e-CRM_ERP

8/8/2019 e-CRM_ERP

http://slidepdf.com/reader/full/e-crmerp 1/39

E-CRM & ERP

Sanjay Kehar

8/8/2019 e-CRM_ERP


What is ERP?

How will it help my business?

What are its costs? What are the risks?

8/8/2019 e-CRM_ERP


Enterprise-wide system that integrates thebusiness functions and processes of anorganization

Integration of business functions into oneseamless application

Usually runs on a relational database

Replaces countless departmental and

workgroup information systems

8/8/2019 e-CRM_ERP


Links business processes

Maintains audit trail

Utilizes a common information system

Implementation normally involvesBPR: Business Process Reengineering

Difficult to Implement Correctly ± RailroadTracks

8/8/2019 e-CRM_ERP


Before/After ERP

8/8/2019 e-CRM_ERP


Evolution of ERP

1960¶s: Inventory Control Systems

1970¶s: MRP: Material RequirementPlanning

1980¶s: MRPII: MRP & Distribution

1990¶s: MRPII ERP with introductionof other business functions CRM¶s

Today: Web Enabled ERP ± Connecting

ERP Externally

8/8/2019 e-CRM_ERP


Factors Along the Path to ERP

The development of client-server architecture «and later the n-tier client-server architecture

The rush to replace out-dated and non-Y2K

compliant systems. The desire to have integrated systems within

the firm.

The desire to get out of the applicationdevelopment "business".

8/8/2019 e-CRM_ERP


Core Modules of SAP

Finance

Human Resources

Corporate Services (asset management,project management, etc.)

Operations (manufacturing, sales, service,logistics, etc.)

8/8/2019 e-CRM_ERP


Other SAP Modules

Portals

Supply chain/Supplier relationshipmanagement

Customer relationship management

Product life cycle

Business intelligence

8/8/2019 e-CRM_ERP


Interfaces«

The goal in ERP is to sunset as many systemsas possible

But some systems will remain

Need to build interfaces these systems

More interfaces built/maintained

more complexity of the ERP implementation

higher cost.

8/8/2019 e-CRM_ERP


«and ³Bolt-ons´

Core ERP functions may be augmented by ³bolt-ons´ (specialized functionality above and beyond that of theERP)

Four major areas:

Supply Chain Management (SCM)

Product Lifecycle Management (PLM)

Customer Relationship Management (CRM)

Business Intelligence (BI)

8/8/2019 e-CRM_ERP


ERP Enterprise Architecture

8/8/2019 e-CRM_ERP


How SAP Works

8/8/2019 e-CRM_ERP


Issues with SAP

Cultural Issues

System designed in North America or WesternEurope

Embodies best practices from µhome¶ country ±based on µhome¶ country assumptions

Practices and assumptions may not transferacross borders

8/8/2019 e-CRM_ERP


Benefits of ERP - Promised

Shorter order cycle time

Increased productivity

Lower IT costs

Better cash management

Reduced personnel

8/8/2019 e-CRM_ERP


Reasons to Adopt ERP

One face to the customer

Knowing ³what is possible´ in terms of organizational inventory

Eliminating redundancy

Consolidation

8/8/2019 e-CRM_ERP


Reasons to Adopt ERP (cont¶d)

Handle growth

Reduce stress on existing IT

Avoid legacy systems

Modernizing

8/8/2019 e-CRM_ERP


Reasons Not to Adopt

Cost

Loss of competitive advantage

Resistance to change

Poor cultural fit

8/8/2019 e-CRM_ERP


Alternatives?

Open Source ERP (+ Support Vendors)

ERP for SMEs

less expensive systems with fewer "bells andwhistles"

ERP ASPs (Application Service Providers)

ASPs will host and maintain the software for you

8/8/2019 e-CRM_ERP


Post-ERP?

Service-Oriented Architectures (SOA) holdsome promise as the natural evolution fromERP

The foundation of SOA is standardization basedupon web services interoperability standards.

SOA does not replace ERP provides the ability to ³loosely couple´ services

(business functions).

8/8/2019 e-CRM_ERP


Before/After

8/8/2019 e-CRM_ERP


e-CRM

Customer relationship management

The process of:

Targeting Acquiring

Servicing

Retaining and

Building long-term relationships with customers

It is effectively relationship marketing, using customer data andfacilitated by technology

8/8/2019 e-CRM_ERP


CRM benefits

Increased revenues from better prospect targeting

Increased purchases per current customer Customers retained longer

Cost savings

But need good databases which are properly maintained inorder to retain customers and serve their particularneeds

And the costs of acquiring new customers far outweigh thecosts of retaining existing customers

8/8/2019 e-CRM_ERP


CRM aspects:

Sales force automation (primarily B2B

markets)

Marketing automation

Customer service

8/8/2019 e-CRM_ERP


Sales force automation

Software such as that at www.salesforce.com:

Allows salespeople to build, maintain and access customerrecords while on the road

Manage leads and accounts

Send sales calls results and activity reports to the companydata warehouse

Allows salespeople to manage their schedules

8/8/2019 e-CRM_ERP


Benefits of such sales software:

Close more deals (allows teams across the organisation

to work together to manage accounts etc) Seize all sales opportunities (every lead is recorded and

automatically routed to the right person, and trackedthrough the pipeline in real time)

Update opportunities, accounts and contacts offline

Enables collaborative and consistent customermanagement

See the big picture

8/8/2019 e-CRM_ERP


Marketing automation

Gives a disciplined approach to the capture, integration

and analysis of customer data Helps effective targeting

Ensures efficient marketing communications

Real time monitoring of customer and market trends

Takes data from web sites and databases and turns it

into reports for the fine tuning of CRM efforts

8/8/2019 e-CRM_ERP


It looks good but CRM

systems often do notwork as promised

Indeed yet to see evenone organisation gettingCRM right

8/8/2019 e-CRM_ERP


Building blocks for successful CRM (according to the Gartner Group)

