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Customer relationship management
Customer relationship management
From Wikipedia, the free encyclopedia
Customer relationship management (CRM) is a process in which a business or other organization administers its interactions with customers, typically using data analysis to study large amounts of information.[1]
CRM systems compile data from a range of different communication channels, including a company's website, telephone, email, live chat, marketing materials and more recently, social media.[2] They allow businesses to learn more about their target audiences and how to best cater for their needs, thus retaining customers and driving sales growth.[3] CRM may be used with past, present or potential customers. The concepts, procedures, and rules that a corporation follows when communicating with its consumers are referred to as customer relationship management (CRM). This complete connection covers direct contact with customers, such as sales and service-related operations, forecasting, and the analysis of consumer patterns and behaviors, from the perspective of the company.[4]
The concept of customer relationship management started in the early 1970s, when customer satisfaction was evaluated using annual surveys or by front-line asking.[5] At that time, businesses had to rely on standalone mainframe systems to automate sales, but the extent of technology allowed them to categorize customers in spreadsheets and lists. One of the best-known precursors of the modern-day CRM is the Farley File. Developed by Franklin Roosevelt’s campaign manager, James Farley, the Farley File was a comprehensive set of records detailing political and personal facts on people FDR and Farley met or were supposed to meet. Using it, people that FDR met were impressed by his "recall" of facts about their family and what they were doing professionally and politically.[6] In 1982, Kate and Robert D. Kestenbaum introduced the concept of database marketing, namely applying statistical methods to analyze and gather customer data.[citation needed] By 1986, Pat Sullivan and Mike Muhney released a customer evaluation system called ACT! based on the principle of digital Rolodex, which offered a contact management service for the first time.
The trend was followed by numerous companies and independent developers trying to maximize lead potential, including Tom Siebel of Siebel Systems, who designed the first CRM product, Siebel Customer Relationship Management, in 1993.[7] In order to compete with these new and quickly growing stand-alone CRM solutions, the established enterprise resource planning (ERP) software companies like Oracle, SAP,[8] Peoplesoft (an Oracle subsidiary as of 2005)[9] and Navision[10] started extending their sales, distribution and customer service capabilities with embedded CRM modules. This included embedding sales force automation or extended customer service (e.g. inquiry, activity management) as CRM features in their ERP.
Customer relationship management was popularized in 1997, due to the work of Siebel, Gartner, and IBM. Between 1997 and 2000, leading CRM products were enriched with shipping and marketing capabilities.[11] Siebel introduced the first mobile CRM app called Siebel Sales Handheld in 1999. The idea of a stand-alone, cloud-hosted customer base was soon adopted by other leading providers at the time, including PeopleSoft (acquired by Oracle),[9] Oracle, SAP and Salesforce.com.[12]
The first open-source CRM system was developed by SugarCRM in 2004. During this period, CRM was rapidly migrating to the cloud, as a result of which it became accessible to sole entrepreneurs and small teams. This increase in accessibility generated a huge wave of price reduction.[11] Around 2009, developers began considering the options to profit from social media's momentum and designed tools to help companies become accessible on all users' favourite networks. Many startups at the time benefited from this trend to provide exclusively social CRM solutions, including Base and Nutshell.[11] The same year, Gartner organized and held the first Customer Relationship Management Summit, and summarized the features systems should offer to be classified as CRM solutions.[13] In 2013 and 2014, most of the popular CRM products were linked to business intelligence systems and communication software to improve corporate communication and end-users' experience. The leading trend is to replace standardized CRM solutions with industry-specific ones, or to make them customizable enough to meet the needs of every business.[14] In November 2016, Forrester released a report where it "identified the nine most significant CRM suites from eight prominent vendors".[15]
Strategic CRM is concentrated upon the development of a customer-centric business culture.[16]
The focus of a business on being customer-centric (in design and implementation of their CRM strategy) will translate into an improved CLV.[17]
The primary goal of customer relationship management systems is to integrate and automate sales, marketing, and customer support. Therefore, these systems typically have a dashboard that gives an overall view of the three functions on a single customer view, a single page for each customer that a company may have. The dashboard may provide client information, past sales, previous marketing efforts, and more, summarizing all of the relationships between the customer and the firm. Operational CRM is made up of 3 main components: sales force automation, marketing automation, and service automation.[18]
Sales force automation works with all stages in the sales cycle, from initially entering contact information to converting a prospective client into an actual client.[19] It implements sales promotion analysis, automates the tracking of a client's account history for repeated sales or future sales and coordinates sales, marketing, call centers, and retail outlets. It prevents duplicate efforts between a salesperson and a customer and also automatically tracks all contacts and follow-ups between both parties.[19][20]
Marketing automation focuses on easing the overall marketing process to make it more effective and efficient. CRM tools with marketing automation capabilities can automate repeated tasks, for example, sending out automated marketing emails at certain times to customers, or posting marketing information on social media. The goal with marketing automation is to turn a sales lead into a full customer. CRM systems today also work on customer engagement through social media.[21]
Service automation is the part of the CRM system that focuses on direct customer service technology. Through service automation, customers are supported through multiple channels such as phone, email, knowledge bases, ticketing portals, FAQs, and more.[18]
The role of analytical CRM systems is to analyze customer data collected through multiple sources and present it so that business managers can make more informed decisions.[22] Analytical CRM systems use techniques such as data mining, correlation, and pattern recognition to analyze the customer data. These analytics help improve customer service by finding small problems which can be solved, perhaps by marketing to different parts of a consumer audience differently.[18] For example, through the analysis of a customer base's buying behavior, a company might see that this customer base has not been buying a lot of products recently. After scanning through this data, the company might think to market to this subset of consumers differently, to best communicate how this company's products might benefit this group specifically.[23]
