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SYSTEM
TERM REPORT
ON
“Customer relationship management,
Enterprise resource planning
$
E-commerce”
Submitted By:
(GROUP E)
1
Index
E-commerce.
Group members-
Anjani yadav
Ankita dixit
Priyanka pandey
Mansi singh
Nidhi srivastava
Hasrat wahab.
2
Section-1
Customer Relationship
Management
Introduction:
3
Today, customers are in charge. It is easier than ever for
customers to comparison shop and, with a click of the mouse,
to switch companies. As a result, customer re1ationsbzps have
become a company’s most valued asset. These relationships
are worth more than the company c products, stores, factories,
web addresses, and even employees. Every company’s
strategy should address how to find and retain the most
profitable customers possible [9].
Let’s start with a real world example. Read the Real World Case
on the next page. We can learn a lot about the many ways
companies are implementing customer relationship
management systems.
What is CRM?
4
Managing the fatal range of the customer relationship involves
two related objectives: one, to provide the organization and all
of its customer-facing employees with a single, complete view
of every customer at every touch point and across all channels;
and, two, to provide the customer with a single, complete view
of the company and its extended channels [26].
5
fax, e-mail, the company’s web- site, retail stores, kiosks, and
personal contact. CRM systems store the data in a common
customer database that integrates all customer account
information and makes it available throughout the company via
Internet, intranet, or other network links for sales, marketing,
service, and other CRM applications.
Sales:
A CRM system provides sales reps with the software tools and
company data sources they need to support and manage their
sales activities, and optimize cross-selling and up-selling.
Examples include sales prospect and product information,
product configuration, and sales quote generation capabilities.
CR1vI also gives them real-time access to a single common
view of the customer, enabling them to check on all aspects of
a customer’s account status and history before scheduling
their sales calls. For example, a CRM system would alert a bank
sales rep to call customers who make large deposits to sell
them premier credit or investment services. Or it would alert a
salesperson of unresolved service, delivery, or payment
problems that could be resolved through a personal contact
with a customer.
6
The major application clusters in customer
Relationship management
Marketing
and Fulfillment:
7
A CRM system provides service reps with software tools and real-
time access to the common customer database shared by sales
and marketing professionals. CRM helps customer service
managers create, assign, and manage requests for service by
customers. Call center software routes calls to customer
support agents based on their skills and authority to handle
specific kinds of service requests. Help desk software assists
customer service reps in helping customers who are having
problems with a product or service, by providing relevant
service data and suggestions for resolving problems. Web-
based self-service enables customers to easily access
personalized support information at the company website,
while giving them an option to receive further assistance online
or by phone from customer service personnel.
8
• Seventy percent of complaining customers will do business with
the company again if it quickly takes care of a service problem
[9].
PHASES OF CRM
Figure 8.4 illustrates another way to think about the customer and
business value and component of customer relationship
management. We can view CRM as an integrated system of
Web-enabled software tools and databases accomplishing a
variety of customer-focused business processes that support
the three phases of the relationship between a business and its
customers [9].
9
ACQUIRE-A business relies on CRM software tools and databases to
help it acquire new customers by doing a superior job of
contact management, sales prospecting, selling, direct
marketing, and fulfillment. The goal of these CRM functions is
to help customers perceive the value of a superior product
offered by an outstanding company.
10
RETAIN- CRM analytical software and databases help a company
proactively identify and reward its most loyal and profitable
customers to retain and expand their business via targeted
marketing and relationship marketing programs. The value
perceived by customers is of a rewarding personalized
business relationship with “their company.”
CRM, despite all the talk about it being one of the most 'profitable'
customer strategies of the decade, still allows room for failure.
The most important aspect of CRM problems is its excellent
ability to achieve customer retention but its failure to do
so. This is indirectly responsible for CRM collapse. What
actually is CRM failure and why does it occur? Generally one of
the reasons this happens is because most organizations that
11
actually employ CRM, experience a lot of confusion about its
attributes and what it really is. Some would define it as a
business strategy while others view it as something to do with
technology.
