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findings:
For the past four years, SAP
commissioned Peppers & Rogers
Group to conduct 23* mySAP
CRM ROI Reviews. These
assessments led to the strategic
insights outlined in this report:
Insight #1:
Customer data management
goes mainstream
Insight #2:
CRM adopts a more enterprisewide presence
Insight #3:
CRM matures beyond the
Interaction Center (IC)
Insight #4:
Change management becomes
more sophisticatedand essential
to ROI
Insight #5:
Customer-centricity is a brand
differentiator
Insight #6:
CRM is an ongoing journey
contents
Insights Drive Results .........2
Brutl
C.H. Beck
Cardinal Health
Day & Zimmermann
CJ
Energie AG
IPSOA
By the Numbers....................5
Molex
Pacific Coast Feather
Beyond ROI...........................7
What Gets Measured .........8
Perdigo
Philips Consumer
Electronics
RWTV AG
Understanding Return
on Customer..........................9
Schering do Brasil
Sterling
Tallard
Tata Telecom
(Avaya GlobalConnect)
Villeroy & Boch
Waters
20%
40%
60%
80%
100%
120%
140%
ROI (%)
All companies reviewed faced unique business and implementation challenges, delivering
ROI by approaching CRM as a strategic solution.
160%
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24 mySAP CRM ROI
Reviews were conducted
over a 42-month period.
The profile of
participants includes:
Regions:
EMEA (11)
North America (9)
Asia (2)
South America (2)
Industries:
Consumer Products (5)
Wholesale/Distribution (1)
High Tech (6)
Utilities (2)
Automotive (1)
Pharmaceutical (1)
Professional Services (4)
Media (2)
Engineering & Construction (1)
Telecommunications (1)
CRM Capabilities:
Interaction Center/
Service (20)
Marketing Management (6)
Mobile Sales (3)
Internet Sales (5)
Opportunity Management (2)
Quotation Management (1)
Deduction Management (1)
Portal (2)
Activity Management (1)
Interactive Intelligent Agent (1)
Intellectual Property
Management (1)
Number of Users:
1-49 (3)
50-99 (7)
100-249 (4)
250-499 (1)
500-999 (4)
Over 1000 (2)
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HIGH-TECH
position as multimedia
CONSUMER PRODUCTS
UTILITIES
Jean-Michel Adant
General Manager, Brutl
MEDIA
PHARMACEUTICAL
ENGINEERING & CONSTRUCTION
WHOLESALE/DISTRIBUTION
AUTOMOTIVE
TELECOMMUNICATIONS
0
Number of Participants
mySAP CRM is delivering ROI across vertical industries. Among companies reviewed, CRM is a
catalyst for creating improved customer experiences throughout the customer lifecycle.
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Customers are actively involved with AMD in designing more effective and efficient solutions and processes. By creating these initiatives from the customers perspective, AMD is
analyzing the types of customers that are buying, what they are buying and what they will
need capabilities-wise to improve their business. This type of systematized foresight has
given way to an enterprise-wide customer focus that frames the DNA of AMDs brand.
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By the Numbers
Snapshot: mySAP CRM ROI Review Program Participants
The 24 mySAP CRM ROI Review participants span industries, regions and capabilities.
All companies mySAP CRM implementations were 100% on time and within budget,
helping them realize return faster.
INDUSTRY
REVENUE
(approx. in
USD millions)
# of mySAP
CRM USERS
mySAP CRM
CAPABILITIES
TOTAL
INVESTMENT
(USD millions)
ATTRIBUTABLE
BENEFITS
(USD millions)
INTERNAL RATE
OF RETURN
(ROI %)
adidas
EMEA
Consumer Products
8,836
160
Interaction Center/Service
1.18
1.21
37%
Adobe
N. AMER
High Tech
1,970
60
Interaction Center/Service
9.90
15.57
16%
AMD
N. AMER
High Tech
5,000
75
Interaction Center/Service
(Customer Service &
Support), Complaints &
Returns Mgt., Internet
Customer Self-Service,
Marketing Mgt., Analytics,
Channel Mgt.
