SAP details: Events News - Training - World wide sites  - Sap Labs SAP Magazine  - SAP Screen saver - Stock Price
SAP CRM    (article by Kaushik Das)


 CUSTOMER RELATIONSHIP MANAGEMENT

Introduction :

As we enter the 21st century, technology, business, the economy, and society as a whole are changing more rapidly than at any point in history. Technology is woven into our personal lives and our businesses due to the combined forces of technology advances and dropping costs. At the core of this change is a fundamental shift in business philosophy that is based on strong, trusting relationships with individual customers. The opportunity, and the challenge, for information technologists is to design, develop, and deploy the right technology to support this dramatic change in a timely manner with optimal return on investment. More than any other business technology opportunity in history, our ability to meet this challenge has a direct impact on the bottom line of the enterprise. 

How Important is Customer Relationship Management

The past decade has seen concentrated efforts at integrating enterprise relationship planning (ERP) systems at the same time that organizations eliminated Year 2000 concerns. Now, an increasing number of companies are turning to customer relationship management (CRM) strategies to retain and acquire customers in a worldwide marketplace characterized by heightened competition.

Why CRM?

By 2001, the worldwide CRM market is estimated by AMR Research of Boston to be around $11.2 billion. Whether your organization's customers are consumers or other businesses, all expect instantaneous service, and full knowledge of their concerns and issues. These are capabilities that CRM provides.

Companies implementing CRM have reduced customer response times from 48 hours to instantaneous response. Many are on the way to achieving a "360-degree" view of each customer relationship — whether the company employee engaged with the customer is in sales, service, marketing or accounting. In some industries, customers demand specific response timeframes to issues — and will go elsewhere if these timeframes cannot be met.

Regardless of industry, new Web-based technology now makes it possible for both businesses and consumers to access goods and services from any geographical location, and at any time. These customers' expectations of the companies they do business with have grown.

In the future, customer expectations are likely to expand even further, as both businesses and those they serve enter into one-on-one marketing that anticipates and tailors specific product and service offerings to clients — even before they ask.

Customer Relationship Management (CRM) is defined as aligning business strategy, corporate culture and organization, customer information, and supporting information technology so that all customer interactions promote a mutually beneficial relationship between each customer and the enterprise. Primarily, customer relationship management is a business strategy, but it is a business strategy enabled by advances in technology. Widespread implementation of customer information, Enterprise Resource Planning (ERP) systems, sales force automation, and integrated point-of-sale systems have made customer information readily available in large volumes. Reduced costs and higher levels of performance for database management platforms enable us to gain access to this customer information and gain new insights into our customers and their behavior through a variety of analysis methods. Advances in contact management technology and supporting infrastructure allow us to take advantage of this information in increasingly cost-effective and innovative ways. Perhaps most significant, the Internet provides a completely new way for an enterprise to interact with its customer-the electronic channel, or the e-channel. With consumers buying everything from groceries to automobiles on the Internet and businesses beginning to shift their purchasing activities to industry-oriented virtual marketspaces, the characteristics of customer interaction are forever changed.

To support the enterprise's transition to a customer-focused approach to doing business, individuals throughout the enterprise must have access to a set of capabilities necessary to plan and manage customer interactions, or customer touches. These capabilities can be categorized in two ways:

·         >Operational, Tactical, or Strategic capabilities to the Enterprise

·         Acquisition, Retention, and Expansion of a Customer Relationship

These two categories represent the business perspective of the capability and how the capability relates to the customer.

Generally speaking, operational capabilities are supported by the Business Operations component of the Corporate Information Factory, with some operational CRM capabilities spilling over into Business Management, where tactical capabilities reside. Strategic capabilities are supported by the Business Intelligence component of the Corporate Information Factory.

However, it is probably more useful to look at capabilities from the customer's perspective. After all, the purpose of these capabilities is to gather customer information and use this information to modify customer behavior in a mutually beneficial way. To look at these capabilities from the perspective of the customer, it is useful to see how the customer interacts with the enterprise over time as the enterprise:

·         Acquires the initial customer relationship

·         Works to earn the customer's ongoing loyalty

·         Expands the relationship to gain a greater share of each customer's purchasing potential

These activities represent a cyclical process of interactions between each customer and the enterprise represented as the Customer Life Cycle (Figure 2). Using the Customer Life Cycle as a tool, we can see how each CRM capability affects customer interactions at various points in the life cycle.

