The focus is shifting from
just streamlining backend operations to acquiring new
customers and retaining existing ones. The move is towards
Many respondents to this survey
said the top three business priorities are 'Provide
better quality of service', 'Increase profits', and
'Decrease cost'. But to ensure this, one needs to begin
with the customer. Today, companies are focused on improving
customer service. That means improving the delivery
of products and services, and offering these at lower
prices. When you get down to doing this, it means streamlining
business processes, collecting and analyzing business
data (then acting on it immediately), and improving
coordination between departments. Enterprise-wide applications
can automate and facilitate these activities.
It's no wonder then that almost
half the respondents (45 percent) have invested in Enterprise-wide
applications (EWA) in the past. The number of companies
investing in EWA will increase this year, albeit modestly.
In the past one year, 31 percent invested in EWA; this
year 35 percent plan to do so. More medium and large
enterprises will invest in EWA.
Streamlining processes, improving
the bottom line
The applications that are helping
companies improve the bottom line are ERP, e-business
solutions, data warehousing/data mining, CRM and SCM.
ERP is the most popular enterprise-wide
application and 63 percent companies have already implemented
an ERP application. Using an ERP solution, companies
can automate core processes to cut costs in terms of
faster production cycles, reduced inventory, and better
information flow between various departments.
ERP has always been associated
with Manufacturing/Engi-neering—in fact 88 percent of
respondents within this vertical use ERP solutions.
Other process and production-related verticals like
Auto & Auto components, Chemical & Pharmaceuticals,
FMCG/Consumer durables, and Telecom/IT/ITES have substantial
ERP implementations. Health care is one sector which
has substantial investments in ERP (above 80 percent).
This is in the form of Hospital Automation Software.
The benefits of ERP are now being acknowledged in other
non-process/production-oriented verticals too. For instance,
69 percent of Govt./PSU companies plan to invest in
some sort of ERP this year.
SCM solutions bring together
various entities in the chain through which a product
passes, as it goes from manufacturer to customer. This
includes manufacturer, raw materials suppliers, warehouse,
distributors, retailers, and finally the customer. It
helps in planning and scheduling to ensure that products
are delivered in time, at the right quantities, to the
right people, at optimal cost. These solutions are used
mainly by companies in verticals like Auto & Auto
components, FMCG/Consumer durables, and Tele-com/IT/ITES.
This year 55 percent of Auto & Auto components companies
plan to invest in SCM.
Serving customers better
CRM is one area that is getting
all the attention these days. As we said in the beginning,
businesses have moved away from being product-centric
and have become more customer-focused. That's where
a CRM solution comes in. CRM helps you understand your
customers better, and tells you what they expect from
your organization. To leverage on this tool, one should
use both analytical and operational CRM.
25 percent went in for CRM in
the past and 32 percent plan to invest in CRM this year.
Fast growing, customer driven businesses (like banks,
telecos, ITES companies) will benefit the most from
CRM. This year 56 percent of BFSI companies will invest
A missing link in the ERP-CRM
chain is data warehousing and data mining tools. Given
the amount of transactional or customer data generated
by an ERP or a CRM, it makes perfect sense to analyze
hidden patterns in data to define future growth strategies.
That's why enterprises are increasingly using data warehousing
and data mining solutions. With data warehousing tools,
one can extract specific data from operational data,
and reformat this data so that it can be easily interpreted
and analyzed. Specialized data mining tools help you
identify patterns or trends in this extracted data,
so you can leverage on this to improve business.
While 31 percent have invested
in data warehousing/data mining tools, the same number
plan to invest in these tools this year. It's mainly
companies in the BFSI segment who use such tools—50
percent of companies are already using them while 61
percent say they plan to invest this year.
What about B2B?
E-business (B2B) seems to be
under a cloud after the dotcom bust. All the supposedly
thriving online exchanges now are bereft of transactions.
Ditto with B2C e-commerce. This explains why the number
of companies investing in e-business solutions is low.
In 2003-04, less than 30 percent companies plan to go
in for e-business solutions.
- More medium and large enterprises will invest
in enterprise-wide applications. These are mainly
manufacturing oriented or service driven companies.
- The use of ERP is widespread, and 63 percent
of the companies already have some ERP in place.