The third primary aim of CRM systems is to incorporate external stakeholders such as suppliers, vendors, and distributors, and share customer information across groups/departments and organizations. For example, feedback can be collected from technical support calls, which could help provide direction for marketing products and services to that particular customer in the future.[24]
Main article: Customer data platform
A customer data platform (CDP) is a computer system used by marketing departments that assembles data about individual people from various sources into one database, with which other software systems can interact.[25] As of February 2017 there were about twenty companies selling such systems and revenue for them was around US$300 million.[25]
Components in the different types of CRM[24]
The main components of CRM are building and managing customer relationships through marketing, observing relationships as they mature through distinct phases, managing these relationships at each stage and recognizing that the distribution of the value of a relationship to the firm is not homogeneous. When building and managing customer relationships through marketing, firms might benefit from using a variety of tools to help organizational design, incentive schemes, customer structures, and more to optimize the reach of their marketing campaigns. Through the acknowledgment of the distinct phases of CRM, businesses will be able to benefit from seeing the interaction of multiple relationships as connected transactions. The final factor of CRM highlights the importance of CRM through accounting for the profitability of customer relationships. Through studying the particular spending habits of customers, a firm may be able to dedicate different resources and amounts of attention to different types of consumers.[26]
Relational Intelligence, which is the awareness of the variety of relationships a customer can have with a firm and the ability of the firm to reinforce or change those connections, is an important component to the main phases of CRM. Companies may be good at capturing demographic data, such as gender, age, income, and education, and connecting them with purchasing information to categorize customers into profitability tiers, but this is only a firm's industrial view of customer relationships.[27] A lack in relational intelligence is a sign that firms still see customers as resources that can be used for up-sell or cross-sell opportunities, rather than people looking for interesting and personalized interactions.[28]
CRM systems include:
Data warehouse technology, used to aggregate transaction information, to merge the information with CRM products, and to provide key performance indicators.
Opportunity management which helps the company to manage unpredictable growth and demand, and implement a good forecasting model to integrate sales history with sales projections.[29]
CRM systems that track and measure marketing campaigns over multiple networks, tracking customer analysis by customer clicks and sales.
Some CRM software is available as a software as a service (SaaS), delivered via the internet and accessed via a web browser instead of being installed on a local computer. Businesses using the software do not purchase it, but typically pay a recurring subscription fee to the software vendor.[18]
For small businesses a CRM system may consist of a contact management system that integrates emails, documents, jobs, faxes, and scheduling for individual accounts. CRM systems available for specific markets (legal, finance) frequently focus on event management and relationship tracking as opposed to financial return on investment (ROI).
CRM systems for eCommerce, focused on marketing automation tasks, like cart rescue, re-engage users with email, personalization.
Customer-centric relationship management (CCRM) is a nascent sub-discipline that focuses on customer preferences instead of customer leverage. CCRM aims to add value by engaging customers in individual, interactive relationships.[26]
Systems for non-profit and membership-based organizations help track constituents, fundraising, sponsors' demographics, membership levels, membership directories, volunteering and communication with individuals.
CRM not only indicates to technology and strategy but also indicates to an integrated approach which includes employees knowledge, organizational culture to embrace the CRM philosophy.
Customer satisfaction has important implications for the economic performance of firms because it has the ability to increase customer loyalty and usage behavior and reduce customer complaints and the likelihood of customer defection.[30][31] The implementation of a CRM approach is likely to affect customer satisfaction and customer knowledge for a variety of different reasons.
Firstly, firms can customize their offerings for each customer.[32] By accumulating information across customer interactions and processing this information to discover hidden patterns, CRM applications help firms customize their offerings to suit the individual tastes of their customers.[32] This customization enhances the perceived quality of products and services from a customer's viewpoint, and because the perceived quality is a determinant of customer satisfaction, it follows that CRM applications indirectly affect customer satisfaction. CRM applications also enable firms to provide timely, accurate processing of customer orders and requests and the ongoing management of customer accounts.[32] For example, Piccoli and Applegate discuss how Wyndham uses IT tools to deliver a consistent service experience across its various properties to a customer. Both an improved ability to customize and reduced variability of the consumption experience enhance perceived quality, which in turn positively affects customer satisfaction.[33] Furthermore, CRM applications also help firms manage customer relationships more effectively across the stages of relationship initiation, maintenance, and termination.[34]
With Customer relationship management systems, customers are served better on the day-to-day process. With more reliable information, their demand for self-service from companies will decrease. If there is less need to interact with the company for different problems, customer satisfaction level increases.[35] These central benefits of CRM will be connected hypothetically to the three kinds of equity that are relationship, value, and brand, and in the end to customer equity. Eight benefits were recognized to provide value drivers.[36]
Enhanced ability to target profitable customers.
Integrated assistance across channels.
Enhanced sales force efficiency and effectiveness.
Improved pricing.
Customized products and services.
Improved customer service efficiency and effectiveness.
Individualized marketing messages are also called campaigns.
Connect customers and all channels on a single platform.
