Customer Relationship Management

Parag Amin

CRM-What is it?

• It is a broad term that covers concepts used by companies to manage their relationships with customers, including the capture, storage and analysis of customer information.

• CRM is not just a technology, but rather a holistic approach to an organisation's philosophy in dealing with its customers.

• This includes policies and processes, front-of-house customer service, employee training, marketing, systems and information management.

Why CRM?

• Every organisation needs at least one customer.• It is more profitable to retain a customer than to

acquire a new one.• Relationship marketing theory suggests that

companies change their focus from pursuing the aim of selling to the maximum number of people to concentrating on developing relationships with their existing customers.

• The main focus of CRM is the formation of relationships with customers with the intention of improving customer satisfaction and maximising profits.

Role of Technology in CRM

• With the development of technology many IT systems have been developed to assist this aim.

• They range from contact databases to campaign management software.

• All of these various systems, which can assist with improving the efficiency of CRM, have been grouped together and are now generically know as CRM software.

CRM is not just the technology….

• Often when people talk about ‘doing a CRM project’ they are simply talking about the software they are installing and how they are going to use it.

• This approach is not going to bring great improvement to the company – possibly some, but not a radical change.

• The main focus of any CRM project should be on the benefit it will produce for the customer and for the business.

• The first thing that should be looked at is what is being done now and then working out what should be done in the future to improve the way you work with your customers. Then, and only then, start looking at how it can be done and how that can be helped with an IT solution.

The approach to CRM• There are many examples of companies using

revolutionary methods to deal with their customers which have led to great success.(Ex-Budget Airlines,Telephonic banking,etc.)

• The examples above made significant changes to their industry, not by changing the core concept of what they do but in the way they dealt with their customers.

• All of these examples rely heavily on the use of their IT systems but the concept came first and the technology was put in place to support the concept.

The approach to CRM….• The first step is not to start by looking at

software packages but to look carefully at your current customer interactions and then consider whether you want to change the processes involved.

• These may be slight changes, they may be significant – you may even come up with a radical new concept for the industry you work in – but they should be carefully considered first.

• Once you have gone through this process start to look for the technology that can support what you want to achieve.

Departments benefiting from CRM

• Sales-This is the most obvious contact point a business has with its (potential) customers and is usually the first place considered for a CRM project. There are a number of ways that sales teams can be organised and the sales process managed and monitored.

• Marketing-The close link between Sales & Marketing is reflected in most sales management systems which generally provide functionality to cover marketing processes in addition to sales processes.

• Administration & Management-One key contact point that customers have with a company is its management and general administration staff, such as those in accounting. If a manager is dealing with a client or if a member of the accounts team is handling an enquiry it can reflect badly on your organisation if they don’t have the relevant facts to hand. Many of these facts are captured and available in a CRM system).

• Service-The product/service delivery team must know exactly what the customer has ordered. There are occasions where some small, but crucial, part of the customer’s requirements isn’t passed on by the sales team to the delivery team or is forgotten about somewhere along the line.

Departments benefiting from CRM

• After Sales Service-There are a range of helpdesk and service management solutions on the market place which suit a wide variety of situations from dealing with product guarantees & repairs to providing scheduled maintenance visits.

• Customer Segmentation-CRM has the ability to categorize or segment its existing customer base and prospects. This may be based on the products or services that the client purchases, demographic information for consumer clients, industry sector or company size for corporate clients and so on.

• Employee Empowerment-If you give employees access to a significant amount of information relating to your clients you have to give them the ability to act on that information, within well understood boundaries.

Aspects of CRM

• There are three aspects of CRM which can each be implemented in isolation from each other:– Operational CRM- automation or support of customer

processes that include a company’s sales or service representative

– Collaborative CRM- direct communication with customers that does not include a company’s sales or service representative (“self service”)

– Analytical CRM- analysis of customer data for a broad range of purposes

Operational CRM

• Operational CRM provides support to "front office" business processes, including sales, marketing and service.

• Each interaction with a customer is generally added to a customer's contact history, and staff can retrieve information on customers from the database as necessary.