CRM Capabilities and the Customer Life Cycle


Customer acquisition consists of the business processes in the Customer Life Cycle leading up to the customer moment, when consumers become customers...or not. This includes needs development, awareness generation, knowledge transfer, consideration, pre-sales, and evaluation. Example capabilities include consumer surveys in business operations, tracking enterprise-wide customer interactions in business management, and market basket analysis in business intelligence. The enterprise clearly requires customer acquisition to maintain and expand revenues and profits. A business without new customer acquisition will shrink and eventually fail. But compared to customer retention and expanding "share of customer," customer acquisition can be expensive. One easily measurable example of this expense is an online brokerage's promotion adding $75 to the balance of newly opened accounts as an incentive for initiating a relationship. Even this is small compared to the millions that some enterprises may spend to acquire a large business customer.

What is the definition of CRM?
CRM stands for Customer Relationship Management. It is a strategy used to learn more about customers' needs and behaviors in order to develop stronger relationships with them. After all, good customer relationships are at the heart of business success. There are many technological components to CRM, but thinking about CRM in primarily technological terms is a mistake. The more useful way to think about CRM is as a process that will help bring together lots of pieces of information about customers, sales, marketing effectiveness, responsiveness and market trends.

What is the goal of CRM?
The idea of CRM is that it helps businesses use technology and human resources to gain insight into the behavior of customers and the value of those customers. If it works as hoped, a business can:

·         provide better customer service

·         make call centers more efficient

·         cross sell products more effectively

·         help sales staff close deals faster

·         simplify marketing and sales processes

·         discover new customers

·         increase customer revenues

That sounds rosy. How does it happen?
It doesn't happen by simply buying software and installing it. For CRM to be truly effective, an organization must first decide what kind of customer information it is looking for and it must decide what it intends to do with that information. For example, many financial institutions keep track of customers' life stages in order to market appropriate banking products like mortgages or IRAs to them at the right time to fit their needs.

Next, the organization must look into all of the different ways information about customers comes into a business, where and how this data is stored and how it is currently used. One company, for instance, may interact with customers in a myriad of different ways including mail campaigns, Web sites, brick-and-mortar stores, call centers, mobile sales force staff and marketing and advertising efforts. Solid CRM systems link up each of these points. This collected data flows between operational systems (like sales and inventory systems) and analytical systems that can help sort through these records for patterns. Company analysts can then comb through the data to obtain a holistic view of each customer and pinpoint areas where better services are needed. For example, if someone has a mortgage, a business loan, an IRA and a large commercial checking account with one bank, it behooves the bank to treat this person well each time it has any contact with him or her.

Benefits of customer relationship management

·         Sell additional products and services

·         Develop new products

·         Increase product utilization

·         Reduce marketing costs

·         Identify and retain profitable customers

·         Optimize service delivery costs

·         Retain high lifetime value customers

·         Enable personal and relevant communications

·         Improve customer loyalty

·         Improve response rates to direct mail

·         Increase product profitability

·         Respond quickly to market opportunities

·        Acquire new, profitable customers

Some Questions and Answers on CRM:

Are there any indications of the need for a CRM project?
Not really. But one way to assess the need for a CRM project is to count the channels a customer can use to access the company. The more channels you have, the greater need there is for the type of single centralized customer view a CRM system can provide.

How long will it take to get CRM in place?
A bit longer than many software salespeople will lead you to think. Some vendors even claim their CRM "solutions" can be installed and working in less than a week. Packages like those are not very helpful in the long run because they don't provide the cross-divisional and holistic customer view needed. The time it takes to put together a well-conceived CRM project depends on the complexity of the project and its components.

How much does CRM cost?
A recent (2001) survey of more than 1,600 business and IT professionals, conducted by The Data Warehousing Institute found that close to 50% had CRM project budgets of less than $500,000. That would appear to indicate that CRM doesn't have to be a budget-buster. However, the same survey showed a handful of respondents with CRM project budgets of over $10 million.

What are some examples of the types of data CRM projects should be collecting?

·         Responses to campaigns

·         Shipping and fulfillment dates

·         Sales and purchase data

·         Account information

·         Web registration data

·         Service and support records

·         Demographic data

·         Web sales data

What are the keys to successful CRM implementation?