In 2012, after reviewing the previous studies, someone selected some of those benefits which are more significant in customer satisfaction and summarized them into the following cases:[37]
Improve customer services: In general, customers would have some questions, concerns, or requests. CRM services provide the ability to a company for producing, allocating, and managing requests or something made by customers. For example, call centre software, which helps to connect a customer to the manager or person who can best assist them with their existing problem, is one of the CRM abilities that can be implemented to increase efficiency.[38]
Increased personalized service or one-to-one service: Personalizing customer service or one-to-one service provides companies to improve understanding and gaining knowledge of the customers and also to have better knowledge about their customers' preferences, requirements and demands.
Responsive to customer's needs: Customers' situations and needs can be understood by the firms focusing on customer needs and requirements.[39]
Customer segmentation: In CRM, segmentation is used to categorize customers, according to some similarity, such as industry, job or some other characteristics, into similar groups.[40] Although these characteristics, can be one or more attributes. It can be defined as a subdividing the customers based on already known good discriminator.
Improve customization of marketing: Meaning of customization of marketing is that the firm or organization adapt and changes its services or products based on presenting a different and unique product or service for each customer. To ensure that customer needs and requirements are met Customization is used by the organization. Companies can put investment in information from customers and then customize their products or services to maintain customer interests.
Multichannel integration: Multichannel integration shows the point of co-creation of customer value in CRM. On the other hand, a company's skill to perform multichannel integration successfully is heavily dependent on the organization's ability to get together customer information from all channels and incorporate it with other related information.[41]
Time saving: CRM will let companies interact with customers more frequently, by personalized message and communication way which can be produced rapidly and matched on a timely basis, and finally they can better understand their customers and therefore look forward to their needs.[42]
Improve customer knowledge: Firms can make and improve products and services through the information from tracking (e.g. via website tracking) customer behaviour to customer tastes and needs.[43] CRM could contribute to a competitive advantage in improving a firm's ability of customer information collecting to customize products and services according to customer needs.
Research has found a 5% increase in customer retention boosts lifetime customer profits by 50% on average across multiple industries, as well as a boost of up to 90% within specific industries such as insurance.[44] Companies that have mastered customer relationship strategies have the most successful CRM programs. For example, MBNA Europe has had a 75% annual profit growth since 1995. The firm heavily invests in screening potential cardholders. Once proper clients are identified, the firm retains 97% of its profitable customers. They implement CRM by marketing the right products to the right customers. The firm's customers' card usage is 52% above the industry norm, and the average expenditure is 30% more per transaction. Also 10% of their account holders ask for more information on cross-sale products.[44]
Amazon has also seen great success through its customer proposition. The firm implemented personal greetings, collaborative filtering, and more for the customer. They also used CRM training for the employees to see up to 80% of customers repeat.[44]
Further information: Consumer behaviour, Biology and consumer behaviour, and Buying decision
A customer profile is a detailed description of any particular classification of customer which is created to represent the typical users of a product or service. Customer profiling is a method to understand your customers in terms of demographics, behaviour and lifestyle. It is used to help make customer-focused decisions without confusing the scope of the project with personal opinion. Overall profiling is gathering information that sums up consumption habits so far and projects them into the future so that they can be grouped for marketing and advertising purposes.[45] Customer or consumer profiles are the essences of the data that is collected alongside core data (name, address, company) and processed through customer analytics methods, essentially a type of profiling. The three basic methods of customer profiling are the psychographic approach, the consumer typology approach, and the consumer characteristics approach. These customer profiling methods help you design your business around who your customers are and help you make better customer-centered decisions.
Consultants argue that it is important for companies to establish strong CRM systems to improve their relational intelligence.[46] According to this argument, a company must recognize that people have many different types of relationships with different brands. One research study analyzed relationships between consumers in China, Germany, Spain, and the United States, with over 200 brands in 11 industries including airlines, cars, and media. This information is valuable as it provides demographic, behavioral, and value-based customer segmentation. These types of relationships can be both positive and negative. Some customers view themselves as friends of the brands, while others as enemies, and some are mixed with a love-hate relationship with the brand. Some relationships are distant, intimate, or anything in between.[28]
Managers must understand the different reasons for the types of relationships, and provide the customer with what they are looking for. Companies can collect this information by using surveys, interviews, and more, with current customers. Companies must also improve the relational intelligence of their CRM systems. These days, companies store and receive huge amounts of data through emails, online chat sessions, phone calls, and more.[47] Many companies do not properly make use of this great amount of data, however. All of these are signs of what types of relationships the customer wants with the firm, and therefore companies may consider investing more time and effort in building out their relational intelligence.[27] Companies can use data mining technologies and web searches to understand relational signals. Social media such as social networking sites, blogs, and forums can also be used to collect and analyze information. Understanding the customer and capturing this data allows companies to convert customers' signals into information and knowledge that the firm can use to understand a potential customer's desired relations with a brand.[48]
Many firms have also implemented training programs to teach employees how to recognize and effectively create strong customer-brand relationships. For example, Harley Davidson sent its employees on the road with customers, who were motorcycle enthusiasts, to help solidify relationships. Other employees have also been trained in social psychology and the social sciences to help bolster strong customer relationships. Customer service representatives must be educated to value customer relationships and trained to understand existing customer profiles. Even the finance and legal departments should understand how to manage and build relationships with customers.[49]
Contact centre CRM providers are popular for small and mid-market businesses. These systems codify the interactions between the company and customers by using analytics and key performance indicators to give the users information on where to focus their marketing and customer service. This allows agents to have access to a caller's history to provide personalized customer communication. The intention is to maximize average revenue per user, decrease churn rate and decrease idle and unproductive contact with the customers.[50][51][52]
