Professional Employment Organizations (PEOs) or employee leasing companies are organizations that help other businesses by offering a number of valuable services to their customers. In general, PEOs provide organizations with payroll services, access to workers compensation policies, help in managing their human resources, risk management (i.e. employee manuals and other services), which at times may be difficult for these same organizations to manage on their own. As a result of this more efficient way of managing workplace processes and workplace safety, companies can further reduce administration costs while remaining focused on their core business strategy. PEOs also help companies gain more control over their costs of worker compensation coverage since most of the time workers’ comp rates are based on actual hours worked, so a company is exactly even every week and the worry of tax penalty goes away because the PEO pays all the state and federal taxes.
Additionally, most PEOs help organizations with their hiring practices by attracting and retaining good employees, while reducing their employee turnover and unemployment compensation claims, which is critical in today’s working environment. Because most employee leasing companies also represent a number of different employers these companies usually have access to a larger pool of workers. In turn, having access to a larger pool of workers can sometimes help lower the costs associated with certain employee benefits such as health and dental insurance, supplemental insurance, and even 401(k) retirement plans, which many companies cannot afford individually but now can because of the buying power of an employee leasing company (U.S. Department of Labor).
The National Association of Professional Employer Organizations (NAPEO) Financial Ratio and Operating Statistics Survey (2010) found, “that 2-3 million Americans are currently co-employed in a PEO arrangement. About 700 PEOs that offer a wide array of employment services and benefits are operating today in 50 states. PEOs have an 88 percent client retention rate due to strong client satisfaction.” If you would like more information on Employee Leasing or Payroll Companies you can email or call me personally at 813-474-2705 to discuss how you continue to remain focused on growing your bottom line, so you have a competitive advantage over your competition.
Otherwise, please feel free to post any additional questions or comments, as I continue to collect real world research on how new technological advancements are helping to shape the future of Small-to-Medium Enterprises (SMEs). Until next time, keep smiling, and thanks for stopping by :)
References
National Association of Professional Employer Organizations (2010). What is a PEO? Industry Statistics. PEO Industry Statistics, retrieved on June 26, 2011 from: http://www.napeo.org/peoindustry/industryfacts.cfm /
Thursday, June 30, 2011
Monday, June 6, 2011
What Does it Take for an Organization to become known as a Vanguard or a Sustainable Company?
When people think of a sustainable or vanguard company, often times they fail to mention the different ways that management can affect long-term sustainability planning within an organization. According to (Kanter, 2009) “a vanguard company is only as good as leaders’ ability to attract, motivate, and retain skilled people and enable them to self-organize and collaborate” (p. 28). Partnering with Boston Consulting (Hopkins, et al., 2009) adds a manger(s) sustainability practices within an organization are often based on the assumption of the more you know, the more you do within an organization. Thus, the more experience a manager has dealing with long-term sustainability issues, the more equipped they will be for future endeavors through social, economic, or environmental planning that directly affects a company’s long-term bottom-line results.
Hopkins et al., (2009) clearly point out that it is obvious that the more managers know about things that affect long-term sustainability planning the more they could/will help in shaping future business plans of an organization. However, the fact is many business managers or owners do not give much thought to long-term sustainability and this is why sustainability planning within many companies exists in a limited capacity or not at all. (Senge, Kruschwitz, Laur, & Schley, 2008) also mentioned that millions of people “including managers” are/will continue to search for ways to educate more people about sustainability issues. Like Hopkins et al., (2009) discussing the importance of managers uniting suppliers across that value chain Senge et al., (2008) recommended that more people need to learn how to “see the larger systems” in which they belong such as the supply chain, industry, or a region. This philosophy will not only provide additional insights for managers but also help educate more people with different perspectives, which will continue to help shape long-term sustainability plans of an organization.
According to (Wüstenhagen, Hamschmidt, Sharma, & Starik, 2008) another concept that can/is helping managers see the big picture is sustainable entrepreneurship, which has characteristics that carry with it high social benefits for the private, along with the public sector(s) of business. Sustainable entrepreneurship is dependent on innovation and stakeholders in order to succeed long-term. (Schlange, 2009) defines this concept as a process of identifying opportunities by being creative, while defining stakeholders as people or companies that are associated with certain organizations, which can help minimize risks, while maximizing benefits. In addition, Schlange (2009) identified three types of sustainable entrepreneurship (1) socially, (2) economically, and (3) ecologically driven. From a stakeholders perspective the key to effective sustainable entrepreneurship is to develop all three types of sustainability in order to create value and venture relationships that are likely to mature overtime.
However, business models that carry high social, economic, or ecological benefits may not always be suitable for the mass market, as in some instances they are actually detrimental to society. Expanding on the concept of sustainable entrepreneurship (Carter & Rogers, 2008) use conceptual theory building of sustainability to introduce readers to the concept of sustainability across the supply chain, which they explained helped shape the social, economic and environmental environments of this business segment. Using past research theories based on Transaction Cost Economics (TCE), ecology, and views within several organizations Carter and Rogers (2008) developed a framework driven by entrepreneurs that represented the middle ground of “Sustainable Supply Chain Management (SSCM),” which would ultimately connect social supply chain responsibility with environmental and political programs (p. 360).
Carter and Rogers (2008) were also able to determine that sustainable entrepreneurship within an organization can also affect the societal, economic, and environmental performance of a manager and/or company much like (Hopkins, et al., 2009; Kanter, 2009). In fact, the societal, economic, and environmental processes analysis showed improved results in the overall economic performance of an individual or the entire supply chain. Four main factors supported the claims (1) the overall business strategy, (2) culture, (3) transparency, and (4) risk management. Carter and Rogers’s combination of processes with the identified four factors are a good starting point for those managers that are actually looking to learn more about and develop long-term sustainability practices within their organization(s) or the old adage of the more you know, the more you learn.
There are many ways people, managers, and executives looking at sustainable development in their personal and professional lives. In fact, as previously mentioned, sustainable management and entrepreneurship are two ways of creating long-term sustainability within an organization. However, can we meet the needs of the present with these sustainability processes without compromising future generation’s abilities to meet their own needs? Kanter (2009) says yes, as a sustainable or Vanguard Company is “able to change internally with fewer stumbles and less resistance because they empower people to change themselves,” by collaborating, forging new relationships, and developing new networks for future generations (p. 258). Wüstenhagen et al. (2008) also identified several strategies, which can help create a more sustainable future such as collaborating to improve the triple bottom line. (Markley & Davis, 2007) also looked at and examined collaboration as a way of improving the triple bottom line (socially, ethically, environmentally, and financially) through the creation and development of a sustainable supply chain. The purpose of this discussion was to outline appropriate future directions for management in order to improve a company’s overall organizational performance, while working with manufacturers, distributors, and customers to decrease the environmental effects of a supply chain manager’s decisions over the long run.
The concept of triple bottom line is not only important to the continued development of social, environmental, and financial sustainability but it is also important because it can enhance purchasing decisions, inventory management practices, employee training, material handling and material disposal. In other words, the triple bottom line can help managers address sustainability affects socially, environmentally, and financially throughout an organization. Although most of the time financial sustainability is at the top of most managers’ priority lists, it is also important that managers also recognize the importance of sustainability from a social and environmental viewpoint if they want to continue providing ideas that help an organization maintain a competitive advantage.
The fact is that many factors can contribute to an organizations long-term sustainability development planning. As a result, looking ahead it becomes even more of a challenge for managers that are searching for answers and additional ways to remain competitive, which in turn may become more of a challenge for even the most experienced managers or executives. Therefore, it is important that employees, managers, executives, and other individuals continue to work together to help solve problems or “creating futures they truly desire,” which sequentially will help improve an organization’s 21st century social, economic, and environmental performance and sustainability (Senge, et al., 2008).
