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Transcript of CRM and IT Trends
8/6/2019 CRM and IT Trends
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IT Strategies and CRM
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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.
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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?
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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!
Why should an organization consider ERP?
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Need for Organic Systems
Organizations are organic and not
static
Processes need to be continuously
refined / improved exploiting
infrastructure support
Globalization with regional flavours
Why should an organization consider ERP?
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What should an organizationget from ERP?
Significantly increased inventory turns
Capacity optimization
Improved workforce productivity/throughput
Win-Win supplier relationship
Improved competitiveness
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Why should an organization consider ERP?
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"
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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
Why should an organization consider ERP?
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What does a typical ERP
product offer?
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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
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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
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MRPMRP
PurchasePurchase
requisitionrequisitionPurchase order Purchase order
ContractContract
fixedfixedvendor vendor
EDIEDI
AUTOMATEDAUTOMATED
Goods receiptGoods receiptShippingShippingnotificationnotification
EDIEDI InvoiceInvoice
verificationverification PaymentPayment
WarehouseWarehouse
AUTOMATEDAUTOMATED
Procurement thru EDI link
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Current Business Model
Supplier
ERP
Enterprise Customer
CRM
SCM
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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
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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
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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
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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
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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
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The Fourth Day� Keeping the team leader fully informed, the
supplier pours the casting
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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!
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The Evolution of Business-to-
Business Electronic Commerce
� Internet� Corporate intranets
� Extranets
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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
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Internet, Intranet & Extranet
IntranetManagement
EmployeesProduction Centres
Other departments
ExtranetVendors/SuppliersDistri butors,
Bankers
Consultants
InternetCustomersCompetitors
General Pu blic
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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
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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
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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
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E-wedding� indiamarriages.com
� jeevansathi.com
� mybindhi.com
� shaadi.com
� weddingsutra.com
Business Today, July 7-21, 2000
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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
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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
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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
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© Dr. M J Xavier
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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.
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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.
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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.
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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.
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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.
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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.
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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.)
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Emerging Business Model
ERPn
Enterprise
ERP1
Enterprise
Suppliers Customers
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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
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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
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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).
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Value Constellation is a term coined to describe the complex web of
relationships needed to reinvent value in today's highly competitive business environment.
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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
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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.
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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.
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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.
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Virtual Cluster: THE CASE OF CAR
BUYING
VIRTUALCOMPANY
Competing Car Manufacturers and their suppliers
Competing Insurance Firms
Road Transport Office
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Jevin Eagle and Liz Lempres, From products to ecosystems: Retail 2010, The McKinsey
Quarterly, 2000 Num ber 4
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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
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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)
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Reinvent, respond,
revolutionize
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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