Customer Relationship Management and Systems

That follows the basic concept of enterprise yester which are based on a suite of integrated software modules and a common central database. When new information is entered by one process, the information Is made Immediately available to other business processes. Although companies can rewrite some of the software in ERP systems, the software is unusually complex and extensive customization may degrade system performance, compromising the information and process integration. If companies want to reap the maximum benefits from enterprise software, they must change the way they work to conform to the business processes in the software.

Although Symantec and Verities ad each used Oracle E-Business Suite 1 old prior to the merger, both used highly customized versions of the systems that made Integration a daunting task. An overhaul of the combined company's enterprise systems was needed to Join together Symantec and Verity's data from key business processes. Enterprise systems help large companies enforce standard practices and data so that everyone does business the same way worldwide.

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Enterprise systems help firms respond rapidly to customer requests for information or products. Unfortunately, the two companies bungled the implementation of the enterprise system almost from the ginning. 2. What management, organization, and technology factors were responsible for Management: Most of the issues were due to the company's shortsightedness in implementing Project Oasis. The initial reaction to the launch of the new system was decidedly negative. Once customers reached a Symantec employee, they could spend up to 20 more minutes troubleshooting problems, and were often told that there was nothing that could be done.

There was simply too much change occurring all at once for typical customers to handle. Partners were unhappy with Symantec slow response to many of the problems. Organization: The company was unprepared to meet the increased demand for customer support after the roll. Symantec neglected to coordinate the development of its new ERP system with the launch of other products from different divisions within the company. The changes to the licensing system were not coordinated with the rest of the project. Customers were unhappy with changes to the stock-keeping unit product system (SKU system).

Symantec had overlooked the needs of many customers while designing a technically sound but user-unfriendly ERP system. Technology: Both companies used highly customized versions of Oracle's E- Business Suite 1 old prior to the merger. Users struggled to process the large amount of information provided to them and were overwhelmed by the increased number of steps, all of them new, required to place orders. Some smaller distributors and partners didn't update their systems to handle the new SKU and were unable to submit purchase orders electronically.

After the roll, licensing became much more difficult for Symantec customers and partners, forcing them to wait multiple weeks before receiving their licenses. 3. Was Symantec response to the problem adequate? Explain your reasoning. The company initiated a follow-up project named Project Nero. The goal of the project was to recapture the loyalty of customers who were disenchanted by the changes brought about by Oasis. The project reached out to customers and fixed the problems with the information systems to improve response times and streamline operations.

The company began by adding over 1 50 new customer representatives to handle the increased volume of calls, reducing wait times and increasing customer satisfaction. Executives traveled the country to improve relations with angered customers and partners. The company introduced a master list of product releases departments regarding new projects and change management. Symantec used Net Promoter methodology to measure and increase customer loyalty. The results identified specific criticisms and customer problems and dramatically aided Symantec in correcting those problems.

Project Nero helped the company weather the worst of the crisis. However, the company does not release the results of its Net Promoter surveys to the public so the extent to which it has repaired its reputation is unclear. 4. What would you have done differently to prevent the implementation problems hat arose at Symantec? Student answers will vary but some of the principles that should be included in their answers are: Even the most careful planning and well-designed systems can quickly go awry if customers are unable to make use of the new system.

Enterprise applications involve complex pieces of software that are very expensive to purchase and implement. The total implementation cost of a large system, including software, database tools, consulting fees, personnel costs, training, and perhaps hardware costs, might amount to four to five times the initial purchase price for the software. Enterprise applications require not only deep-seated technological changes but also fundamental changes in the way a business operates. Business processes must be changed to work with the software. Employees must accept new Job functions and responsibilities.

Most implementation projects fail or experience enormous problems because executives, managers, and employees did not understand how much organizational change was required. Specific Symantec problems that perhaps could have been avoided: Communicate with employees better to counteract the negative attitude towards the Communicate with customers and distributors better about the project. Upcoming changes. ; Make sure all of the systems that were changing were coordinated throughout the organization. ; Not change as many systems all at the same time.

Even though stretching the implementation out over a longer period may have cost more money, perhaps it would have prevented some of the massive problems overall. In response to the ERP overhaul issues? Why or why not? Student answers will vary. Some principles to keep in mind are: Enterprise applications introduce switching costs that make it very costly to switch vendors. Companies become dependent on the vendor to upgrade its product and maintain the installation. Many of Symantec partners and smaller distributors were reliant on Symantec and perhaps could not afford to switch vendors.

