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Infosys – Order management | CRM & SRM Case Study | Solution
1. Order Management
Unleashing the Potential of CRM and SRM
David P Spencer & Sandeep Kumar
Putting the Issue in Perspective
It’s a story that finds an echo in hi-tech and manufacturing industries around
the world. Chances are you are experiencing the pangs of CRM¹ and SRM²
applications yourself. If your systems are not yielding desired results, an
interface may well realize the potential of these applications.
The crux of the matter lies in the character of your applications on both the
customer and supplier ends. CRM addresses customer acquisition, retention
and customer segmentation to maximize profitability. SRM streamlines
processes regarding the acquisition of products and services, inventory
management and materials processing to fulfill orders.
Invariably, these applications function as standalone systems and lack a
consolidated view of the “buy” and “sell” sides of the supply chain. When
customer and supplier applications do not collaborate and share data, gaps
surface in demand and supply.
Jan 2005
2. Let us get under the skin of the problem with the help of a real world scenario.
XYZ is an OEM of PCs. The company sells laptops, desktops, printers and related products. Customers and prospects transact
through multiple customer touch points viz., the web, phone, fax, EDI and e-mail. Similarly, the maze of interaction from the
suppliers’ side is complex and varied.
In such a situation, the company’s CRM and SRM systems must have answers from customer and supplier standpoints:
Buy side Sell side
Are my customer orders managed cost effectively across the Are my supplier choices the most optimal ones? How do
order fulfillment chain? I measure performance? How best can I use such data in
order fulfillment processes?
Who are my most profitable customers? Do I leverage this How do I address cost reduction and value engineering
data in order management strategies? with suppliers? How do I facilitate collaborative planning to
manage exceptions viz., stock-outs and inventory pile-ups?
What are my customer segmentation strategies? How does Do I use a judicious mix of suppliers and leverage their
order fulfillment capitalize on customer segmentation? allocations for split sourcing decisions?
While CRM and SRM applications address these issues strategically, the need to link the outputs to operational processes is
paramount. Order fulfillment processes hold the key to integrating these.
Corrective Action from a Business Perspective
A diagnosis of a typical IT environment in the manufacturing industry suggests a lack of supply chain integration across the
customer and suppliers. In the absence of such integration, the company cannot provide the “glass pipeline” transparency
and visibility across the supply chain.
Visibility on both the customer and supplier fronts holds the key to strategic planning and execution. On the customer
side, you need to see where the order has been placed and the order status; also, if the order is altered, how late in the order
cycle it can be executed. On the suppliers’ side, you need to manage the interaction with the vendor taking into account the
customers’ purchase decisions.
As Figure 1 illustrates, it is imperative for the Order Management cycle to have supply chain visibility and the capability to
manage exceptions and interventions through event management, alerts and notifications. Also, the systems need to account
for order promise, multi-channel integration, contract management and collaborative planning.
Demand Propagation
Enquiry Capture Validate Allocate Plan Source Make Deliver
Customer Expectations
Order Promise, Status track and trace, uniform customer experience across channels,
ability to make late changes, contract adherence, early notification on changes,
collaboration on planning
Supplier Expectations
Early visibility into planning, collaborative planning, order balancing, early
notification on changes, strategic sourcing relationships
Figure 1: Order Management needs across supply chain entities
2 | Infosys – View Point
3. In most cases, companies focus on CRM and SRM applications without paying heed to business process improvements in the
order management cycle that meet the needs of the enterprise as spelt out in Figure 1.
The Big Picture: Processes hold the Key
Infosys believes that CRM and SRM investments contribute to increased productivity and improved profitability only through
efficient order management processes.
AMR Research has corroborated this perspective in a study on channel management implementations, including CRM and
SRM. The AMR survey3 revealed that even though there is a wide range of software available for channel management, the
benefits of implementing these strategic applications have been few and elusive. However, users focused on processes such as
order and lead management have seen the best returns.
As Figure 2 illustrates, order fulfillment processes span enterprise SRM and CRM applications. Such processes depend
on CRM and SRM systems for inputs that help in taking strategic decisions regarding multi-channel order capture, order
allocation across customers and sourcing decisions across suppliers. Moreover, these processes need support for visibility,
collaboration, alerts, dashboards and event management to manage and synchronize the supply chain.
Customer Procurement
Orders Orders
Sales Product Design
Service Procurement
Enterprise
Marketing Supplier Scorecard
Processes
Billing Quality Management
Order Promise Inventory
Se ll-Side (CRM) ERP Buy-Side (SRM )
Marketing Campaigns Supplier Scorecards
Customer prioritization Collaborativ e design
Up-sell/ Cross-sell Replenishment Strategies
Loy alty/ Retention Schemes Cost Reduction Strategies
Order Fulfillment Cycle
Visibility Collaboration Alerts Dashboards
Figure 2: Order Fulfillment Processes are driven by CRM and SRM
The Infosys Way: Streamlining Order Management across the Supply Chain
Our experience suggests that a business process view provides greater leverage than an application view. If you put order
management under the scanner, there are several demands placed on processes. Some of the key issues include:
1. Providing greater planning visibility across the supply chain.
2. Offering a uniform user experience across multiple sales channels.
3. Enabling almost real-time track and trace capabilities across the order cycle.
4. Providing advanced order promise capabilities.
Infosys believes that there are several approaches to address the above issues. However, in this paper, we seek to call attention
to “Planning Visibility across the Supply Chain”. The order fulfillment cycle spans several supply chain entities. An effective
solution to foster efficiencies requires synchronizing demand and supply at every step of the chain. This can be facilitated
through collaborative tools that share data across partners.
