A Time to Relate

By Peter Coffee  |  Posted 2002-04-29 Print this article Print

A Time to Relate

In a global marketplace defined by mobility of both capital and information resources, high-value customer relationships are arguably the most crucial and hard-to-copy ingredient in enterprise success.

Before the Internets acceleration of business interactions, inertia favored stable supply chain relationships; it used to be expensive to identify a potential new supplier, to verify its good reputation with customers, and to set up the logistic and financial arrangements involved in creating a new link in that cumbersome chain.

Internal "customers"—that is to say, business units within the enterprise itself—had even fewer options. Many companies, trying to minimize interaction costs across the enterprise boundary, built vertically integrated operations in which each stage of the production process was a monopoly supplier to the next, and even generic business services were performed by internal centers rather than being bought in the open market. Absent the pressures of competition, efficiencies suffered; whatever a company saved by internalizing operations, it may well have lost to the resulting internal (and usually invisible) subsidies.

Despite widely publicized dot-com disappointments, a network-based economy has largely canceled both the advantages of the incumbent supplier and the arguments in favor of vertical integration. For even the satisfied customer of either internal or external suppliers, its cheap and easy to find out whos ready to fight for your business tomorrow—and what theyll do to get it.

Numerous Web sites, both paid and free, make it possible for individual and corporate customers to find out almost anything about a prospective supplier—whether from an established research company or from anecdotal sources or government agencies. The resulting network economy, therefore, puts every supplier into the high-cost, high-risk state of needing to make every transaction a persuasive argument in favor of the next one.

There is also another crucial market: the one for good employees. The employment relationship has begun to approach an almost theoretical level of pure competition. Employees with e-mail and Internet access need not leave their desks to research opportunities in other organizations—or even to engage in part-time employment as consultants (or, for that matter, as industrial spies), while continuing to draw full-time paychecks.

Employers shouldnt fool themselves by looking at only the one-way flow of salaries and benefits from company to worker, with labor coming back in return. An employee is not merely a supplier of services and knowledge but is also investing in a career and making a daily purchase of life experience—paying for both with the invaluable coin of time. Every employer must therefore re-recruit its workers on an almost continuous basis, making the work environment not merely tolerable but clearly superior to readily discoverable alternatives.

Even when the short-term situation seems to favor employers, an "I hate my company" Web page may remain accessible for months or years—potentially scaring away qualified candidates when an economic upturn makes hiring a priority. Figuring out why good employees stay, or leave, and tilting the balance in favor of retaining ones top workers is therefore a mission that should be high on the agenda of once-complacent managers.

This is the huge playing field that faces CRM system builders, whose definition of "customer" seems to be expanding without visible limits. No monolithic technology package can hope to cover this ground with a single umbrella solution.

What IT must do is identify the opportunities to be found in information resources that the enterprise has already bought and paid for and integrate existing knowledge sources and flows across the organization—not create costly parallel systems that merely duplicate existing data or (very likely and even worse) attempt to mirror reality while actually providing a badly distorted picture.

"Companies never seem to solve their business problems because they never get the truth," said Analyticis Horne. "Once you have the truth, its amazing how simple it becomes."

Peter Coffee is Director of Platform Research at salesforce.com, where he serves as a liaison with the developer community to define the opportunity and clarify developersÔÇÖ technical requirements on the companyÔÇÖs evolving Apex Platform. Peter previously spent 18 years with eWEEK (formerly PC Week), the national news magazine of enterprise technology practice, where he reviewed software development tools and methods and wrote regular columns on emerging technologies and professional community issues.Before he began writing full-time in 1989, Peter spent eleven years in technical and management positions at Exxon and The Aerospace Corporation, including management of the latter companyÔÇÖs first desktop computing planning team and applied research in applications of artificial intelligence techniques. He holds an engineering degree from MIT and an MBA from Pepperdine University, he has held teaching appointments in computer science, business analytics and information systems management at Pepperdine, UCLA, and Chapman College.

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