·         Break your CRM project down into manageable pieces by setting up pilot programs and short-term milestones. Starting with a pilot project that incorporates all the necessary departments and groups that gets projects rolling quickly but is small enough and flexible enough to allow tinkering along the way.

·         Make sure your CRM plans include a scalable architecture framework.

·         Don't underestimate how much data you might collect (there will be LOTS) and make sure that if you need to expand systems you'll be able to.

·         Be thoughtful about what data is collected and stored. The impulse will be to grab and then store EVERY piece of data you can, but there is often no reason to store data. Storing useless data wastes time and money.

·         Recognize the individuality of customers and respond appropriately. A CRM system should, for example, have built-in pricing flexibility.

Which division should run the CRM project?
The biggest returns come from aligning business, CRM and IT strategies across all departments and not just leaving it for one group to run.

What causes CRM projects to fail?
Many things. From the beginning, lack of a communication between everyone in the customer relationship chain can lead to an incomplete picture of the customer. Poor communication can lead to technology being implemented without proper support or buy-in from users. For example, if the sales force isn't completely sold on the system's benefits, they may not input the kind of demographic data that is essential to the program's success. One Fortune 500 company is on its fourth try at a CRM implementation, primarily because its sale force resisted all the previous efforts to share customer data.

What industries are leading the way in CRM implementations?
As in most leading-edge technology implementations, the financial services and telecommunications industries set the pace in CRM. Other industries are on the CRM bandwagon include consumer goods makers and retailers and high tech firms.

Which industry is behind the curve?
Heavy manufacturing.

CRM technologies

Customer relationship management revolves around three key technology areas: the Internet, the customer call center and a data warehouse of customer-related information.

From these three technological reference points, there are also offshoots into emerging technology areas such as wireless technology, for facilitated remote access by customers and company field representatives; workforce management software, for streamlined backoffice operations that are organized around the CRM business model; and Web-based customer interaction (WCI).

The first mission of CRM is to capture vital customer information that will give the organization the advantage of knowing more about the customer. A repository of customer information gives the organization the ability to build a long-lasting and revenue-enhancing relationship with the customer.

Customer information is captured through the transactions that the customer completes with the company through the company call center, the Internet, and other communications channels (such as sales or service visits that result in documented call reports). It is this customer information, together with information that flows into the CRM data repository from corporate legacy systems, that begins to establish a "360-degree" picture of the customer that anyone throughout the organization can access when working with the customer.

A total information composite on a given customer allows everyone who is a customer contact point to completely deal with the customer, since every element of the customer relationship is known. The desired result is improved customer sales and service.

The second technological component of CRM is the data warehouse — a separate database from the transaction database that records day to day commercial activity on orders, invoicing, etc.

The data warehouse is populated with transaction data from daily production systems, which is then enhanced with customer-centric information such as sales and service call activity, key customer contacts, and specific products purchased. This warehouse of information is tapped into by sales, service and call center personnel when they work with the customer. At the same time that the information is accessed, representatives working with the data warehouse also add new information to it.

The third technology "leg" of the CRM pyramid is the Internet. On the Web, both company employees and the customers themselves are able to access customer data such as pending orders and service requests.

In some cases, customers can "self-serve" themselves by inquiring into order and service request status online. In other cases, they can instantaneously order a product or request a service call online, without the need to make a telephone call. In turn, the customers receive confirmation receipts and followup correspondence online in a 24-by-7 environment that saves the customer followup calls.

In the end, the goal of CRM is to give everyone a total picture of the company-customer relationship, whether the participants are service representatives, salespersons, call center personnel, company accountants — or the end customers themselves.

The theory of CRM is that if you build solid and long-lasting relationships with your customers, they will develop loyalty and appreciation for high service levels that will render factors like pricing less significant. Customer retention will be strengthened. The botto  m line result will be increased revenue for the organization.

Making CRM work

The first step in making a CRM strategy work in your organization is to understand that CRM requires a commitment from within the company before it can be delivered to company end clients or customers. This commitment has to begin at the top of the organization, because CRM requires that business rules for backoffice and front office operations are rewritten for a customer-centric focus. For many organizations, this means the same amount of internal "growing pains" as an ERP or other far-reaching system integration project.

