Information Systems

College of Business Administration
University of Missouri - St. Louis

August 21, 1995

I. Know Thy Customer

By Stephanie Wilkinson

Relationship-management systems are helping companies live up to their No.1 edict: Catering to clientele.

John Huber remembers when selling air compressors for Ingersoll Rand Co. was as low tech as it gets. Salespeople were handed a phone book and told to find customers. Worse, critical information was rarely shared. After a string of embarrassing foul-ups--such as the time a salesman dropped in on a client for a friendly follow-up call only to find a company technician knee-deep in a glitch--it became clear Ingersoll Rand had to change the way it dealt with customers.

That revelation led the $4.5 billion industrial-equipment company, based in Woodcliff Lake, N.J., to the new breed of relationship-management tools. Although it sounds like a touchy-feely New Age concept, "relationship management" is fast becoming IT's solution to an age-old quest: know thy customer. Companies more high tech than Ingersoll Rand have been using laptops and contact managers for SFA (sales-force automation) for years. But the emerging class of relationship-management programs goes further by offering enterprisewide, client/server solutions for spreading customer data across an organization.

Those capabilities are striking a chord among such companies as industrial-equipment suppliers and overnight-delivery services. By the year 2000, more than 80 percent of all sales and marketing automation programs will be client/server-based, estimates Barton Goldenberg, president of Information Systems Marketing Inc., a sales-automation consulting company in Washington. The market for SFA systems is growing by 20 percent annually, and revenues for off-the-shelf packages should top $403 million by 1999, says Judy Hodges, an analyst with International Data Corp., in Framingham, Mass.

Yet even with all this activity, most companies are still struggling with how to set up a relationship-management system. An IT staff charged with automating a sales force faces a bewildering array of new choices: Should we buy or build? Who other than the sales group needs this data? How do we best roll it out?

Making It Fit

For Ingersoll Rand's Air Compressor Group, the scope of the project--linking sales, service, and marketing personnel throughout North and South America--demanded the kind of tools that weren't practical to build in-house. The solution was to buy best-of-breed components and integrate them internally, says Huber, manager of Ingersoll Rand's sales information center, in Davidson, N.C.

After evaluating such products as SNAP from Sales Technologies Inc. and Brock Activity Manager from Brock Control Systems Inc., Huber's team chose SPS from Saratoga Systems Inc., in Campbell, Calif. SPS was the most flexible tool available, says Huber.

"To us, a customer is more than just a street address," Huber says. "We need to track information on what kind of equipment they buy, their service history, equipment settings, and so forth."

The SPS product became the core of X-Site, the Air Compressor Group's relationship-management initiative. X-Site is built around a proprietary SPS database, which acts as a repository for in-depth customer information drawn from direct-sales offices, company-owned and private distribution centers, telesales, and product managers. After a three-month beta test, X-Site was rolled out in February 1994; now, more than 350 users are linked to the system, either locally via Novell Inc.'s NetWare LANs or remotely by modem.

Huber says one of the biggest strengths of X-Site is that it can replicate unstructured information tidbits, which sales and service people carry in their heads or tuck away in a Filo Fax. For instance, X-Site gives service technicians directions to a customer site and preferred accommodations in the area, along with more traditional data, such as service histories and contact names.

In the hopes of drumming up new business and improving client relations, Huber's group added another module to X-Site: a customer-satisfaction component, which receives monthly input from an outside market-research firm's poll of 500 Ingersoll Rand customers. The customer-satisfaction material and up-to-date location, contact, and sales histories are then tapped to generate competitive data for salespeople.


Another approach that lets companies custom-fit relationship-management software without the pain of writing it from scratch is using a third-party starter kit as a foundation. That's the route that Access Graphics Inc. took when it got serious about managing customer relationships. The computer distributor, which had already adopted Lotus Development Corp.'s Notes as its principal platform, decided to center its new relationship-management system on a workgroup approach vs. Ingersoll Rand's database-centric solution.

A Notes-based system is ideal for relationship management because collaboration across the organization is crucial to the application's success, says Geoff Cooper, vice president of information technology for the Boulder, Colo., company.

To get the ball rolling, Cooper and Jerry Wager, the company's Notes project manager, decided to purchase the Innovation Jump-Start suite of Notes applications made by WorkFlow Technologies Inc., in Scottsdale, Ariz. Included in the suite are Notes databases for scheduling, discussion groups, new-product development, document flow, time management, and customer tracking.

"We invested in this kind of suite because it gave us a springboard for other applications," says Cooper.

