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School of Business, Public Policy and Social Enterpren-eurship MBA Presents

ERP Assignment : Submitted by: Suneet Srivastav School of Business Public Policy and Social Entrepreneurship Ambedkar University , Delhi
Explain the following contemporary issues and describe its current trends and developments. 1. Customer Relationship Management (CRM) 2. Supply Chain Management ( SCM) 3. Service Oriented Architecture (SOA) 4. Software as a Services (SaaS) Model

Ans1 Customer Relationship Management (CRM) :

Customer relationship management (CRM) is a widely implemented model for managing a companys interactions with customers, clients, and sales prospects. It involves using technology to organize, automate, and synchronize business processesprincipally sales activities, but also those for marketing, customer service, and technical support .

Customer Relationship Management (CRM)

Traditional Marketing CRM Goal: Expand customer base, Goal: Establish a profitable, increase market share by long-term, one-to-one mass marketing relationship with customers; understanding their needs, preferences, expectations Product oriented view Mass marketing / mass production Customer oriented view Mass customization, one-to-one marketing

Standardization of customer needs Transactional relationship

Customer-supplier relationship Relational approach

CRM is a business strategy that aims to understand, anticipate and manage the needs of an organisations current and potential customers . It is a comprehensive approach which provides seamless integration of every area of business that touches the customer- namely marketing, sales, customer services and field support through the integration of people, process and technology . CRM is a shift from traditional marketing as it focuses on the retention of customers in addition to the acquisition of new customers .

CRM, or Customer Relationship Management, is a company-wide business strategy designed to reduce costs and increase profitability by solidifying customer loyalty. True CRM brings together information from all data sources within an organization (and where appropriate, from outside the organization) to give one, holistic view of each customer in real time. This allows customer facing employees in such areas as sales, customer support, and marketing to make quick yet informed decisions on everything from crossselling and upselling opportunities to target marketing strategies to competitive positioning tactics.
Purpose of CRM:

The focus [of CRM] is on creating value for the customer and the company over the longer term. When customers value the customer service that they receive from suppliers, they are less likely to look to alternative suppliers for their needs . CRM enables organisations to gain competitive advantage over competitors that supply similar products or services . CRM development history CRM developed for a number of reasons: The 1980s onwards saw rapid shifts in business that changed customer power Supply exceeded demands for most products Sellers had little pricing power The only protection available to suppliers of goods and services was in their relationships with customers

Requirement of CRM CRM involves the following (4): Organisations must become customer focused Organisations must be prepared to adapt so that it take customer needs into account and delivers them Market research must be undertaken to assess customer needs and satisfaction

Information Technology and CRM

Technology plays a pivotal role in CRM. Technological approaches involving the use of databases, data mining and one-to-one marketing can assist organisations to increase customer value and their own profitability This type of technology can be used to keep a record of customers names and contact details in addition to their history of buying products or using services This information can be used to target customers in a personalised way and offer them services to meet their specific needs This personalised communication provides value for the customer and increases customers loyalty to the provider

Information Technology and CRM: Examples Technology can be used to create personalised services to increase loyalty in customers: Phone calls, emails, mobile phone text messages, or WAP services


A cookie is a parcel of text sent by a server to a web browser and then sent back unchanged by the browser each time it accesses that server Illustration: The online store, Amazon, uses cookies to provide a personalised service for its customers. Amazon requires customers to register with the service when they purchase items Loyalty cards

Primary role of a retailer loyalty card is to gather data about customers. This in turn leads to customer comprehension and cost insights Illustration: The supermarket chain, Tescos, offers loyalty cards to its customers. When customers use the loyalty cards during pay transactions for goods, details of the purchases are stored in a database which enables Tescos to keep track of all the purchases that their customers make. The aim of this is to encourage customers to continually return to Tescos to do their shopping CRM software- Front office solutions

Many call centres use CRM software to store all of their customer's details. When a customer calls, the system can be used to retrieve and store information relevant to the customer. By serving the customer quickly and efficiently, and also keeping all information on a customer in one place, a company aims to make cost savings, and also encourage new customers Face to Face CRM CRM can also be carried out in face-to-face interactions without the use of technology Staff members often remember the names and favourite services/products of regular customers and use this information to create a personalised service for them.

For example, in a hospital library you will know the name of nurses that come in often and probably remember the area that they work in. Benefits of CRM include :


reduced costs, because the right things are being done (ie., effective and efficient operation) increased customer satisfaction, because they are getting exactly what they want (ie. meeting and exceeding expectations) ensuring that the focus of the organisation is external growth in numbers of customers maximisation of opportunities (eg. increased services, referrals, etc.) increased access to a source of market and competitor information highlighting poor operational processes long term profitability and sustainability

Supply Chain Management

Supply chain management (SCM) is the management of a network of interconnected businesses involved in the provision of product and service packages required by the end customers in a supply chain. Supply chain management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption. SCM as the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally." History of Supply Chain Management: 1960s - Inventory Management Focus, Cost Control 1970s - MRP & BOM - Operations Planning 1980s - MRPII, JIT - Materials Management, Logistics 1990s - SCM - ERP - Integrated Purchasing, Financials, Manufacturing, Order Entry 2000s - Optimized Value Network with Real-Time Decision Support; Synchronized & Collaborative Extended Network