• One of the main benefits of this contact history is that customers can interact with different people or different contact “channels” in a company over time without having to repeat the history of their interaction each time (Ex-Call Centre)

Collaborative CRM

• Collaborative CRM covers the direct interaction with customers.

• This can include a variety of channels, such as internet, email, automated phone (Automated Voice Response AVR).

• The objectives of Collaborative CRM can be broad, including cost reduction and service improvements.

Analytical CRM

• Analytical CRM analyses customer data for a variety of purposes including– design and execution of targeted marketing campaigns to

optimise marketing effectiveness – design and execution of specific customer campaigns, including

customer acquitision, cross-selling, up-selling, retention – analysis of customer behaviour to aid product and service

decision making (eg pricing, new product development, etc) – management decisions, e.g. financial forecasting and customer

profitability analysis – risk assessment and fraud detection, in particular for credit card

transactions • Analytical CRM generally makes heavy use of

Predictive analytics

Implementing CRM in practice

• It is important that any CRM implementation considers not only technology, but furthermore the broader organisational requirements.

• The objectives of a CRM strategy must consider a company’s specific situation and it’s customers needs and expectations.

Technological Considerations

• The technology requirements of a CRM strategy are very complex and far reaching. The basis building blocks include the following-– A database to store customer information. This can be a CRM

specific database or an Enterprise Data warehouse. There are many vendors in this space including IBM, ORACLE, Teradata etc.

– Operational CRM requires customer agent support software such as Siebel Systems, etc.

– Collaborative CRM requires customer interaction systems, eg an interactive website, automated phone systems etc

– Analytical CRM requires statistical analysis software such as EXCEL, SAS, etc, as well as software that manages any specific marketing campaigns such as TERADATA RELATIONSHIP OPTIMIZER, UNICA, etc

• Each of these can be implemented in a very basic manner or in a high end complex installation.

Implementing CRM

Implementing CRM

• CRM needs to be treated as a major project as it is expected to address the unique needs of an organization and require significant investment in time, money, and effective thinking.

• One must thus make a project plan for implementing CRM comprising of several steps.

Steps in the project plan for CRM

• Business analysis-The first step in your CRM project should be business analysis. Take a step back and look at the areas of your company that deal with client data (most of your company, probably). How well are you handling data right now? Are you collecting all the data you want from your customer or would you like to collect more? Is this information accessible by all those who need it? Do you ever have to reenter information as the customer moves from Sales to Billing?

• Needs analysis-As you ask yourself these and other questions, make a list of your needs. Start with the absolute essentials at the top. Examples of these needs may include collecting certain types of information, a centralized database, scalability, ability to access the system remotely, and others. An important note to remember is that this list should include all your essential needs, even the needs met by your current system.

• Product evaluation-Once you have your list of needs compiled, you can start comparing vendors and products. As you are looking at features offered by the different products, try to cross the critical needs off your list first before you look at “nice to haves.” Remember that you are doing this whole project because you want to fulfill your needs; not to simply change systems for change’s sake. When you are making your project plan, allow plenty time for this phase.

Steps in the project plan for CRM

• Product Configuration-No matter what product you choose, there will most likely be some configuration that needs to be done to make the system fit your company. Treat this as a sub-project with its own project plan that includes timelines and milestones. This customization may not be all at the software end; you may have to do some process reengineering in your company, as well. As you work through these customizations, document everything. Make a user’s manual for the software, and a process manual (with flowcharts) for the business processes.

• Pilot Implementation-Once you have customized the system to your specifications, roll it out in a small, pilot environment. Start with your Marketing users; they will use the software heavily and will be able to provide you with some quality feedback. Keep it in a small group until you have the system customized the way you want it. Once you have reached that point, roll it out to all users.

Steps in the project plan for CRM

• Full Implementation-As you roll the system out to all users, here are a couple of key points to remember. This will be a significant change for most of your users. In addition to learning a new software interface, many users will be faced with entire new business processes. As you know, some workers are far more resistive to change than others. The biggest factor here is communication. Make sure your users understand why this change is taking place; don’t simply mandate the change. Use training sessions and documentation to assist the users with the new system.

