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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.

2010: The year of exploring new avenues.

December 23, 2009 Leave a comment

Every one knows what happened in the year 2008 and 2009. The analysts have made thread bare discussions and post-mortem on the economic downturn. Now, when the economy is looking up, the businesses are again gaining their senses and gathering their strengths back to climb up the crest.

The climb, though exciting, will not be easy. The large organizations have already started making strategic alliances and partnerships to be prepared for the upturn. The smaller players are also pulling up their socks. Over the last few months, I have made a list of recommendations (mostly for small players) that will help them to gear up and make the most of the upturn:

1. Look for options: This is to make sure you don’t just jump on to the bandwagon in anticipation of success. Make sure that the bus is going in the right direction and at right speed before you decide to ride it.

2. Know yourselves well: The downturn has given companies a lot of time to retrospect, but still make sure you know waht you are good at and also know very weel what you are not good at. This will help in increasing the number of successes and decreasing the number of failures.

3. Alliances: Enter into a strategic alliance. Try to make an ecosystem around the customer so that when the customer identifies a requirement, he does not have to wander far and wide for a solution. Step forward and tell the customer that you can deliver it, if not, one of your alliance partners can deliver it.

4. Have a look at emerging markets: By emerging markets I do not mean the emerging markets like India, Brazil etc. , what I mean is look for a market of requirements. There will be lots of unment requirements and if you are an innovator, target the latent requirements of the customers.

5. Keep a track of your dollars: By this recommendation I mean, keep a track of the in-flow as well as the out-flow of cash. Cash in-flow (that too only from operations) is the real wort of the company. The economic downturn has put a lot of pressure on the fluidity and liquidity of finance options. So, make the best use of the money at hand!

These are just a few of the important observations that I came across in last few months. There are many other things organizations should take care of in the oncoming upturn, but, I thought of sharing just a few important out of them. 

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.

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. 

Google Wave: Another step towards “Seamless Collaboration”

November 14, 2009 Leave a comment

Google Wave is another real-time information sharing platform. But is it “just another” social website. No. I would describe it as a hybrid of mail and chat (and much more).

Though Google has been a late entrant on the Social Media stage, it still has a huge fan following to make an impact. There are many features in G-Wave which separate it from the pack. As I see it, all these features take us a step closer to the “Seamless Social CRM”. Some of the features that are of interest are:

  1. Enhanced Chat: It is a major enhancement on the basic G-Talk. One can have conference chat, a one to one chat or a video chat. The chat has been really enhanced with all the features of formatting, highlighting, different fonts etc.
  2. Attachments: This helps in sending attachments in a chat. The chat can be directly sent as a mail with the attachment to the other members who might be offline at the moment.
  3. Collaborative e-mail: This is nice feature. Even at the time of drafting a mail (or for that matter even the contents of a document), one can add friends/ colleagues who can see the content being typed real-time. This helps in leveraging a collaborative effort in drafting such memos.
  4. The Waves: The Google Waves are similar to the Tweets but have the advantage that they are “real time”. One can share and see what is being shared real time. This all is not one to one, but can be many to one or one to many. Add to it the advantage of using photographs, online information etc.
  5. G-Maps: The best feature I found was the sharing of Google maps. One can access the map of an area while chatting and mark the positions and thus create his/her own map. I see a great potential in this application. The customer can explain their exact location to the sales rep. In case of emergency, the victim can use the G Map to tell the position to the emergency response teams. These are just a few examples. The applications might be infinite.
  6. G-Search: Another great feature is the G-Search on the tool. Even at the time of chatting or making an online memo/document, one can use the Google search option to find resources online and quote them.
  7. Embedding: There are a lot of options for embedding from documents to pictures to videos. These objects can be embedded from the desktop or by searching online from the net.
  8. Play collaborative games: One can play games with people across the globe. There are not many applications available at this moment to play these collaborative games but, will be available once the developers start to show their skills.
  9. Mobile updates: The mobile version of the Wave can be used to upload the photographs take from the mobile and create waves then and there with it.

What it means for Collaborative CRM?

