Scania Trucks, which sells in more than 100 countries around the world, has its largest market in the UK. No surprises then that here is the pilot for its sales force automation (SFA) project. Criteria for the design of its system were that it had to be: end-user and customer facing, easy to use and fun to use. “That hasn’t been seen before,” says Scania GB IT director Sten-Ake Tjarnlund.
He adds: “We want a sales-support emphasis, strong brand image and the touch-and-feel of Scania.” Who doesn’t? And his ultimate aim? “A quote from a sales-customer meeting being passed to the factory and confirmation received within five minutes. With the right processes in the factory that could happen one year from now.”
Just one year from now: that’s not long in terms of delivering on a whole new strategy and the supporting IT to match. And it means that Scania GB at least is serious about recognising that it has to change to stay on top. Which begs the question: is SFA mere fashion and hype, or a genuine manufacturing business opportunity? Because most companies can’t and shouldn’t change as fast as fashion – nor for its own sake. And in the area of SFA and related customer relationship management (CRM), adoption of the new applications cannot be done in isolation; not if looked-for benefits are to be achieved. The key issue is integration, and that implies investment and commitment.
Fact is, for many SFA is only just getting started – and it’s not looking too hot. According to consultants at US analyst Gartner Group more than 60% of SFA solution implementations fail. And work done by another analyst, IDC, on behalf of IT giant Amdahl found the average ‘integration factor’ of back office operations with Web sites for SFA about 2.4 (where 1 = no integration and 5 = fully integrated). The implication is apparently clear: not enough integration is going on, and hence the failures.
Ovum lead analyst Cassandra Millhouse says, “Integration is excruciatingly difficult to do.” And she adds that SFA is still poorly defined: you need to question whether product configuration, for example, is part of SFA. “The engine that defines what the configuration can be is the same at the front as at the back end. But the output – an order at the front office and bill of materials (BoM) at the back – is different.”
And there’s more. “With integration, does it take place where the order is placed?” asks Millhouse. “In SFA, the sales staff win the opportunity, convert it to an order and pass the order to the ERP (enterprise resource planning) system – and that, say some, is the point of integration.” The point is, “people integrate to minimise disruption.”
But is it all hype? Peter Williamson, head of e-business at Swedish ERP software vendor Intentia, believes it is. He says of CRM, for example, “[It’s] one of the most over-hyped acronyms of the past two years, and one of the most prostituted.” There’s no apology for his candid assessment. “CRM means what people want it to mean. But it’s the latest stage in a steady progression of marketing techniques that began with mass appeal, followed by segmentation and then niche marketing. “Now it’s all about putting a business proposition to much smaller groups and individuals. Some vendors do a disservice by trying to claim it’s a panacea.”
It’s a pessimistic view. Manufacturing IT consultancy ARC’s senior analyst Simon Bragg prefers to be structural. He points to two distinct camps with SFA and CRM: “the Web-based one where the data is held back at the ranch, like with Oracle’s approach, or the one where everything is on the lap-top, as with Symix.” And he adds: “some, like SAP, have a foot in both camps.”
Either way, Clive Woodward, managing director at ERP firm Symix, is pragmatic. He says that whatever the model, SFA and CRM bring customer service and efficiency benefits – and these are what matter. “Product quality, innovation and price are still important but are not now individual competitive differentiators. Information, knowledge, speed and responsiveness are what are making the difference today. This is where e-CRM products become important, linking into the ERP backbone via the Internet.” And the same applies to SFA.
Meanwhile, ERP colossus Oracle’s director of e-business marketing Robert Fleming says, “The key to success for SFA or CRM is integration with the back office. Sales people need integration for real-time order booking, and available-to-promise (ATP) systems need integration too. The argument rolls on further to incorporate the demand and supply chains, and the integrated value chain.”
Oracle is ranked number two behind Siebel in the loosely connected SFA/CRM software market by IDC. SFA specifically is populated also by Vantive, Clarify, SAP and Baan. Gartner sees consolidation coming – probably to just four or five vendors by 2003, with both Oracle and Siebel surviving – the former having 900-plus customers, including National Instruments, Airbus, Lease & Electric, Hydro Air, Millipore, Pacific Scientific, Canon (Italy), Bodum (Denmark) and GE Medical Systems (France).
