SUMMER TRAINING REPORT SUBMITTED TOWARDS THE PARTIAL

FULFILLMENT OF POST GRADUATE DEGREE

A Study of Customer Relationship Management

In
HONDA

SUBMITTED BY:
Rishabh Singh
MBA (2009-2011)
Roll No. : 309386

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 ACKNOWLEDGEMENT

I express my sincere gratitude to my industry guide Mr. Nitin Kumar, (Asst. Manager–
After sales) HONDA Siel cars India Limited, for his able guidance, continuous support
and cooperation throughout my project, without which the present work would not have
been possible.

I would also like to thank the entire team of After Sales, for the constant support and help
in the successful completion of my project.

Signature
(Student)

CONTENTS

2
 Executive Summary 4
Company Profile 5
Objective 5

Pre-assignment 6
Post- assignment 7
Segregation of work 7
Methodology Used 8

Data Analysis 9
Statistics 10
Commencement. 10
Literary Review 12
Key Industry Pain Points 12
J.D. Sales satisfaction Index. 14
Honda Business Excellence Model. 16
CRM At Honda 29
Implementation of CRM. 30
Elements of CRM. 31
Loyalty Programs. 37
Honda Club. 37
Critical Analysis 38
Suggestions 41

Bibliography 42

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Executive Summary

This project has been a great learning experience for me, at the same time it gave me
enough scope to implement my analytical ability.

The first part gives an insight about the DMS System of HONDA and its Customer
Relationship Management with its customers as well as with its dealers. It is purely based
on whatever I learned at Honda Motors. One can have a brief knowledge about Customer
Relationship Management and all its basics through the project. Other than that the real
servings come when one moves ahead. Some of the most interesting questions regarding
these products have been covered. Some of them are:

• Why has it become one of the largest Automobile Company?

• How company deals with its abundant customer ?

Most popular Automobile company in India and in the whole world as shown its
remarkable presence throughout.

All the topics have been covered in a very systematic way. The language has been kept
simple so that even a layman could understand.

All the quarries of the customer asked by them had been solved with the support of the
seniors in the organization. The problems of the customer were being recorded for the
purpose of the research and development.

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COMPANY PROFILE

Honda Siel Cars India Ltd., (HSCI) was incorporated in December 1995 as a joint
venture between Honda Motor Co. Ltd., Japan and Siel Limited, a Siddharth Shriram
Group company, with a commitment to providing Honda’s latest passenger car models
and technologies, to the Indian customers. The total investment made by the company in
India till date is Rs 1620 crores in Greater Noida plant and Rs 784 crores in Tapukara
plant.

HSCI’s first state-of-the-art manufacturing unit was set up at Greater Noida, U.P in 1997.
The green-field project is spread across 150 acres of land (over 6,00,000 sq. m.). The
annual capacity of this facility is 100,000 units. The company’s second manufacturing
facility is in Tapukara, Rajasthan. This facility is spread over 600 acres and will have an
initial production capacity of 60,000 units per annum, with an investment of about Rs
1,000 crore. The first phase of this facility was inaugurated in September 2008.

The company’s product range includes Honda Jazz, Honda City, Honda Civic and Honda
Accord which are produced at the Greater Noida facility with an indigenization level of
77%, 76%, 74% and 28% respectively. The CR-V is imported from Japan as Completely
Built Units. Honda’s models are strongly associated with advanced design and
technology, apart from its established qualities of durability, reliability and fuel-
efficiency.

PROJECT OBJECTIVE

To devise a methodology to segregate, analyze and update the related data base into
usable form so that it can be used for fruitful promotional and better Customer
Relationship Management.

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Pre-Assignment

As joined I was given a data sheet of excel in which all the customer contacts of BAS
Ring Road Honda were given. Its was around 45000+, in which I was asked to see thru
the data and as according to the priority segregate the data in usable form so that the
faulty data could be corrected as used in better purpose and in usable form.

The data was as follows:

1. I was assigned a data in excel which comprises of all details about the customer of
one of the dealer of Honda . The details were likely sought out to be:

• Log No.

• Frame No.

• Telephone No.

• Fax

• Email ID

• Address

• Purchase Date

• Zip Code and many more……..

As asked to look forward for the sales promotion and Customer relationship
Management, I was assigned some key fields like:

• Log No.

• Telephone No.

• Email ID

• Zip Code

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 • Frame No.

As data was huge, it comprises of 45676 customer data, hence I with the guide line of my
mentor Mr. Nitin Kumar and Mr. Manish Mishra tried to visualize the key
problem areas of the data which are hampering in the Sales Promotion and in the
Interrupting Contact or relationship with the Company or the Dealer.