These applications and features mean lot for the “collaborative and seamless” CRM. The collaboration that is being offered by G Wave has limitless potential if the business teams want to use it. For example there is an option of Yes/No/May-Be for online voting. This can be of tremendous importance when a decision has to be taken by voting. The team does not need to assemble at a place; it just has to click on one of the options in the voting tab displayed.

Oracle has come with something similar for Social CRM. It has some great features of collaboration between the various teams of the organization. It has more of business oriented features where as G Wave caters to the fun and light side of life.

But the big question is: Can it replace G mail? Yes. It has all the punch to replace the G mail. But, it will take time till all the people are on board the Wave!

The exciting world Analytics…and CRM

November 13, 2009 2 comments

There was a time when managers used to think that their business can run on ERP alone. Later the view changed from ERP alone to CRM and ERP combination where the data generated/ stored by the ERP is converted to knowledge by the CRM and then to insights by the analysts.

Now it’s the combination of analytics and CRM which is creating waves. And these are some really exciting waves.

FMCG companies pay billions of dollars to get data from the stores and then analyze them to look for patterns in consumer behaviours and purchasing patterns. This helps in predicting the sales patterns and in turn planning production and planning scheduling. The stores have gone a step forward to make use of this data in optimizing the space utilization in the shelves to maximize the returns per “foot shelf”. In a few cases (I have not worked on such assignments till now) the retail stores charge companies based on the sale these shelves offer. The additional revenue is shared between the store and the manufacturer: All possible due to the new age Analytics.

 In an assignment with a leading telecom player I worked on a solution where the last three to six months data for the customers could be analysed to identify the patterns of use by different users. The CRM then runs a match between the use pattern and the products available. This gives the list of Customers Vs the Products they should be using to make the best use of the offers and schemes available.

I have even proposed this solution to the Libraries (none of them implemented it though). There is huge amount of data available in every library. One can analyze this data to find the frequency of issuing books on various subjects. This will help in optimizing the space in the library shelves. Also in case of private libraries and book stores, the management can contact the customers who might be interested in purchasing/ issuing the new arrivals.

The CRM in combination with Analytic provides a great solution for forecasting, scheduling of production, resource optimization, revenue maximization and many other exiciting opportunities. Keep exploring!

Keep it Simple. But, not Stupid.

November 9, 2009 2 comments

 

Process

When it comes to processes, they can be as simple as one single step or as complex as multiple steps with various points where the optimum path is taken depending upon the logic. But, in any kind of process, whether it is of single step or multiple and/or parallel steps, one needs to keep it simple.

The concept of keeping things “Simple” has been given many jargons by many management gurus and successful managers. Everything comes at the same point: Cut the flab.

The job of cutting down the flab is tedious and has to be carried out with caution. The following steps might help in achieving the same:

      1.      Check the Results first:  Take a single process at a time. Make sure the result of the process is exactly what is desired. If not, first check and tweak the process to get the desired result. This because, there is no use of simplifying a process which does not give the desired result.

      2.     End-to-Front: This works for most of the processes. Check the processes one by one start from the end result and keep going up the value chain. Wherever you find a step that doesn’t add value to the next in line, scrutinize it and chop it off if it doesn’t add value.

            This step might sound easy but in practice it is not easy to remove a step from a process. One has to check the after effects (or what-if?) if the step is removed. Check with all the stakeholders and make sure that it will not cause “value-reduction”.

      3.     Front-to-End: For complex processes, having many forks and logic at each of these forks, the End-to-Front methodology might not work. Segregate these processes and treat them separately. For each of these processes, take each branch one by one and make sure that the redundant steps are removed and we reach at the end result with optimum use of resources.

      4.     Step Back and See: After simplifying each process, just step back and have a look at the bigger picture. The new, lean process should fit into the bigger scheme of things. For making sure the bigger picture is intact, segregate the processes into logical and manageable groups and before proceeding check if the processes fall in place.

           The end result of this exercise will be a simpler and leaner system. This exercise will help in achieving the same (or better) results with the use of optimum resources. Sometimes this exercise helps improving the results even before the implementation of the Enterprise Solution. If this is carried out hand-in-hand with the re-engineering while keeping the strategy and vision of the organization in mind, the results can be astounding!