PDF File: 

CRM5_cs_peppers.pdf

Peppers & Rogers Group

Avid Technology Inc. solidifies leadership through customer-driven integration.

Chances are, the last feature film, television broadcast, music video, CD or video game you experienced was created with media products from Avid Technology Inc. Established in 1987, the Tewksbury, Mass.-based company pioneered digital video, audio and 3-D production systems for the film, video, audio, animation, video game and broadcast news industries. As the world leader in digital nonlinear media creation, management and distribution solutions, Avid helps film, video, audio, animation, games and broadcast news professionals work more efficiently, productively and creatively.

Avid’s tools have been used on such blockbuster films as The Matrix, Mystic River and Seabiscuit; on hit CDs by artists including Madonna, Shania Twain and Eric Clapton; and on groundbreaking video games such as Super Mario 64 and Tekken. Avid, which generated $419 million in sales in 2002, sells its solutions through a network of more than 250 independent resellers and supplements these channels with its own team of field and inside sales agents.

An Industry Pioneer

Avid’s success was founded on a product innovation business model. During the 1990s, the company brought cutting-edge editing products such as Media Composer®, Film Composer, Symphony™ and Avid Xpress® to film studios, postproduction facilities and broadcasting companies. As the 1990s progressed, Avid steadily captured market share through continued innovations and key acquisitions.

As Avid grew in complexity, management recognized that in order to continue serving existing customers and build profitable, new customer relationships, the company needed to streamline its internal technology infrastructure. Although Avid was using bestof- breed applications, multiple teams were required to support each application. In order for sales agents and customer service agents to efficiently meet customers’ needs, Avid required an integrated infrastructure. “Every time a customer interacted with us, she was dealing with another face to the customer,” recalls Jan Pope, Avid’s chief information officer.

Defining A New Path To Growth

Avid’s executive team was determined to strengthen its customer relationships to help drive continued growth. In 2000, Avid launched a new strategy dubbed Make, Manage and Move Media™. The strategy had two core objectives. The first was to cost-effectively shift Avid’s competitive strategy from a product-focused manufacturing company to a customer-focused solutions provider. As a solutions provider, Avid sought to broaden individual customer relationships by expanding its product offerings based on customers’ needs – the most important of which was product interoperability.

The second objective was integration of its best-of-breed solutions under a consolidated technology infrastructure and a single provider. In the past, Avid maintained three separate solutions to support the business. Avid’s management believed broad integration of this infrastructure was critical to becoming a total solutions provider responsive to customers’ needs. Despite bestof- breed functionality advantages, maintaining these disparate systems and their support teams proved costly and did not provide Avid with a consistent, integrated view of its customers.

The Move To A Single Provider

As the need to implement CRM became clear, the determination of SAP as the provider also crystallized. Already equipped with SAP’s R/3 ERP solution, the executive team decided to leverage its existing SAP investment. In May 2001, Avid upgraded to SAP R/3 4.6C to add service management functionality that was previously lacking. In October 2001, Avid implemented SAP Business Information Warehouse 2.1C to provide analytics functionality and completed the mySAP CRM implementation by January 2003.

Identifying the Impact Points

Marketing: Improved Lead Management Stimulates Return

By replacing the slower, manual processes of its legacy marketing tool with mySAP CRM, Avid has already seen marked improvements. Most of the progress to date stems from speedier access to more detailed customer information, resulting in cost savings and more efficient processes.

Now, all sales lead information is loaded into and distributed by mySAP CRM, rendering the information centralized and traceable. Data from the various lead information sources is uploaded through batch processing from Microsoft Excel spreadsheets into mySAP CRM. Through a combination of manual validation and automated questioning, leads are then qualified by marketing as “hot,” “warm,” “cool” or “cold,” then distributed to the proper sales team and tracked through the sales cycle.

Speed was also a factor in the execution of marketing campaigns, which used to be a slow, arduous process. The faster functionality of BW and mySAP CRM enabled marketing to expand the reach of its campaigns. As a result, Avid increased its outbound marketing “touches” to relevant prospects and customers by more than 450,000 in 2003.

Sales: Work Smarter, Not Harder

Through 2003, return primarily consisted of benefits recognized by Avid’s inside sales team. More complete access to detailed and relevant customer information has led to increases in the number of service contracts renewed and an improved ability to focus on customer acquisition efforts.

Quicker access to customer information also reduced the time required to generate service contract quotes. This freed up the inside sales agent’s time to contact more unique prospects and customers for additional sales opportunities. The payoff: an additional $475,000 in revenue enhancements.

Customer Support: Transforming Business

In Avid’s customer support center, the availability of more complete customer data, combined with the elimination of manual processes and a more integrated technology landscape, has helped transform Avid’s customer support function from a cost center to a revenue generator. Customer support information is connected to sales information, enabling agents to see a more complete picture of customer interactions. Agents can enter failures, problems, diagnoses and system changes and can drill down to a customer’s system level all in one location.

The ROI Of CRM

Avid’s commitment to integrate systems and unify customer-focused processes across marketing, sales and customer support has produced quantifiable benefits. Peppers & Rogers Group’s ROI Review calculates a 68 percent IRR through 2003 on Avid’s investment in SAP technology. The IRR is based on a net operating benefit of $5.4 million on a technology investment of approximately $3.3 million over three years. Avid’s SAP technology investment includes hardware, software, license fees, training and consulting services. The benefit categories include but are not limited to:

• Retiring legacy systems. Consolidation under a single technology roof cut Avid’s 2003 IT operating budget by more than $2.2 million.
• Increased revenue from more effective marketing campaigns. Avid increased campaign reach by over 450,000 “touches” in 2003, resulting in $1.85 million in revenue enhancements.
• Increased revenue from customer acquisition. Avid realized $475,000 in additional revenue in 2003 by using mySAP CRM to free up inside sales agents’ time and engage in more focused sales efforts.
• Revenue enhancements from proactive contract management. Inside sales agents identify customers coming to the end of their service contracts and proactively send them renewal information. This resulted in over $426,000 in achieved revenue in 2003.

Avid, Film Composer, Avid Xpress, Media Composer, Symphony, and Make, Manage and Move Media are either registered trademarks or trademarks of Avid Technology Inc. in the United States or other countries. All other trademarks contained herein are the property of their respective owners.