With regards to this I started sorting out my data according to the priority as assigned.

With the help of toolkit of Excel I sorted out the faulty, wrong or redundant data and
highlighted them with and additional color mark so that it becomes easier for others to
understand the areas of fault in the data. It took time but was a success.

Example:

1. In Telephone no.

• Entry many were not input in data sheet.

• Many mobile no. were less than or more than 10 digits.

• Contact Name was given in place of Contact No.

• In place of contact no. Extension codes were given.

2. In Zip Code

• Unauthentic zip codes

• In place of numeric alphanumeric or place name was given

• Zip code less than or more than 6 digits

3. Emails

• No email id was given.

• Wrong id’s were allocated and many more…,,

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Hence like these infruitable, maldata has to be jourded down on system for further
correction in the Database Management System of the dealer which will enhance the
productivity , promotion and good customer – company relation.

Post-Assignment

After doing this database analysis on system I was asked to visit the dealer who was
concerned with this database i.e.., Ring Road Honda.

As we reached, we had a meeting with the officials of Service, Sales and Customer
Relationship Managers. The neediness of the job was very clear when I spoke to them
and got to understand the importance, that its time to update the data in their database so
that they can easily access to their customer and the company can kick starts their
promotional techniques.

As we started , I was made comfortable with the team comprises of 11 members which
include 8 calling persons 2 CR Managers and 1 IT professional.

Segregation of work:-

As mentioned the team was headed by 2 CR managers Mrs.Anuradha and Ms. Chetana.
As I told them the task which has to be performed, after a brief discussion we came upon
a conclusion that the customer before 2007 which be dealt by the team headed by Ms.
Chetana and customer enrolled after 2007 will be dealt by the team headed by Mrs.
Anuradha .

Methodology Used:-

The team followed the most basic and effective measure of fulfillment of data by
personal calling, through which we can achieve maximum of our data which has to be
updated.

Second method which they followed was sending letter of concern to their entire
customer from the database whose data are to be required mentioning a heart full
gratitude to be a part of Honda and also making a request of notifying the dealer if any
change has occurred in their contact details.

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Another method which I suggested that when any car comes to their dealership for
service they can provide the customer with customer feed-back form in which customer
can spare out few minutes and fill the details in the form as applicable.

ILLUSTRATIONS:

As joined the task was to analyze the data and sort out the data on the key notes on which
a good Customer relationship stands. More or less as we go through the data, the task
came out much more clear and understandable that what has to be performed and how in
HONDA

1. Achieve the data and look through the loops in the data which are the matter of
concern for a good communication between dealer with its customer and also between
companies.

2. Segregate the data as according to the priority mentioned above and mark all the
inappropiations as accordingly.

3. Look for the loop holes which are hindering the communication process between
dealer-customer and also company-customer.

4. Analyze the data base as accordingly as needed on the selected and worthy
allocations which are asked to be the key aspects of good communication by the dealer
towards its customer.

5. Dealer also needs a track record for its data about its customers hence dealer too
needed to be same interested and their customer.

ORIENTATION (I):

As started I looked up the as a company and analyse that if I were the company or dealer
which all attributes I’ll be needing for a good communication process between my
company and the costumer and then analyse.

DATA ANALYSIS:

As analysed according to the asked attributes the inappropriate data resultant as shown :

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Wrong Frame No. - 3380

Wrong/Incomplete Registration No. - 6994

No E-mail id - 45388

Owner Zip code - 24518

Owner Tel. No. - 3832

User Zip Code - 24351

User Tel. no. - 5607

STATISTICS:

The above shown statistical structure shows the amount of inappropriate, faulty or
missing data in the database which was analyzed by me about RING ROAD HONDA, a
renounced dealer of Honda on New Delhi and the next step was to step up and make sure
the dealer should update its data in his DMS for better Customer Relationship
Management between him and its customer because better the communication process
better the intended Customer Loyalty and better will be the business.

As analysed the dealer with such a data , his capability has been reduced a lot and on
statistical term is working only with its 50% ability to manage the dealership. If the data
is upgraded and properly allocated its can achieve its core competency by 85% which
means the dealer can increase its profit by 35% by the same task force and working
scenario.

ORIENTATION (II):

As the working on the system of Honda Motors is been through , I was asked to move
down to the dealership to make them understand the neediness of the job of the updation

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of the Database in their Database Management System so that they can use it for better
Customer Relationship and sore their profit by a huge margin because “ Better you’ll be
in touch with your customer better will be the business, because as said by a business
entrepreneur that 80% of the business is given by your 20% customer which are
categorized as Loyal Customer.”

