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November 1-15, 1999 MASTER FILE |
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COVER STORY In The Name of Infostructure Contd... Managing the Customers
Move over to Business Intelligence tools that form a core part of CRM software. According to Anandan G., business manager-Cognos, Enterprise Solutions Division, IIS Infotech Ltd, "Organisations today can't afford not to invest in enterprise computing tools." He adds that the market for Business Intelligence is pegged at Rs 10 crore in India. Take, for example, the case of Citibank mailers which run into millions and the response rate is a mere 3-4 percent. What a waste exercise, both in terms of time and money. But based on the data available, you can identify and build links. For example, if the card billing shows maximum expenditure on electronics, then there is a high chance of that individual to have interest in all mailers pertaining to electronics. But is India ready for niche software? Says Kapoor of Global Groupware, "Only time will tell whether these tools go the ERP way and make waves or will they die with a whimper like Artificial Intelligence that failed to stand up to its share of limelight." Linking the Supply Similarly, supply chain management has become critical to global companies seeking to link with suppliers, distributors, business partners, and customers. As a result, all corporate application vendors are integrating their functionality into their product lines. More and more vendors are now offering the entire supply chain-from obtaining quotes to ordering goods-on the Net. The belief is that Internet will facilitate global E-commerce by eliminating geographical and financial boundaries, and, hence, companies are relying on corporate applications for this functionality. According to Rajendra Pawar, chairman, NIIT, "In the present business scenario, it becomes imperative for organisations to focus on reducing and managing cycle time." His caveat: total integration and better connectivity. Another "in" corporate mantra adopted by IT vendors is Knowledge Management a.k.a. KM. According to industry observers, the need for KM arises out of two things: information overload and knowledge attrition. Studies show that an organisation loses about 50 percent of its knowledge within five to 10 years because of the turnover of its employees, its customers, and its investors. As such, many enterprise computing tools such as CRM are being integrated with different technology such as data mining tools. Why They Fail? Despite all the hue and cry about these 'fix-it' tools, there is a thick fog behind the screen. According to a recent article in Harvard Business Review, about 60 percent of the ERP applications worldwide have failed. Similarly, in an IDC India report, about 41.9 percent organisations said "No" in a cost benefit analysis for ERP while only 58.1 said "Yes". Says Ganesh Ayyar, HP India chief, "Typically, enterprise computing projects fail because they are viewed as technology-driven. For any such project to succeed, they need to be business-driven." Agrees Mazumdar of PwC, "Unrealistic expectation is the key stumbling block here. People believe that enterprise computing tools are like a magic wand." Another key factor is lack of support of the top management. While a new plant in a city might generate a lot of interest in the senior managers, the same cannot be said of the enterprise computing projects. Prevailing tax-regimes can also be a hindrance. Any ERP package that sells in India needs to address four key areas of statutory Indian legislation: central excise, sales tax, octroi, and income tax. Which is why vendors have local product development centres, where a team of software and tax specialists work together to evolve a localisation module. Face it. Some functions in your organisation may not need ERP or any of those fancy enterprising computing packages. By carefully selecting the modules and implementation sites, organisations can lower the cost of their solution. In many functions, a low cost alternative like Groupware can replace an ERP module. That makes sense considering the high cost of these packages. According to Gartner Group's ERP Market Survey 99, the mean ERP-spend per organisation in India was Rs 2.87 crore in 1998-99. Says Sandeep Pal of Oracle, "It's true that there are more non-successful ERP implementations than successful implementations. Organisations don't reap the exponential profits and benefits they expected." According to Professor S. Raghunath, IIM-B, "Whether a company requires seamless integration with suppliers and with customers, i.e. SCM/CRM/ERP is a judgement call based on the realities of competition and service level expectations in a specific industry context. The existence of these tools do not assure the implementing company of identifiable increase in return on investment." Laments Lalit Sawhney, head, Information Systems, Hindustan Lever Ltd, "In India, we have not exploited IT fully. Take CRM. How many magazine subscription departments make use of their subscriber's list for 'talking' to their customers or attracting them to a portal site?" Such stumbling blocks have paved the way for another trend: not happy with the "rigid" modules offered by the traditional ERP vendors in the country, organisations are developing their own customised software. Take the case of Bombay State Electricity Supply in Mumbai. The utility major plans to develop a complete ERP solution meeting the specific needs of the power industry. The Road Ahead Finally, the million dollar question: where will the waves ebb? Quips Kapoor of Global Groupware, "The buck never stops. Technology trends will come and go and keep pace with business trends." As organisations change with changing business environments and growing competition, new technologies, based on those demands, will show their faces with precise regularity. According to Monica Diveshwar of Frost & Sullivan, nodal agencies will emerge that will conduct competitive scenario analysis on a real-time basis to provide for the information requirements of various leading companies. These agenies will use new technology products for enabling real-time collaboration, compilation and anaylsis of competitive information. Also outsourcing facilities (Application Service Providers renting various software on Web), where the key software as CRM, SCM and ERP are available at one location for multiple use, will enable widespread use of technology. Says Ganesh Natarajan of Aptech, "The new imperative is the integration of ERP with business-to-business E-Commerce. The new mantra, EERP-Extended ERP-an extension to the virtual organisation consisting of suppliers, subcontractors and customers is the order of the day." Gibes Ayyar of HP, it is hazardous to make any guesses in this arena-anybody who has made guesses has gone wrong. As technology grapples to keep pace with changes in businesses, there's only one safe bet for all-KISS (keep it simple and straight), he adds. |
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For many firms, using ERP is a
classic case of "been there, done that". So now, they are looking for ways to
better capitalise on their IT investments. Increasingly the priorities are shifting
towards add-on projects to improve sales and customer satisfaction. Consider CRM. While
the management gurus have made a cottage industry out of it-books, seminars and crafty
well-coined phrases, IT vendors have rolled out specific tools. According to them, it's a
commitment to a fundamental philosophy that puts the customer first. Says S.P. Chittora,
CEO, Bunka Orient India, country distributor of Canada-based Pivotal Software Inc.'s
Relationship range of customer interaction software, "Today's organisations don't
want a satisfied customer. They want a delighted customer. Through better deployment of
resources, CRM enables organisations to direct sales and marketing energy more
effectively. It's about getting your sales messages to the right people at the right time,
in the right way." Cashing on the "Please the Customer" wave are enterprise
computing giants such as SAP and Oracle. SAP's 16-product CRM suite is expected to roll
out by next year. 