Supply chain management must address the following problems:

Distribution Network Configuration: number, location and network missions of suppliers, production facilities, distribution centers, warehouses, cross-docks and customers. Distribution Strategy: questions of operating control (centralized, decentralized or shared); delivery scheme, e.g., direct shipment, pool point shipping, cross docking, direct store delivery (DSD), closed loop shipping; mode of transportation, e.g., motor carrier, including truckload, Less than truckload (LTL), parcel; railroad; intermodal transport, including trailer on flatcar (TOFC) and container on flatcar (COFC); ocean freight; airfreight; replenishment strategy (e.g., pull, push or hybrid); and transportation control (e.g., owner-operated, private carrier, common carrier, contract carrier, or third-party logistics (3PL)). Trade-Offs in Logistical Activities: The above activities must be well coordinated in order to achieve the lowest total logistics cost. Trade-offs may increase the total cost if only one of the

activities is optimized. For example, full truckload (FTL) rates are more economical on a cost per pallet basis than LTL shipments. If, however, a full truckload of a product is ordered to reduce transportation costs, there will be an increase in inventory holding costs which may increase total logistics costs. It is therefore imperative to take a systems approach when planning logistical activities. These trade-offs are key to developing the most efficient and effective Logistics and SCM strategy. Information: Integration of processes through the supply chain to share valuable information, including demand signals, forecasts, inventory, transportation, potential collaboration, etc. Inventory Management: Quantity and location of inventory, including raw materials, work-inprocess (WIP) and finished goods. Cash-Flow: Arranging the payment terms and methodologies for exchanging funds across entities within the supply chain.

Supply chain execution means managing and coordinating the movement of materials, information and funds across the supply chain. Importance of Supply Chain Management: Dealing with uncertain environments matching supply and demand Boeing announced a $2.6 billion write-off in 1997 due to raw materials shortages, internal and supplier parts shortages and productivity inefficiencies U.S Surgical Corporation announced a $22 million loss in 1993 due to larger than anticipated inventories on the shelves of hospitals IBM sold out its supply of its new Aptiva PC in 1994 costing it millions in potential revenue Hewlett-Packard and Dell found it difficult to obtain important components for its PCs from Taiwanese suppliers in 1999 due to a massive earthquake U.S. firms spent $898 billion (10% of GDP) on supply-chain related activities in 1998 Shorter product life cycles of high-technology products Less opportunity to accumulate historical data on customer demand Wide choice of competing products makes it difficult to predict demand The growth of technologies such as the Internet enable greater collaboration between supply chain trading partners If you dont do it, your competitor will Major buyers such as Wal-Mart demand a level of supply chain maturity of its suppliers Availability of SCM technologies on the market Firms have access to multiple products (e.g., SAP, Baan, Oracle, JD Edwards) with which to integrate internal processes

Todays Marketplace Requires: Personalized content and services for their customers Collaborative planning with design partners, distributors, and suppliers Real-time commitments for design, production, inventory, and transportation capacity Flexible logistics options to ensure timely fulfillment Order tracking & reporting across multiple vendors and carriers


Reduced inventory Increased revenue Lower order management costs Higher Gross Margin Better forecast accuracy Better allocation of promotional budgets

Reduced inventory Lower warehousing costs Lower material acquisition costs Fewer stockout conditions

Lower freight costs Faster and more reliable delivery Lower capital costs Reduced depreciation Lower fixed costs

Improved customer service More efficient use of human resources

Supply Chain Imperatives for Success: View the supply chain as a strategic asset and a differentiator Wal-Marts partnership with Proctor & Gamble to automatically replenish inventory Dells innovative direct-to-consumer sales and build-to-order manufacturing Create unique supply chain configurations that align with your companys strategic objectives Operations strategy Outsourcing strategy Channel strategy Customer service strategy Asset network

Service Oriented Architecture (SOA) :

Service-oriented architecture (SOA) is a set of principles and methodologies for designing and developing software in the form of interoperable services. These services are well-defined business functionalities that are built as software components (discrete pieces of code and/or data structures) that can be reused for different purposes. SOA design principles are used during the phases of systems development and integration. SOA generally provides a way for consumers of services, such as web-based applications, to be aware of available SOA-based services. For example, several disparate departments within a company may develop and deploy SOA services in different implementation languages; their respective clients will benefit from a well-defined interface to access them. XML is often used for interfacing with SOA services, though this is not required. JSON is also becoming increasingly common. SOA defines how to integrate widely disparate applications for a Web-based environment and uses multiple implementation platforms. Rather than defining an API, SOA defines the interface in terms of protocols and functionality. An endpoint is the entry point for such a SOA implementation. Service-orientation requires loose coupling of services with operating systems and other technologies that underlie applications. SOA separates functions into distinct units, or services, [1] which developers make accessible over a network in order to allow users to combine and reuse them in the production of applications. These services and their corresponding consumers communicate with each other by passing data in a well-defined, shared format, or by coordinating an activity between two or more services.

