Cincom Asserts Expertise In CRM For Complex Manufacturers

Event Summary

Cincom Systems, Inc. (www.cincom.com), a privately-held, Cincinnati, OH based provider of software solutions and services primarily to complex manufacturers, continues with perfecting its knowledge systems for sales, and customer relationship management (CRM). In September, the company announced the availability of its new CRM Solution for Complex Manufacturers. With some of its customers reportedly already asserting proposal times cut from five days to 15 minutes, product time-to-market reductions of as much as 70%, and 15% increases in business win rates, Cincom believes the new offering is arriving just in time for this market segment.

Cincom Manufacturing Business Solutions has spanned nearly four decades as a provider of solutions for manufacturers, and has always strived to provide its customers an evolutionary path through major technological changes, enabling them to keep pace without major disruption of their business. In recent years, Cincom has especially carved out expertise to satisfy the specific requirements of the complex manufacturing industry. Its knowledge of complex manufacturing has often ensured delivery of functional products bundled with rapid implementation resulting in one of the fastest Return-on-Investment (ROI) and one of the best customer service & support in the industry segment.

Complex manufacturers produce products that are of high variation, have complex features and options, and vary in end-user configuration. They consequently invest significant dollars in product design and have lengthy sales and manufacturing business processes, often requiring collaboration between the customer, sales representatives, and critical back-office experts. To that end, Cincom's CRM for Complex Manufacturers facilitates the real-time transfer of information and complex product knowledge for collaboration across the extended enterprise, and should especially be suited to organizations that seek to maintain complex selling relationships, such as businesses whose sales functions rely on channel partnerships or a distributed sales force. The solution is comprised of three components: Cincom's Knowledge Builder, Cincom's Sales Configurator, and Cincom's e-Channel. Purchased individually or as a total solution, the new Cincom CRM components were devised to provide the initial step for complex manufacturers who want to move their product life cycles closer to a mass customization model, in the quest for the ultimate combination of "custom made" and "mass production."

Cincom's Knowledge Builder was devised to simplify the most complex selling, while accelerating the sales cycle, broadening sales channels, and lowering the cost to sell. To that end, a manual process that took anywhere from a day to several days can now reportedly be accomplished in about one minute with the appropriate use of Knowledge Builder. Cincom's Knowledge Management (KM) technology provides the "intelligence" required to support the mass customization of products and services at the point of sale (POS). By providing intuitive rule creation and maintenance in an enterprise environment, companies should quickly and cost-effectively capture critical sales, engineering, and manufacturing knowledge for deployment across sales channels.

When products or services present customers with a complex set of choices, or where product components and pricing elements are subject to rapid change, requiring sales teams to have access to up-to-date configuration and pricing information, the Cincom CRM Solution for Complex Manufacturers comes into the picture to enable sales people and partners to establish smart sales processes worldwide. The e-Channel product enables companies with complex products and services to capture and distribute critical sale and product configuration knowledge across all sales channels. It supports direct and indirect sales channels, and it is a comprehensive interactive selling system for both networked and mobile users. The e-Channel Desktop module permits each sales agent to organize customer, product, pricing, and external information so that it is immediately accessible by anyone involved in the sales opportunity.

One of the most recent endorsements of the offering came in October, when TAFA, Inc., a Praxair Surface Technologies Company, announced it has completed the development phase of a new systems estimator based on Cincom Systems' Knowledge Builder application. The web-based program allows the user to create test configurations of automated thermal spray processing systems, and produce budgetary cost estimates to produce it, whereby the turnaround time to produce estimates has been slashed dramatically. Other notable recent customers of a similar profile have been Pellerin Milnor Corporation, Air Products and Chemicals, Inc., American Power Conversion (APC), Greenheck Fan Corporation and Thyssen Aufzge Group.

This is Part One of a two-part analysis of recent Cincom news.

Part Two will detail the Challenges Cincom faces and make User Recommendations.

