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Posts Tagged ‘Technology’

Two things that customers want. And, Salesforce.com delivers.

January 20, 2010 4 comments

Last night I got a mail from one of the followers of this blog asking me to give the reasons of salesforce.com’s success. I chose to put it in a very simple way: Salesforce.com is delivering what the customers want!

When salesforce.com won four of the ten awards at 2009 CRM Market Awards by the CRM Magazine, many were surprised. But not me! I had expected it to happen and it did happen.

Now the question is why and how did it happen? And the bigger question is what is it that the customers want?

Most of the success that SFDC has achieved has been in the SMB segment. The small businesses have two main concerns when it comes to IT systems implementation:

One: Affordability.

Two: Robustness.

Small businesses look for affordable solutions as they are not in a position to spare and spend multimillion dollar budgets for IT implementations. Also they look for a robust solution as they cannot spend on maintaining an in-house IT team.

It’s a fact that all the businesses need to optimize the use of their resources and have a seamless flow of information across the organization units and also with the partners and customers. All the EA products available before the arrival of SFD were either very costly to implement or maintain, or were suitable for only large enterprises. Small businesses had requirements but there was no product in the market to meet them. SFDC stepped in at the right moment to plug in the gaps that the giants like SAP and Oracle left.

According to the CVS survey for SMBs, on an average of $0.19 million is required for implementing an ERP system for a medium size business. The same capabilities can be delivered through SaaS at a cost of as low as $1000 per year. This makes a very strong case for SFDC. Also, post implementation, the maintenance and upkeep of the system is to be done by the provider. This eliminates the need for an in-house IT team for maintaining the system.

It’s as simple as that: SFDC provides what (it’s) customers want. That makes it successful.

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.

Top three learnings from CRM.

December 27, 2009 Leave a comment

I have worked on CRM as a process consultant for over four years and continued my “relationship” with CRM even after I joined MBA. Not just continued the relationship, but also widened and deepened the same with new perspectives that I absorbed on the way. To keep it short and sweet, I have listed the top three takeaways that I feel have not only widened my perspective on CRM as an enterprise solution, but also in day-to-day business life:   

  1. Relationships Rank No. 1. Customers are the lifeblood of a business just as friends and family are the fuel for our soul.  And just that companies are finding that these relationships are key to surviving the recession, the view can be extended from customers to all the stakeholders in the enterprise and the ecosystem surrounding the enterprise. Relationships and information flow across partners, vendors, customers and the enterprise is the key to deliver the best.
  2. Technology Helps: It is often said that CRM isn’t a technology, it’s a strategy, but , it is the technology helps make it happen. Leave aside the enterprise solutions such as SAP, Oracle etc. but, even in day to day life, we need technology to make a long distance call, travle to friends and family, chat with fiends overseas. Managing relationships has been simplified by technology.  CRM consists of two equally important components of the Human Component and the IT component. Both work hand in hand to make the CRM strategy a success.
  3. Garbage in Garbage Out: You can’t expect a quality outcome if you don’t have quality inputs. For long people have been talking of “user friendly” systems, but, I believe, for best results, we need “friendly users” as well. Remember CRM EA is an enabler in the process of managing and executing the CRM Strategy, even after discounting the internal system checks and balances, it can give valuable outputs only if managed properly. Be nice to the system, the system will be more than nice to you!

Best wishes for the new year!

Why Alliances have gained prominence?

December 24, 2009 Leave a comment

Over last few years, Alliances have gained more prominence than the regular route ot mergers and acquisitions. Monetary considerations have played an important role but, are not the sole reason for organizations going in favour of alliance formation. I have listed below a few important points that have driven forces for organizations going the “Alliance Way” :

1. Core Competence:

Companies tend to build on their core competence and this very fact can give a differentiating  edge on other competitors. Thus, leaving one’s core competence and getting into a new field can be a disaster unless handled very carefully. Aligning to one’s core competence and creating an ecosystem around the core competence is the right way for expansion. The creation of ecosystem can be done through acquisitions, mergers or alliances. Mergers and Acquisitions may lead to diversifying into new territories and may dilute the core competence of the company. Thus, unless handled carefully, alliances should be the first choice for expansion.