COMMENCEMENT:

As asked , after analyzing the data I moved to the dealership and was made
comfortable before I can explain the importance of the job of updation of the data in their
database system.

With few mark-up we had a meeting with the top level management of the dealership
which include

• Head of Service

• Customer Relationship Manager

• HR Head and

• Coordinator assigned by Honda in the dealership.

In the meeting the major points which were to be discussed were:

• Updation of their database in their Database Management System.

• Why updation is important?

• Importance of that updation task?

• Briefing..!!

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As asked I moved to the dealership and had a meeting with all officials regarding the
issue of data updation as its important for all dealers to have a flawless data of their
customer.

After having a meeting I moved to the dealership internal area where I was supported by
staff of 11 which include 8 calling staff, 2 CRM Manager and 1 IT professional.

After knowing to the staff, as asked I had a personal meeting with the entire staff member
who were assisting me. We had a conversation and clarified all the doubts regarding
work.

With my stipulated due course of time I regularly visited the dealership and tried to find
out their working process and attributes. As the work was segregated among the two
managers according to their seniority, the task of updating was quiet bifurcated.

The Ring Road Honda dealership as said is a huge seller of Honda cars in Delhi and
surrounding regions but the main flaw in their system is that they are not online
connected with their DMS to the company directly which ultimately leads to
misconception and inappropriate flow of information between Customer-Dealer-
Company.

During my visit to the dealership I stated with the employees and tried to visualize the
way of working and their database system and updation process.

Honda Motors has taken a phased approach to the implementation, with the goal
of achieving success in each phase before moving forward.

Phase 1:

Focus on capturing customer and vehicle data and automating routine tasks.

Phase 2:

Focus on leveraging data to improve customer interactions and streamline product

development and planning.

Phase 3:

Focus on tuning the system and delivering additional value-added services to customers.

Result:-

As by the time and as informed the dealer has updated around 2000 data in his DMS,
which is a tremendous work.

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LITERATURE REVIEW

The Market Situation

Helped by economic reforms over the past decade, the Indian economy has expanded
rapidly and seen dramatic increases in competition. In the automotive sector, all of the
largest players worldwide—such as General Motors, Ford, Toyota, TATA, and Mercedes
Benz—are competing for a share of the market consisting of more than 950 million
consumers. This competition, along with the cyclical nature of demand in India’s
automotive industry, has made it more difficult to grow revenue and sustain margins.

Key Industry Pain Points

Decreasing sales and market share

The long-term battle for market share continues to intensify. In the mature
automotive industry, where business cycles drive sales fluctuations, market share is

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critical to survival. Consumers are less brand-loyal than in the past, and every market
segment has an increasing number of vehicle choices. To increase sales and gain ground
in the market share battle, companies must improve their ability both to acquire first-time
customers and to develop customer loyalty to their current brands. To achieve these
related objectives, companies must set an aggressive goal-deliver the best customer
experience in the automotive industry.

Difficult dealer relationships and a lack of dealer collaboration

As the consumer's primary touch point; the dealer network is a critical component
of customer-facing operations. Therefore, the integration of the dealer network is
absolutely essential to improving the quality of the customer experience. Only with an
infrastructure that enables the effective flow of information to and from dealers can
companies create a complete view of their customers. Car companies must take the
initiative in understanding the customer’s perspective throughout the buying cycle.

Lack of Multichannel capabilities

With the advent of the Internet as a research tool, the majority of customers are
accessing the automotive enterprises through several different channels. Many times, the
switch between channels happens very rapidly as a prospect or customer can view a Web
site, make a phone inquiry, and visit a retail store within days or even hours of an initial
contact. To improve customer satisfaction and secure customer lifetime value, companies
must be able to capture these multiple interactions, provide seamless management
between channels, and leverage shared customer information to create rewarding
experiences and to develop and execute highly targeted marketing campaigns.

Inefficient demand chain planning and high associated IT cost

Cost reduction is an ongoing competitive requirement. Just as supply chain management

must be supported by a sophisticated information infrastructure, effective demand chain
management also requires the right supporting infrastructure, enabling car companies to
fully leverage each customer relationship through exceptional customer service, efficient
lead generation and management, and effective promotions and campaigns. In addition,
global automotive enterprises operate a wide variety of IT systems in their various
business units and functional groups. Rationalizing these systems offers significant cost
savings.

