InformationWeek
Defining The Business Value Of Technology
February 22, 1999
The Front LineVendors are filling gaps in front-office suites, but are the new applications the right way to go?
By Jeff Sweat
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he market for front-office software is about to get more crowded. Vendors of customer-relationship management applications, which increasingly include companies with sales-force automation and customer-service backgrounds, are filling gaps in their suites. Newcomers, meanwhile, are delivering apps that automate related processes that until now have been managed manually, or not at all. But is it too much of a good thing?The products promise to let companies provide better customer service--by way of targeted marketing, quicker response, and personalized products and support--as well as bring order and automation to marketing and sales functions. They can be used to create IT environments that make it less likely customers will fall through the cracks of a company's support infrastructure.
"The ability to know who your customers are, to respond to what they're telling you, is critical," says Howard Berg, VP of customer-relationship management with Compaq, which uses customer-management apps from Siebel Systems Inc. and is evaluating a sales-lead distribution system from startup MarketSoft Corp.
A slew of products are on the way. This week, Saratoga Systems Inc. will introduce an upgrade to its customer-relationship management software that includes thin-client access, among other features, and IBM will reveal a version of its DecisionEdge marketing and customer-management platform for banks and other financial institutions.
Also in the queue: OnContact Software Corp. will unveil CMS 4.0, a customer-management platform that includes a customer-service and help-desk module for managing trouble tickets. Onyx Software Corp. will unveil Onyx eService, an Internet self-service engine. And Sales Vision Inc. and Glyphica Inc. will introduce products for creating intranet "portals" for salespeople and channel partners.
Worth The Effort?
These and other new offerings make it a great time to shop for everything from single-purpose front-office apps to comprehensive software packages. But because these applications tie in to enterprise resource planning and other enterprise systems, they also introduce a new set of management issues. IT departments have to assess whether the value gained in adding a hot new application is worth the integration effort and added complexity that comes with it. "You can't buy all of these things and integrate them without a huge impact on your IT organization," says Steve Bonadio, an analyst with the Hurwitz Group.
Partnerships among some vendors should help. For example, Oracle and Annuncio Software Inc. this week will demonstrate integration between Oracle's Front Office applications and Annuncio's marketing automation software, AnnuncioLive.
And then there's the nagging question of how much automation is appropriate for a customer-care environment. "There are risks of too much automation," says Steve Hallet, CIO of National Pen Corp. in San Diego.
Reebok International Ltd. chief technology officer Peter Burrows worries that the gold-rush atmosphere among vendors in the front-office market could lead to some short-lived products. "I don't want to be left with a piece of software that no one supports anymore or that isn't compliant with my ERP system," he says. "My sense is that unless something has a burning return on investment, it is not a good time to be dabbling in extra automation."
Specialized products can also result in silos of information, says National Pen's Hallet. The writing-instrument company is deploying Oracle's database, ERP software, and FrontOffice 3.0 suite, including a marketing component that manages the stages of marketing promotions, campaigns, and trade shows. Hallet says FrontOffice may not have all the marketing capabilities of more specialized products--for example, it lacks a feature-rich direct-mail capability--but he's willing to make that trade-off to avoid the cost and complexity of introducing a third-party application. "We're willing to live with a little less functionality today and hope for more in the future," he says.
Either way, demand is fueling the customer-relationship management market, which grew 57% to $1.2 billion last year, according to AMR Research Inc. Bo Manning, director of Deloitte & Touche's customer-relationship management practice, says there's a growing interest among the firm's business customers in pursuing enterprisewide customer-relationship projects, not just sales-force automation or customer-service projects. Companies realize that "the value you can get out of any single component is relatively limited," Manning says.
Some businesses are looking to plug gaps in the sales process, one of the first areas of the front office to be automated. Andy Pease, VP of worldwide sales for Vantis Corp., a Sunnyvale, Calif., division of semiconductor manufacturer AMD Corp., says that while many sales-force automation products manage contacts and sales opportunities, few automate the collection and distribution of information that informs sales pitches and price estimates. For that, the company is evaluating a new product from startup Intelic Software Solutions Inc.
Information Conduit
Intelic ProChannel, to be introduced in April, will be able to combine data such as price lists, product availability, and competitive intelligence from multiple sources. It's intended to serve as a conduit and front end for all of the information a salesperson might need. "Everybody has bits and pieces of the information, but it all ought to be in one place," Pease says. At Vantis, that data will include complex pricing algorithms so that salespeople can offer the best possible quotes to clients.
Pragmatech Inc. this week will introduce a desktop application called Proposal Assembler that automates the generation of sales proposals, a narrow but important function of the sales channel. Cigna Retirement and Investment Services in Hartford, Conn., is evaluating Proposal Assembler for potential use with an existing Pragmatech product, RFP Machine, as a way of responding more quickly to requests for proposals. For example, when a potential client issues an RFP, a Cigna employee could draw on a database of some 600 items, automatically creating a document that can be customized to the client's needs.
It's a highly specialized application, but a step forward for Cigna because it will replace boilerplate documents with customized proposals--and do it faster. "If it takes longer just to pull up standardized information and not even customize it, you're not meeting the specific needs of your customers," says Ann Swanson, Cigna's assistant director of sales and marketing.
Another point solution is Motive Communications Inc.'s recently released Duet, software that bridges the gap between help desks and system-management applications. If a PC user calls in to report a problem, the software automatically pulls the system information directly from the user's desktop. It improves the quality of service and reduces support cost in help desks, says Gino Lamarca, VP and general manager of product support center services for SAIC Inc., an IT outsourcing company. "There's no other product that meets this niche," he says.
There's a challenge in finding the right balance between which front-office processes should be automated and those best handled manually. Swanson expects Cigna's business-proposal application to increase the amount and quality of time that Cigna's staff spends with customers. "They're spending less time pulling together documents and spending more time meeting needs," she says.
VF Corp., a clothing retailer in Wyomissing, Pa., is using a new marketing automation product from Marathon Innovations Inc. to automate aspects of its marketing operations. Amy Robinson, electronic-commerce manager with VF's IT division, says the key is determining which pieces of the customer-management infrastructure benefit from automation. The company has no plans to do away with its call center. "People don't do business with institutions," she says. "People do business with people."
--with additional reporting by Tom Stein
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