The statistics show that only one in every six companies that
have installed CRM has been successful. CRM has lost its
appeal as it has failed to meet expectations. Almost 75% of
projects have not succeeded in delivering the expected ROI
and have faced numerous problems with CRM. However the
absolute failure rate is just 5%. It's mostly the larger corporate
that fail. This happens generally because smaller projects fair
better. Mid size organizations also have a higher success rate.
Exorbitant Costs
Secondly when starting off on a CRM strategy the objectives are clearly
established and followed. Management and employees know
12
fully well what is needed to work towards organizational goals.
The goals themselves are clearly laid out after meticulous
planning. However midway during the CRM implementation,
when hard times hit, the organization loses sight of its goals
and ultimately steers away from it. At times goals get
interchanged and lose their importance. Companies find
themselves work at home directory towards goals that are less
important and forgetting the ones that really are. This is one of
the fundamental and mostly felt problems in CRM.
Insufficient Resources
Inappropriate Metrics
Complex Systems
13
CRM simple? The hype says so, the experts agree. Is this really the
case? Organizations that have employed it though have a
different opinion. They are witness to the fact that CRM
packages can be highly complex, with vast amounts of
intricacies. If this is the case then how do simple employees
cope? The answer lies in sufficient training being given in order
that they are able to comprehend and deal with the difficulties
easily.
No Customer Focus
Customer oriented strategy? Yes, CRM does play the part. Customer
oriented employees? Now 'that' requires an effort on the part of
the organization. It needs to motivate employees to be
absolutely customer centric. This involves tremendous effort
on the part of the company but is highly essential. CRM
problems arise because of employee reluctance to be more
customers focused. The result is a highly expensive customer
strategy being adopted by the company in an effort to retain
customers, with reluctant, unfocussed employees
implementing it.
14
Slow Returns
CRM SUCCESS
Set the CRM Vision: Clear and Definable Goals and Expectations
An old proverb said that you can go anywhere as long as you start from
where you are, not from where you think or wish you might be.
15
ad, calling your toll-free number for service, placing an order,
and signing up to get emails.
16
It's critical to prioritize the order in which business areas, such as
marketing, sales and service, will be addressed.
It may be wise to have executives from the marketing, sales and service
areas are on a CRM committee, as they lead the teams that will
benefit most from the CRM effort.
This is the time to re-engineer your business processes with the optimal
customer experience in mind. It's also an opportunity to
increase procedural effectiveness and reduce costs. For
instance, a well-thought-out system can eliminate and reduce
the duplicate manual entry of customer data. You’re automating
processes. Don't make the mistake some businesses do of
automating bad ones.
Make sure you have a project leader who has the experience to manage
project scope carefully. It's inevitable that change requests will
occur, and they'll likely put great pressure on the budget,
timeline, and overall chances of success. Keep focused on
Your initial milestones and be sure to deliver them. Avoid the natural
tendency to try to do too much too soon.
17
Salespeople, especially, tend to have their own individual
systems for doing their jobs, from notebooks to index cards to
PDA's. You need to get buy-in. It's important to consult with
your employees, get their feedback, and constantly show each
of them how they will benefit from the changes. People give up
familiar processes IF they see there's something better ahead.
Training must be accessible and ongoing. The most important time for
training is in the months after deployment.
Apart of your training needs to focus everyone on the need for accurate,
complete data. Emphasize to employees that great customer
data is the key to unlocking customer value. Show each person
how they will benefit. Make everyone aware of how marketing
campaigns can be monitored more effectively, more accurate
sales forecasts can come together more quickly, and add-on
sales will be easier.
Set clear standards for data quality. Communicate them widely. Make
someone the champion of clean data. Devise a plan for
checking and maintaining data to ensure it is accurate and
clean.
18
improvement. Refine your strategies and processes, set new
goals, and devise tactics to achieve them. Monitor the entire
system for employee participation and make sure it's getting
accurate and complete data.
These are some of the most common steps that have resulted in CRM
success and solid ROI. Now take a look at CRM pitfalls to avoid.
