Tying Order Management Is Critical to CRM Success

1 White PaperUpdated 3/18/04 Yankee GroupExecutive White PaperFebruary, 2004 Tying Order Management Is Critical to CRM SuccessFind out more: contact NetSuite at 1-877 NETSUITEor visit This executive Whitepaper explores the importance of the Order managementcomponent in your CRM system. While research has shown that CRM is still a priority within organizations, it also shows there has been a shift toward tyingtogether all the data into one integrated view of each customer, and leveragingdata across multiple departments. Many are finding that they do not have nearlyenough information to market or support their customers, and are realizing theimportance of integrating the front office and back office. This whitepaper willshow you what you need to know when considering a CRM solution and how youcan enhance and expedite the customer experience within your Find out more about NetSuite and our Services contact NetSuite, Inc.

2 At 1 877 NETSUITE or visit custom report addresses the importance of tyingorder Management to CRM for improved businessperformance along with available options and 2004, the Yankee Group. All rights 1 The Order is the Center of the EnterpriseSource: The Yankee Group, 2004 Executive SummaryTying Order Management toCRM is Critical for CRM Relationship Managementby Sheryl Kingstone February 2004 The Yankee Group Consulting Report is published for the sole use of Yankee Group clients. It may not be duplicated, reproduced, or transmitted in whole or in part without theexpress permission of the Yankee Group, 31 St. James Avenue, Boston, MA 02116. For more information, contact the Yankee Group: Phone: rights reserved. All opinions and estimates herein constitute our judgment as of this date and are subject to change without businesses associate customer relationshipmanagement with a 360-degree view of the customerthat helps increase sales revenue, improve customerservice and enhance marketing essence, what CRM solution providers promised inthe past few years is the ability to increaseeffectiveness and efficiency by automating andtracking the entire customer lifecycle from firstcustomer contact through the contract to , a Critical link many CRM implementationslack is the ability to capture and manage the customerorder.

3 As Exhibit 1 shows, the Order is the center ofthe enterprise and links Critical front-office and back-office business processes. Nonetheless, ordermanagement functionality is not necessarily a corecompetence of many CRM ISVs. Traditionally, best-of-breed providers such as metasolv , Comergent andHAHT Commerce, and enterprise applicationproviders such as Amdocs, oracle and Siebel havedominated sales Order Management ChainProductionAccountsPayableProcuremen tInventoryOrderManagementHuman ResourcesERPF inanceBillingAccountsReceivableCRMS alesServiceMarketingATPP roductDevelopment2 Copyright 2004, the Yankee Group. All rights Relationship ManagementFebruary 2004 Table of Market View .. Order Is the Center of the Enterprise .. 5 III. Conclusions on the Current State of CRM and Order Management .

4 53 Customer Relationship ManagementFebruary 2004 Copyright 2004, the Yankee Group. All rights CRM industry is in a significant state of flux. Manyenterprises express varying degrees of dissatisfactionwith the state of their CRM projects. Vendors and systemsintegrators accustomed to the salad days of selling largemultimillion-dollar deals with thousands of seats findthemselves pinched by a declining appetite for largeinstallations. What is the reason for the ongoing debate onthe relevance of CRM? The debate continues because it isdifficult to show ROI on CRM technology beyond very basicmeasures of efficiency enhancement and cost reduction. Yankee Group research indicates that CRM (in variousguises) is still a business priority. However, the focus hasshifted to the following priorities: The integrated will undertake greaterconsolidation of disparate internal projects.

5 Theseprojects will affect customer-facing departments, andthere will be a concerted attempt to unify the view of thecustomer from multiple departments and systems. The are taking care of data qualitybefore building a single customer profile re also trying to understand the business processthey ll be automating before evaluating ISVs. Back-office and front-office integration. CRMintegration is a Critical budget item for many businesses now understand not only the need tointegrate across sales, service and marketing systems, butalso financial and inventory some companies have made great strides ingathering customer data for independent departmental use,many discover they do not have even basic informationrequired for effective decision-making. Why is this happening? The most common business processin any organization is the Order -to-cash lifecycle.

6 Thisapproach takes into account the complete customerlifecycle from first contact to contract to cash. However,most businesses have cobbled together the systems andprocesses. The traditional approach is full of inefficiencies,such as verbal handoffs, paperwork, redundant data entryand linear processes via multiple disconnected systems. The vast majority of businesses have information scatteredthroughout the enterprise on paper, in siloed databases andin a result, many companies cannot even gain visibility intobasic performance questions, such as: Who are our most profitable customers and what havethey purchased? What are the current opportunities that our sales teamand partner network are working on and when are theyexpected to close? Which marketing campaigns generated revenue and why? Are we allocating the right resources to the rightopportunities?

7 Is the right information necessary tocomplete the Order available efficiently and accurately? What are the past and current service requests from thiscustomer and do they have an outstanding payment?A question remains: Why is it so difficult to answer thesefundamental questions?Few businesses have achieved the Holy Grail of leveragingthe data across departments and business units for improvedcustomer-centricity that drives effectiveness andtransparency. Many CRM solution providers promiseincreased effectiveness and efficiency by automating andtracking the entire customer lifecycle. However, most aremissing Critical functionality to deliver results: ordermanagement capabilities. If CRM does not connect theorder, businesses are missing The Market ViewThe Success of business- Critical applications such assales, service, marketing and e-commerce hinges on theability to capture and manage the Order .

8 Orders and purchasehistory are the foundation of CRM. As shown in Exhibit 2,there are many interdependencies. If CRM does not connectthe Order , then businesses cannot answer fundamentalquestions regarding the state of the business. Without visibility and transparency into the details about theorder, applications and business processes are less are the central issues: Sales representatives need access to a product list, pricingand inventory availability to generate quotes and createorders. Marketing cannot mine patterns for personalizedcampaigns and cross-sell opportunities without purchasehistory. Customer service and support require Order managementcapabilities for review status, making changes andverifying entitlements. Customers are demanding immediate inventoryavailability and visibility into the purchase 2004, the Yankee Group.

9 All rights Relationship ManagementFebruary 2004II. The Importance of an Access StrategyDepending on the size of the business and current stateof IT investment, companies have many options toconnect the Order : Large Enterprises:Large enterprises already haveinvested heavily in enterprise applications (such asPeopleSoft, oracle , SAP and Siebel), HR, financials andsupply-chain Management suites. These vendors provideorder Management , but not necessarily as part of theCRM suite. As a result, the best alternative is to useexisting systems and new integration technologies thatcan streamline customer information from heterogeneoussystems in near-real time. Although this is an expensivealternative, it is Critical to avoid missed opportunities. SMBs:Some midsize companies and divisions of largercompanies also have invested in a variety of stand-aloneCRM and accounting applications.

10 Integration tools canassist with invoice visibility by Tying the front office tothe back office. However, Order Management capabilitiesare usually manual. Even worse, many companies arestill using spreadsheets and contact managers to trackcustomer information, which places considerable criticalinformation in unstructured repositories. Depending onthe existing IT investment, integrating additional ordermanagement from existing vendors or evaluating suitesthat have integrated Order Management capabilities areavailable true measure of any business initiative is the value itcreates for the company. With the economy poised for arebound, enterprises are ready for business processes andtechnology solutions that produce better customer insightand improved business performance. Investments incustomer relationship Management are at the heart offuture Success .