Mobile Applications - Guide to Cloud Computing for Business and Technology Managers - page 480

processes leading to BPM in the companies. As discussed in “Implementing
SAP CRM”, Chapter 7, “SAP and Business Process Re-engineering,” SAP pro-
vides an environment for analyzing and optimizing business processes.
Values are characterized by both value determinants such as
• Time (cycle time and so on)
• Flexibility (options, customization, composition, and so on)
• Responsiveness (lead time, number of hand-offs, and so on)
• Quality (rework, rejects, yield, and so on)
• Price (discounts, rebates, coupons, incentives, and so on)
We must hasten to add that we are not disregarding cost (materials, labor,
overhead, and so forth) as a value determinant. However, the effect of cost
is truly a result of a host of value determinants such as time, flexibility, and
responsiveness.
The nature and extent of a value addition to a product or service is the
best measure of that addition's contribution to the company's overall goal for
competitiveness. Such value expectations are dependent on the following:
• The customer's experience of similar product(s) and/or service(s)
• The value delivered by the competitors
• The capabilities and limitations of locking into the base technologi-
cal platform
However, value as originally defined by Michael Porter in the context of
introducing the concept of the value chain is meant more in the nature of the
cost at various stages. Rather than a value chain, it is more of a cost chain!
Porter's value chain is also a structure-oriented and hence a static concept.
Here, we mean value as the satisfaction of not only external but also internal
customers' requirements, as defined and continuously redefined, as the least
total cost of acquisition, ownership, and use.
Consequently, in this formulation, one can understand the company's
competitive gap in the market in terms of such process-based, customer-
expected levels of value and the value delivered by the company's process
for the concerned products or services. Customer responsiveness focuses on
costs in terms of the yield. Therefore, we can perform market segmentation
for a particular product or services in terms of the most significant customer
values and the corresponding value determinants or what we term as critical
value determinants (CVDs).
Strategic planning exercises can then be understood readily in terms of
devising strategies for improving on these process-based CVDs based on
the competitive benchmarking of these collaborative values and processes
between the enterprise and customers. These strategies and the tactics result-
ing from analysis, design, and optimization of the process will in turn focus