In many organizations across the globe, stakeholders are becoming an important part of a company’s innovative strategies, other business development processes, and additional corporate initiatives. Senge, et al., (2008) stated, “trying to get people committed to a sustainability initiative is a bit like trying to be happy: The harder you try, the less successful you’re likely to be” (p. 267). Consequently (Wüstenhagen, et al., 2008) suggested a way of integrating social, economic, and environmental factor planning with an organizations management’s efforts and stakeholders concerns in order to further improve sustainability initiatives such as “customer value” (p. 241). This blog post has explained several important factors that are helping shape the social, economic, environmental, and financial sustainability efforts of executives, managers, and employees throughout many companies. A common theme throughout this work was that the more people know and understand sustainable business practices, the more they are doing to improve sustainability practices in management, thus helping their organizations become a vanguard company. As a result, this improvement within organizations will continue to help leaders find additional ways to reduce costs, while becoming more efficient and yielding solid social, economic, environmental, and financial results. As technological advancements lead to new systems, regulations will continue to force companies to rethink their long-term sustainability practices if they want to increase their global reputation. There is no doubt moving forward that companies will continue to grow more dependent on sustainability practices over the next 20+ years. For that reason, decision makers need to consider these factors along with others if they want to continue sustainable development thus moving to a vanguard company.
References
Carter, C., R. , & Rogers, D., S. (2008). A framework of sustainable supply chain management: moving toward new theory. International Journal of Physical Distribution & Logistics Management, 38(5), 360.
Hopkins, M., Townend, A., Khayat, Z., Balagopal, B., Reeves, M., & Berns, M. (2009). The business of sustainability: What it means to managers now. MIT Sloan Management Review, 51(1), 20.
Kanter, R. M. (2009). SuperCorp: How vanguard companies create innovation, profits, growth, and social good. New York Crown Publishing Group.
Markley, M. J., & Davis, L. (2007). Exploring future competitive advantage through sustainable supply chains. International Journal of Physical Distribution & Logistics Management, 37(9), 763.
Schlange, L. E. (2009). Stakeholder identification in sustainability entrepreneurship. Greener Management International(55), 13-32.
Senge, P., Kruschwitz, N., Laur, J., & Schley, S. (2008). The necessary revolution: How individuals and organizations are working together to create a sustainable world. New York: Doubleday.
Wüstenhagen, R., Hamschmidt, J., Sharma, S., & Starik, M. (2008). Sustainable innovation and entrepreneurship. Cheltenhem, UK: Edward Elgar.
Hopkins et al., (2009) clearly point out that it is obvious that the more managers know about things that affect long-term sustainability planning the more they could/will help in shaping future business plans of an organization. However, the fact is many business managers or owners do not give much thought to long-term sustainability and this is why sustainability planning within many companies exists in a limited capacity or not at all. (Senge, Kruschwitz, Laur, & Schley, 2008) also mentioned that millions of people “including managers” are/will continue to search for ways to educate more people about sustainability issues. Like Hopkins et al., (2009) discussing the importance of managers uniting suppliers across that value chain Senge et al., (2008) recommended that more people need to learn how to “see the larger systems” in which they belong such as the supply chain, industry, or a region. This philosophy will not only provide additional insights for managers but also help educate more people with different perspectives, which will continue to help shape long-term sustainability plans of an organization.
According to (Wüstenhagen, Hamschmidt, Sharma, & Starik, 2008) another concept that can/is helping managers see the big picture is sustainable entrepreneurship, which has characteristics that carry with it high social benefits for the private, along with the public sector(s) of business. Sustainable entrepreneurship is dependent on innovation and stakeholders in order to succeed long-term. (Schlange, 2009) defines this concept as a process of identifying opportunities by being creative, while defining stakeholders as people or companies that are associated with certain organizations, which can help minimize risks, while maximizing benefits. In addition, Schlange (2009) identified three types of sustainable entrepreneurship (1) socially, (2) economically, and (3) ecologically driven. From a stakeholders perspective the key to effective sustainable entrepreneurship is to develop all three types of sustainability in order to create value and venture relationships that are likely to mature overtime.
However, business models that carry high social, economic, or ecological benefits may not always be suitable for the mass market, as in some instances they are actually detrimental to society. Expanding on the concept of sustainable entrepreneurship (Carter & Rogers, 2008) use conceptual theory building of sustainability to introduce readers to the concept of sustainability across the supply chain, which they explained helped shape the social, economic and environmental environments of this business segment. Using past research theories based on Transaction Cost Economics (TCE), ecology, and views within several organizations Carter and Rogers (2008) developed a framework driven by entrepreneurs that represented the middle ground of “Sustainable Supply Chain Management (SSCM),” which would ultimately connect social supply chain responsibility with environmental and political programs (p. 360).
Carter and Rogers (2008) were also able to determine that sustainable entrepreneurship within an organization can also affect the societal, economic, and environmental performance of a manager and/or company much like (Hopkins, et al., 2009; Kanter, 2009). In fact, the societal, economic, and environmental processes analysis showed improved results in the overall economic performance of an individual or the entire supply chain. Four main factors supported the claims (1) the overall business strategy, (2) culture, (3) transparency, and (4) risk management. Carter and Rogers’s combination of processes with the identified four factors are a good starting point for those managers that are actually looking to learn more about and develop long-term sustainability practices within their organization(s) or the old adage of the more you know, the more you learn.
There are many ways people, managers, and executives looking at sustainable development in their personal and professional lives. In fact, as previously mentioned, sustainable management and entrepreneurship are two ways of creating long-term sustainability within an organization. However, can we meet the needs of the present with these sustainability processes without compromising future generation’s abilities to meet their own needs? Kanter (2009) says yes, as a sustainable or Vanguard Company is “able to change internally with fewer stumbles and less resistance because they empower people to change themselves,” by collaborating, forging new relationships, and developing new networks for future generations (p. 258). Wüstenhagen et al. (2008) also identified several strategies, which can help create a more sustainable future such as collaborating to improve the triple bottom line. (Markley & Davis, 2007) also looked at and examined collaboration as a way of improving the triple bottom line (socially, ethically, environmentally, and financially) through the creation and development of a sustainable supply chain. The purpose of this discussion was to outline appropriate future directions for management in order to improve a company’s overall organizational performance, while working with manufacturers, distributors, and customers to decrease the environmental effects of a supply chain manager’s decisions over the long run.
The concept of triple bottom line is not only important to the continued development of social, environmental, and financial sustainability but it is also important because it can enhance purchasing decisions, inventory management practices, employee training, material handling and material disposal. In other words, the triple bottom line can help managers address sustainability affects socially, environmentally, and financially throughout an organization. Although most of the time financial sustainability is at the top of most managers’ priority lists, it is also important that managers also recognize the importance of sustainability from a social and environmental viewpoint if they want to continue providing ideas that help an organization maintain a competitive advantage.
The fact is that many factors can contribute to an organizations long-term sustainability development planning. As a result, looking ahead it becomes even more of a challenge for managers that are searching for answers and additional ways to remain competitive, which in turn may become more of a challenge for even the most experienced managers or executives. Therefore, it is important that employees, managers, executives, and other individuals continue to work together to help solve problems or “creating futures they truly desire,” which sequentially will help improve an organization’s 21st century social, economic, and environmental performance and sustainability (Senge, et al., 2008).