CRM FAILURES
19
differing expectations of CRM's benefits. Sharing a common
vision is key.
Companies get better results from CRM when they begin by focusing on
sales processes: how do customers need to be approached,
convinced, served and satisfied? Only when these questions
are answered should steps be taken to plan software or
process changes.
Cross-sell
Up-sell
Retain
20
Acquire
What do your customers think of your company before, during, and after
the CRM implementation? What are they happy with, and what
are their complaints? How are other suppliers serving them in
ways that they like? Too often, surprisingly enough, the "C" in
"CRM" is not consulted in all phases of the initiative.
Unclear metrics
Implementation Errors
Have you considered ALL customer touch points and processes? CRM
projects often have focused on some parts of the customer
experience, but ran into trouble when they were unable to link
with or serve well all parts of the customer experience.
21
Lack of preparedness for continuous improvement
People errors
It's easy to want to do too much, too fast. Get it right first with a small
team of employees chosen to represent a cross-section of your
company. Choose an initial project that can make a dramatic
difference, with clear key performance indicators. Strong pilot
results will help you avoid the next pitfall:
It's easy to focus too much on the new technologies and processes
rather than focusing first on the people who will use them
successfully. You need employee excitement about doing a
better job for customers. You need employee feedback and
overall buy-in. The entire company needs to own "customer-
first." They need to see that the CRM vision you all hold takes
them to a better place than where they are now.
Process errors
22
look to CRM as a patch rather than an opportunity from the
ground up to increase customer satisfaction, revenue, service
and overall productivity.
Technology Errors
Different CRM solutions are in place but do not work well together.
23
Your vendor's experience with CRM implementation is one of your best
assets. See a selection of leading vendors.
24
was amenable to helping Pioneer mold and tailor the product
specifically for its needs.
Pioneer began to implement the E.piphany suite in July 2000, but within
months it became clear that the solution was too big to make
for a successful, timely, on-budget rollout. The plan stalled by
November and sat idle until Underhill's arrival six months later.
25
'With the failure rate at 80 percent, why do you think this
project should succeed?'"
Handman concurs: "I agree that the analysts who reported these
statistics believe them, but I don't believe they are right. I
believe that defining failure is the issue."
Last fall Gartner issued a statement that said, "Through 2006 more than
50 percent of all CRM implementations will be viewed as
failures from a customer's point of view." In this case the
customers are the companies that "are receiving the benefits of
these processes," says Scott Nelson, a vice president and
research director at Gartner.
26
in sales automation only to learn that sales reps are still using
ACT," Nelson says.
Yet, not all components of CRM have such a high failure rate. "It
depends on what subset of CRM you are implementing. Email
response management systems tend not to have that kind of
failure rate. The 50 percent failure rate was across the
spectrum," Nelson says. "We wouldn't label it a failure unless
one aspect was so overwhelming, such as a drop in customer
satisfaction, shopping cart abandonment rates go up, or sales
decrease."
Nelson concedes that measuring CRM failure is often difficult. The most
common problem is many companies implementing CRM "don't
apply good project management skills" and do not set metrics
that can help them define success or failure, Nelson says.
Setting Objectives
27
said the CRM project was a dismal failure, because eighty-four
databases were not properly integrated into one holistic data
structure," Goldenberg says.
28
informatics, who initially refused to set a business case with
metrics prior to Tripos' CRM project. "Nearly every company
I've been in is not static. You need a business plan that takes
that into consideration. If we change our business, you can't
track that against your business plan, because you're
comparing apples to oranges," Rubin says. "I pushed back
pretty hard on that. I'm not particularly a fan of a report that sits
on a shelf and doesn't get used."
Goldenberg's persistence paid off. "I can't claim that I fully respected
Bart's approach when we retained him; however, [implementing
CRM] in stages and demonstrating the benefits to each stage is
critical to the success," Rubin concedes.
Underhill's plan was to isolate the portions of the E.piphany suite that
could provide true and immediate business benefit and start
with those. "The technology wasn't an issue since E.piphany
29
lends itself to scalability. The biggest issue was simply trying
to be all things to all people," he says. "We took a small project
team and spread everyone so thin that no one could rapidly
address changing business needs. Breaking the
implementation into manageable parts solved that." But it was
a task the CIO found easier said than done.
