Customer Relationship Management

Customer Relationship Management or C.R.M is a

business strategy to select and manage the most valuable
customer relationships. C.R.M requires a customer-centric
business philosophy and culture to support effective marketing,
sales and service processes. C.R.M applications can enable
effective customer relationship management, provided that an
enterprise has the right leadership, strategy and culture.
Customers are treated as the heart of a business and
are considered as its most valuable resource. The ability to
access information about the customers can determine how well
one can understand and use this resource in the business goals
and strategies. Business strategy is about proper application of
information to use the resources in the most efficient and
economical manner. Thus, the process of using and developing
strategies based on customer information is called C.R.M.
In other words, C.R.M is a customer-focused business
strategy designed to optimise revenue, profitability and customer
loyalty. By implementing a C.R.M strategy, an organisation can
improve the business processes and technological solutions
around selling, marketing and servicing functions across all
customer touch points like web, e-mail, phone, fax, and even inperson.
C.R.M covers the methods and the technologies used
by companies to manage their relationship with clients.
Information stored on the existing customers and the potential
customers are analysed and used to this end. Automated C.R.M
processes are often used to generate automatic personalised

marketing based on the customer information stored in the

system.
According to industry view, C.R.M consists of:
a) Helping an enterprise to enable its marketing departments to
identify and target their best customers, manage marketing
campaigns with clear goals and objectives, and generate
quality leads for the sales team
b) Assisting the organisation to improve telesales, account and
sales management by optimising the information shared by
multiple employees and streamlining existing processes. Eg,
taking orders using mobile devices.
c) Allowing the formation of individualised relationships with
customers, with the aim of improving customer satisfaction
and maximising profits; identifying the most profitable
customers and providing them the highest level of service.
d) Providing employees with the information and processes
necessary to know their customers, understand their needs,
and effectively build relationships between the company, its
customer base, and distribution partners.

Uses of C.R.M
In its broadest sense, C.R.M covers all interaction and
business with customers. A good C.R.M programme allows a
business to acquire customers, provide customer services and
retain valued customers. Customer services can be improved by:
1) Providing online access to product information and
technical assistance around the clock.
2) Identifying what the customers value the most and devising
the appropriate service strategies for each customer.

3) Providing mechanisms for managing and scheduling

follow-up sales calls.
4) Tracking all contacts with a customer.
5) Identifying potential problems before they occur.
6) Providing a user-friendly mechanism for registering
customer complaints, handling these problems and
correcting service deficiencies.
7) Storing customer interests in order to target customers
selectively.
8) Providing mechanisms for managing and scheduling
maintenance, repair and on-going support.

Features of C.R.M
C.R.M is a strategy which is customised by an
organisation to manage and administrate its customers and
vendors in an efficient manner for achieving excellence in
business. It has the following features:
1) Customer needs oriented-An organisation can never
assume what a customer actually needs. Without
modulating the actual needs, it is nearly impossible to serve
the customer effectively and also to maintain a long term
deal with them. Hence by using C.R.M, each customer is
properly interviewed about his likes and dislikes so that the
actual needs are ascertained and practised.
2) Proper response to customer queries-Dealing with the
queries and activities of the customer intelligently is very
important for any organisation. This is due to the fact that
misunderstandings could convey undesirable perceptions.
The success of an organisations reactions totally depends

on its understanding and interpretation of the queries and

then to work out the best solution. Through properly
implementing C.R.M, the supplier succeeds in maintaining
a professional and emotional relationship with the customer
by properly answering his queries.
3) Increasing customer satisfaction-Customer satisfaction is
the measure of how the needs and responses are
collaborated and delivered to excel customer expectation.
In todays competitive business marketplace, customer
satisfaction is an important performance exponent and
basic differentiator of business strategies. Hence the more
is customer satisfaction; the more is the business and the
bonding with customers. Thus, C.R.M helps in bridging the
gap between customer expectation and customer
satisfaction.
4) Maintaining customer loyalty-Customer loyalty is the
tendency of the customer to remain in business with a
particular supplier and to buy his products or services
regularly due to being very much satisfied by the supplier.
To continue, maintain and retain the customer loyalty, the
most important aspect to be focused on is the customer
satisfaction. Hence, customer loyalty maintenance is an
influencing aspect of C.R.M and is always crucial for
business success.
5) Retaining customer base-Customer retention is a strategic
process to keep or retain the existing customers and to not
let them diverge or defect to other suppliers or other
business organisations. Usually a loyal customer tends to
stick to a particular brand or product as long as his basic
needs are properly fulfilled and risk seeking a new product.
Thus initiating a proper C.R.M programme helps a business