• Evaluation-As more and more companies are implementing CRM systems, there are plenty of success stories and plenty of horror stories. The companies that have had successful implementations were those that had a plan from the beginning and followed it through to the end. These are companies that knew their needs and sought to address them. Don’t let your implementation be one of the horror stories – know before you go! 

Why CRM for better Customer retention

• CRM helps you stay current on everything about the customer, especially what their needs are.

• The more you know about your buyer, the more you can personalize the purchase experience.

• A powerful CRM application will let you know who in the organization (tech support, customer service, accounting) has touched the customer and what transpired.

• If you're the sales rep, you have all of this information at your fingertips and you can solve problems before they occur.

• The result is a happy customer, someone who will continue to buy.

E-CRM

• eCRM (electronic CRM) relates to using IT for CRM purposes.

• eCRM allows companies to initiate business-to-business (B2B) CRM activities such as lead capture, campaign management, case entry, case diagnostics and case tracking via the Web.

• E-CRM is not just customer service, self-service web applications, sales force automation tools or the analysis of customers' purchasing behaviors on the internet.

• E-CRM is all of these initiatives working together to enable an organization to more effectively respond to its customers' needs and to market to them on a one-to-one basis.

Why CRM?

• Customers can be divided in 3 categories-– Defection where customers are extremely

hostile and have the lowest level of satisfaction.

– Indifference where customers are not sure. They have a medium level of satisfaction and loyalty towards the company.

– Affection described as "Apostles". CRM focuses on bringing customers from level 1 to level 3 and retaining apostle customers.

Partial List of Features

• Lead Capture

• Lead Management

• Knowledge base

• Campaign Management

• Case Management

• Contact Management

eCRM-Typical Features• Contact Management tools-Using eCRM, every

member has the ability to add, define and maintain contacts in the CRM database. Each record can be defined as either an ‘organisation’ or a ‘contact’, and the relationships between each can be documented. Inter-relationships can also be defined between organisations, such as parent companies, and between contacts, such as manager/sub-ordinate. In fact, complete organisational hierarchies can be captured using eCRM.

• Extensive Data Capture-Users of eCRM will be able to input all of the necessary information to create a complete snapshot of each organisation or contact. These details may include CRM code, status, addresses, phone numbers, relationships to other contacts or organisations, credit information and many more. This information is laid out in logical groupings, making each record simple to navigate via the standard tabs.

eCRM-Typical Features

• Search Tools-Finding an organisation or contact within eCRM is made easy by the search and filter capabilities in the system. Users can search for contacts using freeform strings in tandem with a number of filters that include names, phone numbers, email addresses, relationship type, status and more.

• Daily Summary-Each time a user logs into eCRM, they are presented with their daily summary. The daily summary sets out a user’s tasks for that day, and those that are upcoming. Users can either show or hide all the tasks within a particular category. When the expanded view is shown, users can drill down through each line to view the item in more detail.

eCRM-Typical Features

• Related Items Summary-For each contact or organisation, a user can view a list of all of the associated items that are linked to the record in question. Related items may include leads, quotes, communications, follow-ups, service requests and calls. The related items can be sorted by any column heading, and can be drilled into to retrieve the complete, original record.

• Accounts View-eCRM draws on the data contained in CRM and also the Accounts Payable and Accounts Receivable module to build a view of the customer or suppliers account status.

eCRM-Typical Features

• Customer & Supplier Self Service-eCRM also facilitates self service for your suppliers and customers. Each one can login securely, and view their account status, current invoices, payments and orders, which eases the burden on administrative staff.

• Secured Data-all existing security restrictions in place are respected when accessing the data via eCRM.

eCRM Implementing Strategies-Key Aspects

• Automated gathering, processing and sharing of all information about each customer across all functions within a company. A wholehearted approach to eCRM therefore needs a very good, integrated IT system. It is also necessary that the data on the system is kept up to date and that, in particular all contacts with customers are inputted.

• The implementation of CRM software in a way which allows all relevant staff access to the data they need to achieve the above mentioned CRM benefits.