The group first determined sales force analytics was the most
immediate need. The goal was to take contact management in
its purest form and add features of CRM so the field sales staff
could get rich information to aid the sale, with a delivery
method that would replace telephony and hard-wired laptops.
Underhill says that now he is confident that every dollar spent on the
new technology will be earned back. "Even if building a CRM
solution in this manner doesn't allow us to save money, it
30
allows us to use our funds efficiently," Underhill says. "We are
doing a smarter campaign that will translate to higher sales
later."
Moving Forward
Despite some of the damage that CRM consultants claim the research
firms' reports may have done to the industry, Gartner's Nelson
argues that the reports have helped the industry. "We have
some people accuse us on the hype cycle that it pushes CRM
into the trough," Nelson says. "However, it makes people
realize CRM has to be viewed as more than just a technology. It
helps firms become more conscious to properly staffing
projects and demanding more rigorous ROI work. It has helped
the market mature." Nelson says that he has seen this
firsthand: Clients are more informed about CRM and are
asking him better questions.
Pioneer and Tripos are prime examples of how organizations are getting
smarter about implementing CRM, and more success stories
like theirs are cropping up. In fact, analysts at the Aberdeen
Group Inc. are determined to point that out in a report called,
"What Works: Ten Successful Implementations in
CRM/Customer Contact Centers," which is slated for release
this summer.
"We expect to find that CRM really works," says Christopher Fletcher,
vice president and research director at Aberdeen Group. "This
is partly in response to the horror stories about the CRM failure
rate. We believe there are a lot of positive benefits that come
out of CRM implementations, both qualitative and quantitative."
31
Cross-channel integration truly
Insulates the customer from internal machinations
32
Trends in CRM:
Figure 8.4 outlines four types or categories of CRM that are being
implemented by many companies today and summarizes their
benefits to a business. These categories may also be viewed as
stages or trends in how many companies implement CRM
applications, and the figure also outlines some of the
capabilities of CRM software products. Most businesses start
out with operational CRM systems such as sales force
automation and customer service centers. Then analytical CRM
applications are implemented using several analytical
marketing tools, such as data mining, to extract vital data about
customers and prospects for targeted marketing campaigns.
33
management (PRM) systems. PRM applications apply many of
the same tools used in CRM systems to enhance collaboration
between a company and its business partners, such as
distributors and dealers, to better coordinate and optimize
sales and service to customers across all marketing channels.
Finally, many businesses are building Internet, intranet, and
extranet Web-based CRM portals as a common gateway for
various levels of access to all customer information, as well as
operational, analytical, and cooperative CRNI tools for
customers, employees, and business partners [3, 9]. Let’s look
at a real world example.
34
Section –II
Enterprise Resource
Planning:
Introduction
35
Systems with having helped them reduce inventories, shorten
cycle times, lower costs, and improve overall operations [9].
Read the Real World Case on the next page. We can learn a lot
about the major challenges businesses face when
implementing ER]? Systems.
What is ERP?
36
supports the basic internal business processes of a company.
For example, ERP forward for a manufacturing company will
typically process the data from and track the status of sales,
inventory, shipping, aid invoicing, as well as forecast raw
material and human resource requirements. Figure 8.6 presents
the major application) components of an ER]? System. Figure
8.7 illustrates some of the key cross-functional business
processes and supplier and customer information flows
supported by ERP systems.
37
required financial record-keeping and managerial accounting
applications. Figure 8.7 illustrates the processes supported by
the ERP system installed by the Colgate-Palmolive Company.
Let’s take a closer look at their experience with ERP.
38
processes, information systems, and information resources.
This results in more flexible organizational structures,
managerial responsibilities, and work roles, and therefore a
more agile and adaptive organization and workforce that can
more easily capitalize on new business opportunities.
