CRM and IT Trends

8/6/2019 CRM and IT Trends

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IT Strategies and CRM



ERP

Evolution of ERP/CRM

ERP is the planning of the 4 M¶s of anenterprise's resources, namely

Men

to their best synergistic value, simultaneously

improving the 5th M - Methodology

MoneyMaterial Machine

This means integration of all processes of the enterprise

with the focus on customer satisfaction with enduring

competitive advantage.

- applying

commonly available technology uncommonly well.



Need for Quick Response

Improved communication facilitates customersto order over phone, internet, etc. expectinginstantaneous delivery promise

Customers exercise options & express "wishlists" which require reduction of lead times atall levels (mass-customization)

Planners need to test (sometimes usingcomplex algorithms) their decisions to reducerisks of failure

Change to "pull" from "push" demands theorganization to adjust immediately & effectively

Why should an organization consider ERP?



Need for Quick Response

Quicker response means :

Changes to product design

Changes to product mix

Changes to assembly plan

Changes to distribution plan

These changes cause dynamic "bottlenecks" of funds, capacity,skills, materials.

We need "JIT" everywhere!




Need for Organic Systems

Organizations are organic and not

static

Processes need to be continuously

refined / improved exploiting

infrastructure support

Globalization with regional flavours




What should an organizationget from ERP?

Significantly increased inventory turns

Capacity optimization

Improved workforce productivity/throughput

Win-Win supplier relationship

Improved competitiveness




The Integration Imperative

Independent view of each activity in anorganization does not represent what theorganization does.

Events which occur are transactions andnot processes

A process consists of a sequenceof transactions

Marketing, logistics & finance cannotbe separated

Order received to delivery & collection isa "single thread"



The Integration Imperative

N eed to integrate drawing/part revision

information with planning, sourcing, production & after sales serviceactivities.

N eed to integrate planning, production,

shipping information to respond tocustomer queries.

Distributed plants & facilities to shareinformation for optimum resource

utilization.

Examples




What does a typical ERP

product offer?



The Logistics Chain Model

C apacity resourcesC apacity resources

C apital resourcesC apital resources

long-term short-term

Material resourcesMaterial resources

Logistic processesLogistic processes

Vendor Vendor

P roductionP roduction SalesSalesP rocurement P rocurement

Customer Customer

WareWare--

househouse

WareWare--

househouseMaterialsMaterials

ServicesServices

CapitalCapital InvestmentsInvestments CostsCosts CashCash

Human

ResourcesEquipment



Sales planSales plan

Profit planProfit plan

Sales info systemSales info systemProduction planProduction plan

Production planProduction plangenerationgeneration

Requirements planningRequirements planningCustomer ordersCustomer orders

ProcurementProcurement WarehouseWarehouse ShippingShipping

Order controlOrder control

Materials flowMaterials flow

DisaggregatioDisaggregatio

nn

AggregationAggregation

Business Performance Monitoring



MRPMRP

PurchasePurchase

requisitionrequisitionPurchase order Purchase order

ContractContract

fixedfixedvendor vendor

EDIEDI

AUTOMATEDAUTOMATED

Goods receiptGoods receiptShippingShippingnotificationnotification

EDIEDI InvoiceInvoice

verificationverification PaymentPayment

WarehouseWarehouse

AUTOMATEDAUTOMATED

Procurement thru EDI link



Current Business Model

Supplier

ERP

Enterprise Customer

CRM

SCM



Concept of Agile Manufacturing

A production process so deeply

integrated with suppliers and customersand so widespread in geographic scope,

that a company can make product

modifications anywhere in the world in just a few days



Ob jective of the Study

� How many days will it take for Caterpillar

to respond to a customer¶s request for a

design change - beginning with a

customer¶s request and ending with the

production of the required modification



The First Day� A farmer in a remote farm finds a pro blem

in the undercarriage of his tractor

� Asks Caterpillar Ag Product support groupfor an undercarriage modification

� Product group team leader schedules an

electronic conference

� Result is a well-defined strategy with

responsi bilities, milestones, timeline and a

budget



The Second Day� Team mem bers pursue their own tasks

� Engineers work out the specifications for

the new component� End-of-the-day electronic conference to

decide best course of action

� Design is reviewed, downloaded at other

locations via the we b

� Decision taken to make the new

component



The Third Day� Caterpillar¶s casting supplier simulates

various versions of the new component

� Graphical reports and data sent to the entire

product design team via the internet

� The team meets again (electronic

conference) to compare design alternatives

� One particular option is chosen



The Fourth Day� Keeping the team leader fully informed, the

supplier pours the casting



The Fifth Day� Supplier delivers the casting to Caterpillar

for final machining, testing and shipment to

the dealer

� Everything said or written is in the team

leader¶s data base

� Thus in just 5 days, a manufacturing gianthas responded to a specific customer

request using Extranet technology!



The Evolution of Business-to-

Business Electronic Commerce

� Internet� Corporate intranets

� Extranets



Extranet� A colla borative network that uses Internet

technology to link businesses with their

suppliers, customers, or other businessesthat share common goals.