because the more possibility to retain a customer base, the

probability of net growth of the business.
6) Proper dealing and handling of customer complaintsThere always exists a challenge for the suppliers to deal
with the complaints raised by the customers. A complaint
raised usually indicates that there is dissatisfaction due to a
variety of reasons. These reasons are mostly genuine in
nature but in some cases, it may arise due to some sort of
misunderstanding. The way to handle these complaints is
substantial for any organisation. Hence it is essential for
them to have a predetermined set of processes in C.R.M to
deal and resolve the complaints in no time.
7) Providing efficient customer service-In an organisation,
customer service is the process of delivering information
and services regarding all the products and brands.
Customer satisfaction depends on the quality of service
provided to him by the supplier. If the quality and trend of
service goes beyond the customers expectation, the
organisation is said to have a good business with the
customers. Thus through C.R.M, an organisation has not
only to elaborate and clarify the details of the services to be
provided to the customer but also to abide with the
conditions as well.

Enterprise Resource Planning (E.R.P)

In an organisation, to draw the real benefits from a
technology as powerful as Information Technology (I.T) one has
to devise a system with a holistic view of the enterprise. Such a
system has to work around the core activities of the
organisation, and should provide seamless flow of information

across departmental barriers. Such systems can optimally plan

and manage all the resources of the organisation and hence, they
can be called as Enterprise Resource Planning (E.R.P) systems.
An enterprise is a group of people with a common goal
and which has certain resources at its disposal to achieve that
goal. The group has some key functions to perform in order to
achieve its goal. The resources include money, materials and all
other things that are required to run the enterprise. Planning is
done to ensure that nothing goes wrong. Planning is putting
necessary functions in place and more importantly, putting them
together.
Thus, E.R.P is a method of effective planning of all
resources in an organisation. It covers the techniques and
concepts employed for the integrated management of businesses
as a whole, from the viewpoint of the effective use of
management resources, to improve the efficiency of an
enterprise.
E.R.P packages are integrated (covering all business
functions) software packages that support the E.R.P concepts.
E.R.P software is designed to model and automate many of the
business processes of a company with the intention of
integrating information across the company and eliminating
complex and expensive links between the computer systems.
The success of E.R.P software depends upon reach.
E.R.P systems set of generic processes, produce the dramatic
improvements that they are capable of only, when used to
connect parts of an organisation: and integrate its various
processes seamlessly. The reasons why the market for E.R.P
systems is in great demand are as follows:

a) Improves business performance

b) Reduces cycle time
c) Increases business agility
d) Helps in reducing inventory
e) Helps in improving order fulfilment
f) Supports the requirements of business growth
g) Helps in introducing new products/product lines to attract
new customers
h) Provides flexible, integrated, real time decision support
i) Improves responsiveness across the organisation
j) Takes advantage of untapped mid-market (medium sized
organisations)
k) Increases functionality at a reasonable cost

Advantages of E.R.P
Installing an E.R.P system has many advantages-both
direct and indirect. The indirect benefits include better corporate
image, improved customer goodwill, increased customer
satisfaction. The following are some of the direct benefits of an
E.R.P system:
1) Business integration- The first and most important
advantage lies in the promotion of integration. The reason
why E.R.P packages are considered to be integrated is that
the automatic data updation (automatic data exchange
among applications) is possible among the related business
components. Here, the data of related business functions is
also automatically updated at the time a transaction occurs.
For this reason, one is able to grasp business details in real

