced business value for manufacturers, helping to overcome many of the major pains they face. When CRM processes are more tightly linked with ERP, a manufacturer will have one set of data to manage front-end customerfacing processes and back-end production processes. The simple fact that front-end and back-end processes and information are integrated helps to eliminate the information accessibility challenges that plague most manufacturers. Integrating CRM and ERP gives customerfacing employees access to the back-end information they need to better meet customer demands. Likewise, production employees overcome problems stemming from a lack of visibility into customer demand. This improved information also helps overcome inefficiencies facing manufacturers operating in a global supply chain. In addition, adopting an SaaS approach mitigates the scalability limitations of most CRM and ERP systems because capability can be added or removed by merely amending the contract with the SaaS provider. As a manufacturer s overall command and control system, an ERP solution captures information about demand, makes sure materials and production plans align with demand, and manages accounting for supplier and customer transactions. Although this transactional information is critically important to a company s sales efforts, it traditionally has been difficult for the sales staff to access and leverage it. As a result, a SaaS solution that provides an integrated approach to both the sales operations and an ERP system can dramatically increase the efficiency and effectiveness of a company s sales force. Key benefits include: Integrated Product Data Schedule Adherence Report Enhance the ability to up sell and cross sell. Giving a sales person quick access to ERPbased information about products sold or not sold, delivered or not delivered, sales prices, discounts, sale locations, and product dependencies improves insight into buying patterns that can be used for up-sell and cross-sell activities. Better leverage wins and loss information. Making win/loss data from the ERP system available in the CRM win/loss dashboard gives sales teams more insight into sales results and a greater ability to modify tactics for improved results. For example, win/loss data taken from sales quotes in an ERP system can be combined with CRM information about the performance of certain territories, sales teams or individuals, enabling sales managers to better analyze sales performance and better respond to new opportunities. Integrating CRM and ERP gives customerfacing employees access to the back-end information they need to better meet customer demands. A Joint Salesforce.com and Glovia Services Whitepaper 5 of 7

6 Integrated Shipment Details Improve shipping and delivery performance. Leveraging the detailed analysis of shipping schedules in ERP can help the sales staff respond to customer inquiries and demonstrate on-time delivery as a differentiator in competitive selling situations. Improve inventory availability information. Accessing inventory availability information from the ERP system via the sales dashboard at the office or on the road enables sales persons to immediately commit to a specific delivery schedule. When combined with opportunity management functionality in the CRM system, inventory information can be used to focus sales efforts on companies that show the most promise. Access accurate customer status and credit information. Customer information in the ERP system such as invoices generated and paid, credit history, and current credit situation can be leveraged via the sales force dashboard to help sales persons focus on the highest-quality prospects. Leveraging historical customer transactional data residing in an ERP solution can help the sales staff increase the share of wallet with a particular customer by proposing complimentary products. It can also identify sales opportunities at their competitors, who may have a need for products that have been selling well. Better gross margin analysis. Accessing transactional data from the ERP system such as actual selling prices and discounts provides an accurate picture of margins. This can be used by the sales force to better manage discounting activity and for sales management to base sales staff compensation on the most accurate information. Conclusion SaaS can be a fundamentally important part of a manufacturer s strategy for long-term success by correcting the mismatch between a company s business requirements and IT capabilities. But not all SaaS solutions are created equal. For any manufacturer struggling to address business efficiency and agility challenges and improve the effectiveness of its sales strategies, leveraging a SaaS approach that integrates CRM and ERP processes may produce the best return. This approach to SaaS can deliver a number of business benefits, including: Faster and more thorough response to customer demands Increased win rates and deal sizes The ability to adapt the business more quickly and efficiently Lower total cost of IT ownership A Joint Salesforce.com and Glovia Services Whitepaper 6 of 7

7 This whitepaper is based on the analysis of two leading SaaS providers for the discrete, high tech manufacturing sector. It reflects the combined knowledge that Salesforce.com and Glovia Services have of the challenges manufacturers face and the business advantages that can be realized when the power of advanced ERP and sales force automation are combined in a single SaaS strategy. About Salesforce.com Salesforce.com is the market and technology leader in Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS). The company's portfolio of SaaS applications, including its award-winning CRM application, available at has revolutionized the ways that customers manage and share business information over the Internet. The company's Force.com PaaS enables customers, developers and partners to build powerful ondemand applications that deliver the benefits of multi-tenancy across the enterprise. Applications built on the Force.com platform, available at can be easily shared, exchanged and installed with a few simple clicks via salesforce.com's AppExchange marketplace available at As of April 30, 2008, salesforce.com manages customer information for approximately 43,600 customers including ABN AMRO, Dow Jones Newswires, Japan Post, Kaiser Permanente, KONE, Sprint Nextel, and SunTrust Banks. Any unreleased services or features referenced in this or other press releases or public statements are not currently available and may not be delivered on time or at all. Customers who purchase salesforce.com applications should make their purchase decisions based upon features that are currently available. Salesforce.com has headquarters in San Francisco, with offices in Europe and Asia, and trades on the New York Stock Exchange under the ticker symbol "CRM". For more information please visit or call NO-SOFTWARE. About Glovia Services Glovia Services, Inc. is a wholly owned subsidiary of Glovia International, Inc., a subsidiary of Fujitsu Limited (Tokyo Stock Exchange: 6702), one of the world's most experienced and solidly backed providers of extended ERP solutions for businesses of any size-from small and mid-sized companies to global enterprises. Glovia Services offers GSInnovate web-based manufacturing software from pluggable point solutions to a comprehensive on-demand ERP suite that provides for the unique needs of engineer-to-order, make-to-order, high volume and mixed-mode manufacturing environments through comprehensive, end-to-end functionality for the entire product life-cycle. Headquartered in El Segundo, California, Glovia Services has helped manufacturers to cut costs, improve productivity, and meet customer demands for over 30 years. For more information please visit or call or (toll free). About Fujitsu Fujitsu is a leading provider of IT-based business solutions for the global marketplace. With approximately 160,000 employees supporting customers in 70 countries, Fujitsu combines a worldwide corps of systems and services experts with highly reliable computing and communications products and advanced microelectronics to deliver added value to customers. Headquartered in Tokyo, Fujitsu Limited (TSE:6702) reported consolidated revenues of 5.3 trillion yen (US $53 billion) for the fiscal year ended March 31, For more information, please see: A Joint Salesforce.com and Glovia Services Whitepaper 7 of 7