� Part of the intranet that is made accessi ble

to other companies or as a colla borative

Internet connection with other companies.

� Accessi ble only to the colla borating

parties



Internet, Intranet & Extranet

IntranetManagement

EmployeesProduction Centres

Other departments

ExtranetVendors/SuppliersDistri butors,

Bankers

Consultants

InternetCustomersCompetitors

General Pu blic



³I don¶t think there¶s been anything

more important or widespread in all

my years at GE«

Where does the Internet rank in my

priority?

It¶s No. 1, 2, 3, and 4.´- Jack Welch



Will Internet Replace Traditional

Channels?� Did TV kill cinema?

± No, TV should basically exploit what Cinema

cannot do - Live Coverage

� Will Internet make traditional marketing

channels o bsolete?

± No, Internet should exploit what traditionalchannels cannot do



New Approaches for the InternetDepartment and drug stores typically sell 300 to 1,000

beauty products, he says, adding that the largest stores

carry approximately 19,000 items. "Only those that

appeal to the broadest variety of customer interests reach

the market."

Reflect.com utilizes P&G's product formula data bases to

market more than 50,000 items, with a goal this year of

100,000 availa ble items.Procter & Gamble's Reflect.com takes the beauty counter online.

By Peter A. Buxbaum

Executive Edge from Gartner Octo ber - Novem ber 2000



E-wedding� indiamarriages.com

� jeevansathi.com

� mybindhi.com

� shaadi.com

� weddingsutra.com

Business Today, July 7-21, 2000



JOBS on the Net� Careerindia.com - infotech jobs

� cioljobs.com - infotech jobs

� jobsdb.com - Hong Kong based� naukri.com - all industry segments

� prizedjobs.com - aligned with Satyam

Online� timesjobsandcareers.com - Times of India

portal

� jobsahead.com



B2B SITES� Clickforsteel.com - Essar steelexchange

� chem-india.com - industrial, pharmaceuticals and

petrochemical industries� commodityindia.com - agricultural commodities

� indiaconstruction.com - builders and suppliers

� indiaelectricmarket.com - electrical goods

� indiapoeroline.com - power projects� polyesteronline.com - polyester companies



What do these sites offer?

� Bring together the parties for exchange otherwise not possible in the physical world (marriage, jobs, B2B, B2C, C2C«)

� Disintermediation - cost savings for the company and greater value for the customer (B2C)

� Lower costs and lower capital (reduced inventory, and less investment in infrastructure - sales

offices, delivery trucks etc.)� Infomediary - paisapower.com



© Dr. M J Xavier



Portal

Portal ³ A web site that is the first place people visit when using the web. Typically a portal site has a catalog of web sites, a search engine or both. A

portal site may also offer e-mail and other services to entice people to use that site as the main point of entry or portal to the web. Portals are designed to be the "front door" through which a user accesses links to relevant web sites. Information categories typically include shopping, browse, classified ads, read current news, get weather/stock updates, etc.



VORT ALS

Vortal ³ A web site that provides a gateway or portal to information related to a particular industry. A term that might also be used is interest community web site, since

any vertical industry joins people that share an interest in buying, selling or exchanging information about that industry. Vortals are also seen as likely business-to-business communities. For example, small business people with home offices might be attracted to a comprehensive

vortal that provided ideas and product information related to setting up and maintaining the home office. A vortal gives the user a single place to communicate with and about a single industry.



InfomediaryInfomediary ³ Provides specialized information on behalf of producers of goods and services and their potential customers. Infomediaries can be both B2B

and B2C orientated. They typically require membership and exist in industry specific variations. Infomediaries are similar to the portal concept, yet provide fulfillment.



Vertical and Horizontal Digital

Marketplaces

Vertical Digital Marketplaces ³ A concept within B2B that is a variation on digital marketplaces. These marketplaces are focused on a relatively narrow range of goods and services.

Horizontal Digital Marketplaces ³ A concept of

B2B e-business. A digital marketplace with a multi-industry focus on common functions or business processes.



Digital Bazaar/Marketplace

Digital Bazaar ³ Enables multibuyer and multisellerinteraction and collaboration. Comprised of industry specificsearch engines, information marts and business malls. Valueis added by digital marketplaces through the aggregation of buyers and sellers, creating liquidity by generating a critical

mass of buyers and sellers and reducing transaction costs. In addition, they facilitate information and knowledge-sharing trading communities. In contrast to consumer hubs,the value created by digital marketplaces increasesexponentially with each additional participant in the network. Digital marketplaces can use a variety of market-makingmechanisms between participants to mediate transactions(catalogues, auctions and exchanges). The term digitalmarketplace encompasses that of infomediary. The primarysource of revenue for digital marketplaces are transaction commissions, for infomediaries it is typically subscriptions.



C-Commerce

The C-Commerce vision includes interenterprise

Internet connection, but it goes a step further by enabling multiple enterprises to work interactively online to find ways to save money, make money and solve business problems ³ often by dynamically restructuring their relationships.



Business Ecosystem

Business ecosystem is in short an economic community, that comprises several organisms, i.e. organisations and individuals.

