Meshing CRM, Business Poses Challenges

FRAMINGHAM (03/23/2000) - Osram Sylvania Inc., a lighting manufacturer in Danvers, Massachusetts, this spring plans to be one of the first users to install pieces of SAP AG's new customer relationship management (CRM) software.

The prospect of rolling out the applications doesn't faze Mehrdad Laghaiean, vice president of information technology at Osram Sylvania. "From a software point of view, we're ready for whatever SAP throws at us," he said.

But the business side of the equation is more complicated. Like several other companies, Osram Sylvania is finding that dealing with the business issues created by CRM systems can be a bigger challenge than installing the software.

SAP's applications will let lighting buyers use the Web to place orders directly with Osram Sylvania, instead of having to negotiate prices with multiple distributors. But the company still wants its network of distributors to deliver and service the products.

"A lot of people have to understand how to [use] this," Laghaiean said. "It's not a simple supply chain, and we're adamant that we don't want to do something to harm our relationship with the distributors." In the end, he added, business managers will have to make the call on how the new system will actually be implemented.

For Moore Corp. in Toronto, installing CRM software in its Canadian and U.S. operations took just a matter of months. But Tom Doerner, design director for sales solutions at the maker of business forms, has had to labor long and hard to sell executives and end users on the merits of the system.

The system, based on software from StayinFront Inc. in Fairfield, N.J., costs more than $2 million per year to support and upgrade. And Doerner said the chief financial officer was skeptical about its value because of earlier sales initiatives that hadn't paid off.

Statistical Support

Doerner eventually developed statistics that showed that heavy users of the software bring in 25 percent more new business than other salespeople. But even that hasn't convinced all 1,400 members of the sales staff to use the software.

Doerner said about 30 percent still don't log onto the system daily. So now he's developing new measurements in an effort to show that heavy users make more money.

Enterprise resource planning systems prod most users to adopt standard business procedures that are built into the software for back-office tasks such as accounting and inventory management. But front-office sales and marketing activities aren't as codified as back-office jobs, and CRM systems need to be more flexible, said Joshua Greenbaum, an analyst at Enterprise Applications Consulting in Berkeley, Calif.

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