In many organizations across the globe, stakeholders are becoming an important part of a company’s innovative strategies, other business development processes, and additional corporate initiatives. Senge, et al., (2008) stated, “trying to get people committed to a sustainability initiative is a bit like trying to be happy: The harder you try, the less successful you’re likely to be” (p. 267). Consequently (Wüstenhagen, et al., 2008) suggested a way of integrating social, economic, and environmental factor planning with an organizations management’s efforts and stakeholders concerns in order to further improve sustainability initiatives such as “customer value” (p. 241). This blog post has explained several important factors that are helping shape the social, economic, environmental, and financial sustainability efforts of executives, managers, and employees throughout many companies. A common theme throughout this work was that the more people know and understand sustainable business practices, the more they are doing to improve sustainability practices in management, thus helping their organizations become a vanguard company. As a result, this improvement within organizations will continue to help leaders find additional ways to reduce costs, while becoming more efficient and yielding solid social, economic, environmental, and financial results. As technological advancements lead to new systems, regulations will continue to force companies to rethink their long-term sustainability practices if they want to increase their global reputation. There is no doubt moving forward that companies will continue to grow more dependent on sustainability practices over the next 20+ years. For that reason, decision makers need to consider these factors along with others if they want to continue sustainable development thus moving to a vanguard company.
References
Carter, C., R. , & Rogers, D., S. (2008). A framework of sustainable supply chain management: moving toward new theory. International Journal of Physical Distribution & Logistics Management, 38(5), 360.
Hopkins, M., Townend, A., Khayat, Z., Balagopal, B., Reeves, M., & Berns, M. (2009). The business of sustainability: What it means to managers now. MIT Sloan Management Review, 51(1), 20.
Kanter, R. M. (2009). SuperCorp: How vanguard companies create innovation, profits, growth, and social good. New York Crown Publishing Group.
Markley, M. J., & Davis, L. (2007). Exploring future competitive advantage through sustainable supply chains. International Journal of Physical Distribution & Logistics Management, 37(9), 763.
Schlange, L. E. (2009). Stakeholder identification in sustainability entrepreneurship. Greener Management International(55), 13-32.
Senge, P., Kruschwitz, N., Laur, J., & Schley, S. (2008). The necessary revolution: How individuals and organizations are working together to create a sustainable world. New York: Doubleday.
Wüstenhagen, R., Hamschmidt, J., Sharma, S., & Starik, M. (2008). Sustainable innovation and entrepreneurship. Cheltenhem, UK: Edward Elgar.
Friday, May 20, 2011
Three Futuring Trends that are the Most Likely to Help Organizations Achieve Short and/or Long-Term Success
In the ever-changing world of business, it is extremely important to be able to identify past trends in order to recognize future opportunities that may or may not affect the short-term or long-term health of a business’s functionality now or in the years to come. According to (E. Cornish, 2004) there are an endless amount of ways to assess future events and when doing so you must make sure to use techniques that you are comfortable with. Three important futuring techniques that are sure to help an organization achieve short and long-term success are (1) scenarios, (2) modeling, and (3) wild cards.
According to Cornish (2004), a scenario is a developing future trend or strategy that describes a story or is explained in a detailed outline form. Usually those companies that utilize scenarios as part of the planning process do so if they are uncertain about future events and their potential impact(s) on the organizational planning. (Fink, Marr, Siebe, & Kuhle, 2005) also state that “scenarios can play a significant and new role in combining the well-structured planning process with the often less-organized and in some planners’ minds more “chaotic” early-warning processes” (p. 376). Nevertheless, a company maybe filled with varying perspectives of problems, and different interests that can turn a good strategy into a bad strategy overnight. Therefore, Fink, et al., (2005) explained four ways executives and managers could deal with these differences in order to create a stronger future for the company. First, recognize the key elements of the strategy as step one, where you identify twenty or less factors in order to discover relationships to where a company sees itself now and where it sees itself in the future. Second, improve and explain future options as step two, while describing what factors of those identified in step one can lead to potential future opportunities within the organization. Third, combine future options with step one scenarios since they are the link between future options of each factor identified in step one to strategy scenarios, while stressing the importance and strategy of each scenario developed by the members of the team. Finally, develop a strategic roadmap, which was referred to as the final step (four) or the identification of all the resources needed for any changes, also known as “windows of opportunities” (p. 367).
(Bracken, 2008) agreed with the insights of Cornish and Fink and describes four additional scenarios that are commonly used by leaders in order to help executives continue identifying business trends. The first was technology, followed by political risks, attrition, and strategic personalities. By no means are these four trends the only trends affecting business; but from the research, (Bracken, 2008) stated that these trends would likely continue to be at the forefront well into the next decade. Bracken (2008) also discussed the necessary leadership skills that would be required to produce future scenarios that could help everyone involved in business transactions as (1) foresight, (2) leverage, (3) agility, and (4) broader perspectives. (Bodell, 2006) research also showed that those organizations that are the most successful using scenarios and/or scanning methods are the ones that use foresight and perspective to identify opportunities, while preparing for what is next. (Bodell, 2006; Bracken, 2008) discussed similar methods that others can be taught in order to learn possible future tracks of their organizations. Those leaders that possess these traits will be better equipped to deal with turbulent times, be ahead of the game within their industry, and able to solve problems by viewing the situation from all possible angles.
The second futuring technique that could help an organization achieve short and long-term success is referred to as modeling and Cornish (2004) defines modeling as “something that we use to represent something else” (p. 70). Although there are a number of different modeling techniques that were/are used, (Wind, 2008) describes a modeling technique in relation to the discipline of Marketing. In fact, marketing, like technology has/is continuing to advance into a rigorous field of work and study. Wind (2008) explained that marketing today is a combination of “analysis, economic, and econometric modeling, behavioral economics, data mining, and techniques,” which are “derived from mathematical psychology” (p. 21). As the world continues to move forward, marketing will also need to continue forward; therefore, Wind (2008) proposed seven strategies modeled after several different disciplines (i.e. finance, customer relationship, supply chain management, operations, etc). Wind’s proposed strategies are an excellent example of how modeling can have major impacts on one specific element or several. (Giunipero, Hooker, Joseph-Matthews, Yoon, & Brudvig, 2008) agree with Wind (2008) and add that those organizational leaders that choose to evaluate past literature, while producing new models will be the ones who are able to determine what future development(s) may occur within a network or organizational framework. Like Wind (2008) modeling technique (Giunipero, et al., 2008) were able to correlate different frameworks, challenges, and trends of the past with new information technology and e-commerce, which is perhaps a new way to solve other strategic issues or help solve global supply chain issues heading into the future based on the past.
The last futuring technique that could help an organization achieve short and long-term success is wild cards. In a recent article published in the Futurist (Petersen, 2009) describes some of the same things in Cornish’s (2004) Futuring about wild cards that Petersen (2009) previously mentioned in his book Out of the Blue, which have continued to shape and reshape the future. In fact, Cornish not only uses Petersen’s work to describe past events but offers his analysis of Petersen’s three basic rules for dealing with wild cards, as also featured in the (Edward Cornish, 2003) article The Wild Card of the Future. Cornish quotes Petersen’s three rules as
(1) We need to think about wild cards before they happen because if we do then we are more likely to find a solution(s).
(2) We must also be able to understand the affects of potential wild cards in order to prepare better for a potential response.
(3) Extreme past and future events require unique approaches in order to help solve them.
