Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Gorilla and King Portfolio Candidates -- Ignore unavailable to you. Want to Upgrade?

To: Climber who wrote (12219)	12/6/1999 9:08:00 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 54805

Andersen Consulting was one of the early investors in Siebel Systems. Andersen still has a rep on Siebel's board. Understanding that, you won't be surprised to learn that the following press release is the answer to an essay question in the final exam of Value Chain 101. --Mike Buckley =============================== NEW YORK--(BUSINESS WIRE)--Dec. 6, 1999-- Andersen Consulting Research Identifies Areas Where Chemical Companies Can Invest to Increase Profitability Investing in a small but select number of customer service, sales and marketing capabilities can have a huge impact -- potentially hundreds of millions of dollars -- on a chemical company's bottom line, according to a landmark study released by Andersen Consulting today. For instance, a $1 billion chemical company or business unit improving its customer relationship management (CRM) capability from "average" to "superior," could gain as much as $100 million in profits, the study found. More than 50 percent of the difference in return on sales between average and superior-performing chemical producers may be attributable to CRM performance, according to the study, "How Much are Customer Relationship Management (CRM) Capabilities Really Worth? What Every CEO Should Know." In essence, the findings of the study provide a roadmap for executives showing the customer service, sales and marketing capabilities that provide the greatest financial return. "While most chemical companies agree that investing in customer relationships is essential in this competitive marketplace, few realize the significant impact that investing in the right customer relationship capabilities can have on their bottom line," said John Aalbregtse, a managing partner in Andersen Consulting's chemicals industry practice. "For the first time, chemicals executives have objective data linking the value and impact of specific customer-focused activities to financial performance." The Andersen Consulting study, which analyzed 54 customer service, sales and marketing capabilities, concluded that only five differentiate the strongest performers. The top five capabilities, in order of importance, are: enabling easier customer contact, fairly compensating and rewarding service personnel, developing and executing an effective channel strategy, building flexibility into information systems/technology and using customer service to generate sales. In customer service, the study found that moving from average to superior performance with regard to leveraging information technology could add up to $23 million to a $1 billion chemical company/business unit's return on sales (ROS). In sales, the study identified the development of a superior sales strategy as having potentially the greatest impact. The study projects that moving from average to superior sales performance could add up to an additional $4 million on a $1 billion chemical company/business unit's return on sales. In the marketing area, the study found differences between specialty and commodity chemical companies and determined that building a strong marketing force could add approximately $7 million to a $1 billion commodity chemical company/business unit's return on sales, and up to $10 million for a specialty chemical company. The study also found that commodity chemical companies could potentially boost their return on sales by as much as $19 million by enhancing their customer focused strategy, while improving customer focused strategy could add up to $33 million for specialty chemical firms. "Having a sound basis on which to make CRM investment decisions has been lacking," said Dale Renner, global managing partner of Andersen Consulting's Customer Relationship Management practice. "Now there is a way for chemical executives to select and prioritize their CRM investments for maximum returns." Andersen Consulting is a $8.3 billion global management and technology consulting organization whose mission is to help its clients create their future. The organization works with clients from a wide range of industries to link their people, processes and technologies to their strategies. Andersen Consulting has approximately 65,000 people in 48 countries. Its home page address is ac.com. A NOTE TO EDITORS: For this study, "How Much are Customer Relationship Management Capabilities Really Worth? What Every CEO Should Know," Andersen Consulting surveyed 130 chemicals executives from leading diversified, specialty, commodity and petrochemicals companies. The survey consisted of 400 questions on marketing, sales and service, covering the strategy, process, technology and human performance components of CRM. As follow-up to the survey and to test the survey's conclusions, Andersen Consulting conducted interviews with senior chemicals executives to validate the survey data and gather additional insight into how CRM capabilities are developed and used in the industry. Andersen Consulting has conducted extensive research on the management of customer relationships in a number of industries, including communications, forest products, pharmaceuticals and electronics/high technology.