CRM vision (leadership and value proposition)

CRM strategy (objectives and target markets)

Valued customer experience (understand requirements, monitorexpectations, maintain satisfaction, privacy respected, interaction andfeedback)

Organisational collaboration and commitment (culture, structure,people, skills, competences, incentives, rewards, communication)

CRM processes (customer life cycle, knowledge management)

CRM information (data, analysis, a consistent view across functions)

CRM technology (applications, architecture, infrastructure)

CRM metrics (value, retention, satisfaction, loyalty, cost to serve)

8/8/2019 e-CRM_ERP


Employees

CRM staff Partners

Suppliers

Informationbackbone

Customers andprospects andvarious touch

points

CRM-supply chain management systemintegration

8/8/2019 e-CRM_ERP


CRM usually refers to ³front of house´ or ³front end´ operations (creating satisfying experiences at allcustomer touch/contact points: telephone calls to servicereps, in-person visits to stores, email contact etc)

Need consistent integrated operations and accurateupdating of customer records

Need to seamlessly integrate back of house systems(e.g. inventories and payment processes) with the frontof house CRM system and the entire supply chain

management system If this happens the entire supply chain can work

together, focused on meeting customer needs profitably

8/8/2019 e-CRM_ERP


CRM processes The processes begin with the marketing and e-marketing plans

when target markets are determined Firms monitor and attract customers online and offline as they

progress through the stages of targeting, acquiring,

transacting, servicing, retaining and growing Customers are differentiated:

By highest value, longest loyalty, highest frequency of purchaseetc (Pareto rule: 20% of customers provide 80% of the profits)

By different needs By demographic, geographic, psychographic and usage

segmentation

Some customers are ³the customer from hell´ and are not wantedbecause they are too costly to maintain

Customising the marketing mix and interaction with thesecustomers

8/8/2019 e-CRM_ERP


CRM information

Information is central to CRM

The more information a business has the better value itcan provide to each customer and prospective customer

Gradually more information gathered over time lessintrusively by electronically tracking behaviour

IT allows firms to move beyond traditional segment

profiling to detailed individual profiling Detailed tracking of online behaviour gives a wealth of

information

8/8/2019 e-CRM_ERP


Critical success factors for building successful e-business relationships with customers

Target the right customers (identify best prospects and customers and learn asmuch about them as possible)

Own the customer¶s total experience (the customer share of mind and wallet)

Streamline business processes that impact on the customer (CRM-SCMintegration and all-embracing customer focus)

Provide a 360 degree view of the customer relationship (all contacts)

Let customers help themselves (through websites etc)

Help customers to do their jobs (especially in B2B markets, which generatesloyalty)

Deliver a personalised service (through customer profiling, privacy safekeeping

and marketing mix customisation) Foster community (encouraging customers to join communities of interest that

relate to the firm¶s products)

8/8/2019 e-CRM_ERP


E-marketing ³push´ customisation tools

Company-side tools (push)

Cookies small files written to a user¶s PC hard drive after visiting a

web site.W

hen user returns to site the company serverlooks for the cookie file and uses it to personalise the site

Web log

analysis every time a user accesses a web site the visit is recordedin the web server¶s log file (tracks pages visited, how longstays and whether they purchase)

Data mining extraction of hidden predictive information in largedatabases through statistical analysis

8/8/2019 e-CRM_ERP


E-marketing ³push´ customisation tools continued

Real time profiling special software tracks a user¶s movementsthrough a web site, then compiles reports on thedata

Collaborative filtering software gathers opinions of like-minded usersand returns these opinions to the individual inreal time

Outgoing emailDistributed email use email databases to build relationships by

distributing useful and timely information, sentindividually or en-masse

Chat forums/Bulletin boards listen to users and build community by provider

space for these on the web site

iPOS terminals interactive point of sale terminals at the retail counter,used to capture data and present targetcommunications

8/8/2019 e-CRM_ERP


E-marketing ³pull´ customisation tools

Agents programs that perform functions on behalf of the user(search engines, price scrapers, shopping agents)

Individualisedweb portals users easily configure certain web sites (e.g. Amazon.com)

Web forms designated parts of web pages for the user to seekinformation

Fax-on-demand customers telephone a firm, listen to automated voice

menu and select options to request a fax on a particulartopic

Incoming email queries, complaints, compliments initiated by customers orprospects (essential for good customer service)

8/8/2019 e-CRM_ERP


CRM metrics by customer life cycle stage

Target recent, frequency, monetary value (high value customers identified)

share of customer spending (Pareto rule 20:80)

Acquire new customer acquisition costnumber of new customers referred from partner sites

campaign response (click-throughs, conversions)

rate of customer recovery (customers who have left who are attracted back)

Transact prospect conversion rate (% of web site visitors who buy)

customer cross-sell rate from online to offline and vice versa

services sold to partners

sale of a firm¶s products on partner web sites

average order value (sales divided by order numbers for a given period)

referral revenue (sales from customers referred to the firm by current customers)

sales leads from internet to closure ratio

8/8/2019 e-CRM_ERP


CRM metrics by customer life cycle stage continued

Service customer satisfaction ratings over time

time to answer incoming email from customers

Retain customer attrition rate (proportion who do notrepurchase in a set time period)

percentage of customer retention (proportion of customers who repeat purchase)

Grow lifetime value (net present value of the revenuestream of any particular customer over a period of time

average order value over time: increasing, decreasing

average annual sales growth for repeat customers overtime

loyalty programme effectiveness (sales increase overtime)

number of low value customers moved to high value

e-CRM_ERP

Documents