• Encouraging customer centric behaviour, including the use of all the above data, by appropriate training and incentives and by setting and monitoring relevant targets e.g. customer retention levels.

Major Players in CRM

• Oracle• Siebel• SAP• Peoplesoft• Amdoc• Pivotal• Convergys• Vantive• Clarify

eCRM Architecture

• CRM technologies enable an organization to present a single point of contact to its customers.

• CRM is a broad term encompassing many strategies, processes and technologies all working in tandem to get as close to a customer as possible.

• Initially, CRM operated as small standalone subsets or systems.

eCRM Architecture

• A holistic approach to CRM is now essential to integrate the back office and the front office activities and provide information seamlessly across all tiers of the marketing efforts.

• The CRM architecture has 3 main components-– Operational CRM– Analytical CRM– Collaborative CRM

Components of e-CRM architecture

• Operational CRM involves the automation of business processes involving front office customer touch points.(Ex-SFA,Customer sales & service)

• Analytical CRM analyses the data created on the operational side of CRM effort for the purpose of business performance management and improvement.Prediction of customer behavior,identifying relevant customer segments,potential customers,etc are some of the activities.

• Datamining applications perform this analysis and extract relevant and useful knowledge about customers.

Components of e-CRM architecture

• Collaborative CRM facilitate interaction between customers and companies and between members of a company so as to improve communication and coordination, to increase customer retention.Voice,conferencing,e-mail,web-based and other interactive technologies are some of the examples.

Datawarehouse and CRM

• The Datawarehouse is an important component of CRM.

• Datawarehouse is the infrastructure on which data mining applications are run.

• Datawarehouses may be implemented on standard or extended relational database management system called relational OLAP.If the data is stored in multi-dimensional form,they are called MOLAP.

• Building a Datawarehouse is a long and complicated process taking considerable time,money and effort. Hence many organizations prefer to build datamarts.

• Datamarts are smaller datawarehouses which are departmental subsets focused on specific subjects.(ex- Customer,product,sales information,.etc).

Datawarehouse

DataWarehouse

Operational Database

Monitoring & Admin

Metadata repository

OLAPServers

Analysis, query and reporting tools

Datamining tools

External sources

Datamining and CRM

• Large companies generate gigabytes of daily data through their daily transactions.

• Analysing such large quantities of data requires approaches that are different from traditional approaches in discplines like statistics,AI,etc.

• This has led to the field of Knowledge Discovery in Databases (KDD) more popularly known as Data mining.

• It is a non-trivial process of identifying valid,novel,potentially useful and understandable patterns in data.

Datamining and CRM

• Datamining tools and techniques operate on large databases and extract patterns that are implicit in them.

• The knowledge that is extracted by the datamining algorithms is promarily of 2 types-– Predictive-Prediction involves finding out the future state of a

variable using its past values and the values of others. For ex. A manager of a bank may want to know whether his customer will default on a loan repayment or not.

– Descriptive-This involves finding out the properties that describe the data under consideration. For ex. A manager of a retail store may want to know how the profiles of his/her customers change with either age or their income.

Datamining Tasks

• These are operations to extract predictive and descriptive knowledge from the large databases.The main tasks are-– Classification-is a process that maps a given data item into one of the

several predefined classes.

– Regression-It is the operation of learning a function that predicts the value of a real valued dependent variable based on values of other independent variables.

– Link Analysis-It seeks to establish relationships between items or variables in a database record to expose patterns or trends.

– Segmentation-This aims to identify a finite set of naturally occurring clusters or categories to describe data.

– Deviation detection-It focuses on discovering the most significant changes in the data from previously measured, expected or normative values.

Role of Interactive Technologies in CRM

• Interactive technologies facilitate 2-way communication between the communicating parties.

• The main idea is better communication with the customer and getting a positive impact on his mind about the product/service on offer.

• Interactive technologies have become an integral part of all CRM solutions and they include web sites, kiosks, customer interaction centres, etc.

Advantages of Interactive Technologies

• Better communication-This provides detailed features of the product to the customers and enables customer to get a good idea on the product offerings.

• They offer customers a chance to voice their opinions in a proactive fashion.