To successfully secure long-term internal commitment to the CRM project, the goal of a CRM implementation needs to be clearly defined upfront. This is important because different organizations have different goals for their CRM. Some wish to improve backoffice operations such as customer service, and integration with accounting systems — while others are more interested in front line sales and marketing capabilities. Still other organizations want an "across the board" implementation of CRM that brings all marketing, sales, service and other backoffice systems into one customer-centric system environment. Regardless of the choice of goal, the goal needs to be clearly defined so that everyone who will be involved understands what the desired end result is.

A second requirement is for strong communications across the organization on the CRM project as it is being defined and implemented. Both users and IT need to get involved to determine the best ways to structure CRM to meet stated business goals. This most likely means re-engineering business and system processes, testing these new processes to ensure that they work, making adjustments where necessary, and developing effective training plans for the new system screens and reports that users will be working with.


 

Throughout the process, communications must flow continuously. For example, the IT staff of a California-based network products company that recently implemented CRM continues to meet weekly with users to review system results, along with suggested modifications that would further enhance the system.

Just as vital is a clear understanding of the value that your company is trying to bring to the customer as a result of CRM. For some companies, this might be a reduction of response time waits. For others, CRM might be a means of providing customers with self-sufficiency since they can place their own sales and service requests online, at any time.

In the end, the key value-added capability that CRM is designed to bring to an organization is improved customer relationships which in turn produce enhanced revenue streams. If customer satisfaction goals are not met with a new CRM implementation, the CRM initiative fails.

Finally, there are numerous CRM solutions available in the marketplace. It is imperative to select a CRM partner that can provide you with all of the resources you are likely to need. Because many companies do not have resident expertise in CRM, a business partner who is able to bring consulting and implementation skills, as well as hardware and software solutions, is an advantage.

In-depth of CRM

Enterprises world over have come to appreciate the business value of adopting one-to-one technologies, in the form of Web personalization, targeted marketing automation, customer-facing sales automation, integrated customer service, data mining, and enterprise resource planning (ERP) systems supporting mass customization. There is an associated increase in the fervor for understanding technologies, which enable one-to-one marketing and personalization.

However, for various reasons, the customer relationship management (CRM) implementation efforts of most enterprises typify a stove piped approach to application deployment. There has been little thought given to the CRM ecosystem of operational, analytical, and collaborative components and even less to integrating front-office processes (i.e., marketing, sales, service) with those of the back-office and supply chain (e.g., supply/demand planning, sourcing/procurement, finance, manufacturing).

To alleviate the fear, uncertainty and doubt associated with implementation of CRM projects, it is essential to understand the IT and application architectural considerations of deploying the CRM eco-system and integrating the same with the back-office and supply chain.


The CRM architectural framework: A three-legged stool
Enterprise CRM strategies ideally need to focus on the automation of horizontally integrated business processes to provide end-to-end coordination among sales, marketing, customer service, field support and other vital customer points of interface. It is meant to integrate people, process and technology to optimize relationship management across a myriad range of entities — including consumers, business partners, and other distribution channels. To ensure that the above objectives are met, it is imperative that the CRM application architectures combine operational, analytical and collaborative technologies. A balanced CRM approach that involves implementing all three aspects of the framework leads an enterprise to develop what may be termed as a CRM backbone.

Automating the operations

The operational side of the CRM equation consists of "customer facing" applications integrated across the front, back, and mobile offices which includes sales automation (SA), enterprise marketing automation (EMA), customer service/support, and miscellaneous components.

Analyzing the operational transactions
Data created on the operational side of the equation needs to be analyzed for the purpose of business performance management. This side of the architecture is inextricably tied to data warehouse architecture, and is most often manifested in analytical applications that leverage data marts. Most analytical applications currently available are oriented towards EMA (e.g., campaign management). DW and EMA (and outsourced database marketing) initiatives are typically at odds from an IT architectural perspective, as these marketing applications may come with their own embedded proprietary database and data model. The IT organization needs to take on the responsibility of facilitating architectural convergence of the enterprise DW - not just with marketing applications, but with all types of packaged analytical data mart application products, including financial, manufacturing, retail, and vertical (e.g., healthcare) "data marts in a box".

Collaborating with customers

Collaborative CRM is the communication and coordination model across the ETFS life cycle between channels and customer touch points. It includes establishing cooperative partner networks (e.g., affiliates, portals), management of customer interactions (e.g., e-mail, Web, CIC) and channel alignment strategies that enable consistent collaboration between customers and business organizations.

