Beruflich Dokumente
Kultur Dokumente
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Chapter 22
E-BUSINESS: MODELS AND SOFTWARE
Chapter topic list
1 2 3 4 5 E-Business models E-Business Software: SCM E-Business Software: ERP E-Business Software: SFA E-Business Software: CRM Syllabus reference 1.1 1.3 1.3 1.3 1.3
Introduction
In this chapter we will deal with e-business model B2C, B2B, B2F, C2C, G2C and e-business software SCM, ERP, SFA, CRM
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(a) Negotiation Selling to another business involves haggling over prices, delivery and product specifications. Not so with most consumer sales. That makes it easier for retailers to put a catalog online, and it's why the first B2B applications were for buying finished goods or commodities that are simple to describe and price. (b) Integration Retailers don't have to integrate with their customers' systems. Companies selling to other businesses, however, need to make sure they can communicate without human intervention.
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Managing inventory more efficiently Adjusting more quickly to customer demand Getting products to market faster Cutting the cost of paperwork Reigning in rogue purchases Obtaining lower prices on some supplies
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and providing research on customer demand or industry forecasts for components and raw materials.
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1.8
B2E is business-to-employee, an approach in which the focus of business is the employee, rather than the consumer (as it is in business-toconsumer, or B2C) or other businesses (as it is in business-to-business, or B2B). The B2E approach grew out of the ongoing shortage of information technology (IT) workers. In a broad sense, B2E encompasses everything that businesses do to attract and retain well-qualified staff in a competitive market, such as aggressive recruiting tactics, benefits, education opportunities, flexible hours, bonuses, and employee empowerment strategies. More specifically, the term "B2E" is frequently used to refer to the B2E portal (sometimes called a people portal, which is a customized home page or desktop for everyone within an organization.
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1.10 The B2E portal is sometimes considered to be synonymous with an intranet, but it differs in its focus on the employee's desires. The intranet's focus is the organization; the B2E portal focus is the individual. The B2E portal is designed to include not only everything that an employee might hope to find on an intranet (such as a corporate directory, or customer support information), but also any personal information and links that the employee might want (such as stocks information, or even games). The intention is to increase not only efficiency, but also employee satisfaction and a sense of community within the organization. 1.11 A B2E portal has three distinguishing characteristics:
A single point of entry: one URL for everyone within an organization. A mixture of components. organization-specific and employee-defined
The potential to be highly customized and easily altered to suit the particular employee.
What is E-governance?
1.12 Use by government agencies of information technologies to improve and transform relations with citizens, businesses, and other arms of Government.
Electronic Service Delivery (G2C) Delivering information and services electronically to citizens and businesses
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Government to Business Transactions (G2B) Delivering information and transacting electronically with businesses. Government procurement and infrastructure projects. Internal Government Administration (G2G, G2E) Improving and inter-department interactions within government, Consumer-to-consumer; describes transactions in which a consumer sells a service or product directly to another consumer.
1.15 C2C stand for Consumer to consumer Business website. This site basically is an auction site where customers can sell and purchase there used or new products through open bidding under the standard rules and regulations of payment and delivery offered by the HOST. 1.16 Customer who want to avail this facility have to register itself with the Auction Sever Host where all related information is stored to keep future correspondence in case of fraud and abuse. All registered users are issued with a login and password. 1.17 Profile tracking of the customers is the basic and key feature of the auction website. 1.18 Any registered customer if want to sell can add a category and its product details in the catalog of the products open for sale. Customer has to give a reserve price and the product can be scheduled to be on the net for auction for a specified period of time like week or month. At the and of the scheduled period product is sold for the highest bid offered at that time. 1.19 Price is received through the HOST server which deducts its per product sale depending on the nature of the relationship customer have with the Host. 1.20 In the similar fashion products can be purchased, but for purchasing a product you are not required to be a registered member.
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processes for managing the inventory of goods and services you receive from suppliers, including receiving shipments, verifying them, transferring them to your manufacturing facilities and authorizing supplier payments. (c) Make. This is the manufacturing step. Schedule the activities necessary for production, testing, packaging and preparation for delivery. As the most metric-intensive portion of the supply chain, measure quality levels, production output and worker productivity. (d) Deliver. This is the part that many insiders refer to as "logistics." Coordinate the receipt of orders from customers, develop a network of warehouses, pick carriers to get products to customers and set up an invoicing system to receive payments. (e) Return. The problem part of the supply chain. Create a network for receiving defective and excess products back from customers and supporting customers who have problems with delivered products.