Growing in popularity is the idea of gamifying, or using game design elements and game principles in a non-game environment such as customer service environments. The gamification of customer service environments includes providing elements found in games like rewards and bonus points to customer service representatives as a method of feedback for a job well done.[53] Gamification tools can motivate agents by tapping into their desire for rewards, recognition, achievements, and competition.[54]
Contact-center automation, CCA, the practice of having an integrated system that coordinates contacts between an organization and the public, is designed to reduce the repetitive and tedious parts of a contact center agent's job. Automation prevents this by having pre-recorded audio messages that help customers solve their problems. For example, an automated contact center may be able to re-route a customer through a series of commands asking him or her to select a certain number to speak with a particular contact center agent who specializes in the field in which the customer has a question.[55] Software tools can also integrate with the agent's desktop tools to handle customer questions and requests. This also saves time on behalf of the employees.[21]
Social CRM involves the use of social media and technology to engage and learn from consumers.[56] Because the public, especially young people, are increasingly using social networking sites, companies use[28] these sites to draw attention to their products, services and brands, with the aim of building up customer relationships to increase demand. With the increase in the use of social media platforms, integrating CRM with the help of social media can potentially be a quicker and more cost-friendly process.[57]
Some CRM systems integrate social media sites like Twitter, LinkedIn, and Facebook to track and communicate with customers. These customers also share their own opinions and experiences with a company's products and services, giving these firms more insight. Therefore, these firms can both share their own opinions and also track the opinions of their customers.[24]
Enterprise feedback management software platforms combine internal survey data with trends identified through social media to allow businesses to make more accurate decisions on which products to supply.[58]
CRM systems can also include technologies that create geographic marketing campaigns. The systems take in information based on a customer's physical location and sometimes integrates it with popular location-based GPS applications. It can be used for networking or contact management as well to help increase sales based on location.[21]
Despite the general notion that CRM systems were created for customer-centric businesses, they can also be applied to B2B environments to streamline and improve customer management conditions. For the best level of CRM operation in a B2B environment, the software must be personalized and delivered at individual levels.[59]
The main differences between business-to-consumer (B2C) and business-to-business CRM systems concern aspects like sizing of contact databases and length of relationships.[60]
In the Gartner CRM Summit 2010 challenges like "system tries to capture data from social networking traffic like Twitter, handles Facebook page addresses or other online social networking sites" were discussed and solutions were provided that would help in bringing more clientele.[61]
The era of the "social customer" refers to the use of social media by customers.[62]
Some CRM systems are equipped with mobile capabilities, making information accessible to remote sales staff.[citation needed]
Many CRM vendors offer subscription-based web tools (cloud computing) and SaaS. Salesforce.com was the first company to provide enterprise applications through a web browser, and has maintained its leadership position.[63]
Traditional providers moved into the cloud-based market via acquisitions of smaller providers: Oracle purchased RightNow in October 2011,[64] and Taleo[65] and Eloqua[66] in 2012; and SAP acquired SuccessFactors in December 2011.[67]
Sales forces also play an important role in CRM, as maximizing sales effectiveness and increasing sales productivity is a driving force behind the adoption of CRM software. Some of the top CRM trends identified in 2021 include focusing on customer service automation such as chatbots, hyper-personalization based on customer data and insights, and the use of unified CRM systems.[68][69] CRM vendors support sales productivity with different products, such as tools that measure the effectiveness of ads that appear in 3D video games.[70]
Pharmaceutical companies were some of the first investors in sales force automation (SFA) and some are on their third- or fourth-generation implementations. However, until recently, the deployments did not extend beyond SFA—limiting their scope and interest to Gartner analysts.[71]
Another related development is vendor relationship management (VRM), which provide tools and services that allow customers to manage their individual relationship with vendors. VRM development has grown out of efforts by ProjectVRM at Harvard's Berkman Center for Internet & Society and Identity Commons' Internet Identity Workshops, as well as by a growing number of startups and established companies. VRM was the subject of a cover story in the May 2010 issue of CRM Magazine.[72]
Another trend worth noting is the rise of Customer Success as a discipline within companies. More and more companies establish Customer Success teams as separate from the traditional Sales team and task them with managing existing customer relations. This trend fuels demand for additional capabilities for a more holistic understanding of customer health, which is a limitation for many existing vendors in the space.[73] As a result, a growing number of new entrants enter the market while existing vendors add capabilities in this area to their suites.
In 2017, artificial intelligence and predictive analytics were identified as the newest trends in CRM.[74]
See also: Anonymization and Customer rights
Companies face large challenges when trying to implement CRM systems. Consumer companies frequently manage their customer relationships haphazardly and unprofitably.[75] They may not effectively or adequately use their connections with their customers, due to misunderstandings or misinterpretations of a CRM system's analysis. Clients may be treated like an exchange party, rather than a unique individual, due to, occasionally, a lack of a bridge between the CRM data and the CRM analysis output. Many studies show that customers are frequently frustrated by a company's inability to meet their relationship expectations, and on the other side, companies do not always know how to translate the data they have gained from CRM software into a feasible action plan.[28] In 2003, a Gartner report estimated that more than $2 billion had been spent on software that was not being used. According to CSO Insights, less than 40 percent of 1,275 participating companies had end-user adoption rates above 90 percent.[76] Many corporations only use CRM systems on a partial or fragmented basis.[77] In a 2007 survey from the UK, four-fifths of senior executives reported that their biggest challenge is getting their staff to use the systems they had installed. Forty-three percent of respondents said they use less than half the functionality of their existing systems.[78] However, market research regarding consumers' preferences may increase the adoption of CRM among developing countries' consumers.[79]
Collection of customer data such as personally identifiable information must strictly obey customer privacy laws, which often requires extra expenditures on legal support.