• The company is able to empower the customer with sufficient knowledge about products and their care.

• On the whole, this reduces transaction time and call durations,etc there by increasing the efficiency of the call centre and allowing more time for operators to handle more calls.

Categories of CRM Applications

• Functionally, CRM applications can be categorized into 3 main segments-– Sales Applications-SFA solutions– Marketing Applications-Campaign

management (CMA)– Customer Service and Support (CSS)

applications

Criteria's to evaluate technological solutions for CRM

• Functionality supported by the package

• Catering to multiple channels of interaction (phone, mobile, internet, VOIP, Fax, etc.)

• Compatibility with existing infrastructure

• Scalability

• Integration (It is better to choose solutions that offer tight integration with each other and hence it is advisable to buy all CRM solns from one vendor).

• Choice of a framework (A product can serve as a framework,i.e.a solution around which other solutions can fit and integrate thus increasing the level of integration within and with other systems).

• Flexibility in incorporating changes and upgradability

• Experience in implementation (The vendor should have adequate experience in implementing similar solutions).

• Checking references

• Price

Sales Force Automation (SFA)

• A technique of using software to automate the business tasks of sales, including order processing, contact management, information sharing, inventory monitoring and control, order tracking, customer management, sales forecast analysis and employee performance evaluation.

• Sales Force Automation Systems (SFA), typically a part of a company’s customer relationship management system, is a system that automatically records all the stages in a sales process.

• SFA is often used interchangeably with CRM; however, CRM does not necessarily imply automation of sales tasks.

Sales Force Automation (SFA)

• SFA includes a contact management system which tracks all contact that has been made with a given customer, the purpose of the contact, and any follow up that might be required.

• This ensures that sales efforts won’t be duplicated eliminating the risk of irritating customers.

• SFA also includes a sales lead tracking system, which lists potential customers through paid phone lists, or customers of related products.

• Other elements of a SFA system can include, sales forecasting, order management and product knowledge.

• More developed SFA systems have features where customers can actually model the product to meet their required needs through online product building systems.

Strategic Advantages of SFA

• Sales staff will use their time more efficiently and more effectively and hence productivity will increase. This increased productivity can create a competitive advantage in three ways: it can reduce costs, it can increase sales revenue, and it can increase market share.

• Field sales staff will send their information more frequently. Typically information will be sent to management after every sales call (rather than once a week). This provides management with current information, information that they will be able to use while it is still valuable. Management response time will be greatly reduced. The company will become more alert and more agile.

• These systems could increase customer satisfaction.

Disadvantages of SFA

• Difficult to work with• Require additional work inputting data• Automate a process that should be personal• Require continuous maintenance, information

updating, and system upgrading• Costly• Difficult to integrate with other

management information systems

Enterprise Marketing Automation (EMA)

EMA

• Enterprise Marketing Automation is an application of CRM that improves a company’s ability to evaluate its customer’s needs and satisfy these needs through highly tailored campaigns that are targeted towards its most valuable or profitable customers.

• EMA is all about “Offering the right message, to the right individual at the right time, through the right channel and at the right price.”

• EMA uses information in a datawarehouse or marketing database to plan,manage,and assess marketing campaigns designed to impact customer behavior.

Components of an EMA Solution

• Enterprisewide data warehouse or a customer warehouse

• Business Intelligence or Customer analytics for gaining preliminary insights about the customer.

• Advanced customer analytics, which included data mining capabilities such as customer value modeling, risk analysis, market basket analysis, customer segmentation, cross-selling analysis, and customer channel analysis.

• Campaign management, which automates the customer targeting and feedback process.

SAGE CRM Architecture

Uses of CRM

• In its broadest sense, CRM covers all interaction and business with customers. A good CRM program allows a business to acquire customers, provide customer services and retain valued customers.