31.80
60.80
32%
Audi
EMEA
Automotive
33,426
391
Interaction Center/Service;
Marketing Campaign
Management
11.45
19.55
22%
Avid Technology
N. AMER
High Tech
775.4
105
Interaction Center/Service;
Marketing Campaign
Management
3.30
5.37
68%
BKW
EMEA
Utilities
2,300
50
Interaction Center/Service;
Interactive Intelligent Agent,
Activity Management
6.20
7.88
15%
Brutele
EMEA
Telecommunications
60.50
70
Interaction Center/Service,
(Information Helpdesk,
Complaint Mgt., Customer
Service & Support), Service
Order Mgt., Service Contract
& Entitlement Mgt., Planned
Services, Resource Planning
Tool, Appointment Scheduling
3.75
6.63
26%
Cardinal Health
N. AMER
Wholesale/
Distribution
74,910
615
Interaction Center/Service,
Deduction Management,
Portal
16.30
32.90
70%
C.H. Beck
EMEA
Media
N/A
26
Intellectual Property
Management
0.57
1.02
56%
COMPANY
REGION
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INDUSTRY
REVENUE
(approx. in
USD millions)
# of mySAP
CRM USERS
mySAP CRM
CAPABILITIES
CJ
ASIA
Consumer Products
2,600
2,350
Professional
Services
1,300
Energie AG
EMEA
Utilities
IPSOA
EMEA
Molex
N. AMER
COMPANY
REGION
TOTAL
INVESTMENT
(USD millions)
ATTRIBUTABLE
BENEFITS
(USD millions)
INTERNAL RATE
OF RETURN
(ROI %)
Interaction Center/Service,
Marketing Campaign
Management
3.80
5.80
15%
N/A
11.55
14.15
56%
792
500
Interaction Center/Service
2.10
1.15
23%
Media
N/A
40
Interaction Center/Service
2.18
3.87
30%
High Tech
2,500
600
Interaction Center/Service,
Opportunity Management
20.00
115.00
97%
N/A
N/A
Internet Sales
1.44
1.87
20%
Consumer Products
1,839
< 200
Interaction Center/Service
0.54
1.19
52%
Philips Consumer
Electronics EMEA
Consumer Products
41,070
< 100
Interaction Center/Service;
Internet Sales
16.65
20.13
26%
RWTV AG
EMEA
Professional
Services
462
< 100
Interaction Center/Service
6.50
9.64
23%
Schering do Brasil
S. AMER
Pharmaceutical
5,932
80
Interaction Center/Service,
Mobile Sales
3.63
4.83
15%
Sterling
EMEA
Professional
Services
N/A
33
Opportunity Management
0.29
0.38
74%
Tallard*
N. AMER
High Tech
100
N/A
Interaction Center/Service,
Mobile Sales
0.26
0.35
144%
High Tech
87
525
Interaction Center/Service,
Internet Sales
1.85
4.69
129%
Engineering &
Construction
1,309.3
Over 200
Interaction Center/Service;
Marketing Campaign
Management
1.98
2.46
30%
Waters
N. AMER
Professional
Services
1,104
Over 1,000
Interaction Center/Service,
Marketing Campaign
Management, Mobile Sales,
Internet Sales
5.00
7.80
35%
* A look forward.
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Beyond ROI
Critical to the ROI success for all of these enterprises has been a comprehensive strategic plan
that assesses the current and future customer experience and how mySAP CRM enables that
vision. The plan provides answers to the questions: What is the impact of CRM to the business? What does it mean to individuals within the organization? How will it affect our customers? Not only did this type of planning help ROI Review participants achieve a measurable
return on mySAP CRM, it positioned them well to continue maximizing their investments by
strengthening customer relationships throughout the customer lifecycle.
CUSTOMER STRATEGY
Become a trusted partner. Across service and product offerings, companies have the opportunity
to strengthen the trusted partnership it seeks to create with customers. Proactive communication
facilitates a conversation that automatically lends itself to improved customer collaboration and
stronger relationships.
Build a business case. Align technology to business requirements by building a thorough
business case outlining project scope, budget and deliverable targets with quantitative and qualitative benefits prior to implementation. Continue to track benefits to make sure what gets measured
gets done.
Connect customer insight with product innovation. By creating direct relationships with end customers, companies can collect, analyze and incorporate valuable customer feedback in the product
development process. Cultivating a continuous customer feedback loop demonstrates customer
focus, and increases customer satisfaction.
Proactively seek customer feedback. When developing products or services designed
to meet customer needs, successful companies look to the source their customers for valuable
insight. Before and after implementation, customers can provide constructive feedback on required
operational processes and functionality.
IMPLEMENTATION
Implement incrementally. Implement each core piece of the technological infrastructure
and the support processes one step at a time. This allows companies to track results, measure
performance, apply key takeaways to subsequent phases and achieve ROI sooner.
Capitalize on existing systems. Maximize previous IT investment dollars by building on and
integrating technology systems already in use. This allows for more integration cost reductions and
provides a middle step on the road to enterprise-wide customer focus.
Consolidate to reap rewards. Eliminating disparate legacy systems and consolidating infrastructures
lowers the cost of ownership while bringing cost savings throughout the enterprise.
Enable a unified customer view. Centralize customer data to create a foundation of unified
customer profiles accessible across the enterprise. Siloed information, the absence of inter-departmental collaboration and sparse customer data impede growth and invite inefficiency.
CHANGE MANAGEMENT
Incorporate change management efforts early. While process and technology are two pillars to
effective CRM, forward-thinking organizations understand that people represent the third pillar of the
success triumvirate. Incorporate customer-focused, change management initiatives into strategic
planning so cultural transformation will align IT and process transformation.
Manage and communicate expectations. ROI Review participants attribute much of their mySAP
CRM implementation success to ongoing employee communication. Ensure that all employees are
educated on the scope of the initiative to guarantee cooperation and encourage employee feedback.
