Lexus looks to cloud to slash costs

In 100 days Lexus moved from a chaotic array of suppliers and databases to one cloud-based customer relationship management system from Salesforce.com, saving 43 per cent of annual costs.

Bob Dawes, marketing retention and after sales manager, Lexus Australia
(Credit: Jacquelyn Holt/ZDNet Australia)

Bob Dawes, marketing retention and after sales manager for Lexus Australia, said the previous system was a mess. "We had nine suppliers working for us to provide this solution, we had seven working databases. To say it was a nightmare is an understatement."

Dawes attributes the old system to growing from a small to large company. "Because we grew from a small company, we had things hanging off everywhere. We were getting information at different times, in different formats, things didn't match together," he said. "It became so unwieldy we couldn't manage."

The company needed an entire systems overhaul, moving to a new platform and way of doing things that moved away from previous solutions of "adding on". Not only that, but the company wanted to introduce a system that would allow it to make changes as necessary, rather than relying on its complex system of multiple suppliers. "We had to find a solution that was not only cost effective but that was flexible so we could actually change things ourselves," Dawes said, "and the solution was cloud computing."

However, the move wasn't a simple decision, with Lexus first creating a "wish list" of everything it wanted and needed in a new system.

"We were looking for a CRM platform; we were looking for a data manager and a CRM provider. So we went out with a really comprehensive brief, we developed a criteria based on cultural fit, technology and we looked at what was out there in the network."

After consulting with "six or seven" different suppliers Lexus settled on three, including Sqware Peg as data manager and Salesforce for its customer relationship management platform. It also selected a call-centre provider.

According to Dawes, the roll-out was "deployed in 100 days successfully". Sophie de Flamingh, the company's customer relationship manager, clarified that it had begun in November or December, with the actual migration beginning mid-January. "We started a dry run in mid-April. The call centre ran solo at the end of April," she said.

"We've done more in 100 days with Sqware Peg and Salesforce.com than we could ever have done with our old system," Dawes said, "I'd say the deployment was 99.8 per cent successful."

Dawes said that despite the infancy of the new system, its adaptability has made a significant different to Lexus' customer service. "Before, a data extract took on average four days. Now it takes 10 minutes. Responses to queries used to take a day minimum, now it's an hour maximum," he said. "Annual savings are at 43 per cent already this year."

He also stated, however, that the old suppliers were not to blame for Lexus' previous over-extended system, asserting that the technology developments were the main reason for the company's shift to the cloud.

"The old supplier worked really hard for us, they just didn't have the technology. They would throw resources at the job rather than upgrade the technology, and that's what really showed us that the technological change was the one that we really needed to move forward."

De Flamingh agreed with Dawes' assessment. "Our old call centre was very good; they were just hamstrung by technology," she said.