• Customer services can be improved by-– Providing online access to product information and technical assistance around

the clock – Identifying what customers value and devising appropriate service strategies for

each customer – Providing mechanisms for managing and scheduling follow-up sales calls – Tracking all contacts with a customer – Identifying potential problems before they occur – Providing a user-friendly mechanism for registering customer complaints – Providing a mechanism for handling problems and complaints – Providing a mechanism for correcting service deficiencies – Storing customer interests in order to target customers selectively – Providing mechanisms for managing and scheduling maintenance, repair, and

on-going support

Technical Considerations

• Scalability: the system should be highly scalable, as the volume of data stored in the system grows over time

• Communication channels : CRM can interface with a variety of different channels (phone, WAP, Internet etc.)

• Workflow - a company's business processes need to be represented by the system with the ability to track the individual stages and transfer information between steps

• Assignment - the ability to assign requests, such as service requests, to a person or group.

• Database - the means of storing customer data and histories (in a data warehouse)

• Customer privacy considerations, such as data encryption and legislation.

Evolution of Information Requirements

Bridging the Islands of Automation

CRM Process

The building blocks of CRM

Data capture & Warehouse

The Enabling Technologies

• Call Centre

• Sales Force Automation

• E-Business

The Call Centre

Call Centre• It is a centralized office used for the purpose of receiving and

transmitting a large volume of requests by telephone. • A call centre is operated by a company to administer incoming

product support or information inquiries from consumers. • Outgoing calls for telemarketing, clientele, and debt collection

are also made. In addition to a call centre, collective handling of letters, faxes, and e-mails at one location is known as a contact centre.

• A call centre is often operated through an extensive open workspace for call center agents, with work stations that include a computer for each agent, a telephone set/headset connected to a telecom switch, and one or more supervisor stations.

• It can be independently operated or networked with additional centres, often linked to a corporate computer network, including mainframes, microcomputers and LANs. Increasingly, the voice and data pathways into the centre are linked through a set of new technologies called computer telephony integration (CTI).

The 3 C’s

• Customers seek 3 key benefits from any organization with which they contact. These are-– Convenience (call at customer’s convenience)– Consistency (let people do what they say will do)– Cordiality (treatment)

• To the above, a 4th C is added….this is “Channel” i.e, the customer should be able to call through his preferred channel of communication.

Technology in Call Centre

• Call Centres use a wide variety of different technologies to allow them to manage the large volumes of work that need to be managed by the call centre.

• These technologies ensure that agents are kept as productive as possible, and that calls are queued and processed as quickly as possible, resulting in good levels of service.

Technology in Call Centre• ACW (After call work) • ACD (automatic call distribution) • Agent performance analytics • Automated surveys • BTTC (best time to call)/ Outbound

call optimization • IVR (interactive voice response) • Guided Speech IVR • CTI (computer telephony integration

) • Enterprise Campaign Management • Outbound predictive dialer• CRM (

customer relationship management) • CIM (

customer interaction management) solutions (Also known as 'Unified' solutions)

• Chat and Web Collaboration • Desktop Scripting Solutions • Outsourcing • Third Party Verification (

Third party verification) • TTS (text to speech) • WFM (workforce management) • Virtual queuing • Voice analysis • Voice recognition • Voicemail • Voice recording • VoIP • Speech Analytics • Email Management

Automatic Call Distribution (ACD)

• In telephony, an Automatic Call Distributor (ACD) is a device that distributes incoming calls to a specific group of terminals that agents use. It is often part of a computer telephony integration system.

• ACD systems are often found in offices that handle large volumes of incoming phone calls from callers who have no specific need to talk to a certain person, but want to talk to a person who is ready to serve at the earliest opportunity.

• Routing incoming calls is the task of the ACD system. The system consists of hardware for the terminals and switches, phonelines, and software for the routing strategy.

• The routing strategy is a rule based set of instructions that tells the ACD how calls are handled inside the system. Most of the time this will be a set that determines the best available employee for a certain incoming call.

• To help make this match, extra variables are taken into account, most often to find out the reason why the customer is calling. Sometimes the caller's caller ID or ANI (Automatic Number Identification) is used, more often a simple IVR is used to just ask for the reason.

• ACD servers can cost anywhere between a few thousand dollars to close to millions of dollars for a very large call center handling thousands of calls per day.

Interactive Voice Response (IVR)• In telephony, interactive voice response, or IVR, is a

computerized system that allows a person, typically a telephone caller, to select options from a voice menu and otherwise interact with the computer phone system.

