WHAT IS CRM?

WHAT IS BUSINESS INTELLIGENCE?

WHAT IS BUSINESS PROCESS MANAGEMENT (BPM)?

WHAT IS ERP

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WHAT IS CRM?

Customer relationship management (CRM) encompasses the capabilities, methodologies, and technologies that support an enterprise in managing customer relationships. The general purpose of CRM is to enable organizations to better manage their customers through the introduction of reliable systems, processes and procedures.

Implementing CRM

Customer relationship management is a corporate level strategy which focuses on creating and maintaining lasting relationships with its customers. Although there are several commercial CRM software packages on the market which support CRM strategy, it is not a technology itself. Rather, a holistic change in an organization’s philosophy which places emphasis on the customer.

A successful CRM strategy cannot be implemented by simply installing and integrating a software package and will not happen overnight. Changes must occur at all levels including policies and processes, front of house customer service, employee training, marketing, systems and information management; all aspects of the business must be reshaped to be customer driven.
To be effective, the CRM process needs to be integrated end-to-end across marketing, sales, and customer service. A good CRM strategy needs to:

  • Identify customer success factors.
  • Create a customer-based culture.
  • Adopt customer-based measures.
  • Develop an end-to-end process to serve customers.
  • Recommend what questions to ask to help a customer solve a problem.
  • Recommend what to tell a customer with a complaint about a purchase.
  • Track all aspects of selling to customers and prospects as well as customer support.

When setting up a CRM segment for a company it might first want to identify what profile aspects it feels are relevant to its business, such as what information it needs to serve its customers, the customer's past financial history, the effects of the CRM segment and what information is not useful. Being able to eliminate unwanted information can be a large aspect of implementing CRM systems.

When designing a CRM's structure, a company may want to consider keeping more extensive information on their primary customers and keeping less extensive details on the low-margin clients.

Purposes of CRM

CRM, in its broadest sense, means managing all interactions and business with customers. This includes, but is not limited to, improving customer service. A good CRM program will allow a business to acquire customers, service the customer, increase the value of the customer to the company, retain good customers, and determine which customers can be retained or given a higher level of service. A good CRM program can improve customer service by facilitating communication in several ways :

  • Provide product information, product use information, and technical assistance on web sites that are accessible 24 hours a day, 7 days a week.
  • Identify how each individual customer defines quality, and then design a service strategy for each customer based on these individual requirements and expectations.
  • Provide a fast mechanism for managing and scheduling follow-up sales calls to assess post-purchase cognitive dissonance, repurchase probabilities, repurchase times, and repurchase frequencies.
  • Provide a mechanism to track all points of contact between a customer and the company, and do it in an integrated way so that all sources and types of contact are included, and all users of the system see the same view of the customer (reduces confusion).
  • Help to identify potential problems quickly, before they occur.
  • Provide a user-friendly mechanism for registering customer complaints (complaints that are not registered with the company cannot be resolved, and are a major source of customer dissatisfaction).
  • Provide a fast mechanism for handling problems and complaints (complaints that are resolved quickly can increase customer satisfaction).
  • Provide a fast mechanism for correcting service deficiencies (correct the problem before other customers experience the same dissatisfaction).
  • Use the Internet to engage in collaborative customization or real-time customization.
  • Provide a fast mechanism for managing and scheduling maintenance, repair, and on-going support (improve efficiency and effectiveness).
  • The CRM program can be integrated into other cross-functional systems and thereby provide accounting and production information to customers when they want it.

Improving customer relationships

CRM programs also are able to improve customer relationships. Proponents say this is so because:

  • CRM technology can track customer interests, needs, and buying habits as they progress through their life cycles, and tailor the marketing effort accordingly. This way customers get exactly what they want as they change.
  • The technology can track customer product use as the product progresses through its life cycle, and tailor the service strategy accordingly. This way customers get what they need as the product ages.
  • In industrial markets, the technology can be used to micro-segment the buying center and help coordinate the conflicting and changing purchase criteria of its members.
  • When any of the technology-driven improvements in customer service (mentioned above) contribute to long-term customer satisfaction, they can ensure repeat purchases, improve customer relationships, increase customer loyalty, decrease customer turnover, decrease marketing costs (associated with customer acquisition and customer “training”), increase sales revenue, and thereby increase profit margins.
  • Repeat purchase, however, comes from customer satisfaction - which in turn comes from a deeper understanding of each customer, their individual business challenges and proposing solutions for those challenges rather than a "one size fits all" approach.
  • CRM software enables sales people to achieve this one on one approach to selling and can automate some elements of it via tailor able marketing communications. However, all of these elements are facilitated by or for humans to achieve - CRM is therefore a company-wide attitude as much as a software solution

WHAT IS BUSINESS INTELLIGENCE?

