Extending CRM Tools To Partners To Improve Services and Bottom Line

For years, Hughes Network Systems couldn't give customers a timely response about when it would install or service one of its satellite systems--a seemingly simple question to answer. The trouble stemmed from the way Hughes' support system was set up: 70 third-party companies handled all of its service calls, and communication with them followed a tangled web.

Hughes' major customers buy thousands of satellite systems; Mobil Oil, for instance, uses them to relay information among its 6,000 gas stations. If a satellite needed service, a station manager would call Hughes' toll-free support line. Representatives of the Germantown, Md., company would then figure out which third-party company serviced that area and relay the service call to that company. From there, it could take up to a few days for the service provider to respond to the customer. "It was next to impossible for us to figure out where our service representatives were in terms of installations or visits," says Bruce LeMieux, VP in charge of the Hughes Applications Group.

LeMieux and other Hughes officials recognized that the system needed an overhaul. So last year, they decided to open Hughes' PeopleSoft Vantive customer-relationship management system to its service partners. Now, the partners access the Web-enabled application to view their service calls, which makes them more accountable for performance. Partners must respond to customers and enter a service date for each call into the Vantive system within 24 hours--or risk losing Hughes' business.

Hughes found that customer service quickly improved when it began using its CRM systems to tighten those ties with business partners. And Hughes isn't alone. That technique is an emerging offshoot of partner-relationship management, or PRM, a recent evolution of CRM that integrates aspects of working with partners, such as inventory control. "Getting all the parties collaborating--partners to suppliers--up until this point has been a radical concept," says Craig Conway, president and CEO of PeopleSoft.

During the next several months, American Medical Security Group, Compaq, USFilter, and others will give partners Web access to internal CRM systems and customer information in hopes of improving service, boosting sales, and fostering more-effective partner relationships.

With those benefits, though, come challenges. Companies must deploy and become proficient with their CRM applications before extending them to partners. Then they need to install PRM portal add-ons from their software vendors and train their partners. And they must make sure they've addressed privacy issues before sharing customer data with external companies.

Businesses that have successfully opened their data and applications to third-party partners say the payoff in customer benefit is worth the effort and risk. The immediate reward is making customers more informed about the status of their orders or appointments--just as Hughes' customers now know when to expect a service call.

More than that, Hughes can closely track how its partners are performing using a newly deployed voice-response application that lets service representatives call into a database from the field and update a customer-service record as soon as an installation or repair is complete. In the coming months, consumers who buy Hughes' DirectTV satellite programming from AOL Time Warner will be able to view their installation or service dates through a similar data-sharing deal between Hughes and the media company.

Closer cooperation with business partners can also eliminate inefficiencies--and embarrassment. One municipality issued a request for proposals to several vendors selling water-treatment equipment. It received four multimillion-dollar bids. But on closer examination, the customer realized that three of the four bids were from independent dealers representing the same company, USFilter. Each offered a different price or product solution. "We had no way of knowing who was pitching what to whom," recalls Robert Joyce, executive VP for USFilter, a Warrendale, Pa., division of Vivendi Water, a $4.4 billion provider of water-treatment systems that has acquired more than 250 businesses in the past decade.

With hundreds of independent sales dealerships in the United States, USFilter has struggled to disseminate sales information to its partners. As a temporary first step, USFilter implemented a Microsoft database that its five technology centers maintain to keep track of customer proposals. Independent and internal sales representatives submit paper proposals and status reports to the technology centers, where they're manually entered into the database. Company officials still might decide it makes sense to submit two bids, but they want to be aware of the choice they're making. "There are times when we may have more than one solution for a customer, so we'd want to go in with, maybe, two bids," Joyce says.

Even the database-aided process is extremely labor intensive, Joyce says. To improve customer relationships, USFilter recently approved a two-year CRM deployment that will give third-party sales partners direct access to internal CRM applications from Pivotal Corp. Once USFilter deploys the system to all 250 acquired companies and trains employees, it will bring its partners into the fold. By late next year, USFilter plans to deploy Pivotal's PartnerHub online portal, which lets partners access internal selling, marketing, and customer information stored in Pivotal's CRM applications. Independent sales reps also will be able to access USFilter's field-sales applications and online-messaging capabilities to collaborate with the company's sales, research and development, engineering, and legal departments on bids and projects.

Just as CRM lets companies identify their most-valuable customers, PRM helps companies figure out which partners are performing and which aren't. Hughes requires its partners to respond to a customer-service request within 24 hours. Because partners are required to enter data into the online field-service and call-center applications, Hughes can monitor how productive each of its service partners is. "We can take action with those that aren't living up to their end of the bargain," VP LeMieux says.

