Surviving the Recession, a Quocirca series

In the fifth instalment of this 12-part series, Quocirca's Clive Longbottom looks at some more practical steps IT chiefs can take to get complex solutions working...

Put simply, the ideal is to be able to provide the customer with the item they want every time, on time at the required price. The reality is that this generally involves over-stocking, costly logistics and higher-than-strictly-necessary prices.

How is it possible to bring into balance the demands of the customer with the realities of the supply chain, particularly in a downturning market where investment in technology is being questioned? A project which demonstrably moves towards this goal will appeal to the board far more than a technology focused SCM (supply chain management) project, with marketplaces, auctions and straight-through processing mentioned all over the place.

So, what do we have to look for? If we start from the customer end, we know they will be looking for a trusted party who fulfils what they have promised. Note here that this is not necessarily a provider who delivers at the lowest price in the shortest time. Again, if we start from our suppliers, what are we looking for? A trusted party who fulfils what they promise. Note that we are just another customer to that supplier - and this is how it should be.

With two compatible requirements, we're off to a good start. Unfortunately, you may already have a CRM system and an SCM system, neither of which like talking to each other - and here is where you are going to have to do the work.

Don't fall for the "rip and replace" stories. This will generally just take a long time and create more confusion. Look at your solutions and the APIs that are available. Can you put together a system where available connectors make the two systems talk to each other? Can you utilise XML services to pass intelligent data between the applications?

If you can get the two systems talking to each other correctly then we're cooking on gas. Now we can concentrate on the really important bit - setting expectations.

With the suppliers, this comes down to a good service level agreement (SLA). If they do not hold down their end of the agreement then you have the right to punitive damages and eventually to remove them as a preferred supplier.

From the customer side, you can now say: "Delivery of item abc will be on xyz date" - and mean it. This is far more impressive than customers getting messages like: "We'll deliver tomorrow - probably" and then getting it a week late. Managing and meeting expectations is far more important than making and breaking promises.

If you can tie your messaging system into the system as well, you can proactively and reactively manage the customer as well. Let's say that all of a sudden you can beat the delivery date promised. Just turning up on the customer's doorstep when they aren't expecting it can count against you. Therefore, send a quick email letting them know and giving them the choice. If things go wrong and delivery is to be held up, be honest. Let them know - offer them alternatives (similar product at special price, same product delivered late with five per cent off and so on), so keeping expectations under control.

Tying this all into the customer-facing systems (the web, telephone systems, etc.) also helps. This can then enable customers to become self-service when trying to see what is what with their orders. If you can make it such that a customer can rapidly ascertain exactly what stage their order is at, then there will be less need to talk to the (expensive) human within your organisation.

So here we are, providing a better service to the customer, getting better service from the suppliers and doing it all cheaper to boot. Surely there is some catch?

Well, yes. None of this is rocket science, and should be second nature to customer-facing companies. However, the silo applications that have been forced upon them by vendors and systems integrators who should know better hold you back. Many of the systems will have been set up with different underlying data structures. Getting these to talk sensibly to each other could involve expensive middleware solutions - but you need to look at whether this enables you to survive as one of the more flexible companies at the end of the recession. Only by being there will you be able to compete&.

For the lucky ones who do not have existing monolithic systems, well, you have different problems. Newer solutions on the market are beginning to ensure that CRM and SCM work together as they should. However, they tend to come in big packages, which brings us back to the initial problem mentioned in week one of this series - the time required to implement these solutions is often longer than the likely life of the company without the solution. Rapid solutions need careful planning - certain vendors have the capabilities here (for example Pivotal and Onyx) and the big guys promise it (Siebel and Oracle to name two), even if this is bending the truth a little.

Next week - Creating a basic Total Value Proposition - going for the money&

**Quocirca is a leading, user-facing analyst house known for its focus on the 'big picture'. For a full summary of its activities see http://www.quocirca.com, or reach the company's founding directors by emailing quocirca@silicon.com.

Previous Surviving the Recession columns:
Part 4. The mobile factor - preparing for the deluge
http://www.silicon.com/a50159
Part 3. Knowing the customer
http://www.silicon.com/a50052
Part 2. Prioritising business needs
http://www.silicon.com/a49901
Part 1. It's a recession - save or spend?
http://www.silicon.com/a49733