Business intelligence provides organizational data in such a way that the organizational knowledge filters can easily associate with this data and turn it into information for the organization. Persons involved in business intelligence processes may use application software and other technologies to gather, store, analyze, and provide access to data, and present that data in a simple, useful manner. The software aids in Business performance management, and aims to help people make "better" business decisions by making accurate, current, and relevant information available to them when they need it. Some businesses use data warehouses because they are a logical collection of information gathered from various operational databases for the purpose of creating business intelligence.

Reasons for Business Intelligence

Business Intelligence enables organizations to make well informed business decisions and thus can be the source of competitive advantages. This is especially true when you are able to extrapolate information from indicators in the external environment and make accurate forecasts about future trends or economic conditions. Once business intelligence is gathered effectively and used proactively you can make decisions that benefit your organization before the competition does. The ultimate objective of business intelligence is to improve the timeliness and quality of information. Timely and good quality information is like having a crystal ball that can give you an indication of what's the best course to take. Business intelligence reveals to you:

  • The position of your company as in comparison to its competitors.
  • Changes in customer behavior and spending patterns.
  • The capabilities of your firm.
  • Market conditions, future trends, demographic and economic information.
  • The social, regulatory, and political environment.
  • What the other firms in the market are doing.

You can then deduce from the information gathered what adjustments need to be made. Businesses realize that in this very competitive, fast paced, and ever-changing business environment, a key competitive quantity is how quickly they respond and adapt to change. Business intelligence enables them to use information gathered to quickly and constantly respond to changes.

Benefits of BI

BI provides many benefits to companies utilizing it. It can eliminate a lot of the guesswork within an organization, enhance communication among departments while coordinating activities, and enable companies to respond quickly to changes in financial conditions, customer preferences, and supply chain operations. BI improves the overall performance of the company using it. Information is often regarded as the second most important resource a company has (a company's most valuable assets are its people). So when a company can make decisions based on timely and accurate information, the company can improve its performance. BI also expedites decision-making, as acting quickly and correctly on information before competing businesses do can often result in competitively superior performance. It can also improve customer experience, allowing for the timely and appropriate response to customer problems and priorities.

Factors Influencing Business Intelligence

Customers are the most critical aspect to a company's success. Without them a company cannot exist. So it is very important that you have information on their preferences. You must quickly adapt to their changing demands. Business Intelligence enables you to gather information on the trends in the marketplace and come up with innovative products or services in anticipation of customer's changing demands.

Competitors can be a huge hurdle on your way to success. Their objectives are the same as yours and that is to maximize profits and customer satisfaction. In order to be successful you must stay one step ahead of your competitors. In business you don't want to play the catch up game because you would have lost valuable market share. Business Intelligence tells you what actions your competitors are taking, so you can make better informed decisions.

Business Partners must possess the same strategic information you have so that there is no miscommunication that can lead to inefficiencies. For example it is common now for businesses to allow their suppliers to see their inventory levels, performance metrics, and other supply chain data in order to collaborate to improve supply chain management. With Business Intelligence you and your business partners can share the same information.

Economic Environment such as the state of the economy and other key economic indicators are important considerations when making business decisions. You don't want to roll out a new line of products during an economic recession. BI gives you information on the state of the economy so that you can make prudent decisions as to when is the right time to maybe expand or scale back your business operations.

Internal Operations are the day to day activities that go on in your business. You need an in depth knowledge about the internal workings of your business from top to bottom. If you make an arbitrary decision without knowing how your entire organization works it could have negative effects on your business. BI gives you information on how your entire organization works.

Designing and implementing a business intelligence program.
When implementing a BI program following are the important considerations:

  • Goal Alignment Queries: The first step determines the short and medium-term purposes of the program. What strategic goal(s) of the organization will the program address? What organizational mission/vision does it relate to? A crafted hypothesis needs to detail how this initiative will eventually improve results / performance (i.e. a strategy map)
  • Baseline Queries: Current information-gathering competency needs assessing. Does the organization have the capability of monitoring important sources of information? What data does the organization collect and how does it store that data? What are the statistical parameters of this data, e.g. how much random variation does it contain? Does the organization measure this?
  • Cost And Risk Queries: The financial consequences of a new BI initiative should be estimated. It is necessary to assess the cost of the present operations and the increase in costs associated with the BI initiative? What is the risk that the initiative will fail? This risk assessment should be converted into a financial metric and included in the planning.
  • Customer And Stakeholder Queries: Determine who will benefit from the initiative and who will pay. Who has a stake in the current procedure? What kinds of customers/stakeholders will benefit directly from this initiative? Who will benefit indirectly? What are the quantitative / qualitative benefits? Is the specified initiative the best way to increase satisfaction for all kinds of customers, or is there a better way? How will customers' benefits be monitored? What about employees,... shareholders,... distribution channel members?
  • Metrics-Related Queries: These information requirements must be operational into clearly defined metrics. One must decide what metrics to use for each piece of information being gathered. Are these the best metrics? How do we know that? How many metrics need to be tracked? If this is a large number (it usually is), what kind of system can be used to track them? Are the metrics standardized, so they can be benchmarked against performance in other organizations? What are the industry standard metrics available?
  • Measurement Methodology-Related Queries: One should establish a methodology or a procedure to determine the best (or acceptable) way of measuring the required metrics. What methods will be used, and how frequently will the organization collect data? Do industry standards exist for this? Is this the best way to do the measurements? How do we know that?
  • Results-Related Queries: Someone should monitor the BI program to ensure that objectives are being met. Adjustments in the program may be necessary. The program should be tested for accuracy, reliability, and validity. How can one demonstrate that the BI initiative (rather than other factors) contributed to a change in results? How much of the change was probably random?

WHAT IS BUSINESS PROCESS MANAGEMENT (BPM)?

Business Process Management in broad terms is the automation of those employee activities that cost the company valuable time and money. All businesses today are dependent on people extracting, formatting and distributing business information from business applications. Yet, people have physical limitations, they are prone to illness and unfortunately make mistakes.

Business Process Management technology is the IT industry's response to the problems created by employee-dependant applications. Directors, managers, suppliers and customers expect instant responses to real-time commercial interactions and business process management technology leverages all the organisation's I.T. systems by creating a real-time, responsive infrastructure.

WHAT IS ERP?

Enterprise resource planning (ERP) is a business management software—usually a suite of integrated applications—that a company can use to collect, store, manage and interpret data from many business activities, including:-

  • Product planning, cost and development
  • Manufacturing or service delivery
  • Marketing and sales
  • Inventory management
  • Shipping and payment

ERP provides an integrated view of core business processes, often in real-time, using common databases maintained by a database management system. ERP systems track business resources—cash, raw materials, production capacity—and the status of business commitments: orders, purchase orders, and payroll. The applications that make up the system share data across the various departments (manufacturing, purchasing, sales, accounting, etc.) that provide the data.ERP facilitates information flow between all business functions, and manages connections to outside stakeholders

Enterprise system software is a multi-billion dollar industry that produces components that support a variety of business functions. IT investments have become the largest category of capital expenditure in United States-based businesses over the past decade. Though early ERP systems focused on large enterprises, smaller enterprises increasingly use ERP systems.

Organizations consider the ERP system a vital organizational tool because it integrates varied organizational systems and facilitates error-free transactions and production. However, ERP system development is different from traditional systems development. ERP systems run on a variety of computer hardware and network configurations, typically using a database as an information repository.

Advantages

The fundamental advantage of ERP is that integrating myriad businesses processes saves time and expense. Management can make decisions faster and with fewer errors. Data becomes visible across the organization. Tasks that benefit from this integration include:

  • Sales forecasting, which allows inventory optimization.
  • Chronological history of every transaction through relevant data compilation in every area of operation.
  • Order tracking, from acceptance through fulfillment
  • Revenue tracking, from invoice through cash receipt
  • Matching purchase orders (what was ordered), inventory receipts (what arrived), and costing (what the vendor invoiced)

ERP systems centralize business data, which:

  • Eliminates the need to synchronize changes between multiple systems—consolidation of finance, marketing, sales, human resource, and manufacturing applications
  • Brings legitimacy and transparency to each bit of statistical data
  • Facilitates standard product naming/coding
  • Provides a comprehensive enterprise view (no "islands of information"), making real–time information available to management anywhere, any time to make proper decisions
  • Protects sensitive data by consolidating multiple security systems into a single structure

Benefits

  • ERP can improve quality and efficiency of the business. By keeping a company's internal business processes running smoothly, ERP can lead to better outputs that may benefit the company, such as in customer service and manufacturing.
  • ERP supports upper level management by providing information for decision making.
  • ERP creates a more agile company that adapts better to change. ERP makes a company more flexible and less rigidly structured so organization components operate more cohesively, enhancing the business—internally and externally.
  • ERP can improve data security. A common control system, such as the kind offered by ERP systems, allows organizations the ability to more easily ensure key company data is not compromised
  • ERP provides increased opportunities for collaboration. Data takes many forms in the modern enterprise. Documents, files, forms, audio and video, emails. Often, each data medium has its own mechanism for allowing collaboration. ERP provides a collaborative platform that lets employees spend more time collaborating on content rather than mastering the learning curve of communicating in various formats across distributed systems

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