SAP

Traditionally critics have argued that ABC is too costly and complex to implement and the cost involved in implementing and maintaining ABC based system exceeds the benefits gained. However the advancement in IT has significantly brought down the information processing cost. While the information processing cost has reduced, the cost of poor information leading to poor decision has significantly increased owing to the competitive pressure.

When it comes to IT, the first decision is usually between buy versus build. The ABC allocation model is more or less standard; the Off-the-shelf (OTS) ABC software have matured during the last decade; and building an advanced ABC model is too cumbersome - are the strong arguments in favor of buy option. The build option should be considered only when there is a very strong reason for this. Like - the ABC model is too simple or highly customized or is required to be monolithically integrated with other in-house systems etc.

Talking about the OTS option, the choice can be between specialized ABC software and ABC module of ERP packages. ABC module of ERP package is ideal where ABC is required for operational decision making and most of the data is available within ERP itself.  

However, specialized ABC software should be considered in the following cases:
1) ABC is required for tactical or strategic decision making.
2) Multi-dimensional analysis of overheads are required
3) Underlying data is stored in heterogeneous systems
4) ABC model is required to be flexible as frequent changes are expected.

SAP suite of products has both the offerings - SAP ERP has a sub-module for ABC in SAP Controlling (SAP CO-ABC). SAP BusinessObjects Profitability and Cost Management (SAP PCM) is specialized software for ABC from SAP suite of products.

Right tool selection plays a very important role in the success of ABC. In the subsequent blogs let’s look at some of the important evaluation criteria for ABC software selection, implementation methodology and other related topics. In the mean time, please leave your comments and suggestions .

Posted by Vivek Madhav at 12:18 PM | Permalink | Comments ( 0 ) | TrackBacks ( 0 )

The increasing spending in digital marketing pushes the companies to re-view its organization, processes and systems in order to sustain the growth and manage effectively the digital marketing initiative together with traditional advertising.

In the previous blog I have highlighted the reasons why the spending in digital marketing is accelerating and the areas in which an extensive use of digital marketing channels could mainly impact the organization.

Now let’s look deeper at the impacts of digital marketing on the company information systems.

I think that an effective implementation of digital marketing initiatives is going to impact first of all CRM, Web, reporting and analytics either in term of enrichment of functionalities or re-definition and implementation of new platforms: 

 CRM systems are requiring new functionalities for managing the campaign across multiple channels, capacity to gather from multiple sources new types and higher volumes of information regarding the consumer or the customer, tools and repositories to enable an effective digital asset management.

 Web: the trend is to define and implement new platforms that facilitate the development and hosting of the web initiatives,  increase the capacity to deliver personalized multimedia content, promote the reuse of existing assets for the initiative creation
 
 Reporting and analytics: here the  key element is to develop and elaborate new indicator and scorecards to track the effectiveness of the web initiative, monitor consumer/customer behavior in the web and integrate these measures with the traditional marketing indicators.

How SAP is currently supporting these areas?

We need to look into mySAP CRM.
With the CRM suite SAP addresses multichannel campaign management and allows the interaction with the client via web making available some of the functionalities through the internet channel (e.g quotations and order management, actions) 
But overall at the moment I think it does not provide very specialized E-marketing functionalities.

Campaign management
 Marketing activities can be executed through different interaction channels: direct mail, e-mail, phone, web, fax, and SMS.
 Online marketing channels to plan, develop, and execute e-mail marketing campaigns.

Web Channel management
 Support campaign execution on the web. E.g. the system uses campaign IDs and coupon codes to determine products flagged for campaigns in SAP CRM and to determine campaign pricing in the Web shop. Also create private campaigns for specific target groups or public campaigns for all Web shop visitors. 
 Manage customer loyalty processes via Internet

Web channel analytics
 Perform analysis on the use of web functionalities in order to track the behavior, target the customers and drive future marketing activities.