The core of a business ecosystem consists of core products, complementary products, leading firms, complementing allies, direct competitors, customers and suppliers. In addition, the business ecosystem comprises stakeholders, potential competitors and

governmental institutions. All the parts of the ecosystem interact with each other.

(Moore, James F. 1996a. The Death of Competition - Leadership in the Age of Business Ecosystems. Harper

Collins, New York, 1996.)



Emerging Business Model

ERPn

Enterprise

ERP1

Enterprise

Suppliers Customers



E-Marketplaces� Covisint - virtual market of GM, Ford, Chrysler and

thousands of their suppliers ($240 billion)

� Transora - P&G, Unilever, Kraft«� Warner Lambert, Smith Klein Beecham, Pfizer..

� Cargil, DuPont & Cenex Harvest..Agro Exchange

Source: Business World, 18th September, 2000, page - 24



DOT.COM Failures

"Indeed, during the early stage of the industrial revolution

thousands of start-ups failed because, like today, their business

models were wrong. Their drive and optimism was misdirected.

No one knew how to operate in the emergent, post-agrarianenvironment. Businesses had to invent everything anew --

factories, distri bution chains, la bor relations, sales. Markets

gyrated, and plenty of investors lost their money, to a chorus of I-

told-you-so's. To imagine that the new economy is over is theequivalent of thinking, in the early 1800s, that the industrial

revolution was over because textile manufacturers were going

broke in Manchester."

Alvin Toffler,W

all Street Journal, March m29, 2001



We've historically been competitors," said

Brian Kelley, vice president of Ford's e-commerce operations. "And we'll still be

competitors, but we'll create an

independent company that can go off and

help our suppliers, our dealers, our customers and each of us."

(Source: e-commerce times, 25th Feb, 2000).



Value Constellation is a term coined to describe the complex web of

relationships needed to reinvent value in today's highly competitive business environment.



The Levi·s online eco-store has just received anorder for two pairs of custom-made men·s jeans,two pairs of custom-made women·s jeans, one denimshirt, two pairs of Timberland walking shoes, two

rugged Kipling backpacks, and two tickets to apromotional weekend excursion to a Ski Lodge inLake Tahoe, California, that includes a jeep rental.Payment will be made with a combination of

electronic money, frequent-flyer miles, and Levi·saffinity points. This order needs to be processedand delivered to the customer through herselected delivery service within one week.

Value Constellation



As soon as the payments are verified, the ski excursion bookings are confirmed and printed.

The Levi·s orders are automatically sent to the factory best suited to manufacture the items based upon location, delivery capacity, and workload. The factory makes the items to the specified measurements and confirms pick-up times.

Timberland orders are sent to the warehouse that fills all its East Coast deliveries. The

Kipling order is sent to its dispatch centre, and all the confirmed orders, their pick-up times, and delivery details are sent to FedEx.



The Levi·s order management system processes all transactions across multiple systems and

businesses. The air miles credit card is verified and authorised for partial payment, and the airline frequent-flyer account is charged for the remaining amount of the ski weekend. The Levi·s affinity Visa card is verified and authorised for

the jeans, shirt, and shoes. The eco-store frequent shopper points are redeemed for the backpack, and the consumer·s personal Federal Express account is charged for the delivery services. All these payment verifications and authorisations are made through the eco-store·s partner responsible for payment transactions and loyalty programs.



When Federal Express receives the order, its warehouse is alerted and the pick-up service takes over. Based on the confirmed pick-up times for the various orders, the service collects all goods and brings them to the packaging warehouse where the entire order is verified, checked, bundled, and

sent to the consumer.

The entire process is accomplished within the required time.

Source: Sanjiv Gossain and Gajen Kandiah, ´Reinventing Value: The New Business Ecosystemµ, Strategy and Leadership, November/December 1999, pp. 28-33.



Virtual Cluster: THE CASE OF CAR

BUYING

VIRTUALCOMPANY

Competing Car Manufacturers and their suppliers

Competing Insurance Firms

Road Transport Office



Jevin Eagle and Liz Lempres, From products to ecosystems: Retail 2010, The McKinsey

Quarterly, 2000 Num ber 4





Indian Auto Companies form

e-commerce Portal � Vertical e-vommerce portal fomed to facilitate reduction

in the cost of materials and sourcing

² Ashok Leyland

² Bajaj Auto² Hero Group

² Hindustan Motors

² Maruti Udyog

² Mahindra & Mahindra

² Tata Engineering

² T VS Suzuki

� These 8 account for four-fifths of the business that istransacted between vendors and OEMs in India

² ET, 26/7/2000, Page 11



Indian

e-

Markets

� Elecktraworld for electrical goods by KKNohria

� Steel - Tisco, Kalyani group and SAIL� Clickforsteel - Essar Steel

� sparesindia by Atul Aggrawal (Rs. 12,580crore market)



Reinvent, respond,

revolutionize



1) Build IT capabilities within the enterprise,

2) Link with major suppliers,

3) Link with key customers,

4) Create a corporate web site for e-commerce

5) Link with competitors and

6) Link with several business

t

Documents

CRM and IT Trends