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use for the inflexible resources. Resources can either be acquired or networked: responsive
enterprises will typically acquire resources where expected demand is continual and stable,
whereas if there is a greater variation in the expected capability and capacity needs, the
enterprise will network with resources on as-needed basis. Acquired resources become fixed
capacity costs, whereas networked resources become variable service delivery costs because
they are paid on a per-use basis. It may be more efficient to have the resource in-house on a
per-hour basis, but on a per-use basis, it is more efficient to network for the resources. Thus,
the network approach does not only enhances the flexibility to respond to the customer
needs, but it also makes this possible at a much lower cost!
The purpose of a network is to provide the enterprise with the range of capabilities
and capacities it needs to serve its customers' diverse needs while at the same time
maintaining the cost of the resource as a service delivery cost (which is a variable cost
in the real term) rather than as a capacity cost (which is a fixed cost in the real term).
1.2.2.3 Activity-Based Customer Responsiveness
The customer responsiveness of an enterprise is really dependent on the corresponding business
processes or activities. As explained in Section 1.2.2.2 earlier, in
CRM
, the focus is on flexibility—
the flexibility to obtain the capability and capacity needed to respond to a wide variety of indi-
vidual customer requests. Customer-responsive activities are used to find the best way to solve the
individual customer needs. In customer-responsive activities, the emphasis is on delivered solution
effectiveness (i.e., how well are the individual problems communicated, diagnosed, and solved) and
delivered solution efficiency (how few resources are required to solve the problems).
Enterprises that deploy customer-responsive activities have the following objectives:
◾
Building relationships so that customers become
conditioned
to contact the enterprise first
whenever they have a need
◾
Establishing the enterprise to provide effective diagnoses and response whenever customers
make such a contact with the enterprise
◾
Creating the capability and processes to enable customer-facing members to cultivate deep
and long-term relationships with the customers and cost-effectively coordinate each indi-
vidual delivery of benefits
Traditional mass marketing or mass production approach considered a process to be a way to
produce a product; it focuses on limitations (e.g., setup time, resource availability, capability of
the existing workforce) and develops the most efficient process that can function within the con-
straints. The focus is on coping with internal limitations (often self-inflicted) instead of becom-
ing more responsive to customers and the changing business climate. The emphasis is on control
rather than performance. As against this, mass customization obtains its flexibility by viewing
the process as a way of converting resources into products so that a single process can be used to
produce many different products. The balance of control and power has shifted from producers to
the customers. Mass customization develops processes to minimize or eliminate limitations (e.g.,
reduce setup time, locate alternative resources, expand capabilities of current workforce, develop
a network of resources). Customer-responsiveness management develops numerous best-practice