time, and carry out various types of management decisions

in a timely manner, based on that information.
2) Flexibility- The second advantage of E.R.P packages is
their flexibility. Different languages, currencies, accounting
standards and so on can be covered in one system, and
functions that comprehensively manage multiple locations
of a company can be packaged and implemented
automatically. To cope with company globalisation and
system unification, this flexibility is essential, and it has
major advantages, not simply for development and
maintenance, but also in terms of management.
3) Better analysis and planning capabilities- Yet another
advantage is the boost to the planning functions. By
enabling the comprehensive and unified management of
related business and its data, it becomes possible to fully
utilise many types of decision support systems and
simulation functions. Furthermore, since it becomes
possible to carry out, flexibly and in real time, the filing
and analysis of data from a variety of dimensions, one is
able to give the decision-makers the information they want
and thus enabling them to make better and informed
decisions.
4) Use of latest technology- The fourth advantage is the
utilisation of the latest developments in Information
Technology (I.T). The E.R.P vendors were very quick to
realise that in order to grow and to sustain that growth, they
had to embrace the latest developments in the field of I.T.
Therefore, they quickly adapted their systems to take
advantage of the latest technologies like open systems,
client/server technology, Internet/Intranet, Computer-aided
Acquisition and Logistics Support (C.A.L.S), electronic

commerce, etc. It is this quick adaptation to the latest

changes in I.T that makes the flexible adjustment to
changes in the future business environments possible and
also makes the incorporation of the latest technology
possible during system customisation, maintenance and
expansion phases.
Other advantages include the following:
5) Improved efficiency
6) Information integration for better decision making
7) Faster response time to customer queries

E.R.P Implementation Strategies

Choosing an E.R.P software implementation strategy
is an important consideration. Before choosing a strategy, it is
important to evaluate each of the options available and
understand each one of them thoroughly. Armed with this
knowledge, there is a high probability of success when it comes
to selecting a strategy that fits the organisations accordingly.
In short, choosing the right implementation strategy is
as important as finding the right programme. A strategy
determines how the E.R.P system is to be installed. On the one
hand, E.R.P software may be installed using very different
processes. On the other hand, one approach or strategy may be
used for different software. The following five strategies form
the basis for all other variants available on the market:
1) Immediate change-over transition (Big Bang)-This
method dominated early E.R.P implementations and is
considered as partially responsible for the massive failure

of these systems. All modules are installed at once across

the entire organisation with all enterprise functions being
transferred concurrently from the legacy system to the new
E.R.P system, either over the course of the weekend or in a
day. The implementation requires careful preparation and
planning to avoid failure and the many resources required
to offer support. This method is rarely used by todays
organisations.
2) Phased transition- This is the most commonly used E.R.P
implementation method where the system modules are
installed per unit and per department. Each business unit
has its own E.R.P instance and database that reduces the
risk of customisation and operation failure due to the
reduced implementation scope of the system. In this
approach, interface programmes are used to bridge the gap
between the legacy system and the new E.R.P programmes
until the entire system is fully functional. This strategy
works where there is no centralised synchronisation in the
project.
3) Parallel transition- This approach keeps both systems
active and in operation for a length of time ranging from
one day to several months, and sometimes for years.
Whether it is the finance, marketing or manufacturing
modules, both E.R.P systems run concurrently allowing in
the fixing of bugs and customisations without affecting
workflow. This approach works where there are mission
critical operations. If a module breaks down, then the other
business processes are not affected.
4) Process line transition- This approach is commonly used
on product lines or product flows and related assets. The
first product line is first transitioned from the legacy system

to the new E.R.P system and its success is monitored. Upon

its successful implementation, the second product line is
similarly moved to the new system and its success is also
measured. This approach is useful when one needs to build
industrial faith on a new system with the goal of increasing
its overall success prospects. Usually, the more complicated
and challenging process lines are transitioned only after
achieving successes with the other lines.
5) Hybrid transition- This is a combination of the above
mentioned implementation strategies. The decision on what
method to use tends to be based on the study of the E.R.P
team members and other necessary information. The size
and type of business also contributes to the simplicity or
complexity of a hybrid strategy. Large conglomerates will
no doubt have complex hybrid systems compared to small
single-site businesses. Hybrids are most preferred where
flexibility in adapting to specific needs is required. They
also allow for exclusive adjustments based in industry
needs.