• Generally the system plays a pre-recorded voice prompt and the caller presses a number on a telephone keypad to select an option - i.e. "press 1 for yes, press 2 for no".

• Some IVR systems can also recognize the caller's simple spoken answer such as "yes", "no", or a number as a valid response to the voice prompt.

• IVR systems are used to create and manage services such as telephone banking, order placement, caller identification and routing, balance inquiry, and airline ticket booking.

• IVR systems are generally used at the front end of call centers to identify which service the caller wants and to extract numeric information such as account numbers and to provide answers to simple questions such as account balances or pre-recorded information.

Computer Telephony Integration (CTI)

• Computer telephony integration (CTI) is technology that allows interactions on a telephone and a computer to be integrated or co-ordinated.

• As contact channels have expanded from voice to include email, web, and fax, the definition of CTI has expanded to include the integration of all customer contact channels (voice, email, web, fax, etc.) with computer systems.

Sales Force Automation (SFA)

• Sales Process Automation (SPA) is the approach for helping organizations dramatically improve their sales and marketing effectiveness through the reengineering and automation of their sales and marketing processes, with the ultimate goal of increasing revenues.

• SPA combines a working knowledge of the market’s best ideas, technologies, and vendors with a practical, relentless focus on implementation to deliver outstanding shareholder and customer value.

SFA-Basic Features• Intranet - as an alternative sales channel • Electronic catalog - On-line self served service ordering • Commission - Effective tracking of performances and accurate

commissioning • Opportunity Management - tools such as automated customer

data analysis and pop-up screens will assist in up-selling • Competitor Data - effective analysis of competitive data and

automated access for sales force • Contact Management - Effective tracking and follow-up of leads • Customer Data - Sales people will have a complete analysis of

the customer before their eyes when attending to a customer. No wait, no repeated questions, no frustrated customers

SFA-Basic Features

• News Service - Optional news sorting and reporting will result in informed sales people

• • Order Entry Quoting - On the spot quoting will not give the client a chance to shop around and be hunted

• • Proposal Development - Automated document creation based on corporate standards

• • Pricing - Automated on-line prices based on company rules • • Product - On-line and easily accessed • • Just-in-Time Training - Automated training, WEB based

training, and self training through information sharing • • Electronic Kiosk - WEB page shopping.

SFA Benefits

e-Business

• e-Business is all about integrating the internal and external processes between business partners and customers.

• E-Business has the following benefits- – On average, it costs about $5 - $50 per query to support via

phone – On average, it costs about $1 - $3 per query to support via

E-mail – On average, it cost less than $1 per query to support via

WWW

E-Business Architecture

• For both business-to-business and business-to-consumer sales, there are five key elements to e-Business-– Product Offer– Order Capture & validation– Payment Processing– Order Management– Order fulfillment

E-Business Architecture

View of a complete Information System for an enterprise

Application Service Provider

ASP-What is it?• An Application service provider (ASP) is a business that provides

computer-based services to customers over a network. Software offered using an ASP model is also sometimes called On-demand software.

• The most limited sense of this business is that of providing access to a particular application program (such as medical billing) using a standard protocol such as HTTP.

• The need for ASPs has evolved from the increasing costs of specialized software that have far exceeded the price range of small to medium sized businesses.

• Through ASPs, the complexities and costs of such software can be cut down.

• In addition, the issues of upgrading have been eliminated from the end-firm by placing the onus on the ASP to maintain up-to-date services, 24 x 7 technical support, physical and electronic security and in-built support for business continuity and flexible working.

ASP Business

• There are several forms of ASP business. These are:– A specialist or functional ASP delivers a single application,

such as credit card payment processing or timesheet services; – A vertical market ASP delivers a solution package for a specific

customer type, such as a dental practice; – An enterprise ASP delivers broad spectrum solutions; – A local ASP delivers small business services within a limited

area. – Some analysts identify a volume ASP as a fifth type. This is

basically a specialist ASP that offers a low cost packaged solution via their own Web site. PayPal was an instance of this type, and their volume was one way to lower the unit cost of each transaction.