Market Impact

Despite current seemingly never-ending difficult economic times, the growth of complex contract-based manufacturing has still continued. This expansion has been fueled by a number of factors, among them the advent and a wide adoption of the Internet and consequent rise of e-commerce, as well as the trend in manufacturing toward mass customization, all resulting with pleasing the customer and significantly reducing all elements of the lead time, but without serious sacrifices of the manufacturer. Further, while the commercial complex manufacturing industry may also suffer nowadays owing to the painful recession, it is quite the opposite case in the defense and other government-related industries, partly in light of possible confrontation with rogue countries abroad. Many enterprise applications vendors have spotted the opportunity and have lately been scrambling to address the exacting requirements of the project-based complex industries.

As already indicated, complex manufacturers, such as, e.g., aerospace & defense (A&D), high-tech or electronic manufacturers, must handle complex production processes and large, complex supplier networks. Sophisticated customer interactions (e.g., order/contract definition and management applications) are required, while customer service needs are also oriented toward hands-on contract management and cost reporting. Frequent changes force contract supplier engineers and OEM engineers to be in a constant collaborative communication throughout the design and production cycle of the unit. One of the most manual functions in a supplier organization have traditionally been the sell-side Request for Quote (RFQ) management, which usually revolves around a few key expert individuals that have direct knowledge of the product or who can manually pull together the diverse information sources into a unified document, as contract proposals include quotations, pricing, detailed product information, data sheets, and CAD drawings.

On the other hand, in almost all industrial manufacturing segments, the pressure to reduce lead times has become a constant and ever-expanding concern. Depending on product complexity, some parts/sub-assemblies might be quoted immediately, while others have to be highly specified. Developing a contract proposal requires many levels of checking and re-checking customer process requirements and facilities capabilities, as well as preliminary design work and sourcing of specific components or materials. The process typically goes through much iteration every time the customer uncovers a new requirement or constraint. The labor-intensive nature of this process has often resulted in lengthy estimating cycles, which have in turn often translated to lost business opportunities. By harnessing an enabling technology to make everybody work smarter rather than harder, complex manufacturers could e.g., reduce the time it takes to create contract estimates so that the same number of people could generate more proposals faster and thereby handle more sales opportunities without expanding staff. The combination of outsourced manufacturing with increasingly common configure-to-order (CTO) or build-to-order (BTO) production environments is further making unit-level data management an increasingly high priority for contract manufacturers and the companies that retain them.

Cincom seems to have responded to many nitty-gritty's of the above industries, since it has long developed sharp vertical engineer-to-order (ETO) complex manufacturing functionality, long before most of its peers had grasped the concept of vertical focus. By delivering cutting-edge functionality pertinent to complex discrete manufacturing and maintenance, repair & overhaul (MRO) enterprises, Cincom has made its name especially within the A&D segment. Additionally, with its iC Solutions (formerly called Acquire) product suite for sales force automation (SFA) and bid management functionality that is well-attuned to the CRM needs of complex manufacturers (and some non-manufacturing industries as well), Cincom struck a differentiating value proposition a long time ago.

Fundamentally, its current strategy seems to be sound in that it will continue to exploit complex discrete manufacturing functionality and service & support as its primary strengths and marketing means. While competitive costs (low and flexible software license pricing and implementation costs) and outstanding global service (proven fast implementations and customer loyalty) will remain important requirements for success, particularly in the lower end of the market, vertical focus will remain the key factor for survival. Winning enterprise applications will demonstrate deep industry functionality and tight integration with best-of-bread bolt-on' products in a particular vertical.

Software that combines industry-specific functionality with the flexibility to accommodate each company's unique processes goes a long way toward improving the functional fit and the speed of implementation, with accompanying quick ROI. This also means adding sector-specific, fine-grained front-office capabilities such as billing for utility companies or, as in Cincom's case, the provision of customer communication solutions and services, centered on the lifecycle of customer interaction, including pre-sales, ordering, fulfillment, servicing, and up-selling situations, outside of the conventional realm of an ERP system.

