1. CRM: Customer Relationship Management

2. Objectives CRM is a strategy… CRM & SCM are the company’s DNA
Collaboration is the key to a leadership management based in customer satisfaction and loyalty

3. Getting Ready…
Strategy
CRM
Logistics
Collaboration

4. Strategy 70’s & 80’s: strategy hot but difficult
“…a plan or method to achieve a specific objective”
70’s & 80’s: strategy hot but difficult
Focus on Japanese implementation success
Exercise in best practices, not strategy
90’s: Change, speed, being dynamic, reinventing business as e-business
Strategy is considered rigid and inflexible
Wal-Mart, Dell and Intel prove that strategies work - even in times of rapid business and technological change

5. CRM
…is a comprehensive strategic approach to providing seamless coordination between sales, customer service, marketing, field support and other customer-touching functions for the purpose of creating competitive advantage through relationships with the customers you choose to serve.

6. CRM Is A Strategy Began as Sales Force Automation in early 90’s
Is an organic process by which organizations become customer-centric
New strategies - > redesigned functions - > reengineered work processes - > supporting technology
Can’t change how we interact with customers without changing internally focused organizational values and structures

7. CRM Is Difficult CRM isn’t cheap, easy or optional
Means the dissolution of departmental silos
Requires long-term effort
Attitudes / behaviors of CEOs / senior management are some of the reasons CRM is difficult

8. Customers are not all equal. Treat different customers differently.
#1 CRM Decision
Who are your key customers?
What is their current value and strategic value?
Clearly defined customer profitability / value
Definition communicated to the customer
Gaps in the current relationship identified
Goals and timelines set with that customer
If can’t resolve, mutually agree to no longer work together
“Hire” the right customers from the beginning
Customers are not all equal.
Treat different customers differently.

9. G2000 Enterprises: Y2000 CRM Stovepiped approach
Little thought to CRM ecosystem or front-office process integration
Single function / channel deployments
Source: Steven Bonadio, Application Delivery Strategies, META Group

10. G2000 Enterprises: Y2000/01 CRM
Automation / integration of individual, intra-enterprise customer-facing processes with back-office / supply chain functions
Demonstrable ROI
Efficient customer-focused fulfillment required
Source: Steven Bonadio, Application Delivery Strategies, META Group

11. G2000 Enterprises: Y2002 CRM
Proliferation of multi-process, cross-functional front- to back-office supply chain integration efforts across multiple channels
Growing use of CRM, SCM and ERM application suites / architectures
Maturing EAI frameworks and XML-based messaging standards
Source: Steven Bonadio, Application Delivery Strategies, META Group

12. G2000 Enterprises: Y2003/04 CRM
Demand fulfillment ‘norm’ of downstream supply-driven push is replaced by upstream demand-driven pull
Vendor consolidation/solution expansion
Collaborative supply chain network evolution
CRM infusion within G2000 organizations
Competitive advantage: Map existing CRM activities in marketing, sales and service to companion back-office/supply-chain functions
Source: Steven Bonadio, Application Delivery Strategies, META Group

13. CRM + ERM + SCM
“Organizations can no longer afford to view customer relationship management (CRM), enterprise resource management (ERM), and supply chain management (SCM) initiatives as separate. Synchronizing front-office, back-office, and supply chain activities is critical to attracting/retaining customers, fulfilling demand, and improving cycle times.”
Source: Steven Bonadio, Application Delivery Strategies, META Group

14. Effective Fulfillment = Loyal Customers
Make it easier to do business with you and more difficult to go elsewhere
Create learning relationships
Identify the customer immediately
Act on information gathered previously
With each interaction, ask for feedback and ‘reward’ the customer
As move along the learning curve, the customer gets a product they can’t get anywhere else because they helped create it

15. Value of Customer Loyalty
Tangible
5% increase in customer retention can boost profits 25% to 125%
Shorter customer relationships = lost profits
4 to 7 x more to replace a lost customer
“Old” customers buy more
Intangible
Image, references and additional work
Challenging projects increase internal skills and knowledge

16. Logistics
…management of the flow of materials from the point of origin to the point of consumption to meet customers’ needs
Right Channel
Right Customer
Right Product
Right Price
Right Time
Right Docs

17. Collaboration Formal structure Exchange of proprietary information
…the act of working together; to cooperate…
Formal structure
Exchange of proprietary information
Direct access and processing
‘Real-time’
Visibility
Impact of the Internet
“Real-time doesn’t mean ‘immediate.’ It means responses to inputs are fast enough to affect subsequent inputs to guide the process.”

18. CRM + Logistics + Collaboration
A comprehensive, cooperative strategy encompassing all links in a supply chain designed to provide the seamless flow of materials from the point of origin to the point of consumption - - the success of which creates competitive advantage for the suppliers.
“Real-time doesn’t mean ‘immediate.’ It means responses to inputs are fast enough to affect subsequent inputs to guide the process.”

19. CRM + Logistics + Collaboration
Right Channel
Right Customer
Right Product
Right Price
Right Time
Right Docs
Right Partners
Right Technology

20. New Ways to Collaborate
Collaborative Business Communities
Old: Suppliers - > Manufacturers - > Distributors - > Customers - > Consumers
New: Value network - > End-User
Challenges: Support infrastructure, leadership roles, technology, trust, change…a new paradigm
Benefits:
Better visibility
Increased velocity
Reduced impact of variability

21. New Ways to Collaborate
Merge-in-transit
3rd party adds value to product between its origin and its ultimate destination
Objective: Reduce cost of getting products to customers
Suppliers ship to consolidation or merge point where order is held; ships as single order when complete
Examples
Cisco and Fed-Ex (in beta test)
GroceryWorks.com

22. Return on Your Investment
Financial Performance Measures
Productivity Performance Measures
Quality Performance Measures
Response Time Performance Measures
Return on Customer Loyalty

23. Future Considerations / Next Steps
Evaluate / develop CRM / Logistics strategies
Assess current state of business processes and do gap analysis
Develop business case and metrics
Evaluate CRM / Collaboration technology options
Implement Web-based B2B or B2C scenarios
Personalization
One-to-one marketing

24. Service levels and logistics costs will differentiate trading communities
Manufacturer
Distribution

25. Manufacturer
Distributor

26. 100% Fulfillment - Multiple Ordering/Shipping Points
Distributor
Manufacturer

27. Dynamic Pricing Driven By Dynamic Demand
100% R2
Dynamic Prices R3 R4
Capacity %
Revenue 1 R5 R6 0% R7
Price per Ton

28. Questions or Comments?