Case Study: IM Connects Customers, Suppliers

For David Stuttard, instant messaging (IM) is more than just a toy for chatting. Rather, he helped turn IM into a strategic tool that lies at the heart of how his company does business.

“We’ve connected messaging to the supply chain,” explained David Stuttard, vice president of applications for Avnet Computer Marketing, a distributor of high-end computing equipment such as servers.

Specifically, the company has linked IM to its customer relationship management (CRM) software in a way that enables employees not only chat with each other but also with customers and suppliers. To foster that communication, Avnet provides free, secure IM service to external companies with which it does business.

For that, Lief Morin is glad.

“It’s absolutely been a good thing for my company,” said Morin, president of Key Information Systems of Woodland Hills, Calif. “It helps connect all my employees more closely and we communicate with Avnet better.”

The Deployment

Stuttard said his shop began by testing popular IM clients such as MSN Messenger and AOL Instant Messenger. However, he found that those clients were neither secure enough nor provided enough control over usage.

“AOL and MSN Messenger essentially broker PC to PC connections,” Stuttard said. “With people inside our firewall communicating directly with people outside, that caused firewall breaches. Once that’s happened, (outside) people could pass viruses or whatever.”

Another problem was that employees could use those clients to communicate with friends and family. As a result, the company settled on IBM’s Lotus Sametime, a messaging system aimed at the enterprise.

Sametime operates via an enterprise server. Initially, the company put a server inside the firewall for internal use. Later, it added a server outside its firewall for communications with vendors and customers.

“It’s a secure environment since Sametime encrypts messages,” Stuttard said. “So even if there was somebody with a sniffer, they couldn’t decipher the conversations. Plus, we control the user base, so there are no conversations with friends and family.”

Gaining Acceptance

The key to success, according to Stuttard, was to make IM both compelling and easy to use. The first step was to automatically generate “buddy lists” that are available to users the first time they log on so they can start communicating immediately.

To do that, Stuttard’s shop connected the company’s messaging and customer relationship management (CRM) systems to an LDAP directory. Names entered into the CRM system automatically are placed in the LDAP directory, which Sametime also accesses.

When a user registers for the messaging system, Sametime checks for names in the LDAP directory with whom the person may wish to communicate. For Avnet users, those names could include members of the person’s department, suppliers and customers who also are messaging users. For external users such as Morin and his employees, Sametime automatically generates buddy lists that include employees in the person’s company, contacts within Avnet as well as suppliers.

To encourage use of the system by customers, Avnet offers the service free to other companies. It also ensures the privacy of conversations between employees of the external company.

“It’s private — we can’t see what they’re chatting about internally,” Stuttard noted.

Besides providing a helpful service, use of the IM system by customers helps Avnet’s sales process. That’s because all external users must be entered into Avnet’s CRM system.

“We had one client, for instance, who gave me 34 names for using IM in their own shop,” Stuttard said. “We put those names into our CRM system.”

Without the incentive of free messaging, there would be little reason for the external contacts to log on to the messaging system. The fact that some of Avnet’s suppliers use the system is another advantage that, in some cases, allows customers and suppliers to chat directly, according to Stuttard.

Making the system available to external companies required little additional expense beyond the cost of the external server, Stuttard said. Because that server isn’t part of Avnet’s network, it doesn’t use internal bandwidth.

“Bandwidth-wise, it doesn’t matter whether there are 100 (external) users or 10,000 users,” Stuttard said. “It doesn’t impact our network.”

Stuttard said that about 800 of the approximately 1,000 employees in Avnet Computer Marketing are registered IM users with as many as 600 active users on any given day. He declined to say how many external personnel use the system.

Obvious Benefits

Stuttard said the company hasn’t run a return-on-investment study on the messaging system, but the benefits are obvious. Adding more contacts within customer companies helps Avnet’s sales process and providing the free service strengthens relationships. Another obvious benefit is that it makes Avnet employees more efficient.

“I’d say that IM saves employees at least five to ten minutes a day and in some cases a lot more,” Stuttard said. “A good example is when a field guy returns from a trip. He’s seen four or five customers and has a lot of things to follow up. Before, he’d sit in his office and make phone calls and e-mail. Now, he can quickly see who’s available and chat with several of them at the same time.”

Morin of Key Information Systems concurs.

“It’s 2 o’clock on a Friday and we have to get a system configured or ordered,” he related. “We can go to the IM system, see who’s in the office (at Avnet) and easily accomplish that task. We don’t spend twenty minutes trying to find somebody. Also, people in our remote offices feel an enhanced sense of being part of a group.”

In addition to standard chat, Stuttard’s team connected the IM system to an interactive Web application to help customers. The application helps determine the nature of the problem and provides a list of appropriate Avnet personnel who are online and who can answer the customer’s questions. The result is speedier service and greater customer satisfaction, Stuttard said.

One thing Stuttard doesn’t worry about is lost productivity because of employees playing with the IM system. Rather, with its links to both the company’s CRM software and into its customers’ sites, Avnet’s instant messaging system has become a core business tool.

For more news and information about instant messaging, go to Instant Messaging