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Posts Tagged ‘ERP’

What’s in store for EA-Strategy space in 2010?


We ended the year 2009 on a positive note where almost every analyst and industry watcher was expecting the economy to look up and once again ride up the crest. Things do look better, businessmen do look confident. The economic crumble had given rise to distrust but as the things are improving, the distrust is being replaced by caution.

Yes, the year of 2010 will be one of cautious approach to every major decision. The fact is that the recession has changed many things around us. The time when anyone and everyone would jump on to the band-wagon is no longer reality. Today, and the year to come, people will be pussy-footing around the platform before making up their mind to jump onto it.

I have compiled a list of top ten things around which the business decisions will be interwoven when it comes to using IT as an enabler for strategy execution.

  1. Focus on ROI: Businesses across the globe will be focusing on RoI in any type of implementation. The companies have tightened their belts and cut on budgets and money supply is low and every manager is trying to get the bang for every buck spent. Any major implementation which does not provide substantial improvements in operations will be dinged at first go.
  2. Focus on Operations: In the recession times, the companies have come to face the reality that the most important thing to survive in a business is the cash flow from operations. If the operations are not generating enough positive cash flows, it is very difficult to survive. Companies will be stressing more on the efficiency and effectiveness of the operations and reducing the wastes (the seven types of wastes). To achieve the same, companies will take the help of IT as an integration mechanism for different operations units. At a time when all the job-shops employ the best machines and cutting edge technologies, it’s the flow of information across units and partners that holds the key to efficiency in operations.
  3. Collaboration: The decade just passed has already shown that how important it is to collaborate with all the stakeholders in the business. As the flow of information across units in the organization is important, similarly, the flow of information across partners and stakeholders is very important. When everyone is working hard to lower down costs, holding inventories, wastes, it becomes very important to share information with each other so that the other party can plan their activities accordingly.
  4. The rise of SaaS: SaaS as a delivery model for EA will be in demand. The SaaS market (though has a low base) is growing at 40% percent per annum. According to the CVS Survey, it takes about $ 0.2 million to implement an ERP solution for a SME whereas if the same application is offered through SaaS delivery model, it can be done at as low as $1000 per year. That makes a big case in favour of the SaaS model. I do not say that SaaS will completely overshadow the traditional implementation models, but, SaaS will be a force to reckon with!
  5. A renewed focus on SMBs: The rise of SaaS as a delivery model will go hand in hand with the renewed focus on Small and Medium Businesses. Most small businesses have recognized the need of an EA package to manage their operations, but, cannot afford the same. System Integrators and vendors will focus on these businesses and offer them robust and affordable solutions.
  6. Risk Management: There will be an increased push towards risk management and data security. As I have already pointed above that the flow of information will be the basic requirement for the smooth and efficient run of systems, in the same breath, the security of data and the risks posed by the unauthorized access to data will be of importance.  
  7. Business Analytics: BABI (the term coined by Dr. Bala V. Balachandran, distinguished professor at Kellogs Business School and Dean of Great Lakes Institute of Management) or Business Analytics and Business Intelligence will take to the centre-stage. The companies are making use of the data available for making informed and intelligent decisions. Analytics will play a major role in helping organizations to make the best use of already scare resources and in turn help in improving the RoI of the initiatives.
  8. Organizational alignment to the Systems: Rather than implementing new systems, organizations will make efforts to align their workforce to the systems in place.  Most of the systems fail because the human component in the implementation does not give its best to make the system a success. Falling in line, the management will give a push to the workforce for embracing change and give their best.
  9. Pay for performance or pay for used capacity: At a time when every business is concentrating on RoI, performance is being attached to investments. Organizations are taking the route of attaching payments to performance. Also, paying for used capacity rather than installed capacity (Air-Tel Bharti’s contract with vendors and IBM) will gain prominence.
  10. ERP space will remain a buyer’s market: With companies taking a cautious approach to big ticket IT spending, the ERP space will remain a buyer’s market. Vendors will have to offer very competitive prices to make buyers loosen their purse strings. Companies looking for EA implementations will bargain hard for “exciting” offers.

