Database Reference
In-Depth Information
As will become evident when perusing the aforementioned points, the implementation of SAP
CRM possesses most of the characteristics mentioned earlier.
The most important outcome of BPR has been viewing business activities as more than a
collection of individual or even functional tasks; it has engendered the process-oriented view of
business. However, BPR is different from quality management efforts like TQM and ISO 9000,
which refer to programs and initiatives that emphasize bottom-up incremental improvements
in existing work processes and outputs on a continuous basis. In contrast, BPR usually refers to
top-down dramatic improvements through redesigned or completely new processes on a discrete
basis. In the continuum of methodologies ranging from ISO 9000, TQM, ABM, and so on, on
one end and BPR on the other, SAP CRM implementation definitely lies on the BPR side of the
spectrum when it comes to corporate change management efforts.
BPR is based on the principle that there is an inextricable link between positioning
and
capa-
bility/capacity. A company cannot position the organization to meet a customer need that it can-
not fulfill without an unprofitable level of resources nor can it allocate enhanced resources to
provide a cost-effective service that no customer wants!
BPR in practice has developed a focus on changing capability/capacity in the short term to
address current issues. This short-term change in capability/capacity is usually driven by the need to
◾
Reduce the cycle time to process customer orders
◾
Improve quotation times
◾
Lower variable overhead costs
◾
Increase product range to meet an immediate competitor threat
◾
Rebalance resources to meet current market needs
◾
Reduce work-in-progress stocks
◾
Meet changed legislation requirements
◾
Introduce short-term measures to increase market share (e.g., increased credit limit from
customers hit by recessionary trends)
THEORY OF CONSTR AINTS
One factor that drives down customer loyalty is the primary focus on cost and
the waves of downsizing, with the resulting adverse impact on the customers.
Dr. Eliyahu M. Goldratt's conceived the Theory of Constraints (TOC) by focus-
ing on the concept of throughput
as a panacea for the disastrous decisions resulting from
misguided overhead cost allocations to different products, services, facilities, and other enti-
ties. With unfailing regularity, companies end up treating these wrongful allocations as the
actual costs that lead to disastrous results like termination of
apparently
unprofitable product
lines, manpower layoffs, and plummeting employee morale and customer confidence.
Dr. Goldratt first introduced TOC in the 1980s, with its application to manufactur-
ing planning and scheduling. He later expanded the theory to systematically and holis-
tically address the problems of complex organizations with many interrelationships and
dependencies.
Within TOC,
()
=
−
Throughput T ales
Direct variable costs
where Direct variable costs are usually raw materials.
