CRM Is Here to Stay: Evaluating Its Use with ERP

by Trevor B. Cain

The debate over whether the recession has ended may continue, but most industry watchers agree that conditions over the past two years have created a new climate in business – a climate where caution reigns, and increased customer service will be a key differentiator between competitors.

I hear almost every day from Activant clients and prospects that they need better tools and access to more accurate, real-time information in order to provide the increased level of service required to keep their current customers and attract new business. Competition is tough: a quote from one rep today could easily turn into an order for a competitor tomorrow.

The businesses I work with are distributors of wholesale durable goods. Wholesale distributors often run lean and mean – many times, without an outside sales force or the ability to be in front of every customer all the time. This does not exempt them from needing to create a competitive edge, however. Their field sales force has to be more proactive than reactive. They need to walk into a customer meeting armed with information: Quotes and invoices based on the last visit. Were there any new quotes? Any outstanding orders? Credit issues? Other problems?

Being aware of what is going on with an account has always been basic to customer relationship management (CRM), but in today’s climate, it’s a critical factor. As a result, wholesale distributors are looking for a better approach to CRM as they evaluate Enterprise Resource Planning (ERP) systems to run their business. For some, this is their first look at CRM, but others may be seeking to consolidate systems, searching for a more efficient alternative to maintaining two or more databases of information that often don't communicate with each other.

These stand-alone CRM applications can be quite costly to the midsize family-owned distributor. The functionality may be robust, but is it tailored to the specific demands of the distributor? Often, the investment has more function than needed.

When considering ERP systems for distribution, the question to ask in reviewing CRM functionality is: What does CRM mean to my business? Determining what CRM means to a distributor involves evaluating all areas of the business and their needs. CRM isn't just the customer relationship as it pertains to sales, but also accounting and value-added services, if they exist. Outside of sales, distributors also maintain relationships with their vendors. Without inventory and knowledge of availability, distributors would be dead in the water.

One approach to evaluating these areas of the business is to empower key employees from various departments to have a voice in what is important.

• Does the company have an outside sales staff? If so, enhanced CRM functionality could greatly increase their efficiency. This usually goes to their bottom line, which is what they are always watching.
  


• Do these field sales reps have laptops, smartphones, iPads? What tools do they need to have access to and from a system?
  


• Can your company automate workflow not only within the business, but also out to those reps in the field?
  


• Can the system generate automated tasks based on those important transactions that often require follow-up, such as quotes to the customer?
  


• Does your company get involved in larger bids with customers (i.e., it's not just a single quote, but multiple quotes under a larger opportunity that may linger on for months)? Is the company able to track these opportunities in order to generate a pipeline of what is to come in future months?

These small pieces of functionality will make the difference between being proactive or reactive. The bottom line is, to see both immediate and long-term effects of CRM, you should get buy-in from employees. Determining needs, uncovering key functionality and implementing are only half the battle. No matter what CRM system you choose, the ROI will come only if it is put to use.

Trevor B. Cain is an Industry Segment Manager at Activant Solutions Inc. Find out more about Activant at distribution.activant.com or call 1-800-776-7438.

Economic Conditions Affect Business

By Tim Reynolds
President, Tribute, Inc. and President, COSE (Council of Smaller Enterprises - Cleveland)

Well it’s official. Our economy is in a recession. Of course, economic conditions will affect different businesses in different ways and some of you may be having a great year. But for those of us that have seen our business volume turn down, it’s time for some clear thinking. This will be my third major recession as a business owner and I thought I’d share just a couple of the lessons I’ve learned along the way.

First, denial is the enemy. If your business needs to be smaller for a time, bite the bullet and make it smaller. Failing to take the steps you need to preserve your capital and match your business expenses to achievable revenues is the reason businesses fail.

Only then are you in a position to take advantage of the opportunities recessions have always provided flexible business owners. For example a competitor may stumble, or perhaps a vendor may lay off a talented employee that can take your company to a new level. You may have to lay off employees of your own. That’s painful of course, but it also gives you the opportunity to rethink important business processes. What you do now will lay the foundation for profitable growth thereafter.

Fortune's Feb 18, 2008 issue has an article written by management guru and Wharton faculty member, Ram Charan, which is still timely and offers some useful advice to weather the recession. I found a couple of his tips relevant:

1. Keep building. When the top line looks shaky and the bottom line worse, the temptation is to go after discretionary spending. Fine - but do not consider product development, innovation, and brand building optional. Sacrificing your future for a slightly more comfortable present is not worth it. If you keep building, you can come back strong.

Tribute continues to offer our customers new tools to streamline their business and cut costs. Our users determine the innovations most beneficial to the group as a whole and we implement those tools in our regular releases. We’ve partnered with WarehouseTWO to offer our customers an easy and convenient method to do inventory-sharing, enabling them to get rid of excess inventory and provide another means to fill backorders.

The "American Recovery and Reinvestment Act" has extended the Section179 tax expensing limit to $250,000 and boosts the overall investment limit from $510,000 to $800,000, so this is the year to invest in making your company as efficient and profitable as possible.

2. Communicate intensively. Get information from where the customer action is, and get it to the operating people - fast. Companies should do so routinely, of course. But they don't. It's counterintuitive but true that when the economy slows down, the pace of decision-making has to speed up, because you can't put off the tough choices anymore. The companies that are readiest to act on solid information are primed to shoot ahead of the business cycle.

Partnering with Rubber Tree Systems, Tribute now offers TrulinX Mobile and Tribute Mobile, a business intelligence and sales force mobilization system that extracts the data from our Tribute & TrulinX systems and shares it with any mobile device. In this economy, access to up-to-the-minute data is a must.

Clear thinking and an open mind are critical to small business success. Tribute is ready to help you take a hard look at your business processes, compare them against the best standards in distribution, and show you how our software can help you achieve Best Practice. We continue to invest in product development and innovation to best serve your needs. We can help you keep the “blinders” off and streamline your business so you can be ready for the good times to come.

To find out more, visit www.tribute.com or call us at 800-874-2883 and press “1” for sales.

About Tribute, Inc.

Tribute, Inc. is the leading provider of enterprise-wide distribution management software to the pneumatic & hydraulic, power transmission, belting, sealing products, automation & motion control, instrumentation and hose distribution marketplace. We specialize in providing superior tools combined with personal and knowledgeable customer support for this specific niche. Our customers are more than just a number – they are partners with valuable input that drives the direction of our product. Tribute has provided a comprehensive management solution for industrial distributors for 28 years and is an active member of FPDA, ISD, NAHAD and NIBA.