Post # 2
An article which explains the link between Enterprise Relationship (ERP) focused Companies and their drive to provide Customer Relationship Management (CRM) as one of the important components of a fully integrated and "complete" service.
Please note the mention of the company BAAN within the article.
October 18, 1999, Issue: 785
Section: News & Analysis
By Richard Karpinski
CMP Media Inc
ERP Dragged Into Front Office
If e-commerce places the customer at the center of the enterprise, the integration of back-office ERP applications with sales, customer service and other front-office apps is inevitable. But that doesn't make it any easier for IT managers who have to wrestle with all the challenges that accompany such a radical change. Vendors are promising to bridge the two worlds with integrated products. The latest is PeopleSoft Inc., which last week agreed to acquire customer relationship management (CRM) vendor Vantive Corp.
But experts say the typical IT manager's messy enterprise application infrastructure won't be simplified by vendor consolidation alone. The good news for PeopleSoft or Vantive customers now is that they can have all their requirements met under one roof," said Cassandra Millhouse, an analyst for Ovum Ltd., which dubs the integration of front- and back-end apps a move toward "universal business applications." Millhouse added that the easiest way for a company to achieve integration is to buy all its applications from one vendor.
Even when you're finished integrating the front and back-office apps, the Web makes it necessary to extend those apps out to customers in the supply chain as well, which introduces even greater integration challenges, Millhouse said. Gartner Group estimates that 80 percent of enterprises are focused on internal integration projects today. But that trend will reverse within five years, with only 20 percent of projects focused internally and 80 percent aimed outside corporate walls.
A growing group of vendors are leveraging Web-native technologies, especially Extensible Markup Language (XML), to move data-and, increasingly, business processes-across the enterprise and out into the supply chain. In coming weeks, enterprise application integration (EAI) vendors, including Active Software, OnDisplay and start-up NetFish, will roll out new products for trading partner integration.
Last week's $433 million acquisition of Vantive by PeopleSoft had been expected. Both companies have been struggling in recent quarters and faced renewed threats from larger competitors, most notably Oracle, which is aggressively integrating its ERP and CRM applications. PeopleSoft and Vantive already have begun the integration process. The companies' products integrate today via Vantive QuickConnect for PeopleSoft, a package built with the help of integrator KPMG and EAI vendor Active Software. The combined company will detail further product integration early next year. "Integration is an important thing to customers. They want an integrated enterprise solution wrapped around the customer," said Baer Tierkel, PeopleSoft's senior vice president of business strategy and development. Companies "want to begin an enterprise relationship with a customer, have it hit their financials, be managed by their employees and expose the entire supply chain."
Ameritech Library Services (ALS), a longtime Vantive customer, is rolling out PeopleSoft distribution and financials modules internationally. It had to custom-build interfaces between the two systems, and sees "great advantage" in a common data store across both products. But that won't happen without some effort. "Once there's a massive data store between the two databases, I'm sure we'll go through some pain to make sure all of our customizations [to the individual products] are still in place," said Ed McCracken, CIO of ALS.
Analysts said ERP/CRM integration is a critical starting point for e-commerce. "Companies would like to have an integrated front and back office that's all around the customer," said AMR Research analyst Rod Johnson. Traditionally, packages for sales force automation or call centers are chosen by a company's business groups, which often opt for best of breed. "When a company gets tied to separate data models for ERP and CRM, it's a nightmare," Johnson said. "As companies switch from trying to achieve operational efficiencies to more e-commerce or customer-facing strategies, integration to the back-office becomes critical." No ERP vendor has hit a CRM home run yet. Oracle is perhaps furthest along, with CRM pieces today and a full, Web-based offering in Oracle CRM 11i, due in April. SAP, after several false starts, has been developing CRM functionality as well, including a new module for telecom carriers released last week. Baan, meanwhile, acquired CRM software maker Aurum in 1997. "We strongly believe as an e-business you want to have out of the box a product with a single database instance and a single data center so you can make changes quickly," said Mark Barrenechea, senior vice president of Oracle's CRM products division. "It's a simple question: Can you add a product or service to your Web site over the weekend? Amazon can. Can you?"
The U.S. Department of Transportation is using Oracle's CRM products-initially commerce server functionality but soon call center support as well-to Web-automate all of its transactions with the public. The fact that the department was already using Oracle Financials "was clearly a factor" in buying Oracle CRM as well, said David Kleinberg, the DOT's deputy chief financial officer. "We needed quick-to-deploy, compatible products," he said.
KPMG, whose CRM practice has worked closely with Vantive, Oracle, Pivotal, Siebel and other vendors, sees two factions of users, said Doug Holden, KPMG's global partner for customer management solutions. "Some users are very committed to the value of the integrated enterprise,
and to some extent will trade off deep functionality to have really clean integration," Holden said. "Another group wants deep functionality, and they're willing to pay for integrating the best of breed."
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Customer Takes Center Stage
ERP vendors are adding CRM features to give customers a single packaged
app to satisfy all their e-business needs.
PeopleSoft-Buys Vantive, will combine the two platforms next year.
SAP-Has SAP Sales, Marketing and Service today; moving functionality to
mySAP.com portal.
Oracle-Has CRM suite today; moving to full Web platform called
Oracle CRM 11i next April.
Baan-Still assembling CRM capabilities, in part bought from Aurum.
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So how can Net Shepherd help a company provide with cutting edge and value added Customer Relationship Management services?
NSI will/can provide in organizations with the capability to deliver "Real Time" customer service over the Web. Say a customer or company is surfing through a NSI client?s site. This customer is in the process of shopping or researching information on the client?s site. When appropriate, NSI will be able to recognize this, and as a result of NSI?s licensing of Orbital Software, they will be able to identify and route the call to the respective subject expert(s) in this area. This expert could contact the person / company in a Pop Up box while the customer is on the site. The customer and NSI?s customer service representative could carry out a real time conversation to assist the customer to obtain the information they need, or to carry out their shopping trip. NSI will be able to provide an intelligent, knowledgeable, and real time customer service contact for anyone attempting to carry out E-commerce on the Web.
I believe that any service based company, who have the capability to offer this type of "Real Time Internet" based service will do exceptionally well. Any firm (ERP based or not) who hope to have a dynamic and value added presence on the Web will be very interested in being able to offer this service. Just remember, NSI will either be the first, or one of the first, to have the capability to do this!
Crazy Canuk |