Responding to Market Pressure

With the newly released CRM offering, Cincom has been responding to the recent entry of former pure enterprise resource planning (ERP) vendors to the CRM market space. While the pure CRM suite vendors have lately been re-architecting their offerings as to easily link to disparate back-office systems, several of the major ERP players have lately increased their CRM market presence mainly through the acquisition of former CRM application vendors, including Baan's acquisition of Aurum, PeopleSoft's acquisition of Vantive and J.D. Edwards' acquisition of YOUCentric (see PeopleSoft Buys CRM specialist Vantive for $433 Million and J.D. Edwards Fires Siebel, Hires YOU). In addition, Oracle, SAP and Intentia have painstakingly gradually introduced their own CRM application suites, which have been increasingly attaining the full-fledged CRM product statuses. The focus of these ERP vendors has, however, so far primarily been on providing contact and opportunity management and after-sale customer service/call center applications along with their traditional ERP offering.

Applications for customer interaction to satisfy to order' requirements have also been increasingly pursued lately, though, as very recently, mid-October, illustrated in J.D. Edwards' release of Advanced Order Configurator (AOC), the newest addition to the company's CRM product line, intended to accelerate the made-to-order (MTO) product purchase process. AOC reportedly offers automated catalog translation, compatibility with AutoCAD products, and a point-and-click Rules Manager, to provide sales representatives and customers the ability to visualize different variations of a product in real time. Additionally, AOC should enable users to review and verify product configurations from remote desktops and laptops, or via the Internet or direct enterprise network connections. The product will supposedly operate either as an independent application, or, more logically, integrated with its ERP siblings, J.D. Edwards ERP 8.0 or OneWorld Xe.

From the above, one should be able to glean the high-level requirements for modern product configurators, which have become the pivotal enabling technology for simplifying complex ETO operations in the direction of mass customization, providing the ability to more easily configure individualized products and services at the point of sale with integration to back-office systems. Providing customers with exactly what they want is not exactly a new concept, but the idea of giving the customer ever expanding range of choices as early as possible has become the center of many various industries' customer-oriented activities, given that getting an accurate, customized product to the customer more quickly fosters competitiveness. For a detailed discussion on the importance of product configurators in CRM for complex manufacturers, see CRM for Complex Manufacturers Revolves Around Configuration Software.

Cincom's product lines, industrial experience and expertise with its own ERP products, CONTROL and Priority, might position it well against competitive CRM solutions within the segment. Most ERP systems with a native product configuration functionality do not address the above-depicted intricate needs of the front office, whereas pure CRM solutions do not yet grasp integration issues to the back office. To that end, Cincom's CRM solution combines advanced configuration and KM capabilities with a communication mechanism that facilitates the real-time transfer of information. Most other CRM solutions provide only limited tools for web-based product configuration, deployed at the POS, or used by individuals to support product development. Contrary to it, Cincom provides a solution that extends the configuration capability across the enterprise and the sales channel, allowing for information transfer between front- and back-office operations, or between distributed business units within a single enterprise.

These bases have been covered by the above mentioned three modules of Cincom's CRM offering. The cerebral' and underlying module is Knowledge Builder, which offers product configuration functional underpinnings, customer needs analysis, pricing, document generation, diagnostics, and intelligent searching. On the other hand, as its name suggests, e-Channel includes SFA, interactive selling, and other customer relationship management (CRM) tools for the channel, which could also qualify it as partner relationship management (PRM) application. As hinted earlier at a great length, the Interactive Sales Configurator supports the customer acquisition (contact management and interactive selling), product catalog, quotation management, and order entry.

Unlike most product configurators, Cincom's graphical knowledge modeling environment makes it easy for non-technical users to quickly develop solutions that assist in the analysis of customer needs, product selection, product configuration, pricing, quotations, and customer support. In a nutshell, the entire Cincom's CRM system performs both sales lead tracking, opportunity management, marketing campaigns, reports & analysis, product configuration, and workflow management & administration tools. Moreover, it could be purchased on an outsource basis from Cincom's CinAPPS hosting subsidiary, an application service provider (ASP).