2.4
What is ERP?
3.1 ERP is the backbone of E-business. In other words, ERP is a business operating system, the equivalent of the Windows operating system for back-office operations. Enterprise resource planning (ERP) is a cross-functional enterprise system that serves as a framework to integrate and automate many of the business processes that must be accomplished within the manufacturing, logistics, distribution, accounting, finance, and human resources functions of a business. ERP software is a family of software module that supports the business activities involved in these vital back-office processes. For example, ERP software for a manufacturing company will typically track
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the status of sales, inventory, shipping, and invoicing, as well as forecast raw material and human resource requirements. Figure 3.1 illustrates the major application components of an ERP system. 3.2 Many companies began installing ERP systems as a vital conceptual foundation for reengineering their business processes, and as the software engine required to accomplish these new cross-functional processes. Now ERP is being recognized as a necessary ingredient for the efficiency, agility, and responsiveness to customers and suppliers that an E-business enterprise needs to succeed in the dynamic world of Ecommerce, Companies are finding major business value in installing ERP software in two major ways:
ERP creates as framework for integrating and improving their back-office systems that results in major improvements in customer service, production, and distribution efficiency. ERP provides vital cross-functional information quickly on business performance to managers to significantly improve their ability to make better business decisions across the enterprise
The new product development process in a manufacturing company. This business process must be supported by cross-functional information system that cross the boundaries of several business functions.
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Figure 3.1 illustrates some of the cross-functional business processes and supplier and customer information flows supported by ERP systems. As we will see several times in this text, installing ERP systems successfully is not an easy task because of the major changes to a companys business processes required by ERP software. Now lets look at how a global corporation views the business value of RP systems. 3.3 Enterprise resource planning software, or ERP, doesn't live up to its acronym. Forget about planning-it doesn't do much of that-and forget about resource, a throwaway term. But remember the enterprise part. This is ERP's true ambition. It attempts to integrate all departments and functions across a company onto a single computer system that can serve all those different departments' particular needs. That is a tall order, building a single software program that serves the needs of people in finance as well as it does the people in human resources and in the warehouse. Each of those departments typically has its own computer system optimized for the particular ways that the department does its work. But ERP combines them all together into a single, integrated software program that runs off a single database so that
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the various departments can more easily share information and communicate with each other. That integrated approach can have a tremendous payback if companies install the software correctly. 3.5 Take a customer order, for example. Typically, when a customer places an order, that order begins a mostly paper-based journey from in-basket to in-basket around the company, often being keyed and rekeyed into different departments' computer systems along the way. All that lounging around in in-baskets causes delays and lost orders, and all the keying into different computer systems invites errors. Meanwhile, no one in the company truly knows what the status of the order is at any given point because there is no way for the finance department, for example, to get into the warehouse's computer system to see whether the item has been shipped. "You'll have to call the warehouse" is the familiar refrain heard by frustrated customers. ERP vanquishes the old standalone computer systems in finance, HR, manufacturing and the warehouse, and replaces them with a single unified software program divided into software modules that roughly approximate the old standalone systems. Finance, manufacturing and the warehouse all still get their own software, except now the software is linked together so that someone in finance can look into the warehouse software to see if an order has been shipped. Most vendors' ERP software is flexible enough that you can install some modules without buying the whole package. Many companies, for example, will just install an ERP finance or HR module and leave the rest of the functions for another day.