Understanding the likelihood of future events can better equip you if/or when those events happen. In fact, both Cornish and Petersen describe some of the past wilds cards that have taken place and remind readers those events that happen unexpectedly may or may not be as uncommon as one may think. The truth is, over the years, wild cards have and continue to transform our own daily lives along with that of the global business environment. However, creating a long-term organizational strategy that transforms multiple partners is just the beginning. (Wagner, 2008) points out that an organization can forecast for the future; however, they cannot predict changes or “wild cards” that may occur outside the normal realm of conducting business. Her work examines several wild cards discussed in a work by Schwartz and Randall (2007) along with the main categories used in long-term business planning. Wagner (2008) identified six trends and forecasts companies utilize to predict future demands (1) demography, (2) economics, (3) environment, (4) government, (5) society, and (6) technology, while offering readers a brief classification of each. Obviously many variables can influence our daily decisions, which can affect long-term business forecasting; therefore, Wagner (2009) noted that many futurists often discuss a single trend across several sectors. This organization of trends has proved to be valuable in understanding many global issues or wild cards that can dramatically affect later business decisions and affect long-term business planning, so there are no surprises that you unprepared for.
This blog post examined three futuring methods that Cornish points out in his book Futuring Methods. Although there are many techniques that can predict the future; scenarios, modeling, and wild cards are the most important to my dissertation, hence the correlation of this work to previous blog posts. Additionally, the tools identified here were developed years ago; however, these tools will continue to be used to identify problems, as we continue to look for new tools and additional ways of predicting the future. We must also remember that we need to continue to think strategically, while remaining dedicated to innovation and technological advancements as a group if we want to continue advancing at the current rates. Regardless of the efforts, a company that uses these three methods to try to predict the future will be better equipped to deal with or plan for those unforeseen events, as they are essential to survival in the world we live in today.
Of course, I am always up for other opinions, especially those that involve some of the other futuring techniques used by individuals and business small or large. Shoot me an email, post here, or Tweet me a reply. Until next time, Keep Smiling!!!
References
Bodell, L. (2006). Best practices in scanning. The Futurist, 40(5), 22.
Bracken, P. (2008). Futurizing business education. Futurist, 42(4), 38-42.
Cornish, E. (2003). The wild cards in our future. Futurist, 37(4), 18.
Cornish, E. (2004). Futuring: The exploration of the future. Bethesda, MD: World Future Society.
Fink, A., Marr, B., Siebe, A., & Kuhle, J.-P. (2005). The future scorecard: combining external and internal scenarios to create strategic foresight. Management Decision, 43(3), 360.
Giunipero, L. C., Hooker, R. E., Joseph-Matthews, S., Yoon, T. E., & Brudvig, S. (2008). A decade of SCM literature: Past, present, and future implications. Journal of Supply Chain Management: A Global Review of Purchasing & Supply, 44(4), 66-86.
Petersen, J. L. (2009). How "wild cards" may reshape our future. Futurist, 43(3), 19-20.
Wagner, C. G. (2008). Anticipating wild cards in world affairs. Futurist, 42(1), 6-7.
Wind, Y. (2008). A plan to invent the marketing we need today. MIT Sloan Management Review, 49(4), 21.
According to Cornish (2004), a scenario is a developing future trend or strategy that describes a story or is explained in a detailed outline form. Usually those companies that utilize scenarios as part of the planning process do so if they are uncertain about future events and their potential impact(s) on the organizational planning. (Fink, Marr, Siebe, & Kuhle, 2005) also state that “scenarios can play a significant and new role in combining the well-structured planning process with the often less-organized and in some planners’ minds more “chaotic” early-warning processes” (p. 376). Nevertheless, a company maybe filled with varying perspectives of problems, and different interests that can turn a good strategy into a bad strategy overnight. Therefore, Fink, et al., (2005) explained four ways executives and managers could deal with these differences in order to create a stronger future for the company. First, recognize the key elements of the strategy as step one, where you identify twenty or less factors in order to discover relationships to where a company sees itself now and where it sees itself in the future. Second, improve and explain future options as step two, while describing what factors of those identified in step one can lead to potential future opportunities within the organization. Third, combine future options with step one scenarios since they are the link between future options of each factor identified in step one to strategy scenarios, while stressing the importance and strategy of each scenario developed by the members of the team. Finally, develop a strategic roadmap, which was referred to as the final step (four) or the identification of all the resources needed for any changes, also known as “windows of opportunities” (p. 367).
(Bracken, 2008) agreed with the insights of Cornish and Fink and describes four additional scenarios that are commonly used by leaders in order to help executives continue identifying business trends. The first was technology, followed by political risks, attrition, and strategic personalities. By no means are these four trends the only trends affecting business; but from the research, (Bracken, 2008) stated that these trends would likely continue to be at the forefront well into the next decade. Bracken (2008) also discussed the necessary leadership skills that would be required to produce future scenarios that could help everyone involved in business transactions as (1) foresight, (2) leverage, (3) agility, and (4) broader perspectives. (Bodell, 2006) research also showed that those organizations that are the most successful using scenarios and/or scanning methods are the ones that use foresight and perspective to identify opportunities, while preparing for what is next. (Bodell, 2006; Bracken, 2008) discussed similar methods that others can be taught in order to learn possible future tracks of their organizations. Those leaders that possess these traits will be better equipped to deal with turbulent times, be ahead of the game within their industry, and able to solve problems by viewing the situation from all possible angles.
The second futuring technique that could help an organization achieve short and long-term success is referred to as modeling and Cornish (2004) defines modeling as “something that we use to represent something else” (p. 70). Although there are a number of different modeling techniques that were/are used, (Wind, 2008) describes a modeling technique in relation to the discipline of Marketing. In fact, marketing, like technology has/is continuing to advance into a rigorous field of work and study. Wind (2008) explained that marketing today is a combination of “analysis, economic, and econometric modeling, behavioral economics, data mining, and techniques,” which are “derived from mathematical psychology” (p. 21). As the world continues to move forward, marketing will also need to continue forward; therefore, Wind (2008) proposed seven strategies modeled after several different disciplines (i.e. finance, customer relationship, supply chain management, operations, etc). Wind’s proposed strategies are an excellent example of how modeling can have major impacts on one specific element or several. (Giunipero, Hooker, Joseph-Matthews, Yoon, & Brudvig, 2008) agree with Wind (2008) and add that those organizational leaders that choose to evaluate past literature, while producing new models will be the ones who are able to determine what future development(s) may occur within a network or organizational framework. Like Wind (2008) modeling technique (Giunipero, et al., 2008) were able to correlate different frameworks, challenges, and trends of the past with new information technology and e-commerce, which is perhaps a new way to solve other strategic issues or help solve global supply chain issues heading into the future based on the past.
The last futuring technique that could help an organization achieve short and long-term success is wild cards. In a recent article published in the Futurist (Petersen, 2009) describes some of the same things in Cornish’s (2004) Futuring about wild cards that Petersen (2009) previously mentioned in his book Out of the Blue, which have continued to shape and reshape the future. In fact, Cornish not only uses Petersen’s work to describe past events but offers his analysis of Petersen’s three basic rules for dealing with wild cards, as also featured in the (Edward Cornish, 2003) article The Wild Card of the Future. Cornish quotes Petersen’s three rules as
(1) We need to think about wild cards before they happen because if we do then we are more likely to find a solution(s).
(2) We must also be able to understand the affects of potential wild cards in order to prepare better for a potential response.
(3) Extreme past and future events require unique approaches in order to help solve them.