Cincom Strategic Advantage

Cincom's potential differentiation could be the ability to manage and transfer information in real time between back-office and front-office operations and across distributed company operations, through the combination of a product configurator and a knowledgebase. These capabilities are targeted at market segments where organizations manage a large quantity of products, services, and processes, and where knowledge tends to be "tribal" (i.e., where expertise tends to reside within a small number of individuals, or tends to be isolated to a small subset of the organization). However, to move to an agile manufacturing paradigm, knowledge must be available on-line and presented in customer-friendly terms.

In the future, more customers will be able to configure items on-line by using an intelligent catalog and dictionary of attributes, which should be accessible to everyone within a value chain. To that end, the Knowledge Builder supports the sales force in product configuration, thus helping to deliver individual customer solutions directly at the point of sale (POS). The module also captures knowledge (algorithms, logic, etc.) and transforms it into a powerful sales tool, since a salesperson, partner, or customer can apply expert knowledge at the POS to quickly and accurately translate requirements into a product offering which matches their particular needs.

The Knowledge Builder development environment enables the "domain experts" within the company to quickly and easily capture knowledge about the enterprise's products and services, their attributes and features, and alternative configurations. It accommodates diverse product offerings from simple Configure-to-Order (CTO) to complex Engineer-to-Order (ETO) applications and it helps alleviate the "chasing the expert" syndrome, without rendering the expert redundant (and possibly insecure or even subversive) as he should now have more time to focus on product innovations rather than on annoying calls from sales reps. On the other hand, the company can relax from the hit-by-the-truck' paranoia of its expert's unwanted departure.

To meet customer requirements, and fully reap return-on-investment (ROI), front-office applications must be integrated to back-end enterprise processes. This integration, plus the availability of Web-based CRM suites, has allowed many to-order' manufacturers to obtain immediate response on quotations, proposals, configurations, pricing, and in some cases, even on delivery dates. The market has long realized that CRM systems not only require integration with ERP systems to reconcile data such as customer master data, but also the bigger issue of integrated inter- and intra-enterprise business processes. For make-to-order (MTO) and ETO products, the overall process starts with capturing customer requirements at the front end that can be dynamically converted into work orders, routings, and other procedures via product configuration engines.

To at least keep abreast of the competition, Cincom embarked a few years ago on technologically rejuvenating its product (i.e., the products have been rebuilt for the Web, with all applications incorporating an Internet Explorer (IE) user interface, and Microsoft Active Server Pages (ASP) compliance), while not stranding its customer base on older technology. More recently, the focus has also evolved to target collaborative e-Business capability and enhancements to the product centered on embedding workflow and messaging alerts (event management) to notify personnel based on defined business process parameters.

Starting with 2001, Cincom has also built-in support for BizTalk, Microsoft's eXtensible Markup Language (XML) based integration software and business process management (BPM) product, rendering the system from being a transaction-based environment to an event-enabled environment. These are necessary features, as complex manufacturers are conducting a great deal of collaboration during the phases of design, configuration management, program management, and engineering change management (ECM). Therefore, they are in need of a system, which allows them to publish events internally and externally to other systems and other users, to support this broader, workgroup-based range of collaborative commerce functions.

Addressing this need is Cincom's Environ event-enabled control software, a publish-and-subscribe system that can send notices triggered by activities and events. Environ's notices can be transformed into standard formats, including electronic data interchange (EDI), and transaction formats from the Open Applications Group (OAG). Expertise in addressing the business requirements of organizations through an understanding of their business processes, grounded in Cincom's years of experience as a provider of solutions to manage back-office operations and legacy information, as well as forthcoming business process template orchestrations for critical processes such as engineering change request/approval, receiving/inspection, and request for quote/order, all leveraging the BizTalk Orchestration tool, should help Cincom address the needs of its ETO heartland.

By apparently gaining significant traction, Cincom has grasped the opportunity. Nonetheless, Cincom will have to address inevitable challenges in order to continue to thrive in this ruthless competitive environment with a limited opportunity and functionality that cannot easily be leveraged in many other diverse sectors.

This concludes Part One of a two-part analysis of Cincom news.

Part Two will discuss Cincom's Challenges and make User Recommendations.