Partners feel the pressure to perform. "Before Hughes implemented the online portal, they really didn't push us to send them updates on our progress, but now we've got to do everything in real time," says Steve Smith, a Hughes satellite installation manager for ATS Telecom Services Inc. in Houston. Access and collaboration between Hughes' independent service representatives and its internal call-center staff has greatly improved customer satisfaction and service-center productivity.

For the worst partners, the kind of accountability PRM systems offer will be a threat. But for the best, it can help them run their businesses better--and without dishing out six figures to buy their own CRM suites. "By accessing Hughes' PeopleSoft field-service applications online, I can see exactly where all 12 of my service representatives are," Smith says. Because the service reps update the system on their progress throughout the day, Smith says, he no longer has to try to track down his own employees via phone or radio, and he can juggle schedules more easily when dates and times change. "I can see everything in real time by entering Hughes' field-service application," he says.

In addition to greater customer satisfaction, companies are hoping for more sales from sharing their CRM tools with partners. American Medical Security, an insurance company in Green Bay, Wis., uses Pivotal's CRM suite and plans to deploy Pivotal's PartnerHub to its 32-state network of about 25,000 independent agents and insurance brokers in June. Partners will be able to access and customize the company's quoting engine based on customer requirements and state regulations. And agents will be able to communicate with other employees via a messaging platform residing on American Medical Security servers, from which they also can download policy information, view application status, and get end-of-day updates on agent commissions. "We're going to provide commission reports to our agents online, and we expect to save a quarter of a million dollars on that function alone," says Mark Seghers, director of E-commerce for American Medical Security.

Better selling tools also can attract better partners. During the last four years, Ryan Orrell, owner of QuoteMonster.com in Hot Springs, Ark., has sold hundreds of insurance policies to businesses online through a partnership with eHealthInsurance Services Inc. that provides his customers with information and insurance applications from about 4,000 carriers.

But Orrell says quantity of information hasn't equaled quality of service, so he's replacing eHealthInsurance with American Medical Security. "EHealthInsurance was really a disservice to my customers because they were bombarded with a lot of information on many different policies," he says. "But with AMS, I'll be able to provide better service and get better access to policy information for my customers." Orrell estimates online access to American Medical Security will help him sell 15,000 to 20,000 policies a year, compared with the few hundred he sold on his own last year.

Access to information is also key when it comes to recognizing cross-selling opportunities. USFilter's Joyce says he doesn't expect to save money by extending applications to independent partners. But he does expect internal and external salespeople to increase their cross-selling opportunities, which should raise the bottom line. Even using its simple database system, USFilter can see what quotes or sales its independent representatives have in the pipeline and figure out whether the customer might benefit from other products. What's more, it will create a collaborative atmosphere for all parties. "That's just something you can't measure in dollars," Joyce says.

For all of PRM's benefits, a lot of obstacles must be overcome to take advantage of the tools. Companies need to deploy CRM internally, and only about 15% of companies have done so, according to a Data Warehousing Institute study of 1,516 business executives. Planning and deploying CRM suites can be a difficult process--one that usually takes six months to a year.

Most CRM vendors, including Nortel Networks, Onyx, PeopleSoft, Pivotal, and Siebel Systems, have integrated PRM portals into their overall CRM offerings. That's why packaged software is making it much more affordable and feasible to actively collaborate with partners online, says Adam Klaber, managing partner Americas for PricewaterhouseCoopers' CRM practice. But PRM systems don't come cheap. Niche providers may charge more than $1 million. For example, PRM provider OnDemand Inc. charges $350,000 to $1 million for its PRM suite, including implementation charges. Vendors that offer complete CRM suites with PRM applications typically don't break out pricing for PRM software. But Onyx's CRM suite, including an online partner portal, is priced at about $1,800 per user plus $10,000 to $20,000 per server and implementation fees. While that may seem like a hefty fee, Klaber contends that custom building these systems could take years and cost much more than their packaged counterparts.

Potential PRM users also must address a larger issue: Sharing information can lead to customer privacy concerns. To ensure its customers are protected, Compaq lets them know how much of their data it gives away, says Marius Haas, VP of worldwide E-business. Compaq shares customer data with partners through lead generation with its network of more than 5,000 partners. Next month, Compaq will deploy Siebel's eChannel online portal application to make portions of its Siebel call-center and sales-force-automation applications available to service partners. Compaq uses administration tools to control partner access to its systems, so partners can't view sensitive data such as contract information.

Once the tools are in place, Compaq partners will be able to view service and implementation requests, customer requirements, deadlines, and problems, and Compaq can route sales leads to partners online, so it knows exactly who's dealing with each customer. "We can have one holistic view of the customer," Haas says.

That's been the holy grail of CRM. It has promised that if a company could capture everything its employees know about its customers, it could better understand and serve them. But with PRM, the effort need not stop at the company's own walls.