Database Reference
In-Depth Information
It was emphasized there that the importance of packages such as SAP is not due to
the total integration of various modules, single-point data entry, data integrity, ad hoc
reporting, instant access to information, end-user computing, and so on. The impor-
tance of ERP and CRM packages arises primarily from the fact that information is by
now the fifth resource (the first four being manpower, materials, money, and time). And,
unlike other resources, information is inexhaustible. It can be shared infinitely without
any reduction. Thus, if we can use information as a substitute for other resources (which
we can; see the following discussion), we can use it many times over without any appre-
ciable further cost.
For instance, Just-in-Time (JIT) inventory permits us to order for just the right kind of
material at the right time at the right place. Therefore, it reduces inputs of manpower in
ordering, handling, storing, and so on. It also results in reduced materials inventory and,
hence, cost of storage mechanisms, cost of locked capital, and so on. The availability of
detailed and up-to-the-minute information on, for example, production runs can result in
up-to-the-minute information on
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Production plans for the next run
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Material requirements for the next run
◾
Issue of materials from the main stores for the next run
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Stock on hand in the stores for the next run
◾
Material to be ordered for the next run
It is not difficult to see that this ultimately results in drastically increased throughputs and
reduced business cycle times, which is equivalent to improved production or technological
processes through the use of improved resources. Traditionally, appreciably higher through-
puts and lower production/business cycles were possible only through innovation in technol-
ogy or production methods or processes. How information provided by CRM systems and
ERPs is a resource of an organization can be seen from the analogy with fuel that drives
automobiles: information made available by SAP greatly increases the velocity of business
processes within the organization. These gains are a class apart from what is achievable with
the manual or even fragmented legacy computerized systems. Enterprise-wide JIT (Just-in-
Time), and not just the one confined primarily to the production department, is impossible
without integrated computerized systems like CRM/ERP packages for correct, current, con-
sistent, and complete information.
It should be specially noted that only a CRM/ERP implemented within an enterprise
enables the optimal utilization and efficient conversion of such a seemingly intangible
resource as information into a tangible commercial product, which is also a highly perish-
able resource!
Enterprises that use customer capital as the defining component of the marketing systems
benefit because of the following:
◾
They address the customer as a whole who uses myriad services and products.
◾
They utilize customer interactions to reinforce relationships and attain customer extensions.