Part of the paradox with CRM stems from the challenge of determining exactly what CRM is and what it can do for a company.[80] The CRM paradox, also referred to as the "dark side of CRM",[81] may entail favoritism and differential treatment of some customers. This can happen because a business prioritizes customers who are more profitable, more relationship-orientated or tend to have increased loyalty to the company. Although focusing on such customers by itself isn't a bad thing, it can leave other customers feeling left out and alienated potentially decreasing profits because of it.[82]
CRM technologies can easily become ineffective if there is no proper management, and they are not implemented correctly. The data sets must also be connected, distributed, and organized properly so that the users can access the information that they need quickly and easily. Research studies also show that customers are increasingly becoming dissatisfied with contact center experiences due to lags and wait times. They also request and demand multiple channels of communication with a company, and these channels must transfer information seamlessly. Therefore, it is increasingly important for companies to deliver a cross-channel customer experience that can be both consistent as well as reliable.[21]
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^ Greenberg, Paul (2009). CRM at the Speed of Light (4th ed.). McGraw Hill. p. 7.
^ Put Cloud CRM to Work PC World: April 2010
^ Oracle Buys Cloud-based Customer Service Company RightNow For $1.5 Billion Techcrunch: 24 October 2011
^ "News Analysis: The Implications Of Oracle's Acquisition Of Taleo". Enterprise Irregulars. 9 February 2012. Retrieved 4 August 2021.
^ "Oracle to Buy Eloqua in $810 Million Deal". Wall Street Journal. 20 December 2012. ISSN 0099-9660. Retrieved 4 August 2021.
^ SAP Challenges Oracle With $3.4 Billion SuccessFactors Purchase Bloomberg Businessweek: 7 December 2011
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^ Forrester. "Three Key CRM Trends In 2021 That Will Allow You To Better Engage Your Customers". Forbes. Retrieved 4 August 2021.
^ Gagliordi, Natalie. "Oracle announces in-game ad measurement technology in new CX portfolio update". ZDNet. Retrieved 18 August 2021.
^ "Gartner's Top 54 CRM Case Studies, Sorted by Industry, for 2005". Retrieved 20 May 2005.
^ Destinationcrm.com CRM Magazine: May 2010
^ Nirpaz G., Pizarro F., Farm Don't Hunt: The Definitive Guide to Customer Success, March 2016, p. 101
^ "7 Top CRM Trends for 2017: A Look Ahead". CMS Wire.
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^ It's all about the Customer, Stupid – The Importance of Customer-Centric Partners.
^ Jim Dickie, CSO Insights (2006) Demystifying CRM Adoption Rates.
^ Joachim, David. "CRM tools improve access, usability." (cover story). B to B 87, no. 3 (11 March 2002).
^ Law, Monica; Lau, Theresa; Wong, Y.H. (2003). "From customer relationship management to customer‐managed relationship: unraveling the paradox with a co‐creative perspective". Marketing Intelligence & Planning. 21 (1): 51–60. doi:10.1108/02634500310458153. hdl:10397/60525.
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^ Nguyen, B, Lee-Wingate, SN & Simkin, L (2014), The customer relationship management paradox: Five steps to create a fairer organisation Social Business, vol. 4, no. 3, pp. 207-230. https://dx.doi.org/10.1362/204440814X14103454934177
REFERENCE LINK - https://en.wikipedia.org/wiki/Customer_relationship_management
What is ERP and why do you need it?
What is ERP and why do you need it?
ERP is an acronym that stands for enterprise resource planning (ERP). It’s a business process management software that manages and integrates a company’s financials, supply chain, operations, commerce, reporting, manufacturing, and human resource activities. Most companies have some form of finance and operational system in place but most of the software that’s out there can’t go beyond everyday business processes or help with future business growth.
As company’s needs change and they expand, their systems should keep up with them. We’ll define what ERP is and why it’s smart to have software in place that keeps up with your business needs.
What is enterprise resource planning? Yesterday and today.
What is enterprise resource planning? Yesterday and today.
Historically, ERP systems were monolithic suites that that worked separately and didn’t talk with other systems. Each system required expensive, complex, and customized code to meet unique business requirements which slowed—or even prevented—the adoption of new technology or process optimization.
What makes today’s ERP software different is that it brings all these different processes to the table and together in one fluid system. And not just offering data connectivity within your ERP system, but also within your productivity tools, e-commerce, and even customer engagement solutions. Helping you connect all your data for better insights that help you optimize your processes across your entire business.
In addition, a modern ERP solution offers flexible deployment options, improved security and privacy, sustainability, and low-code customization. But most importantly, it will build continuity and resiliency into your business and processes through insights that help you innovate at a rapid rate today while preparing your business for what’s next tomorrow.
Why ERP is critical for your businesses
Why ERP is critical for your businesses
While there’s no all-up solution software for every business process, ERP technology is getting better and better at bringing processes together. Once your processes, systems, and data are connected, you’ll get the intelligence, acceleration, and adaptability you need to start optimizing your operations.
Here’s three ways ERP can improve your business:
1
1
Drive optimal performance
Drive optimal performance
With solutions that integrate artificial intelligence (AI), you’ll access insights that enhance your decision making and reveal ways to improve operational performance going forward.
2
2
Accelerate operational impact
Accelerate operational impact
By connecting processes and data, you’ll bring more visibility and flexibility to employees to help them take action quickly and deliver more value across the business.