Oracle Social CRM: A short review

December 16, 2009 Leave a comment

Oracle Social CRM is proving itself as the next generation collaborative CRM which incorporates some very advanced features required in today’s business environment. The below video gives an overview of the functionality of the product.

Competing on Analytics: Part 3

December 14, 2009 Leave a comment

In parts 1 and 2 we have seen the power of analytics and how companies have made use of analytics to achieve substantial gains. The last part of  in the series gives the details of some other important aspects of data.

Where to capture this data?

The modern enterprise has numerous channels from which the data flows. The data can converge into a single destination or may be stored at different locations in the integrated system. The various channels of data flow may be: call centre, direct sales, partner operations, IVR, Self Service-Internet etc. It is again the decision of the management team to identify which sources of data to tap. The Six Cs (Correct, Complete, Current, Consistent, Context, Controlled) of data play an important part in the identification of places where the data can be found. For Example in a telecom enterprise, the data may be available at a number of places such as the CRM database, the Billing Database, IVR Database, the Interaction Centre, the networks etc.

How much data is needed?

The amount of data plays an important part in the ability of the enterprise to leverage the ability of the system to convert the data into knowledge and insights. Any enterprise looking for reliable results should have data at least for two years. The organizations operations in an industry sector which faces cyclicity need even more data for making sure there is no cyclicity in the cycles.

The base line is “The more (without compromising the quality) the better”. The knowledge depositories using analytics solutions build over time. The irregularities are smoothened over time and with the refinement in analysing techniques. Companies should not expect instantaneous results from implementation of analytics. The results take some time to show up and the managers also take some time to pick the fine lines in leveraging the results.

Analytical tools and Analysis

Once the data is ready, the next important aspect is the data analyzing tools. The market is abuzz with tools ranging from very simple tools like XL- Spread Sheets to very complex and powerful tools such as SAS, SPSS, Minitab etc. The organization needs to again take a subjective decision on which tool to use. Some tools offer marginal improvements at a very high additional cost. Also, the analytical tool just provides the results of analysis and is a DSS (Decision Support System). The interpretation and implementation of results is again a function of the “human factor”.

Knowledge and Insights

I always tell fellow consultants and clients that the implementation of Analytics does not “give” knowledge and insights. It has to be “achieved”. The IT component is only a small part of the whole exercise. All the stakeholders have to play their part to achieve the two. Once the trends and patterns are identified, the managers have to play their part. Many companies implement these solutions but not many can leverage the results. The analytics (or any other DSS) can increase the accuracy in identifying more factors that influence the decisions. In the end it’s the manager who makes the decision. 

Competing on Analytics: Part 2

December 13, 2009 1 comment

We have seen in my earlier post on Analytics that how and which companies are competing on the basis of analytics. The next questions that a person is bound to ask is that what type of companies or companies in which industry sector make the best use of Analytics?

The answer is ANY. Yes, any company in any sector can compete on the basis of analytics. Analytics does not mean that one has to have hoards of data and numbers. Analytics can also be use on transactions that involve verbatim details. Companies even make use of the analytics in analyzing words, phrases, the sentiments etc.

So now we know that any company can implement analytics. But, to make use of the analytics framework and to derive the desired results, the human component is as important as the mathematical model and IT component driving it.

There are a few more questions that arise in the implementation of analytics:

What data to capture?

This question has no straightforward answer. The executives driving the implementation should decide on what data will enable them to achieve the insights required. Some executives try capturing every bit of data that they can lay their hands on. It is good to capture as much data as one can because you never know what will be required at what point in time. But al J.L. Distinguished Prof. of Kellogg University puts it “It may lead to data obesity and knowledge starvation”. There no measure to determine the “optimum” amount of data or the “optimum” parameters on which to collect data. Thus, it is a pure Human component of the implementation that decides what to capture (unless one is implementing a package which requires mandatory fields to be captured). The capture of data also depends upon the requirements of the “downstream” systems and channels. For example in the CRM system may not require all the data for itself, but has to mandatorily capture it for the downstream systems such as Billing and Finance.

Correct: The data captured should be correct in all respects. Incorrect data will spoil the quality of results and may even lead one to wrong results.