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What Gets Measured Gets Done:
A Review of CRM Metrics
The following is a sampling of the metrics used by the mySAP CRM ROI Review
participants to generate results across the most prevalent customer touchpointssales,
marketing and service. From increased response rates to reduced inquiry handling time,
these companies established the right metrics to achieve their business objectives.
Sales
mySAP CRM opportunity management functionality has helped Molex develop its
military and medical market segments in the Americas region, increasing revenue by
over $10 million through 2007
From increased order size and frequency to acquisition of new B2B customers in all of
its channels, Pacific Coast Feather will see over $900,000 in revenue contribution
through 2007
Better opportunity management processes will boost revenue contribution for
Tallard by more than $268,000 through 2006
Better access to physician and institution data enables Schering do Brasils sales
representatives to sell more, contributing over $3.5 million through 2009
Marketing
By cleaning its customer lists with mySAP CRMs campaign management functionality, Waters chemistry operations saw a 50% increase in its direct mail response rate
For Audi, increased targeting of direct marketing campaigns will result in more
qualified lead generationUSD $2.8 million increase in revenue contribution
through 2005
With mySAP CRM, CJ now executes its 94 annual marketing campaigns in-house,
resulting in a total cost reduction of USD $839,000
Philips Consumer Electronics continues to collect information about consumers
needs and preferences, resulting in increased marketing campaign response rates,
contributing $3.5 million to the bottom line
Service
As Brutls customer service center now works with a single customer view, the
average cost per case has decreased, increasing productivity by 3.54 million
through 2008
AMD projects that using mySAP CRM to enable the global warranty claims process
will result in revenue contribution by over $60 million through 2010
Adobe will reduce costs by $1 million a year through 2008 from higher productivity
due to revamped processes in its North American Customer Care Center
C.H. Beck will save over 60,000 from access to author master data, intellectual
properties, contracts and royalties from mySAP CRM-enabled service processes
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Enhancing Metrics:
Understanding Return on Customer
SM
Customers are companies most important business asset. However, increases or decreases in
the value of a companys customer base are rarely taken into account when a company
calculates its own success and reports it to the world at large.
A new concept in measuring the value of a company is the idea that companies should measure their Return on Customersm, (ROCsm). Return On Customer can be used as an internal
benchmark for progress in centering a management teams efforts around
customers. It takes account of the firms current profits as well as any changes in the level
of a firms customer equity (the sum of all the lifetime values of a firms current and future
customers). Fundamentally, ROC serves as a speedometer for organic growth.
ROC can be calculated as the rate at which a business creates value from any given amount
of customer equity. Mathematically, ROC is the sum of a firms current-period profit from its
customers, plus any changes in customer equity, divided by the total customer equity at the
beginning of the period.
Benefits of ROC measurements
At the first level, ROC is a kind of go/no-go indicator, describing a companys yes-or-no effectiveness at growing its business organically, from the value proposition it offers to
customers. A positive ROC implies value creation, while a negative ROC implies value
destruction. An ROC of zero indicates that value is neither being created nor destroyed, but
simply is converted from customer equity to current-period profit.
At a second level, Return On Customer is a speedometer for organic growth. It is a
quantitative measure of the efficiency with which a company is able to create value. An ROCefficient company will tend to conserve and replenish that value through investments in
customer service, relationship building, customer prioritization and new customer acquisition, among other things. Moreover, a company is likely to experience different ROC levels
with different groups of customers, so understanding which customers can produce the most
value will allow the firm to be more efficient in prioritizing all its efforts.
At a third level, ROC gives us a way to think more clearly about the true economic cost of
interruptive marketing, including telemarketing, direct mail, e-mail and other forms of proactive, outbound messaging. The more a firm solicits business from a customer without success,
the less valuable that company will be to that customer, and vice versa. The result is not just a
decline in marketing efficiency; it is a destruction of customer equity.
ROC is simply a quantitative lens for viewing the results of your companys mission more
accurately, and for managing it more responsibly and effectively. ROC and customer
relationship management (CRM) practices go hand in hand: Doing the right thing for
customers, delivering better value for customers, making business a safer, more hospitable
place for customers as the fundamental way to build enterprise value is the mission of customer-focused firms. Return On Customer is a useful tool with which companies can better
drive that mission home to the organization, teaching everyone how to make daily decisions
that not only serve customers well, but also create genuine, long-term value for the business.
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From 2002 into 2006, SAP commissioned Peppers & Rogers Group to conduct 23
mySAP CRM ROI Reviews among enterprises that had purchased and implemented
the mySAP CRM suite. Two other third party evaluators conducted three additional
ROI Reviews. Combined, the ROI Review participants report findings from a variety
of mySAP CRM business process implementations, worldwide regions, industries
and company types. This report notes critical insights for companies looking to maximize the value of their mySAP CRM investment and supporting customer strategy.