Infosys presents a likely scenario and proposes how best to leverage the solution for enhanced business value.
Infosys – View Point | 3
4. A familiar IT experience
Let us get back to the situation of XYZ, the OEM of PCs. The company sells products through retailers such as RetailCo. XYZ
sources components and assemblies from vendors such as SupplyCo. RetailCo shares a 13-week order forecast on goods from
XYZ that the company expects to sell in the form of a demand plan. XYZ reverts with a 13-week supply plan to RetailCo. XYZ
gets the part requirements for the goods in the demand plan through a BOM explosion and communicates a 13-week order
plan on parts requirements on its buy-side to suppliers.
SupplyCo in turn makes a supply plan known to XYZ. The planning process takes place through an exchange of
spreadsheets. It is used to identify excess demand or supply positions at different planning stages. Wherever demand and
supply differ beyond certain limits, the partners enter into a discussion to balance demand and supply through postponement
or advancement strategies.
This is a typical example of order planning and fulfillment strategies practiced in most companies. Here are some of the grey
areas that result in critical gaps in the order fulfillment cycle:
1. Lack of standardization in sharing and collaborating plans.
2. Manual interventions for exceptions such as “demand and supply” imbalances.
3. No consistent workflows for working on exceptions.
4. Lack of historical data for analysis.
5. Manual allocation of customer and supplier priorities at XYZ company.
6. Inability to construct different views of planning data – by product hierarchy, location hierarchy, category and
partners.
Fulfillment, powered by Infosys
The Infosys solution envisages collaboration on the order planning process. Accordingly, XYZ company is empowered with a
collaborative planning tool that helps manage both buy-side and sell-side collaboration. The collaboration helps synchronize
demand and supply through exchange of an order forecast and a corresponding supply plan.
The solution envisaged by Infosys includes automation features to help identify exceptions on demand-supply imbalances
and provides alerts and notifications to planners on either side. The solution has detailed alert resolution processes that help
take every exception situation to closure.
The key components of the Infosys solution include:
1. Business rule-driven workflow management features to identify exceptions.
2. Alerts and notifications to indicate open and unresolved alerts for user action.
3. Alert resolution processes that are event driven and have associated workflows for managing alerts and exceptions to
closure.
4. Key performance indicator dashboard to monitor the collaboration and take remedial action if needed.
5. Historical data capture on order planning for analysis and decision support.
6. Strong user interfaces that enable multiple data presentation format.
The Infosys solution enables closer integration with supply chain partners, thereby offering early visibility in plan changes.
The technology solution integrates with SRM and CRM applications within XYZ company to help identify customer and
supplier prioritization.
Summing up
The need of the hour is to integrate CRM and SRM systems through order management. The payoff lies in their working in a
homogenous environment. Infosys believes that the following areas assume critical importance in your IT roadmap:
1. Technology solutions such as web-based collaboration tools must synchronize demand and supply on both the buy
and sell sides for organizations.
2. Automated capabilities for identification and managing exceptions and business process standardization must enable
planners on either side to focus on more efficient order fulfillment.
4 | Infosys – View Point
5. 3. With the right inputs from CRM and SRM systems, these tools must integrate processes on order fulfillment across the
chain and create significant business value through better operational efficiencies.
Companies must take an enterprise view of CRM and SRM systems. Having achieved that, the enterprise must integrate these
systems. Remember, you can maximize returns on these investments only when these systems are connected and collaborate
with each other.
About the Authors:
David P Spencer is the Associate Vice President of Infosys’ High Tech & Discrete Manufacturing business unit. David
has over 18 years of experience in designing and delivering technology-enabled business solutions to Fortune 1000
clients in Hi Tech, Manufacturing and Financial Services industries. He holds an MBA from Miami University (Oxford)
and Bachelors’ degrees in Computer Science and Business Administration from the University of Cincinnati. David can
be reached at david_spencer@infosys.com
Sandeep Kumar is a principal consultant and group leader of the manufacturing and supply chain group, Domain
Competency Group, Infosys. Sandeep has 10 years of industry and consulting experience, having partnered several
Fortune 500 customers in process re-design of the supply chain. He has an MBA from the Indian Institute Of
Management, Bangalore. Sandeep can be reached at sandeep_kumar@infosys.com
Infosys Hi-Tech and Discrete Manufacturing (HTDM) Practice
The Infosys HTDM Practice delivers business solutions to Fortune 500 clients representing all parts of the Hi-tech and
manufacturing value chain, spanning from semi-conductor manufacturers to OEMs, value-added resellers and distributors,
software products and service companies and other discrete manufacturing companies. Infosys provides services that cover
business process conceptualization, process engineering, package selection and implementation, application development,
maintenance and support, infrastructure management, product engineering and business process outsourcing. To meet
customer needs, Infosys leverages strategic alliances with our partners including IBM, Informatica, MatrixOne, Microsoft,
Oracle, Sun Microsystems, TIBCO and Yantra.
1
Customer Relationship Management (CRM) is a business strategy to select and manage the most profitable customer relationships. CRM requires a customer-centric
business philosophy and culture to support effective marketing, sales, and service processes.
2
Supplier Relationship Management (SRM) is a comprehensive approach to manage an enterprise’s interaction with organizations that supply the goods and services.
3
Excerpted from “Channel Management Software Best Practices: It’s All About Orders”, an AMR Research report, December 2002. To look up the report,
visit www.AMRresearch.com
Infosys – View Point | 5