- This year 42 percent companies plan to invest
in ERP, a major chunk of this will be from Govt./PSUs.
- 55 percent of Auto & Auto components
companies plan to invest in SCM.
- Over 50 percent companies in the BFSI vertical
plan to invest in some sort of CRM solution.
- The BFSI vertical is also in the forefront
of data warehousing/mining applications.
- After the dot-com bust, e-business initiatives
are clearly on the decline.
- Process- or production-oriented companies
should implement ERP to improve the integration
between departments, thereby streamlining operations
and cutting costs.
- Fast growing, customer driven businesses
(like banks, telecos, ITES companies) will benefit
the most from CRM.
- Focus more on analytical CRM rather than
just operational CRM. A combination of both,
depending on business needs, is required.
- Remember that a CRM solution is not an end
in itself. It should be supplemented by training
and monitoring of customer service executives.
- Companies can derive more value from transactional
or operational data by using analytical data
warehousing/ data mining solutions.
- SCM is recommended for industries that deal
with movement of goods (between warehouse and
retail, factory and warehouse, etc).
- Companies should give e-business a second
look. E-business will help companies cut further
costs by creating a seamless web between its
suppliers, distributors, and customers.
Chartered Bank (SCB) uses SAS Customizable CRM
Solution to analyze huge volumes of data captured
by its OLTP systems. The solution aids the bank
in performing numerous business critical activities
and in providing excellent customer service.
Standard Chartered Bank uses OnLine Transaction
Processing (OLTP) system to facilitate and manage
transaction-oriented applications. The bank realized
that it needed to go a step further and deploy
a solution that can be used to analyze the huge
volumes of data captured by the OLTP systems.
Says Sedjwick John Joseph, Head-Business Intelligence
Unit, SCB, "Any bank today cannot ignore
the risk:reward equation. It is the process of
applying a variety of scoring techniques across
product lines to arrive at the probable risk associated
with each product sale and the possible rewards.
We wanted the solution to leverage information
on customer profiles and segments and enable us
to spread our risks based on empirical data analysis."
After evaluating number of solutions, SCB chose
SAS as the solution partner across Asia for its
The solution has helped the bank effectively manage
and optimize profitability of all the products
that constitute its retail portfolio. The implementation
has resulted in focused marketing campaigns, reduced
costs, and improved customer acquisition and/or
satisfaction. The bank can now exploit changing
and widening markets; implement a customer-centric
approach; concentrate on financial budgeting,
cost control, and risk management. SCB plans to
embark on SAS' data mining technologies for various
predictive modeling and advanced scoring initiatives
to strengthen its risk management framework in
the area of retail lending.
Hero Honda Motors has implemented SAP R/3 Release
4.6B to consolidate disparate applications that
ran on different departmental servers. It used
modules like production planning, materials management,
quality management, and sales & distribution.
It implemented plant maintenance, human resources
and payroll modules, and upgraded SAP R/3 from
4.6B to 4.6.
Pre-ERP, the company had diverse operations running
in different locations. To get a hold over this
diverse operations it needed to consolidate various
departmental applications in areas like accounting,
inventory management and so on under the same
After implementing SAP, it is now possible to
integrate data and enable common master sheets
that can be used across various functions like
transaction, validation, accounting, and reporting.
Better cost control
Using SAP, Hero Honda was able to implement better
cost control measures. Says S.R. Balasubramanium,
CIO, Hero Honda, "The ERP made it possible
to calculate cost of consumables, tool inventory
cost, power & fuel costs, and plant overheads.
There were improvements in the quality, access,
and usage of transactional data."
There was emphasis on carrying business process
improvement by removing several non-value processes
on regular basis, adopt best business practices
and carry out BPRs (Business process re-engineering)
to derive best business value. Few BPRs implemented:
Quality check removal of components (self certification
of supplied goods by vendors); Migration of discrete
to repetitive manufacturing strategy; and Bar
coding at entry gate. Post implementation the
company also experienced improvement in operational
processes at various stages. It also readied the
organization for future SCM (Supply Chain Management)
and CRM (Customer Relationship Management) implementation.
The company plans to implement ESS (Employee Self
Service) module. It also plans to implement SCM
applications to seamlessly connect and manage
its dealers and vendors.