Integration with enterprise business applications
Ideally, channel-independent CRM transactions should create upstream supply chain pull, resulting in a seamless lead-to-customer-to-order-to-source/build-to-delivery cycle. In reality, single-function/channel (e.g., sales automation for a field sales force) CRM deployments are the norm as cultural issues, vendor product limitations, and integration challenges impede realizing the ideal.

The imminent competitive pressures are driving organizations today to automate/integrate individual, intra-enterprise customer-facing processes with back-office/supply chain functions (e.g., quote-to-order), where value justification is demonstrable and efficient customer-centric fulfillment is required. The growing footprints of CRM, SCM and enterprise resource management application suites, as well as maturing enterprise application integration frameworks and XML-based messaging standards will facilitate 360 degrees, cross-functional front to back-office supply chain integration efforts across multiple channels. In the near future, vendor consolidation/solution expansion, collaborative supply chain network evolution, and CRM infusion within these organizations will enable upstream demand-driven pull to replace downstream supply-driven push as the modus operandi of demand fulfillment.

To achieve competitive advantage (or, at a minimum, maintain parity), organizations therefore must deploy an enterprise CRM backbone. This can be done by mapping their CRM strategies in marketing, sales, and service to a CRM ecosystem comprising of operational, analytical and collaborative information systems and linking them on appropriately to companion back-office/supply chain functions.

CRM in the Internet Era:

As any business owner knows, customer relationships are your single most important competitive advantage. The in-depth knowledge of your customers' business requirements, expectations, and contacts, built consistently and carefully over time, is an asset that cannot be easily traded or commoditized. Therefore, customer relationship management—collecting and using data about your customers' buying histories, service histories, profitability, and so forth, to offer an exceptional customer experience—should be a strategic priority in any organization. The goal is to use the information to meet customer needs better, build customer loyalty, and increase business efficiency, as through informed call centers and targeted marketing.

Customer relationships become even more important in today's Internet marketplace. The Internet has enabled a dramatic reduction in the cost of transactions and interactions among people and businesses, which in turn has created a new set of expectations among customers. Online customers expect shorter sales cycles, personalized information, quicker resolution of service issues, and added value at each stage of the transaction. To maintain positive customer relationships, your business needs to meet and exceed these expectations. Ironically, the Internet is both the cause of and the solution to this phenomenon.

Customer relationship management, therefore, must be a well-integrated effort, using the Internet to shrink time and distance across the supply chain and to your customers, creating new levels of speed and efficiency in your business. I believe companies that do this successfully will be those that adopt crm as a philosophy and way of doing business, rather than just as a technology that automates a piece of their business. Within Dell, for example, a third of our technical-support activities, about 75 percent of order status transactions, and almost 50 percent of sales are enabled by the Web. We are moving these transactions online because customers told us they want faster, more efficient support for routine interactions. Over the phone, these transactions cost between $3 and $10 each, but the Internet lowers the cost to zero in most cases. More importantly, the entire process is more efficient for customers and enables us to extend cost savings to them, resulting in winners all the way around.

This leads me to the golden rule of Internet customer relationships: The online experience must be better than the experience in the physical world. Some situations will not and cannot translate to a superior online experience.

Research shows that a positive customer experience drives more e-loyalty than traditional attributes like product selection or price. In traditional channels, you can lose customers if they walk into a physical location and are disappointed in the store appearance, have an unsatisfactory experience with a salesperson, or can't find what they want. The Internet environment is no different: You must not only excel in your market but do so in a convenient, helpful, and reliable site.

The ultimate goal is to deepen relationships by adding convenience, efficiency, cost savings, and a wider array of services. Doing business online is about more than processing Web-based transactions. It is about using the Internet to develop, maintain, and manage positive relationships with customers, partners, and suppliers. The result is long-term relationships, repeat sales, business efficiency, and increased profitability. I believe companies that put a strategic focus on customers and leverage the capabilities of the Internet to enhance those relationships will survive and thrive in the Internet marketplace.

SAP & CRM:

In the new, New Economy, customer relationships are playing an increasingly important role, with the main focus on long-term considerations. With its Customer Engagement Model (CEM), SAP has developed a solution for cultivating customer relationships throughout the entire life cycle, creating a lasting increase in added value for customers.

