Project No 4: Customer Relationship Management

By John Moore  |  Posted 2005-05-23
Project No 4

Project Summary
Technology: Software that manages how companies interact with their customers
Goals: Provide metrics and historical trend data to customers and partners; analyze customer data to make marketing programs more efficient
Average planned spending in 2005: $6.6 million

Call 2005 the year of the add-on for customer relationship management.

The category is a top area for enterprises this year, but the focus isn't necessarily on core functions of the call center or the sales force. Instead, companies using software to track their telephone or field sales forces' interactions with customers want to add features and capabilities to the customer information "hubs" they already have.

Hot-button initiatives include gaining fresh insight into customer habits, rolling out Web portals to better serve sales staff and customers, and plugging customer response data into analytical software to gauge the effectiveness of marketing campaigns.

Consider Oakwood Worldwide, which installed Siebel Systems' Call Center and Sales software packages in August 2004, a project that gave the San Mateo, Calif., corporate housing provider a better understanding of its customers.

Oakwood had used a homegrown contact management system, which tracked interaction with its customers' human-resources and relocation company personnel, but shed little light on the personal and professional backgrounds of the guests who actually stayed in its 30,000 apartments in the United States, the United Kingdom and Asia. Siebel provides Oakwood with a more comprehensive view of both constituencies, says Oakwood senior vice president Ric Villarreal, who oversees the company's information technology.

When Oakwood knows more about who its customers are, it can develop a marketing strategy its sales team can act upon. To that end, Oakwood this year plans to deploy Siebel's marketing and marketing analysis add-ons, which will help the company design and execute new campaigns, and then assess their effectiveness.

Villarreal says those additions will help the company identify and penetrate new markets, and "allow us to focus our salespeople on high-yield, high-payback activities."


The City on the Web

The city of Indianapolis' initial customer relationship management deployment has also spawned additional projects. The Mayor's Action Center, the city's call center to field questions and complaints from citizens, switched on Siebel's Public Sector software last June to manage the process.

In one project, the city is building a Web portal that will allow citizens "to see pretty much what we see," says Patrick Holdsworth, administrator of the Mayor's Action Center. One example: The self-service application will let residents track the status of complaints (such as abandoned vehicles and sewer-system backups) filed with the city. Holdsworth's team customized a Siebel module to build the e-government feature, which he expected would debut by the end of May.

With the portal coming online, the city plans to beef up its servers, Holdsworth says. Indianapolis officials already tap the Siebel servers to run reports—say, to determine whether animal control officers are able to meet the city's goal of responding to a complaint about stray dogs within 24 hours. "We need to make sure we aren't slowing citizens down with the reports we are running," Holdsworth explains.

Portals also top the list of customer- relationship enhancements at IHOP, which oversees nearly 1,200 pancake restaurants nationwide, most of them franchises. The company last year launched guest and franchisee call centers using Oracle's TeleSales software.

IHOP also installed Oracle's property and contract management software for its franchises. The company holds about 700 leases on restaurants it built for franchisees, and the property management software allows executives to track those leases and variable rent information. IHOP now requires franchisees to build their own restaurants, and corporate managers use Oracle's contract management application to keep tabs on their progress. Another element, Oracle's Customer Data Hub, pulls together information from the call centers and ancillary applications to give IHOP executives a consolidated view of its franchisees.

That's where the portals come in. IHOP executives can access information on franchisees through a Web application that taps into the Customer Data Hub, says Patrick Piccininno, vice president of information technology. To build the interface, he explains, IHOP used a combination of Oracle's portal code and custom application development.


Who Ordered the Special?

IHOP now plans to provide its restaurant operators with a similar view—a sharp departure from current practice. Today, IHOP runs a slew of manual reports and provides very little analysis to its franchisees, Piccininno says.

IHOP will test its portal, now under construction, with a group of franchisees in October, with a systemwide launch slated for early 2006. Piccininno says franchisees will be able to view guest information gathered via the call center, including analysis of customer trends such as which new entrees are selling well on the weekend.

That will let restaurant managers obtain "direct and timely feedback on how operational changes and marketing campaigns are affecting sales performance and customer satisfaction," notes Jeff Valine, IHOP's manager of information technology applications and business analysis.

The add-on trend also rings true for companies running outsourced customer relationship management applications. Musical instrument maker Yamaha Corp. of America has entered its second year using's hosted offering, and is providing new features branching off the core application. For example, Yamaha salespeople can now schedule online meetings hosted by WebEx Communications directly from's calendar, says David Bergstrom, corporate planning manager at the Buena Park, Calif., company.

Yamaha also plans to deploy's asset management feature this year. Warranties on items such as grand pianos transfer with ownership, so the company must track assets as well as customer contacts, Bergstrom explains. And, in another extension, Yamaha plans to introduce a portal this year that will let dealers check inventory, place orders and track delivery schedules electronically, in addition to receiving paper copies in the mail.

Bite, Chew, Swallow

IHOP's Piccininno says the hurdles in rolling out a customer relationship management system aren't very different from those encountered in other enterprise applications. "You've got the typical stuff—the data migration does happen a little bit slower than you would have liked," he says. Integrating the way Oracle's various modules exchange data, for example, "has been a little bit of a challenge."

On the other hand, IHOP has yet to hit an obstacle that would cause the company to rethink its strategy. "We've implemented a lot of software in a very short amount of time," Piccininno points out. "We have been very consistent in our approach and, in general, things have gone very well."

But extending the core capabilities of a customer relationship management system takes more than just adding new software, according to Oakwood's Villarreal. Ultimately, he says, customer relationship management software is simply a tool that is part of a larger strategic goal: Villarreal sees Siebel's software as one element to transform the way Oakwood handles its marketing. To make effective use of the software, the company has hired consultants well versed in marketing analysis and strategy who know how to roll out campaigns, he says.

In general, Yamaha's Bergstrom and other technology managers say they believe an incremental approach provides the best path to effective use of a customer relationship management system. provides a new feature set every few months, he says, and offers the ability to add customized applications.

The wealth of options, Bergstrom says, makes it all the more important to move forward one piece at a time. His advice: "Don't try to implement everything at once."