E.R.P Implementation Lifecycle

The E.R.P implementation project involves different
phases which have definite activities as explained below:
a) Pre-evaluation screening- To search for the perfect
package which will be most suitable in terms of functional
fit of the business process, skill set available and easiness
to adopt.
b) Package evaluation- To understand the performance of the
business and to do the cost benefit analysis.

c) Project planning phase- To make a tentative plan for the

implementation in terms of time, identification of the
person responsible for the coordination of the
implementation programmes, skill development and
monitoring the progress.
d) Gap analysis- To identify the gap between the existing
system and future expectations from the E.R.P system so as
to optimise the outcome from the implementation
programme.
e) Re-engineering- To bring the necessary changes in the
system in terms of physical system, hardware, mindset of
the people, dataflow and reporting.
f) Configuration- To install the necessary hardware, database
management system and configuration of the E.R.P system
accordingly.
g) Testing- To test the system with test data set like entering
data, validating them and generating reports for all modules
and checking their correctness.
h) End user training- To impart training to people from
different functional areas.
i) Going live- To finally switch over to the new system with
data migration and running the system with live data of all
functional areas.
j) Post implementation- To arrange for maintenance of the
system in terms of provision of technical expertise in case
of problems.

Steps in implementation of E.R.P system

The methodology of implementation of the E.R.P
system involves different activities like understanding the need
`

for the system, benefits to be derived, people to be associated,

need for their skill updates, database configuration, etc.
Generally, an E.R.P implementation can be divided into 5
phases:
1) Understanding the problem- This is the phase where indepth analysis of business system is undertaken to
understand the need for an integrated system in handling
data and for improving the data flow towards better
management reporting and effective decision making. The
company goes for the evaluation of different packages and
selects the one which is the perfect fit to the requirement.
The parameters taken into consideration include functional
fit with companys business process, degree of
implementation among various modules, flexibility,
technology requirement, cost of the system, time of
implementation, skill requirement, and technical support
and so on.
2) Defining the solution- This phase considers all the
intricacies of the system so as to take care of all those
during the development process. The gaps in the present
system, scope of improvement in the data flow and need for
integration for better control are the most important three
areas which are critically evaluated to arrive a solution set.
Finally, the outcome of the same is taken into consideration
for the software. This phase gives solution for data
migration process, volume of data and database size, plan
for implementation in terms of technical requirements and
timeframe. In fact in this phase, the project team is built
and project schedule is defined for all broad activities.

3) Undertaking the technical work- In this phase, the

activities are broken into details. The work involved in this
phase include procurement of hardware, configuration of
the system, data migration, developing and testing the
interfaces, developing the new procedure associated with
the system, testing the new system and training the endusers.
4) Going live- In this phase, the system is to be finally
implemented in the new environment with a real life data
set and to the satisfaction of the end-users. In E.R.P
systems, the integration of all the modules is the critical
part. The end-users must understand the sequence of
operations, how one module interacts with the others and
what are the restrictions in operation in terms of priority so
as to establish proper checks at all levels in the process.
The co-ordination among the project members for different
modules is very essential for the smooth and successful
implementation of the E.R.P system.
5) Post-implementation
maintenanceOnce
the
implementation is over, the services of the vendor and the
hired consultants will not be available. Trained in-house
employees may have limited exposure to take care of all the
problems just after implementation. Post implementation
needs a different set of roles and skills to solve the
problems in an integrated system. The training will never
end as new functionality may be added which will invite
different technical problems like enhancement of system,
fresh configuration for added integration features, etc.
Thus, this is a very critical phase. To reap the full benefits
of an E.R.P system, there should be arrangements made for

the continuous training of employees and also for the

system.

Supply Chain Management (S.C.M)

Supply chain is a process umbrella under which
products are created and delivered to customers. From a
structural point of view, a supply chain refers to the complex
network of relationships that the organisations maintain with
their trading partners to source, maintain and manufacture
products. In other words, the flow of materials and information
through a business, from the initial purchasing function through
the operation and eventually to the customers is known as the
supply chain.
Supply Chain Management is a systems approach to
managing the entire flow of information, materials and services
from the suppliers of raw materials through factories and
warehouses to the customers. The Supply Chain Management
covers all aspects of a business. From the stage of raw material
to the end user, each and every aspect of this cycle is covered by
the management system-be it sourcing, product design,
production planning, order processing, inventory management,
transportation and warehousing, and customer service.
The Supply Chain Management manages the flow
between different stages to maximise productivity and minimise
stock-outs or overstocking. The solution spans across the
different companies involved, and the system used by these
companies involved, and the system used by these companies
should be able to talk to each other and understand each others
requirements. The reason why the Supply Chain Management is

an inseparable part of todays business is that it offers a solution

to the increasing demand uncertainty and the ever-shortening
life cycle of products.

Internet enabled Supply Chain

Management or e-S.C.M