Strengthening Relationships: Customer Engagement Model (CEM)

SAP's Customer Engagement Model (CEM) is redefining the company's relationships with its customers. CEM's tools, services, and processes give customers a competitive advantage, with long-term considerations playing a crucial role.

The Internet is turning the world of business on its head. Although it is companies' business processes that most need to adapt to the changed conditions, the transformation also affects the technology on which these processes are based, as well as companies' relationships with their customers. But there are some things that the New Economy hasn't changed: Business models, sales revenues, and profits still top the list of priorities.

To improve their chances of success, companies need to concentrate on five essential areas:

·         Strategy: Focusing increasingly on the value chain. What's needed here is a cross-company exchange of information through collaborative forecasting, e-business accounting, and shared analytical services. SAP's solutions for this are mySAP Marketplace, mySAP Business Intelligence (mySAP BI), mySAP Financials, mySAP Customer Relationship Management (mySAP CRM), and mySAP Supply Chain Management (mySAP SCM).

·         Change management: Building up role-based organizations that give priority to information exchange and knowledge sharing (e-learning and e-tuning). SAP has also developed effective solutions for change management, in the shape of mySAP Workplace, mySAP Product Lifecycle Management (mySAP PLM), and mySAP Human Resources (mySAP HR).

·         Top line: Achieving higher customer satisfaction using analytical and collaborative customer relationship management (CRM). Analytical CRM focuses on evaluating customer data and habits to improve customer loyalty. With collaborative CRM, the main priorities are supply chain optimization and improving suppliers' reliability with the help of portals (available-to-promise solutions). SAP's main solutions for this are mySAP CRM, mySAP SCM, and private exchanges.

·         Bottom line: The key words here are division-to-division (D2D) integration and business-to-business (B2B) collaboration. D2D integration involves implementing processes across department and country boundaries (with mySAP.com or SAP R/3 for instance). This means adapting specific requirements and developing global templates, such as Best Practices.

·         Sustainability: Comprehensive service and support plus diversified consulting offerings encourage sustainability in the new type of customer relationship. SAP offers customers a range of solutions, such as the E-Business Case Builder, Collaborative Business Maps, Business Consulting Sets, and Best Practices for mySAP.com.

In 1999, SAP developed the Customer Engagement Model (CEM) to provide a consistent solution model for e-business alongside its extensive Internet offering. The purpose of CEM is to create added value for customers in the e-business environment based on the five business essentials described above and to strengthen customer relationships throughout the entire life cycle. The four pillars of CEM are Customer Segmentation, the Customer Engagement Life Cycle (CEL), Partner Value Net (SAP's global partner network), and Corporate Governance (SAP's internal management).

There are countless examples of the model's customer orientation. The Coca Cola Company uses SAP Business Information Warehouse (SAP BW) and SAP Strategic Enterprise Management (SAP SEM) to speed up accounting processes and to improve planning on both the operational and strategic level. This gives Coca Cola more time to analyze information, which helps it to recognize new business opportunities. SAP solutions also help with change management, as shown by the example of GMAC-RFC, an international leader in mortgage- and asset-backed securities . GMAC-RFC is using the Role Library from SAP Best Practices, mySAP Workplace, and mySAP HR to build up a role-based organization and to enable, for example, the direct processing of orders. Its employees' productivity has already increased by up to 50%.

The customer is always right
Companies need detailed knowledge about their customers’ buying habits and needs. Customer relationship management (CRM) tools help build and track that knowledge to create customer-oriented businesses.

Customer orientation is a business philosophy that optimizes the realization of customer potential. It is the one model that can provide companies with the foundation for success in global, deregulated, saturated markets in which products and product-related services are hard to differentiate.

Implementing customer relationship management (CRM) tools makes customer orientation easier. Optimizing the customer’s life cycle allows you to fully exploit your customer base. This includes identifying customers, tracking their growth, and retaining them. CRM also helps to lower the cost of servicing customers by recognizing the profitable customers as quickly as possible, and by deploying best services to best customers only. Further on in the customer life cycle, increasing customer wallet share plays an important role. The right up-selling and cross-selling measures boost trade with customers. Finally, comprehensive and customer-specific sales, marketing, and service activities consolidate the ties with customers in the long term - by making it expensive to switch providers, for example.