Digital Asset Management
 Within the marketing resource management a central repository for the digital assets (photos, videos, or text documents) can be maintained. To each object properties and authorization concepts can be assigned to each object in order to manage it efficiently and secure direct web access. Besides the systems tracks the download information and provides specific reporting for each asset.

What is your point of view on this topic? Your thoughts would be highly appreciated and more than welcome.
Is SAP developing any innovative solution with the social CRM?
I will discuss on it in my next blog.

Posted by Lorenzo Pagani at 1:50 PM | Permalink | Comments ( 0 ) | TrackBacks ( 0 )

Professional Hair Care - Retailing with style !

The first thought that always comes to mind whenever someone makes a mention of CPG industry - the traditional manufacturer-distributor-retailer business which works in tandem to deliver the goodies to the God in the entire chain - The Consumer! This traditional CPG-retailing is pretty well set over the ages and is perhaps one of the most revenue and employment generating businesses around the globe.

There is another cousin, Professional Hair Care business, which technically shares the same categorization - CPG-retailing, but is altogether different ballgame when it comes to sales and retailing.

To many of us, hair care translates into an application of shampoo and conditioner in the bathroom! But the fact is that there is whole lot of art-work that can go on your head and translates into much bigger revenues than just shampoo and conditioners!

Professional Hair Care is more a multi-billion dollar global industry and growing steadily. This fact is realized by the major CPG manufacturers and they have acquired big stakes in the Professional Hair Care by way of acquisitions during the last few years.
While the Hair Care industry gets a boost from the major CPG players to ride on the well established volumes and scales of the CPG logistics, there is also a different approach that the manufacturers have to take when it comes to marketing and selling these products.

Style matters!

Hair Care Salons are the place where the hair care products get consumed. But this consumption is not a simple “buy” from the end consumer, un-like the traditional retail store. These salons are run by artists who perform coloring and styling on the clients. The bottom line here is CLASS and STYLE! The more effective and customized the style for the client, the more repeat business and personal relationship it generates.

The same stands true for the manufacturer – salon relationship. It needs the personal touch. This is catered to by sales representatives from manufacturer / distributor paying scheduled visits to the salons and interacting with them constantly.

Incentives - Key business generators

Promotions, in this industry, are an essential growth driver. Salons are not volume-based retailers. While class and quality remain their key areas, they also depend on the offerings and discounts to maximize the cost saving opportunities. Promotions, like buy-1 get-1 free, get discounts or bonus on meeting certain volume or targets, new launch initiatives, etc. contribute heavily towards the sales to salons. Salon setups and customizations, which are big investments for salon owners, are also provided by the manufacturers as a financial aid, thereby winning over customer loyalty for future product sales – a win-win solution for both.

......will look at this business from a technology enablemnet perspective in Part-II of this blog

Posted by Sameer Ahmed at 12:16 PM | Permalink | Comments ( 0 ) | TrackBacks ( 0 )

Key Success factor
- Visible Executive sponsorship
- Effective communication in the organisation
- Stakeholder heavy involvement
- Effective knowledge management
- Clearly defined measures of Success

Benefit
Some of the global ERP vendors like SAP, are prepackaging the ERP solution to specific Industry verticals which include preconfigured and document Industry processes. Such approach can bring in some of the following benefits:

Save time and money:
And achieve predicted results
Fewer risks:
Avoid common e-Business beginners‘ mistakes
Fast track:
To extending your business solution with new business processes
No trial runs:
Start straight off with a fully documented prototype that is fully reusable
Failure is not an option!
It works: what you see is what you get for implementation
Communication:
Among project team members and executives becomes more effective
Consistent approach:
Focusing on integrated end-to-end business processes

Conclusion
Adopt Industry Best Practices for better ROI, but ensure you do the home work during planning phases; else the project can be a financial and business disaster.

Posted by Sathyanarayana Krishnamurthy at 11:35 AM | Permalink | Comments ( 0 ) | TrackBacks ( 0 )

What is Trade Promotion Management (TPM)?

Posted by Shashi Jadhav at 4:45 AM | Permalink | Comments ( 0 ) | TrackBacks ( 0 )