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3.10 Let's go back to those inboxes for a minute. That process may not have been efficient, but it was simple. Finance did its job, the warehouse did its job, and if anything went wrong outside of the department's walls, it was somebody else's problem. Not anymore. With ERP, the customer service representatives are no longer just typists entering someone's name into a computer and hitting the return key. The ERP screen makes them businesspeople. It flickers with the customer's credit rating from the finance department and the product inventory levels from the warehouse. Will the customer pay on time? Will we be able to ship the order on time? These are decisions that customer service representatives have never had to make before, and the answers affect the customer and every other department in the company. But it's not just the customer service representatives who have to wake up. People in the warehouse who used to keep inventory in their heads or on scraps of paper now need to put that information online. If they don't, customer service reps will see low inventory levels on their screens and tell customers that their requested item is not in stock. Accountability, responsibility and communication have never been tested like this before. 3.11 People don't like to change, and ERP asks them to change how they do their jobs. That is why the value of ERP is so hard to pin down. The software is less important than the changes companies make in the ways they do business. If you use ERP to improve the ways your people take orders, manufacture goods, ship them and bill for them, you will see value from the software. If you simply install the software without changing the ways people do their jobs, you may not see any value at allindeed, the new software could slow you down by simply replacing the old software that everyone knew with new software that no one does.
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Reduce inventory
3.17 ERP helps the manufacturing process flow more smoothly, and it improves visibility of the order fulfillment process inside the company. That can lead to reduced inventories of the stuff used to make products (work-inprogress inventory), and it can help users better plan deliveries to customers, reducing the finished good inventory at the warehouses and shipping docks. To really improve the flow of your supply chain, you need supply chain software, but ERP helps too.
Standardize HR information
3.18 Especially in companies with multiple business units, HR may not have a unified, simple method for tracking employees' time and communicating with them about benefits and services. ERP can fix that. In the race to fix these problems, companies often lose sight of the fact that ERP packages are nothing more than generic representations of the ways a typical company does business. While most packages are exhaustively comprehensive, each industry has its quirks that make it unique. Most ERP systems were designed to be used by discrete manufacturing companies (that make physical things that can be counted), which immediately left all the process manufacturers (oil, chemical and utility companies that measure their products by flow rather than individual
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units) out in the cold. Each of these industries has struggled with the different ERP vendors to modify core ERP programs to their needs.
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When will I get payback from ERPand how much will it be?
3.22 Don't expect to revolutionize your business with ERP. It is a navel-gazing exercise that focuses on optimizing the way things are done internally rather than with customers, suppliers or partners. Yet the navel gazing has a pretty good payback if you're willing to wait for ita Meta Group study of 63 companies found that it took eight months after the new system was in (31 months total) to see any benefits. But the median annual savings from the new ERP system were $1.6 million.
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(c) Customization Add-ons are only the beginning of the integration costs of ERP. Much more costly, and something to be avoided if at all possible, is actual customization of the core ERP software itself. This happens when the ERP software can't handle one of your business processes and you decide to mess with the software to make it do what you want. You're playing with fire. The customizations can affect every module of the ERP system because they are all so tightly linked together. Upgrading the ERP packageno walk in the park under the best of circumstancesbecomes a nightmare because you'll have to do the customization all over again in the new version. Maybe it will work, maybe it won't. No matter what, the vendor will not be there to support you. You will have to hire extra staffers to do the customization work, and keep them on for good to maintain it. (d) Data conversion It costs money to move corporate information, such as customer and supplier records, product design data and the like, from old systems to new ERP homes. Although few CIOs will admit it, most data in most legacy systems is of little use. Companies often deny their data is dirty until they actually have to move it to the new client/server setups that popular ERP packages require. Consequently, those companies are more likely to underestimate the cost of the move. But even clean data may demand some overhaul to match process modifications necessitatedor inspiredby the ERP implementation. (e) Data analysis Often, the data from the ERP system must be combined with data from external systems for analysis purposes. Users with heavy analysis needs should include the cost of a data warehouse in the ERP budgetand they should expect to do quite a bit of work to make it run smoothly. Users are in a pickle here: Refreshing all the ERP data every day in a big corporate data warehouse is difficult, and ERP systems do a poor job of indicating which information has changed from day to day, making selective warehouse updates tough. One expensive solution is custom programming. The upshot is that the wise will check all their data analysis needs before signing off on the budget. (f) Consultants ad infinitum When users fail to plan for disengagement, consulting fees run wild. To avoid this, companies should identify objectives for which its consulting partners must aim when training internal staff. Include metrics in the consultants' contract; for example, a specific number of the user company's staff should be able to pass a projectmanagement leadership testsimilar to what Big Five consultants have to pass to lead an ERP engagement. (g) Replacing your best and brightest It is accepted wisdom that ERP success depends on staffing the project with the best and brightest from the business and IS divisions. The software is too complex and the business changes too dramatic to trust the project to just anyone. The bad news is a company must be prepared to replace many of those people when the project is over.