Customer orientation, therefore, requires a holistic approach, taking into account the following:

·         Business integration: Building and operating a virtual, process-oriented enterprise by using an e-business platform to integrate the back office, the front office, and the mobile office

·         Operational CRM: Automating the front office and the mobile office

·         Analytical CRM: Controlling, monitoring, and measuring the performance of customer-centric business processes, using data warehouses, online analytical processing (OLAP), and data mining. The basis for this is a uniform, comprehensive data model that provides a 360-degree view of customers.

·         Collaborative CRM: Formalizing and automating collaboration on the sales side. In other words, continuing business processes beyond the boundaries of the company, with customers serving themselves using all the available channels.


More than operational CRM

To manage customer relationships across a complete range of business applications, mySAP CRM offers a complete spectrum of integrated approaches:

·         Operational CRM facilitates empowerment and personalization through role-based relationship management workplaces, enables seamless real-time integration of front-office interaction and back-office fulfillment, and synchronizes customer interactions across all channels.

·         Analytical CRM supports discovery and understanding of customer behaviors, and it improves and optimizes operational processes to drive customer retention and acquisition.

·         Collaborative CRM combines new ways of interacting with customers to create additional value within the ecosystem, and it facilitates participation within a marketplace community of customers and business partners.


 mySAP CRM provides solutions through all phases of the customer relationship life cycle:

Customer engagement

·         Marketing planning and campaign management

·         Telemarketing and lead generation

·         Opportunity management

·         Sales activity and contact management

·         Customer segmentation, product and service profiling


Business transactions

·         Order acquisition

·         Internet pricing and configuration

·         E-selling

·         Telesales

·         Field sales

·         Profitability analysis

·         One-step buying and selling


Order fulfillment

·         Complete order life-cycle process

·         Real-time availability checks

·         Contract, billing, and financials management

·         Fulfillment visibility and order tracking


Customer service

·         Interaction center

·         Internet customer self-service

·         Service management

·         Claims management,

·         Field service – mobil e service

·         Field service - dispatch

The next generation of Customer Relationship Management

The Internet is strengthening the position of the customer and pushing customer relationship management into the strategic focus of enterprises. With mySAP CRM, SAP offers a comprehensive, Internet-based, software solution that helps you plan, establish, and develop lucrative customer relationships.

In the customer-driven Internet economy, customers are better informed about the products and services available in the global market, and they can make decisions more flexibly. Customers change their requirements quickly and demand solutions tailored to their needs, with extensive services included. Enterprises must be able to recognize trends in customer behavior early on, rapidly adapt their products and services to take advantage of those trends, and adopt a customer-focused approach overall.

This presents many diverse challenges because it involves people, processes, and software solutions. It means that the Internet changes how business transactions are initiated and carried out. Innovative software solutions enable and support new business models and more efficient processes that then have to be brought to life by the people involved.

Why CRM doesn't Work sometime?

Some people claimed customer satisfaction study helped improve customer satisfaction levels and increase customer loyalty. Yet, my many years of experience on customer satisfaction study have proved these claims false.Some people claim that one-to-one marketing is the only solution to business success. They have provided many one-to-one marketing success stories to demonstrate that. However, after I pointed out that they had no evidence of their success, they told me that we could not see evidence of successful one-to-one marketing because it is too new a marketing theory (even after 10 years?!) and that the companies that succeeded in one-to-one marketing tried to keep their success secret!

Last year, a "leading" research company predicted that in 12 months more than 90% of the Web sites were going to adopt personalization. Some company even forced us to make a choice "to personalize or to perish"? As Web marketers, we all know the result today. How many of us have perished because we did not personalize our Web sites?Technically, CRM should be better than all other marketing hype because it follows the basic marketing principles (market segmentation and segment targeting); however, CRM systems have experienced a very high failure rate.

Why?

People have attributed the failures of CRM to the lack of understanding of the CRM process and the lack of management support. In my observation, the real reason is that current CRM systems do not start from customer relationship and, therefore, are unable to manage it. Two cases illustrate this point.

The first case regards a financial company conducting a customer satisfaction study. This company targets a niche market: It lends money to those who have poor credit records and cannot get money from other financial institutions.The company charges sky-high interest on its loans. Consequently, many of its customers are unable to pay their debt on time. Thus, it has to hire a strong team to chase its customers to get its money back. Imagine its customer relationship. When it learned that a customer satisfaction study could help improve its customer satisfaction level, it spent millions of dollars to conduct a customer satisfaction study. When its customers were asked why they were unhappy with the company, they pointed out that, had the company not harassed them by calling them at midnight or arriving during dinner, they would have been much happier!

