The SAP CRM dilemma

CRM in ERP

Is it possible to support customer relationships in the SAP ERP system? The question posed in this way will be answered affirmatively by each sales manager in a company using the SAP system.

Tools for handling sales and distribution processes (the SD module) provide access to up-to-date data about contacts with a customer – starting from first meetings and talks, through handling orders of counterparties and shipment, up to invoicing.

The Sales Information System (SIS) available in SAP SD extends capabilities of informational support of decision-making processes relating to sales. This enables making right decisions regarding the management of the whole sales process and identification of new market opportunities. SIS is filled in with data from all documents registered in the SD module (contracts, orders, deliveries, invoices, etc.).

Therefore, sales department employees have up-to-date information, necessary for making decisions. Available reporting functions deliver reports drawn up according to many criteria, e.g. counterparties, an assortment, a location, etc. It is also possible to track trends and to plan sales – e.g. based on historical data – and then to compare sales plans with actual data.

SAP ERP provides also tools for registering information about sales contacts. The Customer Interaction Center (CIC) available in SAP ERP enables a simple phone interaction, searching through a customer base or calling up basic transactions in the context of a given customer. It also contains a base of problems and their solutions. The SAP ERP Customer Service (CS) can be used to register contracts for provision of services, to handle services orders or complaints.

In addition to standard SAP solutions, it is also possible to implement additional applications that enable the potential of the information gathered in the system to be better used. The Single Customer View is such a tool. It is an in-house developed application prepared by SNP. It provides all information about a selected customer on one screen.

In many companies, these tools are sufficient for maintaining relationships with customers. This is the case especially in companies that do not have extensive requirements regarding the support of pre-sales and after-sales processes and cooperate with a limited number of regular customers, and therefore have a small sales department and do not run extensive marketing campaigns.

More than ERP

The needs of many companies, however, go far beyond the possibilities offered in the ERP system. They are characterized by long-term and multi-stage sales processes, a large number (thousands and more) of varied customers, who have to be treated individually, and what is connected with it – a sales department employing tens or even hundreds of people in various subsidiaries. This scale of a sales activity is usually accompanied by numerous marketing campaigns that differ depending on what market segment they are targeting and what product they are focused on.

All this can mean that there is a need for a new, enhanced IT tool for customer relationship management. In large companies that already use a wide range of SAP ERP functionalities and whose customer relationship model resembles the one described above, the implementation of SAP CRM is a natural choice.

SAP CRM – what for?

The first answer that comes to mind to the question: what is the goal of the CRM implementation is the improvement of relationships with customers. However, the concept of the development of customer relationships is too vague to justify spending considerable funds on a new IT tool.

Good customer relationships should translate into increased revenues or savings as a result of a better organization of marketing and sales processes. In a word, it must be possible to express the goals of the SAP CRM implementation in concrete figures, which can be achieved within a foreseeable time frame.

However, the accurate definition of goals is not eve-rything. The SAP CRM implementation is, in business and organizational terms, a more challenging project than an ERP project – since it is related to the change of a company operation model to a larger extent.

Therefore, the knowledge and practical experience is necessary to properly prepare and plan an SAP CRM project – to specify the scope and schedule of the implementation, to take into account necessary organizational changes to be made, to set up a hierarchy of goals and priorities.

Based on unique experiences from first large implementations of SAP CRM in Poland and work in dozens of other SAP projects in the field of sales, service and marketing, SNP proposes focusing on business while preparing the SAP CRM project.

According to our approach, the most important element is a business project, which consists in the analysis and adjustment of processes relating to the customer relationship management. The analysis results are used to decide whether these processes should be carried using standard functions of the SAP ERP system, its additional enhancements or a selected scope of SAP CRM.

At the business analysis stage, the most important goals are set and a hierarchy of their importance is defined. The key can be a specific impact on sales and the bottom line, or measureable improvement of the service quality. The hierarchy of goals is also a starting point for creating a project schedule, including its division into stages.

The selection of goals depends on an industry, a company size and other factors. Below we present a short review of areas of benefits from the SAP CRM implementation. It can be a starting point for a discussion about a target form of the system and a strategy of its implementation.

Knowledge

The foundation for increasing the effectiveness of relationships with customers is the proper collecting, systematizing and providing the customer information.

Registering and storing the history of interactions (e.g. of sales representatives, service engineers, call center employees) with a customer is the first step to ensuring the completeness, consistency and reliability of knowledge about a customer. It is also a tool for evaluating the effectiveness of the sales department activities.

The process of instructing a new salesperson or substitutes in case of absences is simplified. From this moment, the knowledge is held by a company and not an employee. It is important if we take into account a high turnover in sales departments, in particular in a call center.

A level of details of notes from contacts with a cus-tomer, a scope of recorded information, required at-tachments (e.g. offers, agreements), and also a scope of authorizations granted at specific positions should be considered at the stage of preparations for the implementation and they should guarantee the data security.

SAP CRM ensures the comprehensive maintenance of data on customers (or generally, business partners) and enables easy adjustment to needs and the specific nature of a company. Master data on a partner can be easily extended. The system also stores data on relationships be-tween partners, e.g. “is a contact person”, “is a sales executive”, “has a subordinate unit”. Information about relationships can be used e.g. while reporting or creating a target group.

Analysis

SAP CRM means also extensive analytical capabilities that enable establishing with complete certainty what was previously based on scattered and incomplete information, and very often only on salespersons’ intuition. What are the characteristics of sales opportunities that are successful, what features characterize a failure, how to better leverage our strengths, how to eliminate weaknesses? This is the knowledge that can translate into increased revenues of a company.