Understanding the likelihood of future events can better equip you if/or when those events happen. In fact, both Cornish and Petersen describe some of the past wilds cards that have taken place and remind readers those events that happen unexpectedly may or may not be as uncommon as one may think. The truth is, over the years, wild cards have and continue to transform our own daily lives along with that of the global business environment. However, creating a long-term organizational strategy that transforms multiple partners is just the beginning. (Wagner, 2008) points out that an organization can forecast for the future; however, they cannot predict changes or “wild cards” that may occur outside the normal realm of conducting business. Her work examines several wild cards discussed in a work by Schwartz and Randall (2007) along with the main categories used in long-term business planning. Wagner (2008) identified six trends and forecasts companies utilize to predict future demands (1) demography, (2) economics, (3) environment, (4) government, (5) society, and (6) technology, while offering readers a brief classification of each. Obviously many variables can influence our daily decisions, which can affect long-term business forecasting; therefore, Wagner (2009) noted that many futurists often discuss a single trend across several sectors. This organization of trends has proved to be valuable in understanding many global issues or wild cards that can dramatically affect later business decisions and affect long-term business planning, so there are no surprises that you unprepared for.
This blog post examined three futuring methods that Cornish points out in his book Futuring Methods. Although there are many techniques that can predict the future; scenarios, modeling, and wild cards are the most important to my dissertation, hence the correlation of this work to previous blog posts. Additionally, the tools identified here were developed years ago; however, these tools will continue to be used to identify problems, as we continue to look for new tools and additional ways of predicting the future. We must also remember that we need to continue to think strategically, while remaining dedicated to innovation and technological advancements as a group if we want to continue advancing at the current rates. Regardless of the efforts, a company that uses these three methods to try to predict the future will be better equipped to deal with or plan for those unforeseen events, as they are essential to survival in the world we live in today.
Of course, I am always up for other opinions, especially those that involve some of the other futuring techniques used by individuals and business small or large. Shoot me an email, post here, or Tweet me a reply. Until next time, Keep Smiling!!!
References
Bodell, L. (2006). Best practices in scanning. The Futurist, 40(5), 22.
Bracken, P. (2008). Futurizing business education. Futurist, 42(4), 38-42.
Cornish, E. (2003). The wild cards in our future. Futurist, 37(4), 18.
Cornish, E. (2004). Futuring: The exploration of the future. Bethesda, MD: World Future Society.
Fink, A., Marr, B., Siebe, A., & Kuhle, J.-P. (2005). The future scorecard: combining external and internal scenarios to create strategic foresight. Management Decision, 43(3), 360.
Giunipero, L. C., Hooker, R. E., Joseph-Matthews, S., Yoon, T. E., & Brudvig, S. (2008). A decade of SCM literature: Past, present, and future implications. Journal of Supply Chain Management: A Global Review of Purchasing & Supply, 44(4), 66-86.
Petersen, J. L. (2009). How "wild cards" may reshape our future. Futurist, 43(3), 19-20.
Wagner, C. G. (2008). Anticipating wild cards in world affairs. Futurist, 42(1), 6-7.
Wind, Y. (2008). A plan to invent the marketing we need today. MIT Sloan Management Review, 49(4), 21.
Friday, May 6, 2011
How Does/Can Social Media Impact Your Supply Chain and/or Business Strategy?
Of late there has been a lot of talk about the influences that social media plays in almost all the things we do in our daily lives. In fact, many people have argued that this new median for reaching larger audiences is now starting to affect the ways organizations conduct business, build relationships, and increase sales throughout the world while enhancing supply chain operations. Or is it?
As customer wants and the business landscape continues to change, we must also continue to look for ways to integrate social media into our daily business activities if we want to continue achieving the type of long-term growth most of us are looking for, or the old adage “innovate or die.” In a recent blog post (Cunha, 2011) discussed some of the ways that we can connect customers with things they want to buy in it what he terms “the Connected Experience” by discussing four important concepts (1) ERP, (2) Real-Time, (3) China, and (4) Software, while offering several detailed explanations of each.
(1)Enterprise Resource Planning (ERP)- the corner stone of the supply chain, which offers a company the ability to plan, analyze, and/or implement new strategies in a timely manner in order to produce enough product in real-time. That is if the organization realizes the strengths and weaknesses in what their system(s) can do such as integrating your ERP system with a reputable Customer Relationship Management (CRM) system in order to track customer issues with product quality, other opinions, and reviews or through other medians such as Social Media.
(2)Real-Time- what many purchasing decisions are based on, especially now with social media, as these medians offer leaders the ability to track potential purchase decisions simply by tracking the number of likes, dislikes, comments, and/or discussions through almost any social media site, which is extremely important in small and large purchases alike.
(3)China- the research continues to show China a leader in retail marketing by their continued success in online trading platforms such as Alibaba, Made in China, Global Sources, etc. It is no secret that these as well as other social media sites such as Twitter and Facebook have and will continue to allow China and others the ability to reach mass audiences while streaming the way the products are purchased, distributed, and consumed all over the world. Either organizations will have to get on board or be left behind.
(4)Software- with a number of different enterprise systems available to organizations (ERP, VMI, APS, etc) obviously the key here is to understand what system can offer you the best ways to analyze data in order to make additional long-term strategic decisions. If you use one if not more of these systems with a mix of social media sites, you should be able to segment, create benchmarks, and correlations between your software solutions and your bottom-line results.
(Cunha, 2011) identified four important and relevant items that can help you and/or your organization collect, analyze, and assemble new ways to reach more people, hence streamlining your supply chain functionality. Regardless of the reasons, you use social media, it is becoming more important now a days to use it, and if you don’t then later you will more than likely end up asking yourself why you didn’t. As more and more companies continue to build their online presence, more and more people and businesses will continue to make purchases, while influencing others within their network to make the same purchases, which should indicate that your social networks can not only grow your business but also encourage new strategies for those involved in making strategic supply chain decisions. Ultimately, social media will never replace personal relationships but it should allow companies to build leaner supply chains, while connecting more brands with more consumers for any organization that competes in the market today.
Lastly, (Cunha, 2011) analysis like many of the others that I have continued to review over the course of my Doctoral work provides yet a few more reasons why this subject matter is extremely important not only to the continued evolution of supply chains systems but any system that social media has/will impact in the years ahead. Of course, other opinions, ideas, and suggestions are what will ultimately decide who, what, when or where consumers make a purchase but this subject should continue to drive business and purchasing decisions in some fashion in the foreseeable future, hence why this is such as important piece of the work that I continue to report and conduct. Of course, I am always up for your opinions and you can also contact Mr Cunha through my references at the bottom of this page.
Until, next time continuing smiling, achieving, and dedicated, as we all look for answers to the social media maze-- Cheers
References
Cunha, L. (2011). What does social media mean to your supply chain? Warehouse Management Systems Guide, retrieved on May 6, 2011 from: http://www.warehousemanagementsystemsguide.com/blog/social-media-supply-chain-042711/
As customer wants and the business landscape continues to change, we must also continue to look for ways to integrate social media into our daily business activities if we want to continue achieving the type of long-term growth most of us are looking for, or the old adage “innovate or die.” In a recent blog post (Cunha, 2011) discussed some of the ways that we can connect customers with things they want to buy in it what he terms “the Connected Experience” by discussing four important concepts (1) ERP, (2) Real-Time, (3) China, and (4) Software, while offering several detailed explanations of each.
(1)Enterprise Resource Planning (ERP)- the corner stone of the supply chain, which offers a company the ability to plan, analyze, and/or implement new strategies in a timely manner in order to produce enough product in real-time. That is if the organization realizes the strengths and weaknesses in what their system(s) can do such as integrating your ERP system with a reputable Customer Relationship Management (CRM) system in order to track customer issues with product quality, other opinions, and reviews or through other medians such as Social Media.
