A few years ago, when I was heading up the telecommunications industry group for a Fortune 500 software company, we had a saying, “There’s no such thing as a standard price quote.” Virtually every deal called for special pricing relative to the particular needs of the customer, whether scope of deployment, customization or a host of other factors. So rather than closing business based on pre-set pricing guidelines, the salespeople had to literally walk every deal through a fairly onerous approvals routine, involving lots of phone calls, emails, faxes and spreadsheets. It was an ugly process, often delaying revenue bookings, and it happened every quarter.
Recently I called an old colleague of mine to see if things had gotten any better. His answer: “It’s worse than ever.”
It turns out, it’s the same all over. Despite huge investments in enterprise software and the best efforts of CRM vendors, many customer-facing processes are still managed the old fashioned way – via phone, fax and email. The fact is, CRM systems are designed to store customer information, not track and manage tasks requiring human judgment, collaboration and decision making. A wide range of processes, like non-standard price quotes, RFP/RFQs, customer complaints and installation sign-offs, are still handled manually. As a result, with little or no visibility into these processes, prolonged cycles and failures to execute are commonplace.
To address these issues, an increasing number of companies are looking to extend the value of their CRM investments by adding BPM functionality. For example, when a sales rep prepares a quote in the CRM system, it may launch a process to get the quote approved. Or an entry at the solution definition stage may trigger a risk assessment step. Or a revised forecast may automatically escalate a customer issue. In each case, using BPM to drive behavior around CRM-related events and issues can help remove bottlenecks to closing business, and keep existing customers happy.
Opportunities like these and others are spurring strong growth in packaged BPM solutions. Gartner predicts the BPM market will hit $6 billion by 2006. The problem with BPM software in today’s world, however, is the problem with packaged software in general: high upfront license fees; protracted, expensive implementations; ROI promises that can take years to fulfill; and difficulty responding to change on an ongoing basis. Fortunately, the rising interest in BPM is converging with another, even more significant trend – the move to software-as-a-service.
Business Process Improvement… On Demand
According to Merrill Lynch analyst Jason Maynard, “2004 will be the year the software industry hits a critical inflection point and moves closer to being a consumed as an On Demand service.” The early successes of several on-demand software companies, notably salesforce.com, SalesNet, RightNow and NetSuite, prove that the concept of affordable, subscription-based enterprise applications delivered on a hosted model really works, even for such business-critical functions as CRM.
Most people associate BPM with a lengthy process that involves licensing software then analyzing, modeling and coding various business processes, followed by implemention, deployment and training. Today, however, many companies are electing to simply activate business process automation on a hosted basis so they can begin reaping the benefits right away.
Hosted access also means outside entities can easily participate in the process. At high-tech manufacturer Smart Modular, for example, sales operations is using hosted functionality to track price quotes from 400 users at 19 different rep firms, including details on products, customers and competitors.
On the service side, there is laser-maker Spectra-Physics, where customer service reps and field service engineers (FSE) are tracking progress on equipment installations, and expediting the billing process. Since they implemented a hosted solution, Spectra-Physics went live in a matter of days, not months.
These examples are just the tip of the iceberg. The potential for companies to improve their customer-facing processes with on-demand process automation is simply huge. If you need to automate manual sales operations or customer service processes, without the cost and time commitment associated with packaged BPM software, you may want to consider a hosted solution. It could be just the thing to deliver the unrealized value of your CRM investment.