Depending on the goals set, through improving an interaction with customers, the SAP CRM implementation can help increase revenues or reduce costs of this interaction.

In this first group, the business analysis and implementation will focus on a better and fuller use of the knowledge about a customer stored in the system and available from other sources. An example can be here the External List Management tool, which allows data to be imported and rented or purchased lists of prospective customers to be handled.

The systematic searching through a base enables the identification of new sales opportunities and management of an offer preparation process – in SAP CRM, sales opportunities and activities preceding an order placement by a customer are registered.

The sales funnel analysis allows a potential result to be determined more precisely. The sales management process is standardized, its selected elements can be automated with the support of workflow tools, e.g. granting a discount above a specific amount requires the acceptance by a department director.

Through the integration of activities in the SAP CRM system, a marketing department gains a reliable and up-to-date source of knowledge about customers, which allows it to precisely select target groups for its activities. What’s more, marketing activities can initiate the extension of knowledge about customers (e.g. through surveys).

Interaction

The essence of sales is an interaction with a customer. A high degree of automation of repeatable activities, a reliable knowledge base and quick access to information about a customer and a company’s offer as well as efficient analytical tools are a good starting point for increasing the effectiveness of a sales department and the customer satisfaction, and in consequence, obtaining better sales results.

Marketing campaigns planned and run in CRM are one of the basic tools in this area. A tool for man-agement of marketing campaigns will enable their implementation (e.g. creation of lists of phone calls, sending out mailings, planning visits for salespersons), registration of data on campaigns and monitoring of their effectiveness. Analytical functions will allow a multidimensional verification of a campaign result and, through the integration with SAP ERP, its financial control.

Lower costs of customer service and a higher quality of service are priorities for companies that conduct a service activity and have many sales channels, including sales representatives, a call center.

The SAP CRM Customer Interaction Center tools enable a mass outbound communication (phone campaigns), based on an easy access to a history of contacts and ready-to-use conversation scenarios. Fast creation of customer contact documents allows an interaction effect (meetings, phone calls) to be registered on an ongoing basis.

The service in SAP CRM means, in turn, an access to basic types of documents for customer service: complaints, service orders, etc. The system itself monitors the time of order completion and makes sure that deadlines arising out of agreements are met. Scheduling of technicians’ work and a possibility to store in the system the data on components installed at the customer’s company are functions that can be a basic tool of everyday work in a service organization.

Fast does not always means good

As mentioned earlier, the definition of implementa-tion goals and setting priorities among them is one of the most important factors that influence the pro-ject success. It is a good idea to divide the implementation of SAP CRM into stages corresponding to a hierarchy of successive goals.

An implementation scenario is, to a large extent, dependent on a company’s business profile, a number and structure of customers and channels of communication with them.

Different priorities will be set in a company offering a rather narrow assortment distributed through a diversified distribution network including, for example, trading partners, large and small chains of stores, wholesalers and individual customers. The implementation will be carried out in a different way in a company producing a large number of goods offered in various variants, available in its own retail chain. Finally, different SAP CRM tools will be used by a service company whose priority is the quality of cooperation with a customer.

A consequence of dividing the CRM implementa-tion into stages is the project extension over time. This time can be spend on the evolutionary introduction of organizational changes, data consolidation and familiarizing employees with the new tool. The changes concern, among others, requirements relating to the registration of contacts, “sharing knowledge” about a customer, compliance with established recording standards.

Teamwork

Another important condition of the project success is the selection of people engaged in the implementation, and also the executive sponsorship. A direction of changes and a philosophy of customer relationships as well as a role of SAP CRM tools clearly specified by the management board and communicated to employees significantly facilitate implementation works.

It is important to plan from the beginning the activities extending beyond the project time frame and to designate a position or a department responsible for the development and maintenance of CRM. The role of a person responsible for CRM in a company when the implementation project is underway is to make sure that the goals set are achieved, and after its completion – to initiate actions to adapt SAP CRM tools to the changing market and customer expectations.

The company’s support for the SAP CRM project means the selection of people assigned for its execution, and the time they spend on project works. A project manager should be a decision maker, who perfectly knows the way in which the company operates and its marketing strategy.

The project manager role should also include motivating engaged employees and making sure that people who do not participate in project works are informed about project goals and a work progress. This will make the introduction of changes smo-other. We should remember that the effectiveness of the SAP CRM system is based on data whose completeness, accuracy and reliability is the responsibility of employees. The quality of tools supporting a customer interaction depends on the employees’ conscientiousness and motivation.

An SAP CRM project in a large company engages many people from various departments. Its course will show how many processes require cooperation, how many processes are dependent on one another. It is quite a typical situation when sales and marketing departments maintain separate customer bases for purposes of their own activities. The implementation of CRM tools is often the first opportunity to make this data common and to join efforts in maintaining it. This produces a perfect synergy effect when both of these departments can share effects of their work.

The above mentioned factors are independent of a company or an industry. Of course, the project scale does not always justify taking all the steps described, however it is worth being aware of their existence. The practice shows that the effort put into the implementation and then into solid, everyday work with the system really pays off.

We gain a new outlook on the way in which our company operates, on the value that our customers are for us, on the way of operation that translates into the best result. Our outlook is no longer based on feelings, but is supported by figures. How we use this knowledge depends only on us.