Lack of effective information sharing

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Car companies must integrate global operations in order to achieve the benefits of
consolidation - cost reduction, effective communication, and true integration of core
competencies. In addition, internal alignment between business units and functional
groups is required to create a unified view of consumers, products, and services.
Currently, each business unit, functional group, and brand operates through independent
systems, programs, and touch points. As a result, there is limited synergy across the
ecosystem, leading to significant inefficiencies, lack of coordination, and most important,
an inability to maximize "share of wallet "from every customer through well-targeted
marketing and cross-selling. Synergy between traditionally independent business units
such as captive finance companies and between functional groups such as sales, service,
and marketing is more critical now than ever before. Only by sharing customer
information can customer lifetime value be maximized among different groups.

Complex data governance requirements

Global automotive enterprises have large, complex information technology ecosystems.

While customer information must be shared within this ecosystem in order to fully
maximize global operations, it must also be protected. Proper management of customer
information requires a sophisticated capability to manage a variety of access rules and to
accommodate legal restrictions that can change very quickly. The trust required for
successful collaboration between groups in the automotive enterprise must be built by
demonstrating that customer information can be shared while observing these complex
requirements.

Difficulty managing employee relationships

In today's fast-paced business environment, automotive companies need to ensure that

their most valuable asset -their employees have immediate access to the critical
information, services, and applications required to be productive. Organizations must
enable employees to make better decisions, work collaboratively, enhance customer
relationships, and maximize productive time. Global automotive enterprises must be able
to enact and enforce consistent policies across business units, instil a common corporate
culture across a geographically dispersed and diverse workforce, equip employees with
effective search tools to access corporate knowledge bases, and provide employees with
the training necessary to service customers in a volatile and demanding market.

JD Sales Satisfaction Index

The J.D. Power SSI Study is a consumer-driven measure of customer satisfaction

with the vehicle sales and delivery process. According to the study, there are six major
factors impacting satisfaction with the dealership at the time of purchase. They are Sales

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Experience, Explanation at Delivery, Price Evaluation,
Delivery Timing, Salesperson Knowledge and Post-
Delivery Contact.

For 2003 For

2005

JD Power survey which reflected upon the

customer satisfaction levels in automobile industry for
2003 and 2005. This gave us an insight so as to which
aspects were given importance by the customers.

It was seen that Honda Motors has consistently

been ranked quite low in terms of its performance in
this field leading to its share.

The 7 factors here actually were made up of 42

individual factors, which gave a complete insight into
the mind of the customer. Thus having identified the
important parameters which affect customer
satisfaction, HONDA Motors identified the following
challenges that it faced to provide better service and be
more customer centric.

Business Challenges:

• Needed a centralized customer database and

standardized business processes

• Needed to communicate better with more than

1,600 dealer locations and respond promptly to
customer requests

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• Required better feedback on product quality and more effective measurement of
campaigns and programs

To satisfy these it launched its CRM initiative to become more customers centric and
improve its service so that it could retain its customer.

HONDA BUSINESS EXCELLENCE MODEL

Business excellence has been embedded in the Honda Group through a holistic
methodology that enables companies to heed the call of quality. Honda Motors have
adopted the Honda Business Excellence Model (HBEM) to achieve well-defined levels of
business excellence.

HBEM is a framework defining the quality movement in the Honda Group. It has been
adapted in the early 1990’s from the renowned Malcolm Baldrige archetype. The Model
works under the aegis of Honda Quality Management Services (HQMS), an in-house
organization mandated to help different Honda companies achieve their business
objectives through specific processes.

The HBEM methodology has been molded to deliver strategic direction and drive
business improvement. It contains elements that enable us to capture the best of global
business processes and practices. It translates into an ability to evolve and stay in step
with ever-changing business performance parameters.

The Goals of HBEM

• Delivery of ever-improving value to customers, resulting in marketplace success.

• Improvement of overall organizational effectiveness and capabilities.

• Organizational & Personal Learning

HBEM Core Values and Concepts

HBEM FRAMEWORK: A SYSTEMS PERSPECTIVE

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18
BUSINESS EXCELLENCE MODEL : KEY ELEMENTS

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STRATEGIC LEADERSHIP

Leadership Role

• Set direction

• Organize and allocate resources

• Review to achieve plans

• Develop Employees

• Innovate and improve

Leadership System

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SELF EVALUATION MATRIX

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22
Strategic Planning-Through Balanced Scorecard Development and
Deployment

BSC –Four Perspectives

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CVBU –BSC Implementation Structure

Figure : CVBU –BSC Implementation Structure

BSC Assessment

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Figure : BSC Assessment Char

Market Development Process

Figure : Market Development Process

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Listen and learn

Figure : Listen and learn

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Customer Relationships

Figure : Relationship Management & Sales Process Improvement

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Figure : Customer Satisfaction Improvement Process

HR Focus

• Attract the GOOD

• Advance the BETTER

• Retain the BEST

HR Vision and Mission

Enhance and maintain Human Capital, which will make the Organisation a
world class player and further the interests of all stakeholders

• Source, develop and maintain Human Capital, which will drive the
culture of customer focus, high performance and seamlessness.