Complete: The data to be captured should complete. There should be no missing fields. The missing fields may be considered as “zero” or “null” by the analytical tool. This may again lead to incorrect results.

Current: The data should be consistent with the time line. The data being captured at this moment should be current. Any data that is not current should specify the timeline when it was captured.

Consistent: The data should be consistent along the time line. There should not be huge deviations and fluctuations in the quantity and quality of data. This discounts the cyclicity of the data.

Context: The data being captured should be in line with the context. The context is again defined by the parameters which define the scope and scale of the framework.

Controlled: The data should be controlled and manageable. The control on the data makes sure that the data under analysis is the sample that one wants to analyse. The control on the data also ensures the management of sudden spikes and troughs.

Poor Customer Service Costs Billions

December 8, 2009 Leave a comment

A new study, “The Cost of Poor Customer Service: The Economic Impact of the Customer Experience and Engagement,” may finally put the damage bad service can create into a language executive boards understand : Dollars and Cents. According to the survey of 8,880 consumers across 16 countries, poor customer service cost an aggregate of $338.5 billion per year, the average value of each lost relationship across all countries surveyed costing $243.

According to study findings, companies in the financial services and telecommunications sectors should take special notice. Statistics reveal that financial services firms lost more than $44 billion, while cable and satellite television providers lost upwards of $37 billion. Wireless carriers and Internet service providers each lost $36 billion, with landline carriers posting $33 billion in lost revenues.

Financial services and otherwise, the most significant reasons for poor service according to the study are:

  • being trapped in automated self-service;
  • waiting too long for service;
  • callers having to repeat themselves; and
  • customer service representatives lacking the skills to answer inquiries.

Consequently, what then ended up at the top of many respondents’ wish lists for customer service improvements included better integration between self-service and assisted service, including voice and Web.

Possibility, Feasibility and Compatibility

December 8, 2009 Leave a comment

Those who have been around me have heard me using these words very often. For a re-engineering exercise and for any implementation, I use these three words to convey very simple, yet very important message to the people involved in the exercise.

Possibility:

The end users and even the process owners might get carried away with the implementation exercise and list down requirements (read wish list) which might be outrageous and impossible to do. As an example, on one of my assignments, the user asked me if he can get an SMS is someone tries to log-in into his system. No doubt this can be done, but it’s an “outrageous” requirement for an organization unless the organization deals with data pertaining to the nuclear missiles and the like.

At the time of gathering requirements during interviews, and later at the time of analyzing the requirements, it’s the responsibility of the Consultant to segregate there “impossible” requirements and remove them for the list.

After checking for “impossibility” one is left with only “possible” requirements.

Feasibility:

Feasibility can only be checked for the “possible” requirements. Thus, this logically forms the second step in the implementation.

The requirements which can be done with the available resources and/ or can be achieved with the resources the project can afford and are within the scope of the project are feasible requirements.

Compatibility:

After one is left with the feasible requirements, it’s again the job of the Consultant to make sure the requirements are in line with the Business Case for the implementation and the strategy execution which the steering committee aims to achieve with the implementation. The consultant always has to ask the question “Is this compatible with the strategy?” If the answer is No, he has to think over it again and talk to the process owner as well for the value addition that this requirement will to the overall success of the project.

Thus, the answers to questions for checking possibility, feasibility and compatibility are very important during the execution of implementing a project.

The CRM implementation: Preparing the ground.

December 7, 2009 3 comments

Once the organization knows that it has to implement CRM and has selected the EA Product to implement, the next step is to have the ground ready for the implementation. Along with that, the organization has to form a team for managing and overlooking the implementation. The following is the list of some important components of this phase. The organization is required (or I say MUST) prepare ground to have a long term relation with these components. The effective management and control of these components is important in the making or breaking of the project.