That would mean they would have to switch all of their internal systems at great cost. Customers are often reluctant to switch vendors based on historical relationships. If the problems seem temporary, the customers will hang on. If the problems seem insurmountable, some customers will desert the sinking ship. Review Questions If not enough time left, pick a few important ones from the below list. We will provide students with solutions in week 12 to help them with revision. 1 . How do enterprise systems help businesses achieve operational excellence?

Define an enterprise system and explain how enterprise software works. Enterprise software consists of a set of interdependent software modules that multiple functions and business processes for precise organizational coordination and control. Organizations implementing this software would have to first select the functions of the system they wish to use and then map their business processes to the predefined business processes in the software. A particular firm would use configuration tables provided by the software to tailor a particular aspect of the system to the way it does business. Table 9. Describes some of the major business processes supported by enterprise software. These include financial and accounting processes, human resources processes, manufacturing and production processes, and sales and marketing processes. Describe how enterprise systems provide value for a business. Enterprise systems provide value both by increasing operational efficiency and by providing fireside information to help managers make better decisions. Large impasses with many operating units in different locations have used enterprise systems to enforce standard practices and data so that everyone does business the same way.

Enterprise systems helps firms respond rapidly to customer requests for information or products. Manufacturing is better informed about producing only what customers have ordered, procuring exactly the right amount of components or raw materials to fill actual orders, staging production, and minimizing the time that components or finished products are in inventory. Enterprise software includes analytical tools for using data captured by the system o evaluate overall organizational performance.

Enterprise system data have common standardized definitions and formats that are accepted by the entire organization. Enterprise systems allow senior management to easily find out at any moment how a particular organizational unit is performing or to determine which products are most or least profitable. Companies can use enterprise systems to support organizational structures that were not previously possible or to create a more disciplined organizational culture. They can also improve management reporting and decision making.

Furthermore, enterprise systems promise to provide firms with a single, unified, and all- encompassing information system technology platform and environment. Lastly, enterprise systems can help create the foundation for a customer-driven organization 2. How do supply chain management systems coordinate planning, production, and logistics with suppliers? A supply chain is defined as a network of organizations and business processes for procuring materials, transforming raw materials into intermediate and finished products, and distributing the finished products to customers.

It links suppliers, manufacturing plants, distribution centers, retail outlets, and customers to supply goods and services from source through consumption. Supply chain management is the integration of supplier, distributor, and customer logistics requirements into one cohesive process. Explain how supply chain management systems help reduce the bullwhip effect and how they provide value for a business. The bullwhip effect occurs when information about the demand for a product gets distorted as it passes from one entity to the next across the supply chain.

It can also result from "gaming," as purchasers present manufacturers or suppliers with a false stricture of consumer demand. It can be dealt with by reducing uncertainties about demand and supply when all of the supply chains have accurate and up-to-date information. Define and compare supply chain planning systems and supply chain execution systems. Supply chain planning systems enable the firm to generate demand forecasts for a product and to develop sourcing and manufacturing plans for that product.

They help companies make better operating decisions such as determining how much of a specific product to manufacture in a given time period; establishing inventory levels or raw materials, intermediate products, and finished goods; determining where to store finished goods; and identifying the transportation mode to use for product delivery. One of the most important functions is demand planning, which determines how much product a business needs to make to satisfy all of its customers' demands. These functions are referred to as order planning, advanced scheduling, demand planning, distribution planning, and transportation planning.

Supply chain execution systems manage the flow of products through distribution centers and warehouses to ensure that products are delivered to the right locations n the most efficient manner. They track the physical status of goods, the management of materials, warehouse and transportation operations, and financial information involving all parties. These functions are referred to as order commitments, final production, replenishment, distribution management, and reverse distribution. Help companies manage them better.

Firms use intranets to improve coordination among their internal supply chain processes, and they can use extranets to coordinate supply chain processes shared with their business partners. Using intranets and extranets, all members of the apply chain can instantly communicate with each other, using up-to-date information to adjust purchasing, logistics, manufacturing, packaging, and schedules. A manager can use a Web interface to tap into suppliers' systems to determine whether inventory and production capabilities match demand for the firm's products.

Business partners can use Web-based supply chain management tools to collaborate online with suppliers and customers. Sales representatives can access suppliers' production schedules and logistics information to monitor customers' order status. The Internet has introduced new ways of managing warehousing, shipping, and snacking based on access to supply chain information that can give companies an edge in delivering goods and services at a reasonable cost. Distinguish between a push-based and pull-based model of supply chain management and explain how contemporary supply chain management systems facilitate a pull-based model.

In a push-based model, production master schedules are based on forecasts or best guesses of demand for products, and products are "pushed" to customers. In a pull-based model, actual customer orders or purchases trigger events in the supply chain. In contemporary supply chain management systems, the Internet and Internet genealogy make it possible to move from sequential supply chains, where information and materials flow sequentially from company to company, to concurrent supply chains, where information flows in many directions simultaneously among members of a supply chain network.