3
3
Ensure business agility
Ensure business agility
Many ERP solutions are built to adapt to your needs and grow with you, helping you proactively prepare for—and readily respond to—any operational disruption or market change.
What business functions benefit from ERP?
What business functions benefit from ERP?
ERP can cover many core functions across your organization—helping break down the barriers between the front office and back office while offering the ability to adapt your solution to new business priorities. Some of the key business functions include:
Commerce
Today’s retailers face many challenges and an ERP system can deliver a complete, omnichannel solution that unifies back-office, in-store, and digital experiences. Customers will get a more personalized and seamless shopping experience through AI recommendations, while retailers are able to increase employee productivity, help reduce fraud, and grow their business.
Finance
Modern ERP will help you increase profitability while driving compliance. It offers dashboards and AI-driven insights that give you an overview of your finances to help you tap into the real-time information anytime and anywhere. It should also help you cut down on entering information manually by automating daily tasks and include tracking abilities that help with your business’s regulatory compliance.
Human resources
Modern solutions offer ways to manage company data and streamline employee management tasks like payroll, hiring, and other duties. You’ll be in a better position to help retain, recruit, and empower employees while also tracking employee performance and identifying HR problems before they happen.
Manufacturing
This function improves business communication, automates daily processes through robotic process automation, and offers manufacturers the ability to fulfill customer needs and manage resources by accessing real-time data. This solution also optimizes project and cost management as well as production planning.
Supply chain
If your company is still entering information by hand and trying to track down inventory in your warehouse, you can easily save time and money by automating these processes with ERP. Modern solutions also offer dashboards, business intelligence, and even Internet of Things (IoT) technology to help you get a handle on your inventory management.
SAP
SAP
From Wikipedia, the free encyclopedia
Founded
Weinheim, Germany
(1972; 49 years ago)
Founder
Hans-Werner Hector
Headquarters
Dietmar-Hopp-Allee 16, Walldorf, Baden-Württemberg, Germany
Area served
Worldwide
Key people
Hasso Plattner (Chairman)
Christian Klein (CEO)
Website
SAP SE (/ˌɛs.eɪˈpiː/) is a German multinational software corporation based in Walldorf, Baden-Württemberg, that develops enterprise software to manage business operations and customer relations.[2][3] The company is especially known for its ERP software.[4][5] SAP is the largest non-American software company by revenue, the world's third-largest publicly-traded software company by revenue, and the largest German company by market capitalisation.[6][7]
Historical references include Systems, Applications, and Products in Data Processing,[2] SAP AG and SAP SE.
Founded in 1972 as a private partnership named Systemanalyse und Programmentwicklung (lit. 'System Analysis and Software Development'; SAP GbR), which in 1981 fully became Systeme, Anwendungen und Produkte in der Datenverarbeitung (SAP GmbH) after a five-year transition period beginning in 1976.[2]: 1972–1980 In 2005 it further restructured itself as SAP AG. Since 7 July 2014, its corporate structure is that of a pan-European societas Europaea (SE);[8][9] as such, its former German corporate identity is now a subsidiary, SAP Deutschland SE & Co. KG.[8]
SAP is headquartered in Walldorf, Baden-Württemberg, Germany with regional offices in 180 countries.[10][3] The company has over 425,000 customers in over 180 countries[11] and is a component of the Euro Stoxx 50 stock market index.[12]
When Xerox exited the computer hardware manufacturing industry in 1971,[13] it asked IBM to migrate its business systems to IBM technology. As part of IBM's compensation for the migration, IBM was given the rights to the Scientific Data Systems (SDS)/SAPE software, reportedly for a contract credit of $80,000.
Five IBM engineers from the AI department[14][15] (Dietmar Hopp, Klaus Tschira, Hans-Werner Hector, Hasso Plattner, and Claus Wellenreuther, all from Mannheim, Baden-Württemberg) were working on an enterprise-wide system based on this software, only to be told that it would no longer be necessary. Rather than abandoning the project, they decided to leave IBM Tech and start another company.[4][16]
In June 1972, they founded the SAP Systemanalyse und Programmentwicklung ("System Analysis and Program Development" / "SAPD") company, as a private partnership under the German Civil Code.[17]
Their first client was the German branch of Imperial Chemical Industries in Östringen,[18] where they developed mainframe programs for payroll and accounting. Instead of storing the data on punch cards mechanically, as IBM did, they stored it locally in the Electronic System while using a common Logical database for all activities of Organization.[clarification needed] Therefore, they called their software a real-time system, since there was no need to process the punch cards overnight (for this reason their flagship product carried an R in its name until the late 1990s). This first version was also a standalone software that could be offered to other interested parties.[19]
In 1973, the first commercial product was launched. SAP completes its first financial accounting system - RF. This system serves as the cornerstone in the ongoing development of other software modules of the system that will eventually bear the name SAP R/1.[17]
This offered a common system for multiple tasks. This permitted the use of a centralized data storage, improving the maintenance of data. From a technical point of view, therefore, a database was necessary.[20]
In 1976, SAP GmbH Systeme, Anwendungen und Produkte in der Datenverarbeitung ("Systems, Applications, and Products in Data Processing") was founded as a sales and support subsidiary. Five years later, the private partnership was dissolved and its rights were passed on to SAP GmbH.[17]
The headquarters moved the following year to Walldorf, Germany. Three years later, in 1979, SAP launched SAP R/2, expanding the capabilities of the system to other areas, such as material management and production planning. In 1981, SAP brought a re-designed product to market. However, SAP R/2 did not improve until the period between 1985 and 1990. SAP released the new SAP R/3 in 1992. SAP developed and released several versions of R/3 through 1995. By the mid-1990s, SAP followed the trend from mainframe computing to client–server architectures. The development of SAP's internet strategy with mySAP.com redesigned the concept of business processes (integration via Internet).[16] As a result, R/3 was replaced with the introduction of SAP ERP Central Component (ECC) 5.0 in 2004.[21] Architectural changes were also made to support an enterprise service architecture to transition customers to a services-oriented architecture. The latest version, SAP ERP 6.0, was released in 2006. SAP ERP 6.0 has since then been updated through SAP enhancement packs, the most recent: SAP enhancement package 8 for SAP ERP 6.0 in 2016.[22]
In August 1988, SAP GmbH became SAP AG, and public trading started on 4 November 1988. Shares were listed on the Frankfurt and Stuttgart stock exchanges.[16] In 1995, SAP was included in the German stock index DAX and, on 22 September 2003, SAP was included in the STOXX Europe 50.[23]
The company's official name became SAP AG (a public limited company) after the 2005 annual general meeting.