 

  1. The Business Case: For every task that involves huge monetary and human efforts, one needs to justify the means and the end. For the same, a business case is necessary that concisely states the end result one wants to achieve by the efforts and the benefit that the stakeholders will get from the exercise. Someone rightly said that if you cannot state the business problem in a single sentence, you have not understood the business problem. I agree with the statement, but, in addition to that, one should put a one pager note to the business case which in brief explains the cause, case and the end. 
  2. The Steering Committee: The stakeholders need to form a steering committee for the implementation. The main task of the Steering Committee is to make sure that the teams working o the project do not loose the direction. The SC works mainly on the line of aligning the implementation with the long term strategy and achieving the same. The SC generally has on board the decision makers from all the partners involved in the implementation. There will be a few representatives from the client, the System Integrator, the vendor and other partners. In most of the cases, the SC is the ultimate decision making authority in case a dispute arises among the partners. The SC also takes care of the mid course correction, if required. 
  3. The Lead: All the teams involved in the exercise have to have a team lead. The team leads act as the POC (Points of Contact) for the teams to coordinate with each other. Also, the Leads make sure that the teams understand their roles and give the required inputs. In case there is ambiguity in the views given by the end users or the team members it is the Lead who gives the final say. Also, the Leads resolve the disputes in case something is overlapping two areas and most of the time is involved in give and take when some functionality can be done by one or more of the teams. 
  4. The Champions: The Champions will be the guys in different teams who have the knowledge of “how things work?” and not only “why something works?” In every organization and department, there will be guys who know which piece fits where in order to make the system work perfectly fine. They will be a great source to know the short comings of the present system. For a successful implementation, the Champions are required at every point in time. But, the Leads should not be too dependent on the Champions as they have the present system imbibed in them, they might not be able to visualise the future system or the future requirements. 
  5. The SI/ Implementation Consultants: The System Integrator (SI) and the implementation consultants come from two backgrounds (one consultant have both the back grounds). One, some of them have in depth knowledge of the domain and are called domain experts. Two, the product experts: Who have the in depth knowledge of the EA product. The implementation consultants work together to understand the client requirements and meet the same through the system capabilities. There are other functions of the implementation consultant which are very vague and may come time to time. Some of these functions might include getting a buy-in for the solution from the Process Owners, negotiation with the clients and the partners etc.
  6. The Vendor Relations: It is a must to have a small team from the client and the SI to keep in touch with the Vendor. This is to make sure from time to time on the customizations and the bolt-on that are being built. Some (read all) of the vendors might not give the support and upgrade required for the EA product in the future.
  7. Feedback Channels: The implementation exercise should have feedback channel for the implementation. The feedback can come from all the stakeholders including the Steering Committee, the Process Owners, Business Managers, Vendors etc. The Feedback is necessary to make sure that the implementation is in line with the “means and the ends”. This also gives a base for the course correction, if any, required.

 

The above listed teams and the functionalities are very important for a successful implementation. Or, to put it in the other way, these are the participants required to “almost” eliminate the chance of a failure.

The CRM implementation: Selecting the EA Product

December 4, 2009 2 comments

The selection of the product for implementation plays a major part in the success or the failure of the implementation. The success or the failure of the implementation is measured in terms of the extent to which the set targets/ goals have been achieved by the implementation. The product selection again depends on a number of factors or constraints that the organization may be facing. I have listed a few of these factors below. The list is an indicative list and does not contain all the factors that might affect the product selection:

  1. Budget: The CRM implementation can cost an enterprise from a few thousand dollars to a few hundred million dollars. The budget allocated for the product alone can be from a 5% to 70% of this cost. There are some open source CRMs available for free downloads (Sugar CRM) where one does not have to pay a single penny for the product. Then there are products by SAP and Oracle which may cost a bomb for the vanilla product alone. Midway the two are some mid range CRMs. Though most of the CRMs claim to address most of the industry requirements, not many (read “none”) are able to meet all the requirements of the organization.
  2. Scale: The Scale also plays an equally important part in the product selection. Some company may just require managing the contacts or the interaction with the contacts form the MS Outlook. There are some small packages available which can be downloaded and easily laid on the existing MS Outlook framework. They help manage the schedules, inquiries etc. Then there may be some organizations which require just managing the sales team or the marketing team or the Call Centre operations. Most of the modern day CRMs have 20-25 modules. The Organization may require a few or all of these modules. The cost and the selection of the product depend on the need for the modules required by the organization from this list.
  3. Complexity: The processes of two industries can be vastly different from each other. Though no industry processes can be called easy to manage, but my experience says that telecom industry processes are most complex and difficult to manage. Add to this the dynamic nature of the telecom industry where new products are launched daily and new functionalities are added daily. Thus the products for telecom industry contain more functionalities than for any other industry. These products, no doubt, are costlier than their peers form other industries.
  4. Deviation from the Industry Practices: Even in the same industry, one organization may have processes very different from other organization. Every organization tries to follow the “differentiation” path to move ahead of the competition. In this quest of differentiation, these organizations have processes which are vastly different from other similar organizations in the same industry. If your organization is different from the others, the CRM product to be chosen will depend upon the extent to which you are willing to sacrifice the uniqueness of your processes and the money you are willing to pay for the customizations required in the generic product for maintaining the existing processes.
  5. Model of implementation: The CRM products differ in genre which is dictated by the mode of implementation.  For example, if the implementation on-premise, the costs may be different, than when it is a SaaS. Similarly comparing it with PaaS implementation may give different commercials. The products for SaaS, On Premise, PaaS may also be different in costs based on the vendor selected.
  6. Existing Systems: If one is looking for compatibility of the CRM to be implemented with the existing legacy systems (such as Inventory, Billing, Financials etc.), one has to be very careful while choosing the product. If proper precautions are not taken care of, the new product may pose difficulties in the integration of existing systems. The cost of the selected product again depends on the vendor who offer the most compatible product.
  7. Human Factor: The human factor comes into play at a number of instances in the selection of the product. The team or the person authorized to make the final say on the purchase may have some pre notions for some product. The employees or the implementation team also may count in the ease of use for the product. Some CRMs are more user friendly than the others and hence are favoured by the implementation teams or the advisors for product selection.

All the above factors and some more influence the selection of the EA product to be implemented by the organization. Nonetheless, the product selection is a very important and a crucial aspect for the implementation to deliver the desired results.

The CRM implementation: Is CRM really required?

November 30, 2009 Leave a comment

Every day there are stories and advertisements in business magazines and newspapers about the organizations benefitting from the implementation of ERP and CRM. The vendors (Oracle, Sales force etc.) leave no stone unturned to make sure their success stories reach the audience. Many organizations do get influenced by these messages coming from the industry as well as the vendors. No organization wants to lag behind its competition and is willing to invest a few million dollars if the implementation gives it an edge over the competition.

But, the question is: Is the CRM really required?

The legendary Harvard Professor and noted economist, Theodore Levitt once said that a customer does not want a quarter inch drill; all he wants is a quarter inch hole. The same rule applies to organizations thinking for implementing the CRM package. The question they should ask is: Do we want to implement CRM or do we want a solution for a problem? More often than not, the answer will be that the organization is looking for a solution to its problem. There can be many solutions to this problem. The organization can improve by just improving the competency of the human component or by just re-engineering its processes. Some other problems might be solved with just adding enhancements to the existing IT systems.

Build vs. Buy: When the organization is convinced that it has to improve or replace the existing IT systems, the next decision is to decide between whether the organization should build its own system or buy an EA product?

When the patchwork on the IT system stops working, the option of building the system has been ruled out its time to justify the implementation of CRM. The implementation of CRM is justified if the organization has the following requirements:

  1. The organization is a customer centric organization or wants to transform into a customer centric organization.
  2. It has multiple teams working on a single process and the process ownership changes from one stage to another.
  3. The coordination between teams and flow of data from one team to another is the key to success of a process/ transaction.
  4. It feels that customer service has to be personalized for each segment or each customer.
  5. It wants to integrates all the three functions of the customer interaction: Identification, Acquisition and Maintenance of customers.
  6. It has the money and resources to implement and maintain a CRM System.

The CRM Implementation- Introduction

November 30, 2009 Leave a comment

    Many organizations have a need and a desire of implementing CRM and the related systems. Implementing these systems if a big decision for the companies and costs a bomb in terms of money and human resource spending. Even after meticulous planning and careful implementation, the companies are not sure if they will be able to achieve the desired results.

    I have started writing a series of articles on the planning and implementation methodology that may serve as broad guidelines for companies to implement these systems. The series will take the readers from the planning through the implementation and optimizing and fine tuning the system.