Members of the network immediately adjust to changes in schedules or orders. How do customer relationship management systems help firms achieve customer intimacy? Define customer relationship management and explain why customer relationships are so important today. Customer relationship management: a business and technology discipline that sees information systems to coordinate all of the business processes surrounding Importance of customer relationships: Globalization of business, the Internet, and electronic commerce have put more power in the hands of customers.

Companies are realizing that their only enduring competitive strength may be their relationships with their customers. Some say that the basis of competition has switched from who sells the most products and services to who "owns" the customer, and that customer relationships represent the firm's most valuable asset. Describe how partner relationship management (PRM) and employee relationship management (ERM) are related to customer relationship management (CRM)?

CRM systems capture and integrate customer data from all over the organization, consolidate the data, analyze the data, and then distribute the results to various systems and customer touch points across the enterprise. Companies can use this customer knowledge when they interact with customers to provide them with better service or to sell new products and services. CRM systems integrate and automate many customer-facing processes in sales, marketing, and customer service, providing an enterprise-wide view of customers.

These systems track all of the ways in which a many interacts with its customers and analyze these interactions to maximize customer lifetime value for the firm. CRM extends too firm's business partners who are responsible for selling to customers. The more comprehensive CRM packages contain modules for partner relationship management (PRM) and employee relationship management (ERM). PRM uses many of the same data, tools, and systems as CRM to enhance collaboration between a company and its selling partners.

If a company does not sell directly to customers but rather works through distributors or retailers, PRM helps these channels sell to customers directly. ERM software deals with employee issues that are closely related to CRM, such as setting objectives, employee performance management, performance-based compensation, and employee training. Describe the tools and capabilities of customer relationship management software for sales, marketing, and customer service. Tools for sales, customer service, and marketing.

Refer to Figure 9-9 for a diagram of the business processes that CRM software supports for sales, marketing, and service. Capabilities include the following: Sales: ; Sales force automation modules in CRM systems help sales staff increase their radioactivity by focusing sales efforts on the most profitable customers, those who are good candidates for sales and services. ; Provide sales prospect and contact information, product information, product configuration capabilities, and sales quote generation capabilities. Enable sales, marketing, and delivery departments to easily share customer and prospect information. ; Increase salespeople's efficiency in reducing the cost per sale as well as the cost of acquiring new customers and retaining old ones. ; Capabilities for sales, forecasting, territory management, and team selling. Supports direct-marketing campaigns by providing capabilities for capturing prospect and customer data, for providing product and service information, for qualifying leads for targeted marketing, and for scheduling and tracking direct-marketing mailings or e-mail.

Customer Service: ; Provide information and tools to make call centers, help desks, and customer support staff more efficient. ; Includes capabilities for assigning and managing customer service requests. ; May also include Web-based self-service capabilities. Marketing: ; Support direct-marketing campaigns by providing capabilities for capturing respects and customer data, for providing product and service information for qualifying leads for targeted marketing, and for scheduling and tracking direct- marketing mailings or e-mail. Includes tools for analyzing marketing and customer data. Identifies profitable and unprofitable customers, designs products and services to satisfy specific customer needs and interests, and identifies opportunities for cross-selling, up-selling, and bundling. Distinguish between operational and analytical CRM. Operational CRM includes customer-facing applications such as tools for sales Orca automation, call center and customer service support, and marketing automation.

Analytical CRM includes applications that analyze customer data generated by performance management. Applications are based on data warehouses that consolidate data from operational CRM systems and customer touch points. The database serves online analytical processing, data mining, and other data analysis techniques. Provides information related to customer lifetime values. 3. What are the challenges posed by enterprise applications? List and describe the challenges posed by enterprise applications. Enterprise applications are very difficult to implement successfully.

They require extensive organizational change, expensive new software investments, and careful assessment of how these systems will enhance organizational performance. Enterprise applications require both deep-seated technological changes and fundamental changes in business operations. Employees must accept new Job functions and responsibilities. They must learn new work activities and understand how data they enter into the system can affect other parts of the company. Enterprise applications introduce switching costs that make it very expensive to switch vendors.

Multiple organizations will share information and business processes. Management vision and foresight are required to take a firm- and industry-wide view of problems and to find solutions that realize strategic value from the investment. Explain how these challenges can be addressed. Enterprise applications create new interconnections among myriad business processes and data flows inside the firm (and in the case of supply chain management systems, between the firm and its external supply chain partners). Employees require training to prepare for new procedures and roles. Attention to data management is essential.