The company uses harassment to collect its debts while using customer satisfaction study to improve its customer relationship! Didn't the company know that its customers became unhappy when it sent its agents to harass them before it conducted a customer satisfaction study? Then, why did the company do it? Would it change its harassing practice since the customer satisfaction study?

Another story is about AT&T. We have frequently used this company as an example in our monopoly price and customer loyalty discussions. Recently, this company (and other U.S. long distance companies) tried to make the FCC believe that if the local telephone companies lowered their long distance connection charges, they would pass the benefits to their consumers. Well, right after the FCC reduced the long distance connection charges, AT&T planed to increase its long distance price! When this plan leaked, it quickly became headline news nationwide, forcing the company to cancel (or delay?) this very unpopular plan.

Let's ignore how unwise this price increase plan is. (We have witnessed how AT&T lost its market share and allowed its competitors to grow by charging higher prices in the past.) Suppose AT&T installed many CRM systems, do you think those systems could repair the damage to its customer relationship caused by this very unpopular plan?

If you don't have your customers in your heart and don't design your CRM system to improve customer relationship, the CRM system will be unable to help you manage this relationship!

Perhaps someone could argue that if a CRM system recommended a product the customer liked, the system would make the customer happier, improving the company's relationship with the customer. Yes, I agree with this argument when all those "ifs" are true. In fact, any effort to improve your Web business could make your customers happier. Do we call all these efforts CRM? For example, redesigning your Web site to be more customer-friendly would certainly make your visitors happier than a product recommendation system (a CRM system). Nevertheless, do we call the Web designer a CRM specialist?

Some people have been using "natural" logic to imagine how CRM (or personalization or one-to-one marketing) improves customer relationship. If you make your customers a little happier, they are more likely to remain loyal. However, if we put ourselves into our customers' shoes, we know this is not true. The American auto industry was the first to implement customer satisfaction study. Many very nice models have been developed since, such as how dealer loyalty contributes to manufacturer loyalty. Yet, when we visit a car dealer, how many CRM systems could make us believe the dealer is really thinking about our benefit over his bottom line?

Do you really think your customer relationship is important to your company? Do you really want to improve your customer relationship? If your answers to these questions are "yes," then you should ask yourself whether you have your customer relationship in your heart.

The CRM system based on customer relationship is DIFFERENT from CRM systems based on marketing functions. If you don't desing a CRM based on your customers' needs, it is unlikely to improve your customer relationship.

Conclusion

For businesses that compete in environments where CRM is being effectively deployed, some type of CRM strategy must be engaged in order to remain competitive. If you are a Unisys site, Unisys has formed strategic alliances with CRM solutions providers such as Siebel, and can offer a total solution. As well, there are numerous CRM software solutions that are specifically targeted to small- to mid-sized organizations, with price points that are within reach of IT budgets.

However, only your organization can define what your specific CRM business objectives are. This business commitment begins with the company CEO, and is perpetuated throughout a CRM implementation with reinforcement and commitment that is combined with constant and free-flowing communications between IT, the end-user groups involved in CRM — and even the end customers.

Much has already been written about the prime CRM objective of building better, more long-lasting relationships between companies and their customers for competitive advantage. The end theory is that these long-lived relationships will "naturally" produce more revenue for the company.

However, no organization should go into a CRM strategy without some predefined revenue-enhancing or cost-reducing goals. Some organizations look to reduce service request response times and to create online service centers that create new lines of business — such as service contracts that their customers pay annually for. Others use CRM to get product and product promotions to market quicker — resulting in greater sales. Still others have implemented sales and order-taking to the degree that their cost of sales (i.e. the need for large external sales forces) has diminished. Without an identified "payout," automated CRM is difficult to justify.


 
Acknowledgement: www.sap.com     www.crm.com    and from various web site.

 











 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Planetsap.com
 
Home     Post an article    Suggestion   Contact
 
Disclaimer    Copyright; 1998-2002 Softron Systems, Inc. All rights reserved.
 
Home Discussion Forum Services Advertise Contact About Us Sign Up