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Though the ERP market is not as hot as it once was, consultancies and other companies that have lost their best people will be hounding yours with higher salaries and bonus offers than you can affordor that your HR policies permit. Huddle with HR early on to develop a retention bonus program and create new salary strata for ERP veterans. If you let them go, you'll wind up hiring themor someone like themback as consultants for twice what you paid them in salaries. (h) Implementation teams can never stop Most companies intend to treat their ERP implementation as they would any other software project. Once the software is installed, they figure the team will be scuttled and everyone will go back to his or her day job. But after ERP, you can't go home again. The implementers are too valuable. Because they have worked intimately with ERP, they know more about the sales process than the salespeople and more about the manufacturing process than the manufacturing people. Companies can't afford to send their project people back into the business because there's so much to do after the ERP software is installed. Just writing reports to pull information out of the new ERP system will keep the project team busy for a year at least. And it is in analysisand, one hopes, insightthat companies make their money back on an ERP implementation. Unfortunately, few IS departments plan for the frenzy of post-ERP installation activity, and fewer still build it into their budgets when they start their ERP projects. Many are forced to beg for more money and staff immediately after the go-live date, long before the ERP project has demonstrated any benefit. (i) Waiting for ROI One of the most misleading legacies of traditional software project management is that the company expects to gain value from the application as soon as it is installed, while the project team expects a break and maybe a pat on the back. Neither expectation applies to ERP. Most of the systems don't reveal their value until after companies have had them running for some time and can concentrate on making improvements in the business processes that are affected by the system. And the project team is not going to be rewarded until their efforts pay off. (j) Post-ERP depression ERP systems often wreak cause havoc in the companies that install them. In a recent Deloitte Consulting survey of 64 Fortune 500 companies, one in four admitted that they suffered a drop in performance when their ERP system went live. The true percentage is undoubtedly much higher. The most common reason for the performance problems is that everything looks and works differently from the way it did before. When people can't do their jobs in the familiar way and haven't yet mastered the new way, they panic, and the business goes into spasms.
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warehouse. To get the most from the software, you have to get people inside your company to adopt the work methods outlined in the software. If the people in the different departments that will use ERP don't agree that the work methods embedded in the software are better than the ones they currently use, they will resist using the software or will want IT to change the software to match the ways they currently do things. This is where ERP projects break down. Political fights break out over howor even whetherthe software will be installed. IT gets bogged down in long, expensive customization efforts to modify the ERP software to fit with powerful business barons' wishes. Customizations make the software more unstable and harder to maintain when it finally does come to life. The horror stories you hear in the press about ERP can usually be traced to the changes the company made in the core ERP software to fit its own work methods. Because ERP covers so much of what a business does, a failure in the software can bring a company to a halt, literally. 3.25 But IT can fix the bugs pretty quickly in most cases, and besides, few big companies can avoid customizing ERP in some fashionevery business is different and is bound to have unique work methods that a vendor cannot account for when developing its software. The mistake companies make is assuming that changing people's habits will be easier than customizing the software. It's not. Getting people inside your company to use the software to improve the ways they do their jobs is by far the harder challenge. If your company is resistant to change, then your ERP project is more likely to fail.
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4.2
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Figure 4.1 4.3 Increasingly, computers and networks are [providing the basis for sales force automation. in many companies, the sales force is being outfitted with notebook computers, Web browsers, and sales contact management software that connect them to marketing websites on the Internet, extracts, ad their company internets. This not only increases the personal productivity of sales personal, but dramatically speeds up the computer and analysis of sales data from the field to marketing managers at company headquarters. In return, it allows marketing and sales management to improve the delivery of information and the support they provide to their sales people. Therefore, many companies are viewing sales force automation as a way to gain a strategic advantage in sales productivity and marketing responsiveness. For example, salespeople use their PCs to record sales data as they make their calls on customers and prospects during the day. Then each right,
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sales reps in the field ca connect their computers by modern and telephone links to the Internet and extranets, which can access intranet or other network servers at their company. Then, they can upload information on sales orders, sales calls and other sales statistics, as well as send electronic mail messages and access website sales support information. In return, the network servers may download product availability data, prospect lists of information on good sales prospects, ad E-mail messages.