On 21 May 2014, SAP AG announced during the Annual General Meeting of Shareholders held on the same day, 99% of the shareholder votes approved the conversion of legal form to a European stock corporation (Societas Europaea, SE) and at the same time, elected the first supervisory board of SAP SE. The conversion of the company's legal form would take place upon entry in the commercial register, expected to be in July 2014.[24][25]
On 7 July 2014, SAP announced it had changed its legal form to a European Company (Societas Europaea, SE). As a result, its German subsidiary was renamed to SAP Deutschland SE & Co. KG.[8][26] the conversion cost the company approximately €4 million.[27]
Since 2012, SAP has and acquired several companies that sell cloud-based products, with several multibillion-dollar acquisitions seen by analysts as an attempt to challenge competitor Oracle.[28] In 2016 SAP bought Concur Technologies, a provider of cloud-based travel and expense management software, for $8.3 billion, SAP's most expensive purchase to that date.[29] Analysts' reactions to the purchase were mixed, with Thomas Becker of Commerzbank questioning whether Concur was the right choice for SAP, while Credit Suisse called the acquisition an "aggressive" move.[30]
In 2014, IBM and SAP began a partnership to sell cloud-based services.[31] Likewise, in 2015, SAP also partnered with HPE to provide secure hybrid cloud-based services running the SAP platform.[32] Both HPE and IBM provide infrastructure services to SAP, and SAP runs its SAP HANA cloud solution on top. SAP has announced additional partnerships with Microsoft in order to give customers tools for data visualization, as well as improved mobile applications.[33]
SAP exceeded its revenue projections due to the expansion in its cloud business and the success of SAP HANA. The growth can also be partially attributed to the acquisitions of Concur and Fieldglass.[34] Since 2017, SAP is a founding member of the EU Cloud Code of Conduct.[35] Since May 2021 SAP has listed selected Cloud Service adherent to the EU Cloud Code of Conduct as one of the first Cloud Service Providers.[36]
The company announced plans in 2016 to invest heavily into technology relating to Internet of Things (IoT) as part of a strategy to capitalize on the growth in that market. For that purpose, €2 billion is planned for investment in relevant sectors by the end of 2020.[37] SAP will also launch a new product line called SAP IoT, which "will combine large amounts of data from things connected to the Internet with machine learning and SAP's real-time database S/4 HANA."[37]
On 29 January 2019, SAP announced plans to cut approximately 4,000 positions at the company in a strategic plan to shift to more modern cloud-based technologies such as blockchain, quantum computing, machine learning, Internet of Things, and artificial intelligence.[38]
On 13 April 2021, SAP announced the formation of the joint venture SAP Fioneer, a dedicated Financial Services Industry (FSI) Unit between SAP and investment company Dediq GmbH.[39][40] Dediq GmbH has invested over 500 million euros in the newly formed unit and received an 80 percent share in return. SAP brought its products, organizational units and the sales network into the business and holds 20 percent of the shares.[41]
SAP CEO meeting with Azerbaijan's leader Ilham Aliyev
As of 2016, SAP is the world's third-largest software and programming company.[69] The corporation operates in Europe, Asia, Africa, the Middle East, North America, and South America.[70]
SAP focuses on 25 industries and six industry sectors: process industries, discrete industries, consumer industries, service industries, financial services and public services.[71] It offers integrated product sets for large enterprises,[72] mid-sized companies and small businesses.[73]
Service-oriented architecture has been incorporated into the SAP ERP (Enterprise Resource Planning) system and other products defined within the SAP Enterprise Service Architecture (Enterprise SOA).
SAP Enterprise Service Oriented Architecture (or Enterprise SOA) is SAP SE's service-oriented architecture implementation.[74] Enterprise SOA is enabled by the SAP NetWeaver platform and builds on the benefits of Web services. SAP has positioned Enterprise SOA to deliver the benefits offered by service-oriented architecture, including enabling both flexibility and business efficiency. SAP markets Enterprise SOA (service-oriented architecture) as a cost-effective way of adding new applications to existing infrastructure.[75] SAP Solutions that currently use Enterprise SOA are mySAP CRM, mySAP ERP, and mySAP SRM.
