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ERP and CRM Like ERP, CRM solutions focus on automating and improving business processes, albeit in front-office areas such as marketing, sales, customer service, and customer support. Whereas ERP implementation can result in improved organizational efficiency, CRM aims to provide organizational effectiveness by reducing sales cycle and selling cost, identifying markets and channels for expansion, and improving customer value, satisfaction, profitability, and retention. While CRM applications provide the framework for embodying, promoting and executing best practices in customer facing activities, ERP provides the backbone, resources and operational applications to make organizations more efficient in achieving these goals. Technological Tools for CRM Tools Customer databaseA good customer information system should consist of a regular flow of information, systematiccollection of information that is properly evaluated and compared against different points in time,and it has sufficient depth to understand the customer and accurately anticipate their behavioralpatterns in future. The customer database helps the company to plan, implement, and monitorcustomer contact. Customer relationships are increasingly sustained by information systems.
Companies are increasingly adding data from a variety of sources to their databases. Customerdata strategy should focus on processes to manage customer acquisition, retention, anddevelopment.CallCenter helps in automating the operations of inbound and outbound calls generated betweencompany and its customer. These solutions integrate the voice switch of automated telephonesystems (e.g. EPABX) with an agent host software allowing for automating call routing to agents,auto display of relevant customer data, predictive dialing, self service Interactive Voice Responsesystems, etc. These systems are useful in high volume segments like banking, telecom andhospitality. Today, more innovative channels of interacting with customers are emerging as aresult of new technology, such as global telephone based calls centers and the Internet. Companiesare now focusing to offer solutions that leverage the Internet in building comprehensive CRMsystems allowing them to handle customer interactions in all forms. Systems IntegrationWhile CRM solutions are front office automation solutions, ERP is back office automationsolution. An ERP helps in automating business functions of production, finance, inventory, orderfulfillment and human resource giving an integrated view of business, where as CRM automatesthe relationship with customer covering contact and opportunity management, marketing andproduct knowledge, sales force management, sales forecasting, customer order processing andfulfillment, delivery, installation, pre-sale and post-sale services and complaint handling byproviding an integrated view of the customer.It is necessary that the two systems integrate with each other and complement information as wellas business workflow. Therefore, CRM and ERP are complementary. This integration of CRMwith ERP helps companies to provide faster customer service through an enabled network, whichcan direct all customer queries and issues through appropriate channels to the right place forspeedy resolution. This will help the company in tracking and correcting the product problemsreported by customers by feeding this information into the R&D operations via ERP.
Fig 7: CRM – A FRAMEWORKTraditional Approach to CRM Web-Enabled & Integration Approach Customer Contact by Customer Information Telephone System Integration Mail Customer Database with In Person technology Electronic Point of Sale Personal Selling Sales Force Automation After Sales Service (Web & Internet) Automation of Customer Complaint Handling Support Account Management Call Centers Customer care Systems Integration Customer Satisfaction Lifetime value of a Customer Data Mining for CRM: Some Relevant issues Data mining is an important enabler for CRM. Advances in data storage and processing technologies have made it possible today to store very large amounts of data in what are called data warehouses and then use data mining tools to extract relevant information. Data mining helps in the process of understanding a customer by providing the necessary information and facilitates informed decision-making. Operational CRM solutions involve integration of business processes involving customer touch points. Collaborative CRM involves the facilitation of collaborative services (such as e-mail) to facilitate interactions between customer and employees. All this effort produces rich data that feeds the Analytical CRM technologies. Operational CRM Analytical CRM Collaborative CRM
Customer Fig.8 Interactions between CRM TechnologiesInformation Requirements Of An Effective CRM SolutionThe employees of a firm employing CRM would require rich information about their firm andcustomer base including: Information about the market Information about the firm The current segment Demographic Distribution (by age, sex, education, income, marital status, etc) The firm‟s best customers and the segment they belong to, products they buy, preferences, habits and tastes of each segment. Individual level information consisting of: Customer personal details such as name, address, family details, education, etc The customer group /segment to which the individual belongs History of present and past behavior Likes, dislikes, habits and preferences Events coming up in their personal life etc.
