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Electronics industry: Generating revenue thru effective CRM

Posted: 13 Apr 2015 ?? ?Print Version ?Bookmark and Share

Keywords:CRM? revenue? semiconductor? ODM? OEM?

Today's customer relationship management (CRM) has gradually moved beyond its intended scope and function to now actually help generate revenue for companies. Although C-level sales executives might disagree and say, "Sales people drive sales, not IT," truth of the matter is that CRM has emerged to become a much more meaningful aspect of any organisation, revenue-wise.

Before I venture to explain why a next generation CRM solution built for semiconductor and component manufacturers can in fact help drive more designs and revenue into the funnel, we must first take a look at the past.

I wrote an article in 2007 entitled CRM: Vertically Challenged. It outlined the drawbacks of generic CRM solutions in supporting the business needs of semiconductor and component manufacturers. Now the landscape has changed. Today, I could write about "CRM: the Vertical Advantage."

CRM goes vertical

The importance of adapting CRM solutions to vertical industries has grown dramatically during the past few years. An example is the emergence of companies such as Veeva Systems that within five years, has achieved dominance in pharmaceuticals, displacing Siebel. Another example is Salesforce.com, which in 2013 aligned its go-to-market organisation around six vertical industry business units.

Companies such as SAP, Oracle and Microsoft seem content to rely on the service providers in their eco-system to create customisations that bridge gaps in their solutions. These three legacy companies have not committed their product lines to support specific industries. Therefore customers that purchase from them must accept less relevant function and higher cost of ownership as part of the package, and then customise solutions to meet requirements.

Why semiconductor & component companies are challenged by CRM

Generic CRM fails to meet the basic requirements of semiconductor and component companies. Why? Because semiconductor and component enterprises operate in a multi-tiered value chain.

Between the chip or component maker and its end customer lies a network of manufacturing reps, original design manufacturers (ODMs), distributors and contract manufacturers (CMs), and electronic manufacturing services (EMS) companies. CRM solutions do not address this fundamental concept. Apple, for example, is an end customer that does not purchase directly, but through a contract manufacturer that buys through a distributor. So the semiconductor or component supplier has a hard time discovering if and when the business was won.

Design registrations generated by the channel are not supported by standard CRM solutions either though these registrations require review and approval. After all, they drive visibility into channel-generated demand, and pricing and incentives to the channel. Industry-automated data exchanges, such as RosettaNet, are also unsupported.

As a result most CRM deployments separately manage channel funnel and direct funnel. They rely on business intelligence (BI) tools to approximate a picture of actual demand. Demand signals can be generated around the globe and through multiple entities. So it is very difficult for companies within the industry to identify similar or duplicate opportunities generated through different channels and regions.

Add to this the challenge of identifying incoming opportunities that result from transfer business, the process in which the same opportunity moves across regions but may appear in the CRM system as multiple opportunities. Talk about skewing forecasting and operational planning!

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