When the economy slumped, many manufacturers were among the first to realize that their businesses weren't exactly operating like well-oiled machines. To improve satisfaction rates, remain competitive, and open new revenue streams, some decided it was time to get more serious about CRM.
York International Corp., a York, Pa.-based maker of heating, ventilation and air conditioning equipment with 30 factories worldwide, opted to maximize existing relationships -- and bolster its bottom line -- by launching a commercial service business. Customers can now turn to York instead of third-party providers to have equipment serviced. For instance, pharmacy chain CVS Corp. recently signed on to have York repair and maintain systems in its 5,000 stores nationwide.
Success hinges on a hefty technology investment. York spent more than $15 million to launch York Connect, its system for dispatching reps, maintaining records, managing assets, doing field service and running its call center.
York Connect runs on Siebel 7.5 software.
Those familiar with the enterprise software space -- and York's future back-office plans -- might question the company's investment in Siebel. After all, competitor SAP AG is well known for its manufacturing strength, and York is planning to replace its existing ERP software with SAP in the next few years. Still, York felt its CRM choice was clear.
"[SAP] didn't even make the top four [finalists]," said
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Bob Wernly, York's vice president of
total quality and customer relationship management. "It's come along a bit, but the [integration]
value wasn't worth the three- to four-year wait."
Siebel is trying to convince other manufacturers that York's decision to go with best-of-breed software is the smart one. And Steve Fioretti, Siebel's senior director for high tech and manufacturing, said market factors like declining revenue and consolidation in the manufacturing industry have led to a "significant uptick" in Siebel sales in the service space. (Siebel did not respond to requests for more specific figures.)
On the functionality side, Fioretti said, Siebel has added analytics to determine service profitability, enhanced integration between its sales and service modules, and defined integration points through its Universal Application Network (UAN) to tie its software with third-party offerings for knowledge and document management.
Plus, next year's release of Siebel 7.7 is slated to include capabilities for design registration and design-win management for component sales, as well as more robust data synchronization for field service reps.
"If you peel back the onion, you see huge product gaps [with SAP]," Fioretti said.
Analyst Laura Preslan, CRM research director at AMR Research in Boston, agreed that Siebel has a big functional lead over SAP. Still, she thinks that, for many manufacturers, SAP is actually the wiser CRM choice, for several reasons: It narrowed the gap with its 4.0 release. Integration is often simpler with a common provider for the front and back office. And most users will find it easier to manage fewer vendor relationships.
The first question manufacturers should ask, Preslan said, is "Why not SAP?"
"Siebel has functionality that goes from A to Y, and SAP's functionality goes from A to M. But most people only use A to F," Preslan said. "It doesn't matter that Siebel offers more. The two have reached functional parity in the areas people are actually using."
Still, smaller manufacturers often view CRM as an overall communication investment and find that a best-of-breed purchase pays off.
EMI Industries, a midsized food equipment retailer in Tampa, Fla., relies on its 26 seats of Siebel 7 to manage its workflow and approvals process, track customer communications, and service accounts. Everyone from salespeople to engineers and receptionists use the software.
Dave Hahmann, EMI vice president, admits that Siebel is "a bit expensive, but if you look at it not just as a CRM tool, it's not [too pricey]. My goal is to not use Outlook."
Customers like York are also seeing early dividends. For instance, York's Siebel software has been live for less than two years, but eight months into the year, York's service sales exceeded last year's total. The project has also delivered more than twice the sales increases originally planned, Wernly said.
Still, Wernly admitted that progress can be made. He's looking forward to relying more heavily on analytics, using customer information for asset planning, and enabling more mobility. He equates his foray into CRM with a trip to the moon.
"I don't think we've gone as far as we can," Wernly said. "We're still on our suborbital flight."
This was first published in December 2003
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