– In addition to these types, some large multi-line companies (such as IBM), use ASP concepts as a particular business model that supports some specific customers.

The ASP Model

• The application software resides on the vendor's system and is accessed by users through a web browser using HTML or by special purpose client software provided by the vendor.

• Custom client software can also interface to these systems through XML APIs.

• These APIs can also be used where integration with in-house systems is required.

Common Features associated with ASP

• ASP fully owns and operates the software application(s)

• ASP owns, operates and maintains the servers that support the software

• ASP makes information available to customers via the Internet or a "thin client"

• ASP bills on a "per-use" basis or on a monthly/annual fee

Advantages of ASP Model• Software integration issues are eliminated from the client site • Software costs for the application are spread over a number of

clients • Vendors can build more application experience than the in-house

staff • Key software systems are kept up to date, available, and managed

for performance by experts • Improve the reliability, availability, scalability and security of internal

IT systems • A provider's service level agreement guarantees a certain level of

service • Access product and technology experts dedicated to available

products • Reduce internal IT costs to a predictable monthly fee. • Redeploy IT staff and tools to focus on strategic technology projects

that impact the enterprise's bottom line

Disadvantages of ASP Model

• The client must generally accept the application as provided since ASPs can only afford a customized solution for the largest clients

• The client may rely on the provider to provide a critical business function, thus limiting their control of that function and instead relying on the provider

• Changes in the ASP market may result in changes in the type or level of service available to clients

• Integration with the client's non-ASP systems may be problematic

Case Study-Innovative Models

• Amazon - Amazon (which opened its doors in July, 1995) houses a database of millions of products that anyone can browse at any time. It would have been impossible to compile a list this large in any medium other than the Web.

• Ebay - Online auctions make it easy and inexpensive for millions of people to buy and sell any imaginable item. It would be impossible to do this at a reasonable cost or in a timely manner with any medium other than the Web.

• Epinions - Thousands of people contribute to a shared library of product reviews. One of the Web's greatest strengths is its worldwide view and collaborative possibilities.

Examples of ASP• A Web hosting company - Companies like Verio and WebHosting.com

provide a classic ASP scenario -- virtual Web hosting. These companies provide hardware, software, bandwidth and people to host Web sites for companies and individuals. Typically, they charge something like $15 to $30 per month for the service, and may host hundreds of accounts on a single machine.

• An e-mail provider - A Web hosting company usually provides some sort of e-mail service with your Web hosting account. There are two other alternatives: – Free services such as Hotmail or Yahoo! Mail – E-mail server ASPs who run exchange servers, POP servers or IMAP4

servers and distribute them on a monthly-fee basis - For example, a company in the Raleigh area called Interpath offers a complete e-mail solution at a rate of $8 per month per account (as of 4/10/2000).

• The advantage of the second approach is that the e-mail address uses your company's domain name.

• A fax providerEfax provides a free fax service that delivers faxes to your e-mail box. This is a classic example of a free ASP.

Traditional ASP’s• The "traditional" ASP sells a large, expensive application to large

enterprises, but also provides a pay-as-you-go model for smaller clients. A typical example might be ad-serving software or auction software for a Web site. For example:

– Engage offers ad-management software for Web sites. The software can be purchased on a yearly license costing tens of thousands of dollars per year. In addition, the software requires an Oracle database for the software to use. If the Oracle database is already installed and running in-house, then that is no problem, but if not it is a significant hurdle. The alternative is to let Engage manage the software as an ASP and pay Engage a CPM (cost per thousand) price for the service. Unless you are serving millions of ad impressions per month, the ASP model makes tremendous economic sense.

– DoubleClick (along with many similarly positioned companies) is essentially an ASP that offers advertising software plus an advertising sales force. What is so interesting about this ASP approach is that the ASP actually pays the customer!

– OpenSite is a leading supplier for auction software. You can purchase its software and operate it with a database, or access the software using an ASP model.

• Nearly any piece of expensive software, including giant applications like SAP, PeopleSoft and Oracle, now comes in an ASP version to allow these companies to reach smaller customers affordably.