The existing CRM SolutionsDelivering the „360 view‟ requires automation to bring together all the data concerning acustomer. This implies the organisation has to change from:Mass Marketing Product FocusProduct Focus Customer FocusEconomies of Scale Economies of timeOne way communication InteractiveResponse Time Real TimePresent CRM AlternativesPresent CRM solutions are offered by host of vendors that are to a great extent not industryspecific. While there are some vendors, who have come up with industry specific solutions, thebroad model around which the CRM solutions are built remain the same. Adopting a similar or alook a like solution across industries is what causes major strain in servicing a customer.Typical offerings of the current CRM solutions (such as Siebel, Oracle Apps or MySap.com, etc)vary from solution to solution. However typical CRM offerings consist of:Customer Development Field sales, Tele sales, Internet SalesService Centre Call Centres, Field ServiceSale management and support Internet Customer ServiceMarket Analysis Service Interaction CentreInternet, Tele marketing Business Partner CollaborationProduct and brand management
eCRMWhat is eCRM?In simplest terms eCRM provides companies with means to conduct interactive, personalizedand relevant communications with customer across both electronic and traditional channels. Itutilizes a complete view of the customer to make decisions about messaging, offers and channeldelivery. It synchronises communication across otherwise disjoint-customer facing systems. Itadheres to permission-based practices, respecting individual‟s preferences regarding how andwhether they wish to communicate with you and it focuses on understanding how the economicsof customer relationship affect the business.eCRMVs CRMCRM is essentially a business strategy for acquiring and maintaining the “right” customers overthe long term. Within this framework, a number of channels exist for interacting with customers.One of these channels is “electronic” – and has been labeled “e-commerce” or “e-business”. Thiselectronic channel does not replace the sales force, the call Centre, or even the fax. It is simplyanother extension, albeit a powerful new one, to the customer. The thrust of eCRM is not whatthe organisation is “doing on the web” but how fully the organisation ties its on-line channelback to its traditional channels, or customer touch points.Why employ eCRM?Companies need to take firm initiatives on the eCRM frontier to Optimize the value of interactive relationship Enable the business to extend its personalized reach Company-ordinate marketing activities across all customer channels. Leverage customer information for more effective emarketing and ebusiness
Focus the business on improving customer relationship and earning a greater share of each customer‟s business through consistent measurement, assessment and “actionable” customer strategies.The six “E’s” of eCRM1. Electronic channels2. Enterprise3. Empowerment4. Economics5. Evaluation6. External InformationeCRM ArchitectureThe primary inputs to this module are mainly from the eCRM Assessment and strategyalignment modules. During this stage the company will try and develop a Connected EnterpriseArchitecture (CEA) within the context of the company‟s own CRM strategy. The following is aset of technical eCRM capabilities and applications that collectively and ideally comprise a fulleCRM solution: Customer Analytical Software Data mining software Campaign Management software Business Simulation A real time decision engine
Categories of CRM solutionsAny enterprise, which wants to implement CRM solutions can choose from four categories ofsolutions Integrated applications suite Interfaced applications bundle Interfaced best of breed solutions Best of clusterSelecting an interfaced best of breed approach for pure functionality or a front office applicationsuite solely for integration limits enterprise choices. Enterprises need to start with a clear pictureof the basic truths of integration, interfacing and functionality. An integrated application suite isa set of application that employs a common architecture, referencing a common logical databasewith a single schema. Some suites are more often interfaced application bundle i.e. a set ofinterfaced application from a single vendor containing more than one technical architecture ormore than one logical database- frequently assembled by the vendor through the process ofacquisition or partnership
An alternative approach to suites is an interfaced best of breed solution – an approach wherebyan enterprise selects from multiple vendors a set of applications that must be interfaced to worktogether, either by the enterprise, one of the selected vendors or a third party integrator. Theindividual applications are not the best in any objective sense. Rather, some enterprises select theapplications because they best meet the particular needs. The challenge of this approach is that,in some cases, the enterprise fails to complete the necessary interfaces to get the individualapplications working together; consequently, the applications remain stovepipes. Best of clusteris similar to best of breed except that here best is chosen from the cluster and they are interfaced.Key requirements for CRM solutionsSome of the functional and technical requirements for CRM solutions are as listed below: Business intelligence and analytical capabilities Unified channels of customer interactions Support for web based functionality Centralized repository for customer information Integrated work flow Integration with ERP applicationsFunctional Components of CRM solutionCRM applications are a convergence of functional components, advanced technologies andchannels. Functional components and channels are described below:Sales applications
Common applications include calendar and scheduling, contact and account management;compensation; opportunity and pipeline management; sales forecasting; proposal generation andmanagement; pricing; territory assignment and management; and expense reporting.Marketing applicationsThese include web based and traditional marketing campaign planning, execution, and analysis;list generation and management; budgeting and forecasting; collateral generation and marketingmaterials management.Customer service and support applications.These include customer care; incident, defect and order tracking; field service; problem andsolution database; repair scheduling and dispatching; service agreements and contracts; andservice request management. Organising for CRMAssessing NeedHow do you know your business requires CRM?It is very easy for a business to get caught in the latest „customer trap‟ when it is being driven bythe information technology (IT) market. Every business does require CRM; the question is towhat level?TrendsMany businesses are pushed by the current trend to change their business strategy, especiallyaround CRM. There are basically three trends that effect a business:Consumer
The customer is an ever-changing image, to be really successful with CRM you must recognizethe customer trends that are effecting the business.If a business does not understand a customer profile and the changes that have occurred then it isnot possible to provide true customer relationship management.ProductsIt is the business providing the products that meet the changing customer trends. Products needto be reviewed constantly perhaps enhanced or even removed. Supermarkets are a perfect profileto look at for viewing „product trends‟, they constantly add and remove products and theyconstantly view customer buying profiles and set out the pattern of the store to meet the strongestbuying trend. This may not always be by using the latest „technology‟, it could be by justreviewing shells at the end of the day, but the super market is at the minimum watching for thetwo basic trends in CRM.TechnologyEnsure that the business is ready to install the new technologies, is the customer data upto it, or isit time to start again? Do you need to review every technology being used or just one area. Will itassist the business, is it going to grow with the business requirements or is the technology justanother „trend‟? Relationship management should not be an alternative to existingfunctions/technology; it could be a logical extension to enhance those in existence, though itcould radically change some of the operational processes.Does CRM really matter?Whatever the business activity is all companies have to ask themselves is CRM the real factor fortheir company to succeed. Some customers do not need long-term relationship with theirsuppliers; therefore only minimal information is required from that customer. That however isstill a form of CRM. Other companies have high quality and high value customers that they needto know information about, they need to provide exceptional service, the „pedigree‟ of CRM.
Whatever the business is, if it has customer it has to ask, does customer relationship managementmatter? What does it man to them in business terms? At what cost? What is the overall loss if notadhered to?CRM: Yes it does really matter – the strategy needs to last, be constantly reviewed and canevolve over time.