Introduction
5.1 You have heard the constant drum beat of being customer focused and how critical it is to implement a CRM initiative in your organization. Industry research indicates that as many as 74% of CRM projects fail to meet their objectives (The Standish Group). Why do these projects fail? In our experience we have found that the main reasons for a CRM initiative to fail are: (a) Inability to develop the project definition and boundaries. (b) Sluggish start, never gets out of the blocks. (c) No consensus regarding the solution, each department has its own agenda. (d) No sense of ownership for the solution because the people who are impacted by the solution are not consulted and are not given a chance to express their needs. (e) No realized value because the project objectives are not clearly defined and hence are not measurable. This paper explains how to plan for a successful CRM initiative by identifying the common mistakes companies make and providing suggestions for improvement. The paper provides a step-by-step approach to planning a CRM implementation. It is a result of planning for over 150 successful CRM initiatives that Breakaway Solutions has implemented for its clients. Many companies make the mistake of choosing a CRM package first and then try to map their business processes to fit the package. While it is true that implementing a packaged solution does require you to work within the boundaries of the application, doing your planning and due diligence before choosing a package will eliminate most of the problems encountered during typical failed CRM implantations.
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5.3
Projection team
5.4 In many instances functional groups within the organization begin a CRM initiative in the hopes of solving a particular set of problems or limitations. The process usually breaks down when the time comes for getting buy-in from other groups who have not been given an opportunity to express their needs. A CRM initiative should not be viewed as a point or departmental solution but rather as a company wide initiative that touches all aspects of the company either directly or indirectly. For a CRM
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initiative to succeed it must have executive sponsorship at the highest level with a clear vision of the initiative. To this end it is critical to set up the appropriate project team consisting of the following resources:
Project manager
5.5 The project manager is the central point of contact for the CRM initiative. The manager should be given the responsibility for the overall success of the project and more importantly the appropriate authority to make hard decisions. It is not necessary that the manager be from within the IT department of a company, in fact, in most cases it is preferable that the Project Manager be from a business or functional unit outside of IT. A CRM initiative should not be viewed as solving a technology problem but rather a process of aligning your company around the customer. To this end, a non IT project manager will be better able to focus on the business requirements first before getting into the required technology.
Core team
5.6 The core team should consist of representatives from each of the business units that are likely to be directly impacted by the CRM initiative, as well as a representative from the IT department. These team members should have a very good understanding of their business areas both from a managerial and user standpoint.
Project sponsors
5.7 For the CRM initiative to succeed the team must have executive sponsorship at the highest level of the organization. A CRM solution will impact many departments and if done right will require changes in business process. For these changes to be effective the executive sponsors will need to drive the adherence to the changes within their departments. Having the executive sponsorship from the outset of the project will ensure that the objectives and priorities of the CRM initiative are in line with the corporate goals. Since the CRM project will impact many areas of the organization this will require executive buy-in for securing the appropriate funding for the project.
5.8
Project objectives
5.10 The project team must create quantifiable objectives for the initiative that can be used to measure its success. The success of CRM implementations is especially hard to measure because many of the benefits are intangible and hard to quantify. For example Increasing customer loyalty is not a measurable objective while Improve repeat sales of top 10% of customers by 30% by end of year is a measurable objective. Setting clear measurable objectives will help you drive the requirements and priorities of the CRM Initiative.
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Project risks
5.11 Once the objectives of the CRM initiative are created, identify the barriers to the success of the project (risks). This is an ongoing exercise that must be repeated throughout the duration of the project. For example if a requirement of the solution is to provide off-line access to the sales force and the sales-force do not have laptops then identifying the risk up front will allow you to set up a process to mitigate this risk.
Budgetary constraints
5.12 Clearly set the budget expectations with project team and the user community. Too often the project objectives and user requirements are not inline with the budgetary constraints of the CRM initiative. This usually results in the end users being disappointed with the solution because it offers only a fraction what was asked. There are CRM products in the market today to suit almost any budget. Setting realistic expectations up front will ensure that you pick the appropriate solution.