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• Create, learn and implement best in class HR practices and processes
in pursuit of excellence.

• Retain and attract the talent by improving the brand through employee
delight and loyalty.

• Improve Community friendliness.

Work Structures

• Concept of Factories and Centers of Excellence (CX)

• Cross-Functional Teams

• Self-Directed Teams

Employee Development

• Focused Leadership Development through

o Fast track schemes

o Development Centres

o Technical Specialist Scheme

o Talent Management Scheme

• Focused Employee Training aligned with Business Needs

• Evaluation of Training Effectiveness

Employee Welfare

• Policy on Safety, Health, Security & Ergonomics

o Business Risk Management

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o Employee Welfare Services

o Employee Satisfaction Surveys

Manage Processes

Enterprise Process Model

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Figure : Value Chain & Value System

CRM at HONDA MOTORS

Faced with increasing competition from abroad, a cyclical business

environment, and the challenge of a widely dispersed dealer network, Honda
Motors, a comprehensive customer relationship management (CRM) solution
designed specifically for companies in the automotive industry.

Seamlessly integrated with Honda Motors’ dealer management system and

SAP back-office applications, has delivered significant benefits across the
extended organization, including improved customer satisfaction, increased
revenue and productivity, and reduced costs.

To address its competitive challenges, Honda Motors began standardizing its

customer-facing business processes companywide,

• Laying the foundation for stronger dealer relationships,

• Improved operational efficiency and effectiveness,

• A better customer experience.

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This has posed numerous challenges, as it involves working with 250 dealer
organizations and more than 1,600 locations staffed by more than 10,000
salespeople across India. In conjunction with its reengineering effort, Honda
has deployed a robust technology platform to improve the flow of information
across the enterprise.

• The platform consists of an innovative Dealer Management System,

which helps individual dealerships with everything from inventory
management and credit reporting to calculating commissions, and

• Honda Motors, a comprehensive Customer Relationship Management

(CRM) solution designed specifically for companies in the automotive
industry.

By tightly integrating with its dealer management system, Honda has

streamlined transactions and ensured that dealers capture customer data as
a part of their normal operations. The solution provides a 360-degree view of
customers to the extended organization, with appropriate visibility controls to
ensure that one dealer is not privy to information from another. To further
enlist dealer support, Honda Motors involved dealers throughout the solution,
configuration and deployment process. Integrating with their dealer
management system ensured that dealers would immediately see the value
in the solution. This has helped the company overcome the usual resistance
to change and gain rapid acceptance from dealers.

Implementation of CRM

Honda Motors has taken a phased approach to the implementation, with the goal of
achieving success in each phase before moving forward.

Phase 1: Focus on capturing customer and vehicle data and automating routine tasks.

Phase 2: Focus on leveraging data to improve customer interactions and streamline

product development and planning.

Phase 3: Focus on tuning the system and delivering additional value-added services to
customers.

Siebel Automotive has been closely integrated with a wide array of SAP back office
applications.

Functionalities of the Solution

• Inventory management and parts location

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• Pricing and tax calculations adjusted for each dealer’s requirements.

• Comprehensive sales and reporting functionality built into Siebel Automotive

enables Honda to distribute sales targets to its dealers & roll up sales numbers across the
country.

• real-time data flow between the Siebel front end and SAP back end

• Provides multi organization support

• Can be deployed easily over the Internet

• Provides robust partner management capabilities

ELEMENTS OF CRM

CRM Vision

Honda Motors has more than 15,000 Honda Motors dealer personnel in over 1,000 dealer
locations. Its endeavor is to get closer to its customers by obtaining a 360–degree view of
the customer and design better offerings based on customer demands and feedback. The
objectives of the CRM program are:

• Improve its management effectiveness

• To meet increasing competition from global players

Overcome the difficulties of a widely dispersed dealer network of the way to apologize
for the error.

Simultaneously they provide technician who visit their home place in order to attend the
issues and rectify them to satisfaction level. Follow up calls are made to ensure that how
efficiently their problems were resolved.