Back at Scania, the firm expects its SFA to iron out the complex process of selling trucks. The key for Tjarnlund is to provide sales people with a tool to do configuration of the truck with the customer and get it right first time – and to reduce the links in the chain back to the factory. Because the configuration process changes rapidly all the time. New components are added weekly; different finance arrangements are available; and some 50% of all trucks sold are on contract hire. Tesco, for example, wants trailers and ancillary equipment – refrigeration units, cranes, etc – more than 10,000 component options (engine size, brakes, cab design and colour, etc).
Scania has 103 locations in the UK, 86 of which are linked to the Milton Keynes HQ over BT leased lines – the remaining 17 are vehicle maintenance units. A star network links a Unix server to hubs at 15 distributors over high capacity lines, which then link to depots over lower capacity links. The Kerridge dealer management system is the ERP core, and Citrix thin client technology is used “as much as we can”. Salesmen will be equipped with laptops, and the Firepond suite of e-business sales and marketing software will form the heart of the solution. Its business rules engine, for example, is used in component parts selection.
“We have the technical infrastructure in place now and from September/October we’ll be starting the Web browser-based technology pilot with two of our 15 dealers in the UK. The rest will be rolled out before the end of the year,” says Tjarnlund. “Not all of our finance products will be in stage one. Another issue we have to tackle, is in the Swedish bespoke legacy systems. We want to create a seamless flow from customer to factory, and sales to delivery.”
Scania is not alone. For instrumentation and electronics manufacturer National Instruments, SFA is one piece of the puzzle of the total sales automation. Its challenge is to integrate with other sales strategies such as Web working and telesales. The focus here is on acquiring sales intelligence to enable analysis. Hitherto, the company’s field sales force had been tied up selling two business lines – complex sales of high-value low-volume goods and commodity software (high volume and low value).
National Instruments looked at the Internet and now employs a Web store for commodity sales, enabling the sales force to focus on the high-value low-volume business – less on order-taking, and more on CRM operations. The Oracle philosophy at work here is a centralised customer data model shared by multiple applications, all ‘architected’ on Internet principles, with no client-server. The browser is the interface: salesmen on the road use personal digital assistants (like Palm Pilots) synchronised with the server data. Back at the office, systems are updated.
So it’s happening. Who then to turn to for what? And what are the business implications? UK manufacturing and engineering IT consultancy Cambashi’s Edwin Ecob says: “A number of vendors have software that provides Web-to-ERP configurators.” And he cites Baan, JD Edwards and SAP. But he, like the others, insists that integration with other systems remains essential. “What is really necessary is an infrastructure which ensures the commitments made by the sales force are met. This will typically require an integrated supply chain as well as the configuration tools.”
Andy Barraclough, senior consultant with Intentia, adds another thought: “The biggest changes needing to take place are in the minds of the sales force. Salesmen tend to be independent people and know their customers ‘intimately’. They know all there is to know about their sales territory – but this information is either locked in their heads or notebooks.
“Salesmen have got to be encouraged to open up and share this information with the whole organisation which is itself trying to become more customer-focused. If they can become more open they have a lot to teach and contribute to what their colleagues are trying to achieve. The goal is to speed up the time it takes to get information processed inside the organisation and disseminated for use.”
Final notes? To re-emphasise common opinion, “integration of SFA, CRM and associated applications with core ERP systems, is a strategic imperative for today’s e-businesses”. Bloor Research adds, “the growing realisation that the key to customer retention and profitability is to get all your channels working in harmony”. Stand-alone web sites working in isolation from call centres, other customer-facing functions, like SFA, and the fulfilment process are out.
There is a distinct lag between the hype, pushed so heartily by many vendors, and reality. Prevailing wisdom has us firmly placed in that gap.
- Bonfiglioli Riduttori powers sales force with e-commerce
Leading manufacturer in power transmission Bonfiglioli Riduttori produces gearboxes and motors for a spectrum of industrial applications. Based in Italy, the Group has 1,000-plus employees in its global offices, and it was proving difficult to pass large amounts of data and catalogue information between branches, agents and distributors.
Should the product catalogue be offered over the Internet? Well yes, but its complexity meant a lot of information on the customer’s installation was required to choose the correct products. Any solution would have to solve that issue, and be fully integrated into the back-end system – as well as being able to handle large orders quickly and easily.
The company chose the Magic eMerchant e-commerce ordering system to enable agents, distributors and customers to browse the catalogue and input orders via the Web. Says Bonfiglioli managing director Sonia Bonfiglioli, “The system and ordering procedures gave us time savings of 35% over other vendors from design to final delivery.”