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Figure 3 Functional groups that provide support to customer facing function Map existing business processes
5.17 This is an extremely important stage of the plan, which will be the starting point in identifying inefficiencies within each process as well as the problems during hand-offs to other departments. 5.18 Identify the business processes within each functional area that has direct contact with your customers. Each process must have a definition that will define the boundaries of the process, a purpose that should define a reason for the process as well as the value of the process to the business and the timing associated with it. Also document the inputs to the processes (i.e., the information the process requires to work as well as the outputs or the results of the process). Pay close attention to the hand-offs within the processes to other functional groups including the ones that indirectly support and facilitate your contacts with the customer.
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Gap analysis
5.22 Compare the current and new processes to determine the gaps between the two., At this stage focus on the business and functional gaps and not on the technical infrastructure that supports them. The technical considerations will become a factor at a later stage while evaluating products.
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By keeping the functional grouping at this level you will be in a better position to evaluate the value of each of these requirements to your organization.
Phasing strategy
5.27 Plot the value of the functional requirements against its complexity. This will give you a good idea of what functional areas will give you the quickest results, with the greatest impact to the organization. Remember that it is critical for the success of your project to properly phase the development of your requirements. Too often companies will attempt to roll out all the functionality in one large phase. This is usually a recipe for disaster mainly because; (a) rollout of high priority functionality is delayed trying to get everything to work at once. (b) Lessons learned in a live environment cannot be applied to future phases. (c) The ability to adapt to business changes is weakened because it causes the delay of the entire project. It is better to rollout the solutions incrementally, evaluate the impact of each phase continually, and apply the lesson learned to the next phase.
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Value
Case management Online product registration Pipeline management Lead distribution Profile Management Outbound literature Segmentation Campaign management Customer profile analysis Online literature fulfilment
Customer
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Next steps
5.28 You have reached a stage in your planning where you clearly understand how you currently interact with your customers, as well as how you would like to change processes to be more customer focused in the future. The next stage is to begin the process of selecting a CRM package. The steps at a high level are listed below. (a) (b) (c) (d) (e) (f) Create detailed feature function list Create RFP Invite Vendors for demos Create vendor scorecard Evaluate vendor scores Select CRM Package
5.29 This process can be a frustrating one of you rely solely on sales demos togather information on products. There are a number of steps you can take to make this process a successful one too, and is a topic of discussion in a separate paper.
Conclusion
5.30 The majority of men meet with failure because of their lack of persistence in creating new plans to take the place of those which fail. Napoleon Hill Planning adequately for your CRM initiative will help you overcome many of the common mistakes that lead to the failure of most CRM projects. It is critical to note that technology alone will not solve your CRM problem. To this end understanding your business needs and setting appropriate boundaries on the project both from a budgetary and functionality standpoint will ensure your CRM project starts off on the right note. The steps as outlined in this paper will help you succeed where many others have failed. Remember before you select a CRM product first: (a) (b) (c) (d) (e) (f) (g) (h) Set up the project team Define the project objectives Assess the current state Identify Customer touch points Identify supporting functional groups Identify indirect functional groups Map existing business processes Identify the exiting infrastructure
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Define new processes Perform a gap analysis Identify required functions Assess value of functionality Asses complexity of functionality Plan a phased the rollout of your solution
5.31 Only then begin the process of selecting a package. As a final reminder, while planning your CRM initiative make sure that the objectives that you set for the project are measurable and be prepared for changing the way you operate.
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Chapter roundup
E-business models like B2C (business to consumer), B2B (business to business), B2E (business to employee), C2C(consumer to consumer and G2C (government to government) Supply chain management (SCM) software is designed to improve the way your company finds the raw components it needs to make a product or service, manufactures that product or service and delivers it to customers. Enterprise resource planning (ERP) is a cross-functional enterprise system that serves as a framework to integrate and automate many of the business process that must be accomplished with in the manufacturing, logistics, distribution, accounting, finance and human resources functions of a business. Sale force automation (SFA) systems use mobile computing and internet technologies to automate many information processing actives for sales support and management.
Quick quiz
1 2 3 4 5 6 What is B2B? What is the difference between B2C & B2B? What are the benefits of B2B. Define SCM? What is meant by ERP? Define CRM?
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