Customer Valued Experience

The automotive industry is highly competitive world over. The customer in this industry
is pampered by various kinds of vehicular designs and value propositions like mileage,
comfort, style, brand name etc. Apart from the mentioned attributes of the product, what
customers would value is the after sales service. i.e., how the company listens to them
after sale of the vehicle. In short, customers want their vehicle to be taken care of by the
company post sale.

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Customer segmentation for Honda Motors

The automobile industry is divided into two main segments- the commercial and utility
vehicle segment and the passenger car segment. Honda Motors is the only Indian
automobile company which has a large presence in both the commercial vehicle and the
passenger car segment.

Commercial vehicles In the commercial vehicle space Honda Motors is the market leader
with a market share of 60%. It ranks amongst the top 2 global automakers in terms of the
global sales of commercial vehicles. This shows the importance of this customer segment
in the overall scheme for HONDA motors

In the commercial vehicles segment the company has done a need based segmentation of
the customers. The customers are segmented based on tonnage of vehicles required as
well as the specific use of the vehicles. The company serves the customers with medium
and heavy vehicles, light vehicles, small vehicles and busses. Honda Motors also supplies
specially designed vehicles to the armed forces. On basis of specific use the company
segments the customers based on types of vehicles like rigid trucks, tractor trailers and
tippers.

Passenger Vehicles Honda motors is also a very important player in the passenger vehicle
segment of the automobile sector. The company entered the passenger vehicle segment in
late 1990s and enjoys around 16 % share in this segment.

In the passenger vehicle segment the main customer segmentation is based on the price of
the cars. Indian customers are highly discerning, educated and well informed. They are
price sensitive and put a lot of emphasis on value for money. Vehicles priced between Rs.
12,00,000 – 18,00,000 form the largest segment in the passenger car market.

The data about the sales of the cars in various segments is shown in the adjoining graph.

Honda motors also segments the customers based on the

type of vehicles they buy. Even in the passenger car
segment there are some big customers. Honda is very
popular among

elite section because of its good fuel efficiency and

performance blend. The SUVs from Honda are also very

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popular with call centres to ferry their employees as they are very spacious and
comfortable.

HONDA MOTORS – HR and Organization for CRM

Executive Selection Scheme (ESS)

Honda Motors has always strived towards excellence both in its efforts towards total
integration as well as in recognising its talented employees. The Company is constantly
creating prestigious programmes to reward and retain its outstanding employees. The
Executive Selection Scheme is one such programme, which is highly sought after by
Honda Motors employees. It is a matter of pride and prestige to be a part of the ESS
selection process and emerge a winner.

ESS is a fast track programme for accelerated growth of high potential professionals.
This facilitates their early advancement to challenging and visible assignments through a
very systematic procedure.

The selection involves a 3 stage process:

* Written Test

* Power Interview

* Assessment Centre

Short-listed candidates are required to go through an interview with the executive

directors.

Candidates selected gain a huge lead in terms of promotion and learning. They are
promoted to Manager's level thereby saving almost 10 to 13 years of work time. The
successful candidates are relieved from their current jobs and put on various project
based training programmes under the guidance of senior managers in the Company. If the
candidates do not possess management education, they undergo a 4 months MEP at IIM,
Ahmedabad.

After successful completion of training the candidates are mandatorily rotated across
departments to acquire general management skills.

The ESS is a jewel in Honda Motors overall profile as it provides a platform for every
employee of the Company to perform and achieve maximum potential.

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Implementation of IT and Technological Solutions at HONDA MOTORS

The highly respected Honda Motors Ltd. has a strong tradition of entrepreneurship. The
com¬pany’s business strategy calls for reaching beyond the borders of India to enter new
markets for its Accord, the innovative luxury sedan for the upper class.

One of the major drivers of success at Honda Motors Ltd. is its ability to fully exploit
infor¬mation technology to drive business goals. The company was an early adopter of
CAD and CAM systems to speed the design of the sedans. The company also uses Siebel
Systems to manage its vast customer relationship network and SAP® for all critical
business services, such as logistics, supplier relations management, customer relationship
management, human resources (HR), and finance.

IT is an integral part of every busi¬ness process from design to delivery and the power of
IT has been extensively leveraged for the sedan project. The design processes used more
digital content than ever before. State-of-the-art CAD and CAM services integrated
design across multiple disciplines, making it possible for our designers to harness and
benefit from their inherent ability to innovate. IT helped the company shrink the design
cycle time.