(2)Real-Time- what many purchasing decisions are based on, especially now with social media, as these medians offer leaders the ability to track potential purchase decisions simply by tracking the number of likes, dislikes, comments, and/or discussions through almost any social media site, which is extremely important in small and large purchases alike.
(3)China- the research continues to show China a leader in retail marketing by their continued success in online trading platforms such as Alibaba, Made in China, Global Sources, etc. It is no secret that these as well as other social media sites such as Twitter and Facebook have and will continue to allow China and others the ability to reach mass audiences while streaming the way the products are purchased, distributed, and consumed all over the world. Either organizations will have to get on board or be left behind.
(4)Software- with a number of different enterprise systems available to organizations (ERP, VMI, APS, etc) obviously the key here is to understand what system can offer you the best ways to analyze data in order to make additional long-term strategic decisions. If you use one if not more of these systems with a mix of social media sites, you should be able to segment, create benchmarks, and correlations between your software solutions and your bottom-line results.
(Cunha, 2011) identified four important and relevant items that can help you and/or your organization collect, analyze, and assemble new ways to reach more people, hence streamlining your supply chain functionality. Regardless of the reasons, you use social media, it is becoming more important now a days to use it, and if you don’t then later you will more than likely end up asking yourself why you didn’t. As more and more companies continue to build their online presence, more and more people and businesses will continue to make purchases, while influencing others within their network to make the same purchases, which should indicate that your social networks can not only grow your business but also encourage new strategies for those involved in making strategic supply chain decisions. Ultimately, social media will never replace personal relationships but it should allow companies to build leaner supply chains, while connecting more brands with more consumers for any organization that competes in the market today.
Lastly, (Cunha, 2011) analysis like many of the others that I have continued to review over the course of my Doctoral work provides yet a few more reasons why this subject matter is extremely important not only to the continued evolution of supply chains systems but any system that social media has/will impact in the years ahead. Of course, other opinions, ideas, and suggestions are what will ultimately decide who, what, when or where consumers make a purchase but this subject should continue to drive business and purchasing decisions in some fashion in the foreseeable future, hence why this is such as important piece of the work that I continue to report and conduct. Of course, I am always up for your opinions and you can also contact Mr Cunha through my references at the bottom of this page.
Until, next time continuing smiling, achieving, and dedicated, as we all look for answers to the social media maze-- Cheers
References
Cunha, L. (2011). What does social media mean to your supply chain? Warehouse Management Systems Guide, retrieved on May 6, 2011 from: http://www.warehousemanagementsystemsguide.com/blog/social-media-supply-chain-042711/
Wednesday, March 23, 2011
Customer Relationship Management (CRM) in Sales-Intensive Organizations
Over the last several decades technology has continued to change the way organizations manage, strategize, communicate, build relationships, procure vendors, create marketing campaigns, and track customer inquiries. According to (Tanner Jr, Ahearne, Leigh, Mason, & Moncrief, 2005) CRM currently ranks in the top five of most corporate strategies in over 60% of companies, as these systems allow leaders to manage processes, communicate more with their customers, while growing organizational marketing effectiveness and increasing customer and vendor retention rates. Additionally, Tanner Jr, et al., (2005) identified three important aspects of most CRM systems. The first is Strategic CRM, which is the organizational decision making process that helps define and/or build a customer-oriented business strategy with their business processes, and technology implementation. In other words, “the ability to define and implement a right customer → right strategy → right organization → right channel → right people → right rewards success model” (p. 169). The second is Analytical CRM, which are the processes used to analyze customer and industry information in order to provide information that is more accurate and will guide the company’s future marketing efforts. Finally, Operational CRM, which is the business process such as sales, marketing, service, support, etc. All of these important aspects of CRM and resource allocations across all channels accompany a firm’s relationship strategy and point to four issues at the strategic level (1) account management issues, (2) organizational or sales structure, (3) cultural issues, and (4) enterprise-level knowledge management.
(1) Account management issues- a strategic issue that involves how sales organizations use CRM to review the different way that accounts are managed (i.e. territory, key account management, and collaboration).
(2) Organizational and/or sales structure- CRM has allowed more organizations to place more emphasis on selling based on customer needs across many different organizational departments (i.e. field and divisional sales, electronic and team selling, call centers, supply-chain personal and vendors, partners, etc).
(3) Cultural issues- the degree to which an organizations culture may or may not be more inclined towards a CRM implementation (i.e. sales organizations commission based tend to be non-supportive of CRM versus those organizations that offer base plus commissions).
(4) Enterprise-level knowledge management- CRM systems allow leaders the ability to access vast amounts of information in order to predict, develop, and market new products and/or services. This enabling can create a general view of an organizations customer, which in turn can create even more sales and marketing campaigns that are effective.
As more and more organizations gain a better understanding of CRM, these systems will require more researchers to look at the specific benefits that CRM technology can provide a company throughout the entire organization. Therefore, Tanner Jr, et al., (2005) framework, and research for use in analyzing systems such as CRM and Sales Force Automation (SFA) could enable more organizations to achieve even higher levels of performance, procure more vendors, ROI, sales, satisfaction, and enhanced business relationships. Since these five variables are also some of the same drivers in my research analysis this study just like the others analyzed over the last several weeks should allow me the opportunity to determine if the proposed framework in this study will be the best way to determine if a CRM technology is the most important change initiative in SCM. Over the next two weeks, I will make my determination and of course report my findings for additional feedback or comment. Otherwise, if I do deem CRM to be the most important you can expect a more thorough analysis and discussion of this system in the weeks and months ahead as I apply other scholarly pieces into a real world dissertation that will be published in late 2012. Until next time, keep smiling, as it really does look good on you! Cheers
(1) Account management issues- a strategic issue that involves how sales organizations use CRM to review the different way that accounts are managed (i.e. territory, key account management, and collaboration).
(2) Organizational and/or sales structure- CRM has allowed more organizations to place more emphasis on selling based on customer needs across many different organizational departments (i.e. field and divisional sales, electronic and team selling, call centers, supply-chain personal and vendors, partners, etc).
(3) Cultural issues- the degree to which an organizations culture may or may not be more inclined towards a CRM implementation (i.e. sales organizations commission based tend to be non-supportive of CRM versus those organizations that offer base plus commissions).
(4) Enterprise-level knowledge management- CRM systems allow leaders the ability to access vast amounts of information in order to predict, develop, and market new products and/or services. This enabling can create a general view of an organizations customer, which in turn can create even more sales and marketing campaigns that are effective.
As more and more organizations gain a better understanding of CRM, these systems will require more researchers to look at the specific benefits that CRM technology can provide a company throughout the entire organization. Therefore, Tanner Jr, et al., (2005) framework, and research for use in analyzing systems such as CRM and Sales Force Automation (SFA) could enable more organizations to achieve even higher levels of performance, procure more vendors, ROI, sales, satisfaction, and enhanced business relationships. Since these five variables are also some of the same drivers in my research analysis this study just like the others analyzed over the last several weeks should allow me the opportunity to determine if the proposed framework in this study will be the best way to determine if a CRM technology is the most important change initiative in SCM. Over the next two weeks, I will make my determination and of course report my findings for additional feedback or comment. Otherwise, if I do deem CRM to be the most important you can expect a more thorough analysis and discussion of this system in the weeks and months ahead as I apply other scholarly pieces into a real world dissertation that will be published in late 2012. Until next time, keep smiling, as it really does look good on you! Cheers
Wednesday, March 16, 2011
Leveraging your Organizational Capabilities through CRM for Increased Sales
Often discussed amongst organizational leaders and sales managers are some of the issues, impacts, and activities of sales forces, which are responsible for a company’s overall bottom line results. In fact, activities such as sales calls, sale's success stories, and long-term relationship building are continuing to change the way these issues, impacts, and activities are used to manage customer information, which in turn are helping to increase sales volume, identify additional customer buying habits and requirements, thus increasing customer satisfaction, organizational profitability, and competitive actions. (Raman, Wittmann, & Rauseo, 2006) identified CRM as a technological tool that can help an organizations sales force minimize some of these challenges while helping to increase returns on a sales person’s time invested in exchange for higher sales, revenues, profitability.
