Trends

INDUSTRY ANALYSIS

Outside Consultants Are Not Always Better

Companies looking at new CRM, order capture and even distributed order-management systems tend to give too much credibility to the vendors outside their company first, dismissing their own internal resources.

What’s troubling about this is that the answers to their toughest questions may very well be right in their departments, divisions, even the same buildings — if only companies would take the blinders off and realize that the solutions to their order-management issues are right in front of them.

Politics, fear of being laid off and general paranoia about job security can cripple the sharing of data and insights into how to strengthen internal systems — many of which are paid for already. Yet the managers and directors for sales, marketing, operations, service, fulfillment, supply chain and even the executive ranks of your own company have the answers to making internal systems better.

Sounds like common sense, but it is troubling that so many CFOs and CIOs think there is a price/quality relationship when it comes to insights on how to turn their internal systems into even more valuable assets.

Many think that to get good advice you have to spend over $1M in professional services fees. It would be wiser to pocket the $1M and build incentive compensation systems to foster more internally generated innovation. That’s money better spent.

You Know Your Business Best

Global manufacturers on average spend between 12 and 18 months evaluating their internal CRM, order management, quoting, sales configuration and pricing systems relative to the current state of what’s available from vendors. At approximately 18 months, these manufacturers do one of three things:

1. Buy the CRM, quoting, configuration, and order-management applications their ERP vendor has and work to customize it to their needs, even if they are unsure of its ability to contribute — thinking integration and “one throat to choke” is enough validation.

2. Embark on a lengthy and costly analysis of best-of-breed vendors, some of which excel at the combination of CRM, order capture, configuration, order management and pricing and many of which only have a part of the solution.

3. Do nothing.

Going through the hard work to just get to these three options forced the manufacturers to look more critically at their CRM, sell-side, order-capture and order-management problems to begin with. And an epiphany happened. They realized all the consultants and vendor professional service organizations could never fully guarantee the results they were incrementally generating on their own.

Fear Tactic

Face it, the more screwed up a vendor can make you believe your own CRM, order capture and order management systems are, the bigger the payday on professional services for them.

You, as a purchaser of CRM, order capture, configuration and order management applications have to realize that you’re the expert on your company. It sounds so fundamental but the further away from expertise a vendor can make you feel, the more in danger you are of overspending on having them tell you how to fix your own company.

There are instances where going outside to a vendor for a new customer-facing system is critical. These include:

  • Distributed order management between your company and its outsourcers.
  • Merging distributed order-management systems between two or more acquired companies when each company has a different ERP system.
  • Completely changing your pricing strategies and going after special pricing requests as a differentiator for your channels.
  • Look Inside

    Following are some examples of when to re-think the “outside is better” mentality and drill back into your own company for the answers:

    1. Discontinuing your own fax order channel and rolling it into your ERP system.

    2. Enabling both e-commerce and build-to-order business units to report available-to-promise and capable-to-promise from several supply chain systems.

    3. Completing order capture system consolidation across multiple manufacturing and service divisions.

    4. Redesigning lead management and lead escalation strategies as part of your Partner Relationship Management system.

    5. Redefining how your internal systems support product introductions.

    6. Preparing online training. Chances are your company is rich with alternatives for hosting online training on a global scale. Why go outside for what you can do internally?

    7. Launching a new business using your existing orde-management system.

    Bottom Line

    Take a hard look at your internal systems and question whether the many efforts you have going on with vendors can’t be done internally first.

    The dollars you’d spend on professional services could be better used to make the same changes inside your own company with the knowledge already there.

    Sure, there are times when looking outside is critical, like putting in an ERP system to move away from running your business on spreadsheets. There are just as many on the customer- and channel-facing sides, where there are millions of dollars to be saved by saying, “Aren’t we the experts?”


    Louis Columbus is a former senior analyst with AMR Research and is actively pursuing career opportunities in research and consulting.


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