39
implementations, but a sizable minority of firms experienced
spectacular and costly failures that heavily damaged their
overall business. Big losses in revenue, profits, and market
share resulted when core business processes and information
systems failed, or did not work properly. In many cases, orders
and shipments were lost, inventory changes were not recorded.
Figure 8.7: The business processes and functions supported by the ERP
system implemented by the Colgate-Palmolive Company.
40
Typical costs of implementing a new ERP system of ERP software
vendors or on the assistance of prestigious consulting fins
hired to lead the implementation
Trends in ERP:
41
Today, ERF is still evolving-adapting to developments in technology and
the demands of the market. Four important trends are shaping
ERP’s continuing evolution: improvements in integration and
flexibility, extensions to e-business applications, a broader
reach to new users, and the adoption of Internet technologies
[9}.
Figure 8.9 illustrates four major developments and trends that are
evolving in ERP applications [9, 13]. First, the ERP software
packages that were the mainstay of ERP implementations in the
1990s, and were often criticized for their inflexibility; have
gradually been modified into more flexible products.
Companies who installed ERP systems pressured software
vendors to adopt more open, flexible, standards-based
software architectures. This makes the software easier to
integrate with other application programs of business users, as
well as making it easer to make minor modifications to suit a
company’s business processes. An example is SAP R13
Enterprise, released in 2002 by SAP AG as a successor to
earlier versions of SAP R3. Other leading ERP vendors,
including Oracle, People- Soft, and J. D. Edwards, have also
developed more flexible ERP products.
42
partners. This Internet connectivity has led to the development
of interenterprise ER]? Systems that provide Web-enabled links
between key business systems (such as inventory and
production) of a company and its customers, suppliers,
distributors, and others. These external links signaled a move
toward the integration of internal-facing ERP applications with
the external-focused applications of supply chain management
(SCM) and a company’s supply chain partners. We will discuss
supply chain management in Section-III
43
SECTION-3
Electronic COMMERCE:
44
Introduction to e-commerce:
Read the Real World Case on the next page. We can learn a lot
about the challenges and opportunities in the field of electronic
commerce from this example.
45
E-commerce involves accomplishing a range of business processes to
support the electronic buying and selling of goods and
services.
46
processes such as extranet access of inventory databases by
customers and suppliers (transaction processing), intranet
access of customer relationship management systems by sales
and customer service reps (service and support), and customer
collaboration in product development via e-mail exchanges and
Internet news- groups (marketing/discovery).
E- Commerce Technologies:
Categories of E-commerce:
47
Many companies today are participating in or sponsoring three
basic categories of electronic commerce applications:
business-to-consumer, business to-business, and consumer-
to-consumer e-commerce. Note: We will not ‘.explicitly cover
business-to government (B2G) and e-government applications
in this text. However, many c-commerce concepts apply to
such applications.
48
may rely on electronic data interchange (ED1) via the Internet or
extranets for computer-to-computer exchange of e-commerce
documents with their larger business customer and suppliers.
The huge success of online auctions like eBay, where consumers (as
well as businesses) can buy and sell with each other in an
auction process at an auction website, makes this e-commerce
model an important e-commerce business strategy. Thus,
participating in or sponsoring consumer or business auctions
is an important e-commerce alternative
49
Fir B2C, C2B (consumer-to-business), or B2B e-commerce
50
Essential e-commerce Processes:
51
resources of an e-commerce Site except for other people’s
accounts, restricted company data, and webmaster
administration areas. Companies engaged in
52
Once you have gained access to an e-commerce site, profiling
processes can occur that gather data on you and your website
behavior and choices, and build electronic profiles of your
characteristics and preferences. User profiles are developed
using profiling tools such as user registration, cookie files,
website behavior tracking software, and user feedback. These
profiles are then used to recognize you as an individual user
and provide you with a personalized view of the contents of the
site, as well as product recommendations and personalized
Web advertising as part of a one-to-one marketing strategy
Profiling processes are also used to help authenticate your
identity for account management and payment purposes, and
to gather data for customer relationship management,
marketing planning, and website management. Some of the
ethical issues in user profiling are discussed in Chapter 13. See
Figure 9.5.
53