Here Comes Front- office Automation Using technology to automate business processes can increase efficiency and reduce costs, but these returns pale in comparison to what can be achieved when technology becomes the catalyst for changing long- entrenched practices. Some have seen impressive returns on their investments. But the big returns may be yet to come as companies increasingly learn to use these programs as strategic tools. What these programs have in common is an outward focus, aiming to improve dealings with customers, as opposed to the back- office focus on streamlining in- house operations. Studies by the Gartner Group and the International Data Group project that the front- office market will grow from about $6. As more products become commoditized, front- office programs offer corporations a fresh opportunity to differentiate themselves through their marketing, sales and service organizations.
The programs let large companies personalize sales and service relationships the way that small ones always could. This is still a wide- open market, filled mostly with tiny, often privately held companies whose survival is by no means assured. Even some of the largest companies, which have met or passed $1. Some of these companies may be strained serving a large customer, and anecdotal accounts of failed deployments abound. Employees may cling to old, familiar processes no matter how much the new ones are improved. Salespeople may resent the intrusion of technology in their daily routine, and no sales- force automation tool is productive if the people in the field refuse to use it. Most of these products are surprisingly easy to use, with graphic user interfaces that speed the learning curve, but companies still shortchange training at their peril.
Dealers and distributors may feel threatened by programs that forge closer bonds between manufacturers and end users. Most new technologies go through a transition period, when the market moves from a few early adopters who will try anything to the legions of pragmatists who hold back until they've seen that a solution really works. For front- office software applications, that transition is happening now.
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But after all the downsizing and cost- cutting, companies are realizing they can only grow earnings so much without growing revenues. With the broad acceptance of these programs, and the uniformity of the processes they have encouraged, back- office efficiency is no longer a place to gain competitive advantage. The only differentiator you have left is in the sales and marketing arena. With one of these tools on a laptop computer, or increasingly on a corporate site on the World Wide Web, salespeople can tailor a product to meet a customer's specific needs - - interactively and in real time - - without perusing paper manuals or making telephone calls back to base. The program knows which feature sets are compatible and which are not, and how to price them. In many industries, the growing complexity of products makes configurators a powerful tool for competitive advantage.
Before, we sold what was in stock; now we sell a customized truck to every customer. Renault has seen a measurable improvement in quality of orders and a reduction in time to market since implementing the program, he said. In the hospital and surgical supplies market, for example, pricing is set by manufacturers and differs by customer based on volume, but products are delivered by distributors who often depend on manufacturer's rebates for their profit. The Allegiance Healthcare Corporation, a hospital supplies distributor in Mc. Gaw Park, Ill., recently deployed a system produced by Trilogy, interfaced with its own SAP system, to improve the alignment of pricing between itself, its vendors and its customers. When we went into dispute in the past, we had very little historical data, so we had a difficult time collecting. Now we go in in a much stronger position.
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Sales- force automation tools, like configurators, or Siebel's opportunity- management programs help the salesperson meet the customer's expectations. Siebel's program lets field salespeople record and track customer interactions and then present their data through a central database so that the knowledge is available to the entire enterprise. Remedy, based in Mountain View, Calif., produces help- desk software, originally used to track internal service issues, largely computer problems, but now increasingly applied to customer service. Some of these systems may have been inherited through acquisitions, some adopted as new business units formed to offer new products. The problem has only worsened in the era of personal computers and distributed computing, as systems have often been adopted on a departmental basis. These systems cannot share data easily, and the information in them is often contradictory, and thus invalid. These problems affect companies large and small, old and young.
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Datastream Systems Inc., a fast- growing software company in Greenville, S. C., had more than 2. Prudential often sold multiple products, like insurance and mutual funds, to its large corporate customers, but these products had separate sales forces, with distinct, unconnected and incompatible data systems. Information is power. For a company like ADP Employer Services, which provides payroll and human- resource outsourcing, more effective customer service is a matter of survival.
Like Prudential, ADP recently deployed front- office software, in its case from Clarify, to link disparate information systems among its various divisions. They compare us to companies where they get world- class service, like Federal Express or Fidelity. You can't tell people I'll look into it and get back to you in three days. And the industry is full of dark tales from companies about competitors' products deployed but never used.
Many companies, however, report a meaningful return on their investment, often in a very short time. Novell has traditionally sold many of its software programs on an annual contract basis, but, because the sales went through multiple distribution channels and because of Novell's history of growth by acquisition, the data on these contracts were stored in multiple, often incompatible systems, and renewals sometimes fell through the cracks. Now contract renewals all reside on a single database using a front- office program from Scopus Technology, an Emeryville, Calif., company acquired by Siebel in March. Anything you can do to increase revenues is the first thing to look at.
Anything you can do to increase efficiency is the second thing. Front- office vendors as a group insist their programs are more fiexible and can be customized to suit a buyer's existing processes, but they also say the greatest value comes when their programs are the enabling tool to execute long- needed process changes. Users acknowledge, however, that the programs do embody assumptions about best practices, and a company must carefully evaluate these programs to make sure their implicit directions are compatible with the company's own internal goals. Schmidt, who before joining Novell was chief technology officer at Sun Microsystems Inc. Schmidt said he felt the . But he went further, adding that greater standardization of processes among these programs would benefit most companies.
Although most of the software companies have moved toward offering suites of applications that cover the entire front- office spectrum, nearly all of them started with a single program, and the orientation of that program still informs each product's internal logic. House, its chief operating officer. Yet the company had already created its own customer service application and, with the acquisition of Scopus, has now moved further into the realm of call- center management. Both companies view customers as assets to be managed, with a bias that superior service leads to greater customer retention and that retained customers generate more sales at lower costs than new ones do. The idea is to capture, manage and track every interaction with a customer, from initiation to resolution. When a customer calls with a problem, the service person is instantly familiar with that customer's history, likes, dislikes and quirks.
Most of the programs also provide a script, with specific details for different vertical markets, that guides service people through a call. Stamm, Clarify's founder and chairman. Each person knows their role and has responsibility to see it through. Stamm polled Silicon Valley companies before starting Clarify, which is based in San Jose, Calif., to see why no publicly traded company had addressed developing packaged software applications for service automation. But these are areas that have not been very process- oriented, so it probably is a good thing for them to become more focused and measurable.
They haven't really penetrated the heart of the activity. Davenport's assertions, but they say that front- office applications are going through a natural transition, common to new information technologies. As with relational databases in the 1. Only a bold few have already begun to use them for strategy, like weighing the relative merits of different sales and service processes in a proactive way, and then executing those plans. Companies use the technology in the lowest- risk venues first.
Most analysts believe front- office software will follow the examples of countless other software applications, from word processors to electronic design automation, with two or three big players dominant, and smaller companies swept up in acquisitions or dying slowly for lack of sales. But this consolidation has just begun. This process, which began with Baan's purchase of Aurum Software last year, accelerated in March with SAP's announcement of its sales- force automation solution, developed in collaboration with Kiefer & Veittinger Gmb. H of Mannheim, Germany, which is now 8. SAP. The Oracle Corporation, J. D. Customers face a difficult choice: .