BSM tools from BMC Software played a key role in tracking and controlling all
components of IT services and automating the management of the IT infrastructure which
is vital to the design and planning for manufacture of the Civic as well as running day-to-
day business processes.

EXCELLENCE IN OUTSOURCING

Following its strategy of outsourcing noncore activities, TML has outsourced its IT
applications to HONDA Technologies Ltd. and its IT infrastructure to IBM.® The
outsourcing decision has proven to be a wise one. Honda Motors reaped significant
benefits through the outsourcing initiatives. TML was recognized in 2007 and conferred
the “SAP Ace” award for its SRM & Warehouse Management implementations. It also
received the “Uptime Championship Award” at the CIO 100 event in the same year.

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Initially, the outsourcing approach posed several challenges. Technology silos were
performing adequately. However, a flexible service-oriented management framework was
required to link the silos and provide a comprehensive a view of the IT landscape
underlying a given business process.

To make this framework a reality, HMSI decided to adopt IT service management

concepts outlined in the ISO 20000:05 international standards, as well as best practices
outlined in the IT Infrastructure Library® (ITIL®) Version 3. In addition, the company
decided to establish a service-oriented management architecture that treated IT services
as assets and managed them on a lifecycle basis.

PUTTING BMC SOLUTIONS TO WORK

BMC has provided visibility into the entirety of services components across business
process chains. It has also integrated the various IT service management disciplines into a
single, unified solution.

HSCI started with the out-of-the-box capabilities of the BMC Remedy IT Service
Management Suite to establish a baseline of the IT application and infrastructure
landscape across all technol¬ogy pillars. The company used the applications’ embedded
ITIL-compatible controls —without modification — to define roles, responsibilities, and
authorities required in the support groups.

HSCI realized immediate benefits from the transition to the BMC applications, which
served as the software framework for managing the interactions and process relationships
among all the support groups managing the IT infrastructure underlying business
services. A service-oriented organizational structure was designed and configured in the
BMC Remedy applications.

A major innovation in the configuration is the use of logical architectural definitions for
the support group infrastructure. Logical role names for technical support staff login
allowed uniformity of definitions across the entire support community regardless of
whether the employee is internal to HSCI or outsourced.

The naming convention encompasses competency levels that enable the incident
coordinator to assign tickets based on complexity. This feature has real value in a
multisite support group where names by themselves mean very little. Service managers
can now plan staffing on the basis of competencies and have a transparent view of
support staff effort and load across locations.

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A SINGLE POINT OF CONTACT FOR IT SERVICES

HSCI used BMC Remedy Service Desk and the end-user console to establish an
outsourced IT service desk that is the single point of contact between the IT user
community and the IT ser¬vice providers. This new service desk consolidated more than
25 different help desks across the country, making it simple and straightforward for users
to get assistance and report problems. This also helps to project a single unified face of IT
to the customers although multiple IT service providers are involved in the complete
services to the customer.

An innovative, segregation-of-duties approach ensures that the vendor providing a

particular ser¬vice is not also responsible for tracking and reporting on that service. This
was done by creating a special group within the IT service desk for ensuring satisfactory
closure of tickets An innovative, segregation-of-duties approach ensures that the vendor
providing a particular ser¬vice is not also responsible for tracking and reporting on that
service. This was done by creating a special group within the IT service desk for ensuring
satisfactory closure of tickets and moni¬toring status of paused tickets. HSCI is required
to be SOX compliant. Statutory requirements for ensuring segregation of responsibilities
were met by allocating responsibilities for recording, classification, and routing by one
vendor, and closing verification, customer satisfaction assurance, and performance
reporting by another.

CLIMBING THE IT SERVICE MANAGEMENT MATURITY LADDER

BMC solutions have helped HSCI make significant progress toward reaching the top of
the IT service management maturity ladder. The applications, which paid for themselves
within the first year, are delivering quantifiable benefits to HSCI.

The applications have brought greater efficiency to the IT environment, enabling the staff
to dra¬matically reduce the number of trouble calls. For example, calls related to
desktops are down 40 percent, calls from supplier relationship management are down 80
percent, and server support calls are down eight percent.

Most importantly, by keeping critical systems available and operating at peak

performance, the company reduced the development cycle for the sedan compared with

38
earlier platforms enabling the company to get this exciting new offering to market faster
and at a lower cost

LOYALTY PROGRAMS

CITY Circle

Honda Motors Privileges Program – CITY Circle

At Honda Motors, it is Endeavour to spoil you with superior quality of vehicles and
value-added services. With this in mind, Honda Motors have made an effort to enhance
your experience with your Indigo beyond the road. The benefits of becoming a member
of the CITY Circle range from getting special offers and discount coupons, interacting
with the Indigo community on a regular basis and being part of a group where you can
share your views, experiences and more.

