Buy just what you need

Thinking of streamlining your company’s operations? If implemented correctly, enterprise wide applications such as ERP, SCM, CRM and BI can help an SMB do more

Managing distributed processes and related applications across an organisation can be tough. The distributed nature of business processes can result in losses (financial and productivity) as centralisation and the communication of information between systems are absent. The same is the case with manual processes that have to be automated to achieve maximum benefits. The Enterprise Wide Applications (EWA) concept is developed as a cure for these issues.

There is no clear definition of what constitutes an EWA. Therefore, these applications are surrounded by a cloud of ambiguity with three-letter acronyms such as ERP (Enterprise Resource Planning), SCM (Supply Chain Management) and CRM (Customer Relationship Management). There is no denying the benefits that these applications bring when implemented right.

More than acronyms

Generally, EWA is the term that denotes an application used to automate and streamline processes across an enterprise. These systems are usually modular and scalable. This makes it possible to add application components when needed.

EWA can be classified as front office (customer-facing) applications such as CRM, or back office applications such as ERP and SCM. In front office EWA, the application is used to automate or streamline communication between customers and the organisation. Back office EWA systems are used to automate backend processes such as material requisitions, billing, distribution and reporting.

Not just software

The most important thing to remember when considering an EWA is that there is more than a software application involved. Most EWAs will call for process changes and the organisation must be ready to implement them for successful deployment.

The first step in this direction is to measure how open users are to the changes in the existing workflow, practices and processes. A strategy must be defined according to this measurement. This will help select the solution closest to the requirements. A consolidated database or data warehouse will also be required by most EWA systems.

EWA implementation requires the involvement of external business and technical consultants, since most companies do not have in-house expertise in these areas. The business consultant will examine the existing business policies and determine their compatibility with the ERP application processes. He will also suggest changes to the business processes, if required. The technical consultant will be in charge of configuring the ERP system to suit the business’ needs.

It is also important to have quantifiable parameters to define the functioning of EWA. Without this, evaluating ROI is next to impossible. User training should also be a part of the post-implementation strategy. It is then time to look at the common EWA systems in use such as ERP, SCM, CRM and business intelligence (BI).

Planning right

ERP is a forerunner among EWAs, and has contributed significantly to the popularity of these applications. Although ERP systems were initially developed for manufacturing, they are available today for almost every industry vertical.

Basically, ERP is a centralised system to handle varied back office processes such as manufacturing, logistics, distribution, inventory, billing and accounting. A typical ERP system will have these features built-in as standard. Many solutions also offer options to add modules such as SCM to combine supply chain management functionality to the ERP system.

Smoothening supply

The typical supply chain consists of supply, manufacturing and distribution. SCM solutions were initially developed as a means of automating and optimising processes for just-in-time (JIT) manufacturing.

SCM was expected to deliver more than JIT. Today, it is used to rev up operations and trim inventory levels in verticals other than manufacturing. Some functionalities available in SCM packages are demand planning or collaboration, order processing, channel optimisation, production or distribution planning, scheduling, transportation planning, execution and so on.

For better relations

Managing customer relations is a traditional aspect of any customer-facing business entity. However, CRM EWA has given a whole new perspective to the way customer relationships are handled.

Apart from improved customer relations, the effective implementation of a CRM package enables tracking customer preferences, defining product lifecycles for better service management, and identifying customer segments and buying patterns. CRM software typically operates using a centralised database, and can be classified into operational and analytical types.

Operational CRM handles the automation of communication with the customer and other business processes such as sales. Some of the main types or components of operational CRM packages are sales force automation (SFA), and customer service and support (CSS). SFA is used to co-ordinate and streamline the functioning of an organisation’s sales force, while CSS is used to automate and streamline communication with the customer across interaction channels such as phone, e-mail and Website.

Analytical CRM involves the use of features such as reporting and BI to track customer behaviour and trends. In many cases, analytical CRM packages combine operational CRM with analytical capabilities. Depending on whether the CRM vendor’s strength lies in analytics or on the operational side, the mix of analytical and operational components will vary. This means that if your CRM vendor’s core strength happens to be operational CRM, it is reasonable to expect the operational component to be stronger with weaker analytical capabilities and vice versa.

The intelligent business

Information must be converted to usable knowledge. For example, databases contain buying information. This needs to be analysed to track customer preferences and used to tailor services to the said customers. BI software can help in this area.

Most BI implementations depend on a data warehouse and data mining tool to generate reports. Tools available in BI packages include data modelling, OLAP (Online Analytical Processing), statistical analysis, queries and reporting. For an efficient BI deployment, SMBs need to clean and classify data.

BI packages for SMBs have started making their presence felt; however, these are on the expensive side. It will be a while before Indian SMBs adopt BI for good.

Making the right choice

Although EWAs differ in the tasks that they perform, the selection process is similar for most. The basic rule is to buy just what’s needed.

It is inevitable that vendors will hype the application’s touting scalability, flexibility and functionality. Many enterprises are swayed by these showy visions, and end up buying a monster application that costs the earth for features they will never use. Hence, an SMB needs to cut through the buzzwords surrounding an application and examine whether or not it is paying too much for unwanted functionality.

Scalability and functionality are important, but get the requirements right before examining solutions. Charting out the required parameters in advance will help you zero in on the correct application. Important among these are user-friendliness and ease-of-customisation. Next come implementation, TCO, ROI and support costs. It is also important to check an EWA’s compatibility with solutions from other vendors that might already be in use or are being evaluated.

When checking on the available support options, remember that direct support offered by a vendor might be expensive. Therefore check if third-party support is available, as this might be less expensive than direct support.