Point of View

SPM. CRM. EIM. ICM. BAM. The Keys to Business Success, or Tactic of the Day?

Q: We keep reading and hearing the “buzzwords” SPM, CRM, EPM, EIM, ICM, ERM, FRM, BAM. What do they mean?

A: At differing levels, they’re all important because they deal with managing--the “M” in all of them--some critical element of your business or organization. The difference is that some of these objectives are broad, strategic “big picture” in nature (macro), and others are more specific tactical “day-to-day” issues (micro). In fact, some of these elements are actually sub-sets of others.

SPM is Sales Performance Management, the broad range of processes and technologies implemented to enable organizations to manage the sales process.

CRM is Customer Relationship Management, the broad range of processes and technologies, deployed in back-office administrative and support service functions and front-office sales and service functions, that enable product/service relationships between your organization and your customers, through all distribution channels. Variations include Prospect Relationship Management “PRM”, Vendor or Partner Relationship Management “VRM”, and Customer Managed Relationships “CMR”.

EPM is Enterprise (or Employee) Performance Management, the entire range of processes and technologies, deployed throughout the enterprise in all functions and levels, that enable the broad strategy execution and goal achievement relationships between your organization, its management at all levels, and its workforce at all levels. Individuals, teams, independent contractors, consultants, and others that perform work for organizations can be included in EPM.

EIM is Enterprise (or Employee) Incentive Management, and ICM is Incentive Compensation Management, and they interchangeably address the same objective: automating the administration and calculation of employee—most frequently sales—incentive compensation plans.

ERM is Employee Relationship Management, which today generally involves creating an automated CRM-like connection between the organization and its workforce, although at this stage it is hard to solidly quantify or standardize what this specifically means from one organization to another.

FRM, or Financial Resource Management, is the broad scope of processes and technologies, again deployed throughout the enterprise in all functions, that enables the collection, management, and deployment of your organization’s financial resources—money—and its surrogates: assets, liabilities, and equity. FRM includes management of financial, tax, accounting, risk, investment, and related governmental compliance responsibilities and objectives. Some have characterized ERP, or Enterprise Resource Planning, as a tactical manifestation of this strategic-level objective.

Finally, BAM, or Business Activity Management, involves the automation of company business unit performance metrics and scorecard reporting. To a large degree, these technology tools provide much of the same outcomes provided by what people used to call Executive Information Systems.

Q: What do these mean for business success, or are they just the latest business fad?

A: Bottom-line, what is it that businesses do? To be successful, one has to understand the fundamental function of businesses and other service providers: they collect and deploy their financial resources to serve their customers with and through their employees. Business processes and enabling technologies that make these easier, more accurate, more efficient, or more productive are of critical value. FRM manages the financial resource. CRM integrates the customer resource. And, EPM manages the workforce that deploys resources to serve customers. These are the “big picture” strategic initiatives, where the other elements (EIM, ICM, BAM, ERP and others) are tactical implementations of the broader initiatives.

Q: FRM sounds like plain-old accounting and finance?

A: Those are only two of the most obvious of the many manifestations of FRM. Think of the full scope of asset and liability management in today’s modern economy to truly appreciate how “big” FRM is, and then realize that it works as well as it does (except for infrequent Enron-like aberrations) because centralized governmental authorities—the Congress, IRS, SEC, FASB, OCC, FDIC, et. al.—have “laid down the law” and provided specific guidance and rules for how FRM is to be done. With this specific clarity, economies, countries, industries, companies and workforces have been able to create generally standardized strategy execution business processes and enabling technology for FRM.

Q: How does FRM compare with CRM and EPM ?

A: FRM is ubiquitous, within and between enterprises worldwide, and it is so because over the centuries centralized government and business authorities have determined and agreed to make it so; to create standards (GAAP, GATT, etc.). You simply cannot be in business, or stay in it long at all, if you do not comply. Comparatively speaking, while just as strategically important as FRM, EPM and CRM lack the centralized authority that dictates and standardizes how employees or customers are to be managed: so it is every organization for itself. Imagine the chaos if every organization in an economy had its own completely unique approach to financial management: an “asset”, a “loan”, “equity”, “insurance”, “expenses”, “revenue”, a “dollar”…what do you mean by that? Unfortunately, for most organizations, that level of chaos is the reality in CRM and EPM because there are no industry standards; each organization has to create their own unique CRM and EPM worlds.

Q: Many organizations are struggling to make CRM work; do you have any recommendations?

A: Depending on what your enterprise does, the word “customer” can be interchanged with client, member, patient, constituent, prospect, or other related definition: the underlying philosophies are the same. CRM technologies typically include marketing and sales force automation, call/contact center management, campaign management, data analytics, data warehousing, knowledge management, channel management, and other, and can be broadly grouped as “front-office” and “back-office” applications. Some keys to success in CRM include:

  1. Make sure employees are fully-integrated into your CRM process. Surveys show that most (over 50%) employees, when asked, do not know or understand how the business makes money. Tie their activities and results to their rewards and recognition: apply the 20 Golden Rules of EPM.

  2. Make sure your source database is clean. Some surveys suggest that very few companies have clean “customer databases”, severely disabling the potential of service-improving and revenue-enhancing business processes and technologies. Good data leads to good information; good information leads to great results.

  3. Apply the 20/20 Rule. Studies typically show that 80% of your profits are generated by 20% of your customers. Our EPM analyses show that this also applies to your workforce: 20% of your workforce generate 80% of your revenue and profit performance. So by matching the responsibilities of your Employee Top 20% with the sales and service needs of your Customer Top 20%, you’re optimizing your enterprise results.
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