Database Reference
In-Depth Information
than 40 companies actually grew their total shareholder value by more than 25% (see also Chapter
15, Section 15.1.1 “From Built-to-Last to Built-to-Perform Organizations”). In contrast to the tra-
ditional capitalism where it was the scarce offerings (and, thus, resources) that produced wealth, in
customer capitalism, it is the intangible customer relationships that are driving growth and pros-
perity in the networked economy (see Section 1.2.2.2.1 “Networks of Resources” and Chapter 14,
Section 14.11 “Social CRM via Social Networks”).
CRM systems like SAP CRM also act as transformers of the knowledge that resides in the
heads of the operational and subject experts into a more explicit and accessible form. This cor-
responds exactly to the
tacit knowledge
talked about by I. Nonaka and H. Takeuchi in their book
titled
The Knowledge Creating Company
. These could be learning experiences, ideas, insights, rules
of thumb, business cases, and so on. They exhort companies to convert the illusive, unsystem-
atized, uncodified, and
can-be-lost
knowledge of the corporation and its customers into
explicit
knowledge
that can be codified, collated, and managed like any other capital investment. This
could be in the form of documents, case studies, analysis reports, evaluations, concept papers,
internal proposals, and so on. Most importantly, it is available for scrutiny and can be improved
on an ongoing basis. SAP CRM performs the invaluable service of transforming the implicit
customer-related knowledge into the explicit form (see Section 1.2.2.1.2 “Best-Practice Guidelines
Management”).
Customer capital has gained importance because of the following trends:
◾
Information-based targeted marketing is becoming more efficient and effective than unfo-
cused mass marketing because of factors like affordable information technology, sophisti-
cated statistical modeling, low-cost communications, and flexible fulfillment.
◾
Enterprises are no longer dependent solely on the vertical channel systems to control cus-
tomers' buying behaviors.
◾
Enterprises utilizing all the data on customer purchase behavior are not only acquiring new
customers, retaining existing ones, and cross selling more effectively, but they are also link-
ing these data with the corresponding cost data much more efficiently as well.
◾
Customers have access to comprehensive comparative data on competing solutions resulting
in barriers to switch to competing solutions dropping dramatically.
◾
Competitors' targeted acquisition efforts to wean away more attractive customers are under-
mining enterprise's mass marketing strategies entailing more-profitable customers subsidiz-
ing less-profitable ones to achieve targeted profits.
INFORMATION AS THE NEW RESOURCE
All computerized systems and solutions in the past were using past-facing informa-
tion merely for the purpose of referring and reporting only. As pointed out in my
earlier topic
Implementing SAP
, for the first time in history of the computerized
system, ERP, began treating information as a resource for the operational requirements
of the enterprise. Furthermore, unlike the traditional resources, information resources as
made available by ERPs can be reused and shared multiply without dissipation or degrada-
tion. Among all resources, this is one resource, which in practical terms almost defies the
universal law of increase of Entropy as understood in the physical sciences. The impressive
productivity gains resulting from the ERPs truthfully arise out of this unique characteristic
of ERPs to use information as an inexhaustible resource.