Grow Your Own

For some companies with a significant infrastructure already in place, the best option for a relationship-management system is to build their own. That's the tack DHL Worldwide Express is taking as part of its five-year, $150 million technology overhaul. Although a final decision won't be made until November, the unique combination of tools already in place pointed toward building an in-house system, says John Allen, sales and marketing systems manager for the overnight-delivery service's European and African business, based in Brussels, Belgium. Ideally, Allen hopes that DHL will have to build only the core of the client/server, automated sales system, adding third-party applications for expansion as needed.

Whether built or bought, however, the proof of relationship-management systems is seen in the increased productivity of salespeople. The folks at Ingersoll Rand have no doubts about the value of their system. "We know it's working," says Meg Armstrong, manager of customer loyalty marketing, "because we're developing stronger, longer-term relationships with our customers. That's the proof."

(Figure not available)
RELATIONSHIP BUILDER: Ingersoll Rand's John Huber and Meg Armstrong believe tracking customers involves more than juggling street addresses.

Chemical's people power

Stephanie Wilkinson

Chemical Bank Co.'s John McFadden didn't want to buy a relationship-management system. He didn't want to build one from scratch, either. So he found a third way.

When the time came to provide a new system for the Middle Market Division, the vice president of corporate systems and architecture at the New York-based bank first looked inward. By reusing functions and capabilities that were already used in other parts of the bank, McFadden's group could leverage the work of others. That left them free to focus on the important stuff: tailoring a front end to the way their salespeople or "relationship managers" work.

The result is Chemical's RMS (Relationship Management System), a Windows-based client/server system that gives salespeople point-and-click access to customer account data, profitability, exposure, and documentation. The system has become so popular within the bank that McFadden's group can't roll it out fast enough: The user base of 200 is expected to swell to more than 1,000 by the end of the year, and divisions as far-flung as the Houston-based Texas Commerce Group are clamoring to get their hands on it.

Success in this project has hinged on several factors, McFadden says. First, a three-tier architecture (client/middleware/server) has helped leverage legacy systems. Instead of creating new databases for the system--which would be costly, time-consuming, and redundant--RMS is designed to access the data where it lives.

Second, to ensure accuracy, RMS uses only a single authoritative source for data. A Lotus Notes infrastructure was installed to force consistency of data behind the scenes. When an inconsistency is found, a Notes-based form is sent to the data owner, requesting reconciliation.

Finally, salespeople were given the final say in the system's look and feel. During development, a 15-member advisory board met for 3 hours each month to vote on the latest iteration.

"They told us which data was most important to them, and then they designed the buttons that access it," says McFadden. "It's truly a system of the people. We have a powerful system that we didn't have to buy or build from scratch--all because we avoided the 'not-invented-here' syndrome."

Tough sell: Pitching technology to sales staff

Stephanie Wilkinson

Convincing a predominantly technophobic sales force that software is an invaluable tool can be the most arduous pitch a company makes.

To get your salespeople successfully plugged into a relationship-management system, here are some tips from IT veterans: Watch your pacing, offer immediate benefits, and don't overwhelm them with technology.

The first priority for IT is to make sure the solution is solid, says Laurie Wagner, vice president of global strategy and business development for Access Graphics Inc., a computer distributor in Boulder, Colo. "That means no bugs, no glitches," Wagner says. "When you're giving technology to non-tech people, you'd better make sure it's been worked through."

John Huber, manager of the sales information center for Ingersoll Rand Co.'s Air Compressor Group, in Davidson, N.C., advises IT managers to roll out relationship-management solutions in phases. Give them just enough to intrigue them, then reel them in with the rest. "Identify what will be most useful to them and provide that first," he says.

Savvy IT managers first offer basic building blocks--for instance, a database of customer information or a repository of up-to-date sales literature--and then add to the foundation. "Whatever it is, it has got to be useful to them now, not sometime down the road," Huber says.

After the first pieces have been accepted, move quickly to add more functionality, Wagner advises. Second-tier applications include tools for sales-team collaboration, project management, expense-report generation, and forms-routing programs. Adding new modules at a steady pace keeps users aware of the value of the system as a whole.

"If you move too slowly, you'll hit the same resistance to change you did initially," Wagner says.

But whatever you do, don't overwhelm users with the details of the technology, advises Jerry Wager, Lotus Notes project manager at Access Graphics. IT must understand the intricacies, but the sales force doesn't have to, he says. "If you're building applications on top of Notes, for instance, you don't have to tell them how Notes works. Just train them on the application itself."

Finally, as with any new application, provide adequate help-desk facilities, Wager says, because the best antidote to user frustration is "always having an ear to talk to."

Copyright (c) 1995 Ziff-Davis Publishing Company. All rights reserved. Reproduction in whole or in part in any form or medium without express written permission of Ziff-Davis Publishing Company is prohibited. PC Week and the PC Week logo are trademarks of Ziff-Davis Publishing Company. PC Week Online and the PC Week Online logo are trademarks of Ziff-Davis Publishing Company.

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