However, in spite of the tremendous amount of growth in CRM implementations, many people are quick to point out the high failure rates that these systems have also experienced. (Raman, et al., 2006) reported that in a survey conducted by CSO Insights consisting of 1,337 international companies who have implemented some form of a CRM system, that only 25% actually reported a significant benefit in a sales team’s performance. The most common citing found in the survey was that most of the time organizations lacked proper strategic planning that is required prior to any major system implementation such as that of CRM. Therefore, if an organization carefully plans for a CRM implementation (operational^1 or analytical^2 ) then they will be more likely to segment customers, and market more efficiently while identifying those customers that are more and/or less profitable.
Using some of the strengths and weaknesses found within the literature on a CRM implementation (Raman, et al., 2006) conducted their own qualitative study and developed a grounded theoretical model in order show organizational leaders why they should continue to focus on the CRM technology implementations. Four capabilities are discussed (1) organizational learning, (2) business process orientation, (3) customer centric orientation, and (4) Task-Technology Fit (TTF).
(1) Organizational learning- “organizational characteristics such as size, formalization, centralization, complexity, and interconnectedness on adoption and implementation of innovations” (p. 42)
(2) Business process orientation- an attempt to clarify technological innovations that an organization is considering adapting to match their existing processes (i.e. CRM, ERP, etc)
(3) Customer-centric orientation- an organization’s ability to focus on its customers wants and needs versus that of its internal structure or processes
(4) Task-Technology Fit (TTF)- the degree that technology (i.e. CRM) helps individuals position his/her tasks with that of the organizations desires in order to meet/exceed company needs
The results of (Raman, et al., 2006) study showed that most successful CRM technological implementations occurred when an organization incorporated both operational and analytical characteristics combined with the four main capabilities previous mentioned in order to help guide additional strategic long-term decision making (i.e. sales, marketing, customer service, segmentation, properly identifying profitable, non-profitable, and cross-selling customers, etc). Furthermore, the results of the study opened new doors for research opportunities for those curious to draw on the discussed model or those who want to see if different variations of these characteristics and capabilities would help or slow a CRM implementation.
Although CRM is viewed by many as a technological solution to sales and customer service (Raman, et al., 2006) also identified some of the drawbacks of a CRM implementation. One thing is certain from this review and my analysis of CRM over the last few weeks is that CRM can provide many strategic benefits to those people and organizations that understand and utilize all the tools by properly leveraging this resource to produce higher sales, returns, satisfaction, and profitability. Everyone else who does not fully understand how to build CRM into the strategic long-term plans of the organization should be cautious with an implementation of this type.
Like many of the other articles on CRM that I have analyzed over the last few weeks, (Raman, et al., 2006) proposed yet another model, along with some very interesting follow-up (qualitative and quantitative research) for others to consider who are interested in CRM. Therefore, those people like me who are interested in researching this type system additionally could use this study and model to draw their own conclusions of these type systems. It is one thing to say something about CRM or anything for that matter but actually backing up your statements with actual data is a more effective way to get people to listen. Hence, why I will continue to research and report my findings for those who are interested in this niche technological innovation and all others looking for answers that are credible.
Of course and like usual, I am always open to other opinions of the research that I report, so if you got a thought or want to chime in with some additional insight(s) please drop me a line; otherwise and until next time… Keep Smiling
1 Operational CRM involves functions such as sales, service, support, and marketing.
2 Analytical CRM technologies involve customer information that is used by all organizational departments to analyze data in order to improve business decisions and/or future actions.
References
Raman, P., Wittmann, C. M., & Rauseo, N. A. (2006). Leveraging CRM for sales: The role of organizational capabilities in successful CRM implementation. Journal of Personal Selling & Sales Management, 26(1), 39-53.
However, in spite of the tremendous amount of growth in CRM implementations, many people are quick to point out the high failure rates that these systems have also experienced. (Raman, et al., 2006) reported that in a survey conducted by CSO Insights consisting of 1,337 international companies who have implemented some form of a CRM system, that only 25% actually reported a significant benefit in a sales team’s performance. The most common citing found in the survey was that most of the time organizations lacked proper strategic planning that is required prior to any major system implementation such as that of CRM. Therefore, if an organization carefully plans for a CRM implementation (operational^1 or analytical^2 ) then they will be more likely to segment customers, and market more efficiently while identifying those customers that are more and/or less profitable.
Using some of the strengths and weaknesses found within the literature on a CRM implementation (Raman, et al., 2006) conducted their own qualitative study and developed a grounded theoretical model in order show organizational leaders why they should continue to focus on the CRM technology implementations. Four capabilities are discussed (1) organizational learning, (2) business process orientation, (3) customer centric orientation, and (4) Task-Technology Fit (TTF).
(1) Organizational learning- “organizational characteristics such as size, formalization, centralization, complexity, and interconnectedness on adoption and implementation of innovations” (p. 42)
(2) Business process orientation- an attempt to clarify technological innovations that an organization is considering adapting to match their existing processes (i.e. CRM, ERP, etc)
(3) Customer-centric orientation- an organization’s ability to focus on its customers wants and needs versus that of its internal structure or processes
(4) Task-Technology Fit (TTF)- the degree that technology (i.e. CRM) helps individuals position his/her tasks with that of the organizations desires in order to meet/exceed company needs
The results of (Raman, et al., 2006) study showed that most successful CRM technological implementations occurred when an organization incorporated both operational and analytical characteristics combined with the four main capabilities previous mentioned in order to help guide additional strategic long-term decision making (i.e. sales, marketing, customer service, segmentation, properly identifying profitable, non-profitable, and cross-selling customers, etc). Furthermore, the results of the study opened new doors for research opportunities for those curious to draw on the discussed model or those who want to see if different variations of these characteristics and capabilities would help or slow a CRM implementation.
Although CRM is viewed by many as a technological solution to sales and customer service (Raman, et al., 2006) also identified some of the drawbacks of a CRM implementation. One thing is certain from this review and my analysis of CRM over the last few weeks is that CRM can provide many strategic benefits to those people and organizations that understand and utilize all the tools by properly leveraging this resource to produce higher sales, returns, satisfaction, and profitability. Everyone else who does not fully understand how to build CRM into the strategic long-term plans of the organization should be cautious with an implementation of this type.
Like many of the other articles on CRM that I have analyzed over the last few weeks, (Raman, et al., 2006) proposed yet another model, along with some very interesting follow-up (qualitative and quantitative research) for others to consider who are interested in CRM. Therefore, those people like me who are interested in researching this type system additionally could use this study and model to draw their own conclusions of these type systems. It is one thing to say something about CRM or anything for that matter but actually backing up your statements with actual data is a more effective way to get people to listen. Hence, why I will continue to research and report my findings for those who are interested in this niche technological innovation and all others looking for answers that are credible.
