For too many years, hardware and software manufacturer Kingway CAPS was the victim of its own antiquated technology, juggling paper reports and several versions of two out-of-date customer tracking software programs.
When sales representatives for Kingway CAPS, a division of Kingway Material Handling Co., had to report their activities, an executive assistant had to type new orders and customer contacts into a computer. Worse, if a customer called headquarters and reached a different service technician from before, the customer would have to start from the beginning and re-explain his or her problem.
Perhaps worst of all, sales representatives worked under an every-man-for-himself approach to managing individual accounts. In the distribution industry, that can be fatal.
“Our regional sales managers used to have their own tracking systems in [Sage Software SB Inc.s] ACT or [Frontrange Solutions USA Inc.s] Goldmine, so visibility was limited or took a lot of manual effort to combine the various spreadsheets,” said Stephen Small, CEO of Kingway CAPS, a material handling company based in Exeter, N.H.
Today, Small tracks everything from his computer, including updated forecasts. His sales reps, meanwhile, enter their information to a centralized database via laptop while traveling on the road.
“Our integrator provided us with standardized processes and a central location for all information. In addition to tracking all customer interactions and improving the efficiency of our support team, our sales force now has visibility to customer issues,” Small said.
Along the way, Small said he learned that a new CRM (customer relationship management) system—even with all the bells and whistles—had to work hand in hand with cooperative sales reps and overhauled business processes.
Kingway CAPS has 20 employees and an annual revenue of $4 million. It produces hardware and software to help companies pack and ship their products—known in the industry as picking systems. (The “CAPS” in the companys name stands for Computer Assisted Picking System.)
“We supply picking systems for distribution centers,” said Small. As an example, he said, “Picture cardboard boxes coming down a conveyor belt. We help improve the picking speed and accuracy for pickers.” Kingways customers include Avon Products Inc., Kmart Corp. and J.C. Penney Corporation Inc.
Kingway sells its products through two sales channels: regional sales managers and VARs. Kingways four regional sales managers crisscross the United States and serve as Kingways traditional sales channel, while the eight VARs are relatively new to the company.
“The VARs tend to deal with the tier of companies below the Wal-Marts of the world and negotiate on their own,” said Small. “They also need help designing, installing and maintaining our systems.”
To resolve Kingways sales tracking woes, Small said he knew he needed a new CRM system. He also had several needs from such a system, but the largest was visibility in the channel. Smalls sales agents each had their own system for tracking leads. If the sales reps failed to update headquarters about their progress, Small said he had no way of knowing if a sales lead was dead or close to closure.
“On our server we would attach costing sheets, but getting quotes from our sales reps laptops to our server was hit and miss,” said Small.
It was obvious to Small that Kingway needed to centralize its order and contact tracking system, especially with a new team of VARs coming on board.
Small said he wanted the new system to include all company employees so that everybody could see customer service requests that had yet to be solved. In short, Small said he wanted sales and service issues to stop falling between the cracks. And a new solution outside the company was critical because no CRM product that Smalls representatives used at the time solved his needs.
The first step Small said he took was to hit the Internet and educate himself about potential vendors that might offer a solution. He said he and his marketing manager looked at a Microsoft Corp. product as well as several other Internet-based solutions. Thats when Small said he looked hard at UpShot Corp., of Mountain View, Calif., a hosted CRM services provider. “My marketing manager and I had experience using UpShot, and thats what got me tuned in to it,” he said.
Smalls timing wasnt perfect, however, since UpShot was in the process of being sold to Siebel Systems Inc., in San Mateo, Calif. Small said he was unfamiliar with Siebel, so he wanted to learn more about the new parent company and its solutions integrator before committing to UpShot.
In talking with Siebels solutions integrator, Small said it was clear that he wanted a more sophisticated CRM product. What Small didnt realize at the time was that Kingway would need to re-engineer some of its business processes to make the most of a new purchase.
Next Page: A bumpy road lies ahead.
A Bumpy Road Lies
But Siebels Rob Reid did. “Many small- and medium-sized organizations, especially when they have less than 10 salespeople, will use pipeline and forecasting and contact management tools that are basic, and its tough to ramp things up,” said Reid, who is Siebels group vice president and general manager for small and medium businesses.
“They also wanted to reach out to their value-added resellers and integrate them into their processes, and thats a challenge, too, because they used to be mainly a direct sales organization.”
Before choosing a new CRM system, organizations need to address some basic questions, said Reid. “When you roll out a CRM solution, its not just the technology but the business process the organization is trying to overhaul,” he said.
Questions that the organization needs to consider include, “Have the businesss processes been thought through? Did they have input from everyone in the organization? What goals are they trying to achieve?” he said.
Small said he made a point of testing Siebel CRM OnDemand before committing to it. But he said he didnt take many of the steps that Reid recommends to ensure a smooth transition, such as thinking through how the new CRM solution would affect his companys business processes.
After also considering a Microsoft-hosted product, “we settled on Siebel for the primary reason that it offered both sales and customer service,” said Small. “We use the product strictly online, so integration and installation were not factors.”
When using Siebel CRM OnDemand, Kingways sales force attaches documentation before the sales transaction is processed. “I can now call up the job and look at the PDF of the hard-copy order, the original proposal, and any modifications and changes without having to bug anyone,” said Small.
Kingways sales reps typically file reports via laptop at the end of the day, said Small. “That may turn an account from a lead to a qualified lead. This automatically changes my forecasting, and I dont have to have anybody trailing these guys,” he said. “They can sit in their hotel room and task the person in the home office to help a customer, instead of making 20 phone calls.”
Because Small didnt anticipate the impact Siebel CRM OnDemand would have on his sales team and his companys business processes, he said the transition was often a bumpy one for Kingway. For example, he said the CRM system lets sales reps task customer service agents with the handling of customer inquiries. Small said that is a great feature that his sales reps loved to use, but customer service staff sometimes failed to follow through.
“We asked Siebel to change our system so that wed know that someone had completed a task,” said Small. “Theyve been pretty nimble for a large organization.”
Another hitch: Even after Kingway switched to Siebel CRM OnDemand, some of Smalls sales agents were reluctant to stop using their preferred tracking systems. That led to duplicated effort on their part and confusion at headquarters, Small said.
“Its been a struggle,” he said. “There was a lot of resistance, including from yours truly. We actually didnt take advantage of Siebel training as much as we should have. We signed up for the product in May 2004, and it really took us until the start of the new year in January 2005 to fully embrace it. I made it an edict that we would live and die on Siebel. If they have a problem, I told them to go to Siebel for an answer.”
Every Kingway employee now uses Siebel CRM OnDemand, and the sales reps have abandoned their old products (except for one holdout, who still insists on using both, Small confided). But despite the growing pains, Small said he is satisfied with Siebel CRM OnDemand because it keeps Kingways sales force focused on the important tasks.
“We keep forecasting opportunities open until the installation has started,” he said. “It generates reports by month and probability. In the past, wed pass on the project because wed overlook it.”
Siebels Reid advises CEOs to understand that his companys system is not a magic bullet for their channel management needs.
“We tell our customers that they need to get buy-in, that there are pain points and problems to be resolved,” Reid said. “Once they get past these issues, then they can perform a test. When folks do that, our product has a high acceptance rating.”
Reflecting on the overall project, Small said, “My advice would be to integrate everybody in the company—not just the sales reps. And, as the CEO, you need to force it on your companys culture. You have to jump into the change with both feet. You cant just stick your toe in. Otherwise, youll never integrate it.”
Ira Apfel is a freelance writer based in Bethesda, Md. Contact him at firstname.lastname@example.org.