Honda Motors offers you more than just a car. HONDA Motors offer you an experience
that will spoil you for more. Accessories for your car, world-class workshops with state-
of-the-art equipment and high-priority service by extremely qualified engineers are just
steps towards giving you a complete ownership experience. HONDA Motors provide you
with a lot of value-added services and timely information on what needs to be done to
keep your car in the best condition and looking new.

We also reward our customers with points made on purchases with the Empower Card - a
card that gives you several exclusive benefits from Honda Group companies and select
partners. Other privileges available to our customers include receiving information about
the latest happenings, service alerts, and special events. Our customers also have a chance
to get exclusive benefits such as loyalty, exchange and referral bonuses.

At Honda Motors, services and products are delivered courteously, quickly, efficiently
and to your satisfaction. Honda Motors hope you have a great experience with us. Honda
Motors promise to do our best to satisfy your needs to the best of our abilities.

Honda Club

Honda Motors offers you more than just a car. Honda Motors offer you an experience
that will change the way you look at your car. Accessories for your car, world-class
workshops with state of- the-art equipment, and high-priority service by extremely
qualified engineers are just steps towards giving you a complete ownership experience.

39
Honda Motors provide you with a lot of value-added services and timely information of
what needs to be done to keep your car in the best condition and looking new.

We also reward our customers with points made on purchases with the Empower card - a
card that gives you several exclusive benefits from Honda Group companies and select
partners. Other privileges available to our customers include receiving information about
the latest happenings, service alerts, and special events. Our customers also have a chance
to get special benefits such as loyalty, exchange and referral bonuses.

At Honda Motors, the best of services and products are delivered courteously, quickly,
efficiently, and to your satisfaction. Honda Motors hope you have a great experience with
us. Honda Motors promises to do our best to satisfy your needs to the best of our abilities.

Accessories and Service Coupons

Apart from the various accessories and service packages you will also receive several
offers and discounts on accessories and services. An offer coupon booklet is enclosed
along with this booklet.

Privileged Offers

We also run attractive retail offers for our car owners from time to time, in addition to
retail schemes applicable to others. These may include loyalty or exchange bonus on
additional purchase of Honda cars, or referral bonus if you convince a friend to purchase
your favorite car.

We look forward to a relationship that gets stronger with time. Honda Motors constantly
endeavor to change the ownership experience of every Honda owner and your
suggestions and feedback would not just encourage us, but also help us improve our
service standards in times to come. We’re sure you’ll enjoy the experience of owning and
driving one of the finest cars on the road, the CITY. Happy driving!

CRITICAL ANALYSIS

Benefits Obtained

•Integrating Siebel Automotive with dealer management system ensured that the dealers
would immediately see the value in the solution. This has helped overcome the usual
resistance to change and gain rapid acceptance from dealers.

40
•Further, the user-friendly interface has simplified the process of training Honda Motors’
10,000-plus dealer sales force.

•Honda Motors links its 1,600 customer touch points with its centralized data centre in
Mumbai using a combination of VSATs and high-speed virtual private networks.

•Siebel Automotive has transformed the organization and made it truly customer centric.

•The organization has overcome the challenges of relying on disparate sources of

information, as well as having inconsistent business processes.

•Employees and dealers are much more responsive and can serve customers more
efficiently and effectively—drawing upon real-time, centralized customer and vehicle
data.

•Convenience to dealers as they can view their entire stock of vehicles and see how
inventory was ageing, thus improving control.

•Siebel Automotive has also helped dealers respond to customer queries regarding
vehicles that aren’t in a dealer’s stock, but which can be ordered directly from Honda
Motors.

WHAT SALES & CUSTOMER SATISFACTION INDEX SAY

As per the Sales Satisfaction Index (2009) and Customer Satisfaction Index (2008),
Honda Motor ranks among top. This proves that they have utilized the CRM approach
and application of technology is sufficient because there is an actual understanding of
what customer values most. As still on the dimensions mostly preferred by the customers
Honda motors rose high.

41
For 2008-

For 2009-

SUGGESTIONS

Focus on the non-customers

42
Services such as pick and drop, on-road service, should be provided at Honda service
station, which are common in other companies.

43
 BIBLIOGRAPHY

Honda Journals.

Business Review.

India Today.

Books and Magazines.

News Papers

Times Of India.

Economic Times.

The Business Standards.

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Internet

Google.com

Scribd.com

Managementparadise.com

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