Enterprise resource planning: business needs and technologies

Presents briefly ERP as a software solution integrating various functional spheres in an organization. Highlights its role in building a customer process, ERP technologies, available systems, viz. database systems, communication protocols and user interface framework. Details organizational preparedness for embarking and evaluating the investment on ERP. Discusses its application, selection criteria for small and medium organizations and a case study in Indian context. Concludes that ERP is the tool for an integrated information system to stay competitive and customer-oriented for all organizations. . On an average, firms lose 50 per cent of their customers in five years. How many leads do the firms pursue to get an order from a new customer? In some industries, recouping the cost of acquiring a new customer takes years. It is no surprise that firms that keep valuable customers are more profitable than those with little repeat business. . Customer valuation models to quantify revenue potential ± on account of referral value, premiums, lower support and relationship costs, and therefore, identify least and most profitable customers ± a shift from mere order based profitability analysis. . New methods of measuring customer revenue and costs would necessitate a shift from the traditional method of accounting that hides the benefits of loyalty. Activity-based costing could go some way in meeting these requirements. Statistical analysis in terms of quartile rankings of a customer by profitability would supplement total analysis in evaluation of the customer. . Increase in profits on account of retention of customers. While it is well recognized that retention of customers adds to profits, ERP solutions quantify the increase in profits which may vary by industries. . Customers need to be classified and analyzed as individuals, not just merely as a member of any class such has high-income groups, urban teens, etc. . In case of defections of customers, the reasons would have to be analyzed. These could be quantitative (pack size or price), or qualitative (brand positioning, packaging, campaigning). . Loyalty triggers ± what the customer values in the firm and the product. All the above means the ERP products and suppliers have to be more alert in today's changing scenario to don the mantle of the ERP user and visualize the objectives of ERP from the customer viewpoint.