2. Affordability:

Not every company can afford an acquisition or a merger. The costs of M&A are both in terms of tangible and intangible resources. Some companies might not have money or scale for M&A and other might not have scope for M&A.

3. Government regulations:

Sometimes government regulations prevent mergers and acquisitions. For example antitrust laws in the US or anti-Monopoly laws in other countries may hinder the M&A process. Thus, forming an alliance is the most favoured way out.

4. Entry Barriers:

Some markets and sectors have entry barriers due to favours by the home governments, access to raw materials, access to distribution channels etc. In such a case also forming an alliance with an existing player in the market or sector  is the most favoured way out. 

5. Competitive Landscape:

Companies do not operate in isolation. The company takes actions in response to the changing market dynamics and for any action that a company takes, the market forces respond to it. In a competitive environment, sometimes companies bleed to death fighting each other. Over time companies have realized that cooperation gives better results than competition. 

For example when Air Tel entered Sri Lanka, it signed a pact with the biggest telecom player in the market to use its towers and some other infrastructure.

6. Role Play in Value Chain:

All companies have been playing a particular role in the extended value chain. Sometimes the strategic role that the company plays in the value chain prohibits it to go for M&A, hence the Alliance route.

Another big factor in avoiding the M&A option is that only 43% or M&A are successful. The failure rate in IT-ITES is a staggering 80%. This can be because of many reasons. Most important out of which is that companies do not have compatible cultures and even compensation issues.  In an Alliance the companies work together to achieve the desired results, but as separate entities tied by the common goal. The cultural issues and compensation do not hinder the process.

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.

Customer Centricity wins: App Store Redesigned

December 16, 2009 1 comment

Apple has redesigned the App Store for the iPhone and iPod touch, bringing the online store in line with the rest of the iTunes shopping experience. This is mainly to standardize the customer experience across all Apple portals.

User-Centered Design

Analysts say that the design has been re-done keeping in mind the user centricity. Though there have been complaints from developers that it’s not developer friendly. In my point of view, the design of any “service” portal should be customer centric and not vendor/partner centric. Thus, Apple has done a good job by keeping in mind the user requirements before the developer requirements.

The complete analysis can be read here

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 1

December 9, 2009 Leave a comment

Recently, while reading a book on Analytics (incidentally by the same name: Competing on Analytics, T.H Daven Port, J.G. Harris, Harvard Business School Press), I was astonished at the vast range of companies and industries making use of Analytics. The online movie rental company, Netflix uses analytics extensively to make use of data for ranking movies.  Based on the customer selection and ranking the movies are clustered into different segments, the delivery for various customers is prioritized and the demand for yet to be released movies is forecasted. The data generated is also used to the extent to forecast how many copies of a movie the company should order and what it should pay for a particular movie.

The use of analytics by Netflix is not a one off example. Analytics is being used in some areas where one would have never thought of using it a decade ago. Take the case of Boston Red Sox, who made use of analytics to end an eighty six year draught and won the World Series title in the year 2004. The team used analytics on piles of data that they had collected over decades. They analyzed the pitches, the role of weather, the abilities of different players to handle different situations etc. They also made use of data for various players to decide upon what fee to be paid for the player or how much money to be paid for a player in the event of an auction. This helped them to get the best team in the given constraints of money cap. The result was: the team went on to win the 2004 title of the World Series.

Similarly take the example of AC Milan, the team has a separate arm called Milan Labs which makes extensive use of Analytics for making sure the team puts best efforts for playing and winning matches.

The examples of competing on the basis of analytics are many. Pharma companies have made use of data for shortening the product development life cycles. The retail chains have used analytics for planning their supply chain and designing the store layouts and formats. Manufacturing companies have used analytics for planning procurement, scheduling production and saving on costs of carrying inventory. The list is almost endless.

But, the question is: Can every organization make use of analytics for competing? If yes, How?

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.