Dynamic CRM: The Wave of the Future

January 15, 2008 by Sam Varghese, Deloitte U.S.

SAP_CRM

Most organizations have front-office functions – sales and marketing – and back-office ones – manufacturing, operations, and logistics. The ever-increasing velocity of business impacts the front-end functions first, challenging the sales and marketing departments to move rapidly to keep pace. Additionally, sales and marketing must constantly work in concert with IT to stay a step ahead of the competition.

For example, if an organization identifies a business opportunity through market research or other means, the business will ultimately convey it to the IT division. IT in turn must quickly modify existing sales and marketing processes if the organization is to capitalize on the opportunity. The speed with which these changes are required – and expected – creates a classic customer relationship management (CRM) challenge such as the one illustrated in the scenario below.

The CRM challenge

Let’s say, hypothetically, that John is VP of sales and marketing and Mary is VP of IT for ABC, Inc., a maker of innovative electronic products with very short life cycles for niche market segments.

ABC is the market leader in market share and enjoys a healthy bottom line; however, new competitors have entered the market, launching an array of promising new products that could threaten ABC’s very existence. On the one hand, the marketing department is considering modifying the company’s marketing message and communications to address this competitive challenge. On the other, the sales team is seeking to leverage feedback from the company’s satisfied customers to create enhanced products, pricing, packaging and promotions – all within a compressed timeframe that matches the rapid development and short life cycles of their products.

Sales and marketing’s ability to work with IT to expediently bring ideas to life has been – and must continue to be – a competitive advantage if the company is to survive. Both business and IT understand that achieving these objectives will require radical business-process change.

John and his sales and marketing team begin to address these challenges by defining “as is” and “to be” processes using the SAP NetWeaver Visual Composer tool. The team believes it is critical to implement the “to be” processes in sales and marketing before the next product launch in about 90 days.

IT jumps in

To meet this aggressive timeline, Mary and her A-team of IT professionals decide to use a dynamic CRM approach, one that simultaneously combines the company’s existing SAP Customer Relationship Management (SAP CRM) application and business processes; new composite applications delivered with SAP NetWeaver Composite Application Framework (SAP CAF); and programs built with the SAP NetWeaver Developer Studio.

This dynamic approach is made possible through the capabilities of the SAP NetWeaver Composition Environment (SAP NetWeaver CE), of which SAP CAF, SAP NetWeaver Developer Studio, and SAP NetWeaver Visual Composer are part. SAP NetWeaver CE provides an environment for the design and implementation of SAP xApps and other composite applications.

It includes a Java Enterprise Edition 5 platform for building and running applications based on enterprise SOA principles and business semantics, through an Enterprise Services Repository (ES Repository). Furthermore, SAP NetWeaver CE is a design-time and run-time environment that uses the same software to create and to deploy composite applications.

SAP CRM also has many business components available as Web services. In a dynamic CRM approach, these services are coupled with ready-to-run xApps (composite applications) that are specific to a company’s sales and marketing requirements. Mary used these ready-to-run modules to free up her developers to focus exclusively on developing custom code to meet the company’s specific business process requirements. Just like reusing existing software assets, Mary expects to reuse these developed modules to meet new business requirements.

By employing a dynamic approach to CRM, John and Mary can meet the tight timeframe by adapting the company’s existing SAP CRM assets to address the rapidly changing market conditions, through a combination of model-driven architecture (MDA), service-component architecture (SCA), and enterprise service-oriented architecture (enterprise SOA).

IT architecture meets business objectives

A dynamic CRM approach can help shorten the lag that develops between IT and business from requirements gathering through build and test, thus reducing the overall timeline for CRM deployment. It can also give a company the ability to adapt CRM software to its business requirements, rather than vice versa. This approach of adapting a CRM application to the business needs of an organization can free up both time and IT budgets for better and more specific purposes.

Such a fundamental shift is possible because of numerous developments on the CRM side and in the underlying SAP NetWeaver technology platform that supports enterprise SOA. For  example, visual modeling decreases the number of iterations between business and IT by enabling users to graphically depict the end state without manual coding. Best of all, the modeling can take place before IT begins work.

Composite applications like xApps will also help organizations adapt their existing applications to their business needs, rather than build new ones from scratch. As more and more xApps are developed and made available, companies will have more options for reusing those that most effectively help them address their business needs, as opposed to spending time on costly green-field development.

The future of CRM

With new devices and technologies and the growing need to communicate with heterogeneous systems, the future for any CRM system will likely be a service-oriented architecture ecosystem.

In this environment, business management will play a greater role in CRM implementations, formerly the technical department’s stronghold. Visually modeling business processes, reusing composite applications, and re-coupling existing IT systems to generate a desired output will increase the level of business involvement in any CRM implementation. We believe that this top-down approach can also make CRM implementations more effective overall by promoting greater business buy-in and end-user acceptance.

Future CRM implementations will still require the participation of all the players that take part in them today, but heightened business involvement in determining the outcome will better position the CRM solution to support the achievement of a company’ business objectives, as opposed to its IT ones. The enormous IT budgets and time currently spent on software development could then be reallocated to build more value-added applications, since the mundane coding will be available as ready-to-use services or composite applications.

Technologies that enable companies to implement CRM applications by reusing existing platforms with minimum coding, medium configuration, and maximum reusability will more effectively support the efforts of sales and marketing to quickly capitalize on new business opportunities. ABC, Inc., offers a great example of how these developments can be combined to deliver CRM via a shorter implementation cycle, while simultaneously meeting more business requirements and resolving more difficult business challenges with less effort.

The CRM of the future holds great potential for inverting the fabled 80-20 rule: Today, 80 percent of the IT budget achieves 20 percent of the business goals; tomorrow, 20 percent of the IT budget may very well help achieve 80 percent of the business objectives.

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