Let’s start by sauntering down memory lane for a bit. I want to take an evolutionary walk through the types of value chains that have been both popular and useful in the enterprise and,then,take a brief look at the kinds of business and application integration they fostered. Each of these has evolved to something more contemporary and appropriate,but each still is beneficial to a company,either in isolation or in conjunction with the more contemporary approaches.
The Enterprise Value Chain: The Back Office Met the Front Office
Way,way back when CRM was CRM in a manly way—big,beefy,and flabby—and the business ecosystem was a customer-focused corporate ecology,integration usually meant application integration. How did you conjoin those data-driven CRM applications with the legacy systems that your company had invested gazillions in and the thirdparty applications that you just didn’t want to give up? As the corporate ecosystem reached its end of days,it evolved past the data and applications integration it so loved and became something better. It was the front and back offices,the supply and demand chains interlocking as a unified customer-centric business effort. That included the traditional CRM departments like sales and marketing or support. It included the old ERP functions like finance and human resources. It even included those inevitably boring supply chain activities like inventory management,scheduling,sourcing,delivery,and logistics. They all worked together for a common cause—a grab at customer insight,and even more important,a shot at customer “pleasure.” In other words,it was not just application integration,it was process integration geared toward the customer’s wants. Applications communicated with applications,processes communicated with rules,and applications tied themselves to processes. Web services were the interface between those applications, processes,and rules.
Not all that clear? If this were purely application integration,we’d be looking at how to make salesforce.com’s sales application talk to an AppExchange application like Studentforce,or we would see how it integrated with SAP financials and supplier relationship management— using the interfaces of either application. Business integration is interested in also making them communicate but more along of the lines of having someone enter closed deal information in the sales application. This will generate an order,which will then be booked in the financial system. This order will be applied to a compensation program that is part of the human resources system tailored specifically to the individual salesperson who closed the deal. Additionally,the order management system will generate a lookup of the available product inventory and send the information to the logistics team. That team will pack and ship the product,while an e-mail is being generated to the buyer on the expected ship date and delivery date,based on how the buyer chose to handle the shipping. None of the specific application integration points are of interest,nor will it be apparent to the salesperson doing the entry or the buyer receiving the e-mail. It is an application-agnostic approach,though the specific applications that will be engaged will matter.
Back and Front Offices Integrate—and It Works
As far back as 2003,in the Yankee Group’s Edge of the Enterprise enduser survey,71 percent of the companies polled (an admittedly small 78-company sample) increased spending on applications to improve interactions with customers,suppliers,and service providers. While we hadn’t entered the Era of the Social Customer and weren’t too far from the Age of Aquarius,I still can’t imagine that most of them were hoping with Zen-like desire to get in harmony with the customer ecosystem,since it wasn’t truly there yet. But it indicated a growing knowledge in the business world that the orientation of their technology buys and the way they sculpted their processes had to be focused around an increasingly predominant customer. META Group (now integrated into Gartner Group), in fact,was foresighted enough to detail the coming of this change back in 2001 in their report,“Integration: Critical Issues for Implementation of CRM Solutions.” This report identified an enterprise ecosystem that linked supply chain management,enterprise resource planning,and CRM beneath the transactions and collaboration layer. They saw it from the standpoint of a customer-driven corporate ecosystem,though. Even before that,in 2000,the very smart META Group analyst Steve Bonadio,in his short piece, “Exposing the CRM/ERM/SCM Intersection,”wrote “Organizations can no longer afford to view customer relationship management (CRM),enterprise resource management (ERM), and supply chain management (SCM) initiatives as separate. Synchronizing front-office,back-office,and supply chain activities is critical to attracting/retaining customers, fulfilling demand,and improving cycle times.” Bonadio was quite the oracle,wasn’t he?
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