SOA can be seen in a continuum, from older concepts of distributed computing and modular programming, through SOA, and on to current practices of mashups, SaaS, and cloud computing . Service-oriented architecture (SOA) is an evolution of distributed computing based on the request/reply design paradigm for synchronous and asynchronous applications. An application's business logic or individual functions are modularized and presented as services for consumer/client applications. What's key to these services is their loosely coupled nature; i.e., the service interface is independent of the implementation. Application developers or system integrators can build applications by composing one or more services without knowing the services' underlying implementations. Service-oriented architectures have the following key characteristics:

SOA services have self-describing interfaces in platform-independent XML documents. Web Services Description Language (WSDL) is the standard used to describe the services. SOA services communicate with messages formally defined via XML Schema (also called XSD). Communication among consumers and providers or services typically happens in heterogeneous environments, with little or no knowledge about the provider. Messages between services can be viewed as key business documents processed in an enterprise. SOA services are maintained in the enterprise by a registry that acts as a directory listing. Applications can look up the services in the registry and invoke the service. Universal Description, Definition, and Integration (UDDI) is the standard used for service registry. Each SOA service has a quality of service (QoS) associated with it. Some of the key QoS elements are security requirements, such as authentication and authorization, reliable messaging, and policies regarding who can invoke services.

Service-oriented architectures SOA: Changed mindset: service-oriented context for business logic. Changed automation logic: service-oriented applications. Changed infrastructure: service-oriented technologies. A top-down organization transformation requiring real commitment.

Service-oriented architectures SOA Characteristics : Loosely coupled: minimizes dependencies between services. Contractual: adhere to agreement on service descriptions. Autonomous: control the business logic they encapsulate. Abstract: hide the business logic from the service consumers. Reusable: divide business logic into reusable services. Composable: facilitate the assembly of composite services. Stateless: minimize retained information specific to an activity.

Discoverable: self-described so that they can be found and assessed.

Advantages Leverage existing investments Interoperability between heterogeneous applications Facilitate access to business logic and information among diverse services

Challenges Managing services Insufficient attention to service governance; their performance, reliability, and security Providing appropriate levels of security Insuring Interoperability of services Vendor hype can create false expectations

Potential Benefits : Based on open standards. Supports vendor diversity. Fosters intrinsic interoperability. Promotes discovery. Promotes federation. Fosters inherent reusability. Emphasizes extensibility

Service-oriented architectures SOA Conclusion: Not an easy thing to do correctly. The wavelet of the present. The wave of the future. A useful architectural concept. A potential business facilitator.

Ans4 Software as a Services (SaaS) Model :

Software as a service (SaaS,), sometimes referred to as "on-demand software", is a software delivery model in which software and associated data are centrally hosted on the cloud. SaaS is typically accessed by users using a thin client via a web browser. SaaS has become a common delivery model for many business applications, including accounting, collaboration, customer relationship management (CRM), management information systems (MIS), enterprise resource planning (ERP), invoicing, human resource management (HRM), content management (CM) and service desk management. SaaS has been incorporated into the strategy of all leading enterprise software companies. One of the biggest selling points for these companies is the potential to reduce IT support costs by outsourcing hardware and software maintenance and support to the SaaS provider. Software as a service (SaaS) is a model of software delivery where the software company provides maintenance, daily technical operation, and support for the software provided to their client. It assumes the software is delivered over the internet. Software delivered to home consumers, small business, medium and large business

SaaS Working Methodology:

Saas Delivery Method

Benefits of Software-as-a-Service (SaaS)

No software installation, testing, staging, commissioning or maintenance Shorter deployment cycles with users are up and running in minutes instead of months Reduce the risk of acquiring new software to just 1 months rent Global reach with 24/7/365 availability Flexibility to change usage instantly as your businesses changes Service Level Agreements with predictable up-times and expert, dedicated staff devoted to your application for rapid problem fixes Constant product improvements. SaaS allows for consistent and continuous small updates and improvements that accumulate over time to deliver better, smoother functionality instead of traditional large patches and upgrades Less Pain for IT. SaaS can offload much of the IT workload of traditional client/server models, leaving IT staff free to focus on bigger/strategic issues instead of supporting Office applications

Re-shaped IT Budgets. Outsourcing a solution means predictable spend and infrastructure savings Excellent Support. Permits a more tightly-focused IT knowledge base, leaving enterprise IT staff free to concentrate on more important strategic issues Cost savings. Costs saved by SaaS solutions can be reallocated to boost productivity in other areas.

Examples Viatels Webcontrol o Offers protection from spyware, web viruses, phishing, unwanted content and adware through filtering o Requires no hardware, maintenance or upfront capital costs o Redirects all corporate web traffic with its dedicated servers then analyzes it before displaying the content to the end-user

LitwareHR by Microsoft o fictitious HR application providing recruitment-management software delivered as a service o created to demonstrate how to use Microsoft technologies in the creation of SaaS solutions o uses Microsoft technologies such as .NET Framework 3.0 and SQL Server 2005