Of course and like usual, I am always open to other opinions of the research that I report, so if you got a thought or want to chime in with some additional insight(s) please drop me a line; otherwise and until next time… Keep Smiling
1 Operational CRM involves functions such as sales, service, support, and marketing.
2 Analytical CRM technologies involve customer information that is used by all organizational departments to analyze data in order to improve business decisions and/or future actions.
References
Raman, P., Wittmann, C. M., & Rauseo, N. A. (2006). Leveraging CRM for sales: The role of organizational capabilities in successful CRM implementation. Journal of Personal Selling & Sales Management, 26(1), 39-53.
Friday, March 11, 2011
Measuring Customer Relationship Management (CRM) Effectiveness in Order to Reduce Costs and Increase Sales
There are a number of applications or systems that an organization can use evaluate their current market share, profit margins, customer relationships, loyalty, and satisfaction. One such application or technological system most commonly used to analyze these trends is referred to as Customer Relationship Management (CRM). According to (Ja-Shen, Yen, Li, & Ching, 2009) CRM systems are a major marketing and/or services tool that can help an organization take full advantage of its customers by identifying trends in their customers buying behaviors, needs, and future expectations in order to maintain and grow relationships. Although a number of studies have researched and proven that a CRM implementation can enhance an organizations performance with increases in sales, few have focused on how these same systems can further develop more customer relationships, while increasing a company’s market share. As a result of these findings (Ja-Shen, et al., 2009) recent study examined three other factors (marketing, operations, and human resources) of CRM, which they believed could help organizations improve or grow their customer relationships, thus creating more organizational profitability and market share.
When an organization improves its relationship between marketing, operations, and human resources, they become better equipped to disseminate CRM data, which can then lead the organization to make additional innovations, while taking responsive actions. (Ja-Shen, et al., 2009) refer to this dimension of CRM as the Information Technology (IT) or Customer-Focused Information Technology (CFIT) segment, which is the first of three dimensions of interest in their analysis that supports the operations of a company’s CRM processes. The second dimension of interest in (Ja-Shen, et al., 2009) study was referred to as Relationship Marketing (RM), which was identified as the root efforts of a CRM process that can help an organization manage and improve its new and existing relationships with its customers in order to increase customer satisfaction, all while creating additional long-term profitability. Finally, (Ja-Shen, et al., 2009) referred to the third dimension of interest in their study as Customer-Focused Organizational Climate (CFOC) or the human resource side, which deals with an organizations culture to accept, use, and build upon any CRM system in order to help the organization develop, maintain, and grow customer relationships.
(Ja-Shen, et al., 2009) empirical study found that together (marketing, operations, and human resources) with (CFIT, RM, and CFOC) the most common view of CRM as a marketing application or complement of a company’s information technology or CFIT should also include the other two dimensions (RM and CFOC). If an organization wants to excel in the global market it is imperative that more organizations focus not only on advancing their information technology through systems such as CRM but that they also need to use CRM system data to create additional programs that focus more on the retention of current customers (needs) and acquisition of new customers (expectations). Only then will more businesses develop deeper understandings of their customer bases, while being able to target and market more effectively, resulting in more value, satisfaction, and cross or up-selling possibilities.
While the concept of CRM is an increasingly popular and hot topic throughout the world, research into the systems effectiveness on increased market share, profitability, customer relationships, and satisfaction is rather limited. Therefore, (Ja-Shen, et al., 2009) analysis provide three important dimensions (1) RM, (2) CFIT, and (3) CFOC of Customer Relationship Management Effectiveness (CRME). In order to improve the understanding of CRM systems it is dimensions such as these that managers will need to consider as they are continuing to identify the strengths and weaknesses of these programs, so they can continue to retain, update, and analyze the mass amounts of data collected to develop a deeper understanding of customers needs and wants. More importantly, these factors are even more important for individuals that want to reduce costs, while finding new ways to increase sales, Return on Investments (ROI), or enhancing their business’s performance.
This analysis of CRM systems is yet another example of the type of benefits that this supply chain function can provide organizations that truly are looking to grow their business. Therefore, I will continue to provide additional updates into this niche market, as I continue to refine my research in hopes of finding the supply chain function that can contribute most to the additional growth of Small-to-Medium Enterprises (SMEs). Of course, your opinions are always welcome as I truly welcome any additional insights that you may be able to provide. Otherwise, keep smiling since it really does look good on you—Cheers!!!
References
Ja-Shen, C., Yen, H. J. R., Li, E. Y., & Ching, R. K. H. (2009). Measuring CRM effectiveness: Construct development, validation, and application of a process-oriented model. Total Quality Management & Business Excellence, 20(3), 283-299.
When an organization improves its relationship between marketing, operations, and human resources, they become better equipped to disseminate CRM data, which can then lead the organization to make additional innovations, while taking responsive actions. (Ja-Shen, et al., 2009) refer to this dimension of CRM as the Information Technology (IT) or Customer-Focused Information Technology (CFIT) segment, which is the first of three dimensions of interest in their analysis that supports the operations of a company’s CRM processes. The second dimension of interest in (Ja-Shen, et al., 2009) study was referred to as Relationship Marketing (RM), which was identified as the root efforts of a CRM process that can help an organization manage and improve its new and existing relationships with its customers in order to increase customer satisfaction, all while creating additional long-term profitability. Finally, (Ja-Shen, et al., 2009) referred to the third dimension of interest in their study as Customer-Focused Organizational Climate (CFOC) or the human resource side, which deals with an organizations culture to accept, use, and build upon any CRM system in order to help the organization develop, maintain, and grow customer relationships.
(Ja-Shen, et al., 2009) empirical study found that together (marketing, operations, and human resources) with (CFIT, RM, and CFOC) the most common view of CRM as a marketing application or complement of a company’s information technology or CFIT should also include the other two dimensions (RM and CFOC). If an organization wants to excel in the global market it is imperative that more organizations focus not only on advancing their information technology through systems such as CRM but that they also need to use CRM system data to create additional programs that focus more on the retention of current customers (needs) and acquisition of new customers (expectations). Only then will more businesses develop deeper understandings of their customer bases, while being able to target and market more effectively, resulting in more value, satisfaction, and cross or up-selling possibilities.
While the concept of CRM is an increasingly popular and hot topic throughout the world, research into the systems effectiveness on increased market share, profitability, customer relationships, and satisfaction is rather limited. Therefore, (Ja-Shen, et al., 2009) analysis provide three important dimensions (1) RM, (2) CFIT, and (3) CFOC of Customer Relationship Management Effectiveness (CRME). In order to improve the understanding of CRM systems it is dimensions such as these that managers will need to consider as they are continuing to identify the strengths and weaknesses of these programs, so they can continue to retain, update, and analyze the mass amounts of data collected to develop a deeper understanding of customers needs and wants. More importantly, these factors are even more important for individuals that want to reduce costs, while finding new ways to increase sales, Return on Investments (ROI), or enhancing their business’s performance.
This analysis of CRM systems is yet another example of the type of benefits that this supply chain function can provide organizations that truly are looking to grow their business. Therefore, I will continue to provide additional updates into this niche market, as I continue to refine my research in hopes of finding the supply chain function that can contribute most to the additional growth of Small-to-Medium Enterprises (SMEs). Of course, your opinions are always welcome as I truly welcome any additional insights that you may be able to provide. Otherwise, keep smiling since it really does look good on you—Cheers!!!
References
Ja-Shen, C., Yen, H. J. R., Li, E. Y., & Ching, R. K. H. (2009). Measuring CRM effectiveness: Construct development, validation, and application of a process-oriented model. Total Quality Management & Business Excellence, 20(3), 283-299.
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