SAP partners include Global Services Partners with cross-industry multinational consulting capabilities,[76] SAP University Alliances,[77] Global Software Partners providing integrated products that complement SAP Business Suite solutions,[78] and Global Technology Partners providing user companies with a wide range of products to support SAP technology, including vendors of hardware, database, storage systems, networks, and mobile computing technology.[79]
Extensions partners are companies which provide functionality that complements SAP product capabilities. Their products are certified, sold, and supported by SAP. These partner companies include Adobe, CA Technologies, GK Software,[80] Tricentis,[81] Hewlett-Packard, IDS Scheer, Mendix,[82] OpenText,[83] Knoa Software, and BackOffice Associates.[84]
SAP has also partnered with Apple to work on the mobile experience for SAP enterprise customers. As part of the partnership, a new SAP HANA Cloud Platform SDK would be delivered exclusively for iOS. As a result, developers can build applications based on the SAP HANA Cloud Platform for the iPhone and iPad devices. The partnership was announced in May 2016.[85]
In 2019, SAP announced a three-year partnership "Embrace" with Microsoft that should allow its clients to move their business process into the cloud. SAP teams up on cloud sales with Microsoft
In 2020 SAP announced that together with Wipro it will co-develop and market "solutions for the retail and fashion industry."[86]
SAP products for small businesses and midsize companies are delivered through its global partner network. The SAP PartnerEdge programme, SAP's partner programme, offers a set of business enablement resources and program benefits to help partners including value-added resellers (VARs) and independent software vendors (ISVs) be profitable and successful in implementing, selling, marketing, developing and delivering SAP products to a broad range of customers.[87]
SAP for Retailing is a comprehensive set of offerings for various retail processes including demand management/forecasting and supply chain at a high level, and specific areas such as contracting, purchasing, goods receipts, invoice verification, accounts payable, pricing, billing, Point-of-Sale and business analytics.
"SAP for Retail" is the title of a book about the software.[88]
SAP Business Technology Platform, formerly known as SAP Cloud Platform (SCP) is SAP's platform-as-a-service (PaaS)[102] that is used to deliver in-memory capabilities and microservices for building and extending, mobile-enabled cloud applications. The infrastructure is offered through a global network of SAP-managed data centers. SAP Cloud Platform is an open platform-as-a-service, which includes the in-memory SAP HANA database management system, connects to both on-premises and cloud-based systems running SAP or other third-party software, and relies on open standards, like Java, JavaScript, Node.js, and Cloud Foundry for integration options.
SAP Cloud Platform is promoted to build and extend business applications with rapid innovation cycles. SAP and Apple Inc. partnered to develop mobile applications on iOS using cloud-based software development kits (SDKs) for the SAP Cloud Platform. SAP founding development partners[103] for their Cloud Platform include Accenture, Celonis, EnterpriseAlumni, and Walmart.
SAP Cloud Platform is based on open source technology, developed and supported in partnership with SUSE. The company is also in partnership with Cloud Foundry for a beta offering of SAP Cloud Platform that enables customers to test out and give feedback for the functionalities coming with Cloud Foundry.
As part of the "RISE with SAP" program, the SCP was renamed as SAP Business Technology Platform (BTP).
Main article: SAP S/4HANA
In 2015, the company launched S/4HANA, the newest generation of the SAP Business Suite. It was written natively for the SAP HANA platform. It offers cloud, on-premises and hybrid deployment options to customers, with its benefits including a smaller data footprint, higher throughput, faster analytics, faster access to data and better user experience. It also allows existing SAP Business Suite customers to upgrade to this product from SAP Business Suite.[104]
In 2016, SAP introduced SAP HANA, Express Edition which is meant to run on personal computers or on cloud computing platforms for students and other small-scale developers.[105]
"The SAP Enterprise Learning solution is part of SAP ERP HCM" is a quote from a 2009-published book about the subject.[106] The acronym ERP refers to Enterprise Resource Management; HCM refers to Human Capital Management.[107]
There are other books on SAP ERP HCM including:
SAP Enterprise Learning is a learning management system, for large and medium-sized enterprises, from SAP, and it contains a virtual learning room feature powered by Adobe Connect.[110] A sample can be experienced in the SAP Learning on Demand Portal. SAP uses this for delivering online training[111] as a Learning on Demand offering; some of this content is freely available[112] as e-books or simulations. The company has a book on this subject, available since June 2009.[113]
SAP launched the SAP store in March 2015 as its principal e-commerce property to allow customers to buy its products directly on the Web rather than through traditional sales channels. Customers can purchase free trials or starter editions and can pay by credit card or PayPal.
Launched in 2016, the SAP App Center is an online application marketplace for third-party applications that integrate with and extend SAP products. While some applications are available for free, others[114][115] involve a monthly or yearly subscription fee. Applications available range from integrations with content management software to mobile approval management and payment platforms. As of July 2018, it features over 1,500 applications. Major vendors and service providers, such as Accenture,[116] are part of it.
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BusinessObjects
BusinessObjects
From Wikipedia, the free encyclopedia
For other uses, see business object.
Industry
Founded
1990
Fate
Acquired by SAP (2007)
Headquarters
San Jose, California and Paris, France
Key people
John G. Schwarz, CEO
Bernard Liautaud, Chairman and Founder
Products
BusinessObjects XI
Xcelsius
Data Services
Data Integrator
BusinessObjects Edge BI
Revenue
$1.077 billion USD (2005)
Number of employees
4,977 (as of Q2 2006)
Website
SAP BusinessObjects (BO, BOBJ, or BObjects) is an enterprise software company, specializing in business intelligence (BI). BusinessObjects was acquired in 2007 by German company SAP AG. The company claimed more than 46,000 customers in its final earnings release prior to being acquired by SAP.[1] Its flagship product is BusinessObjects XI (or BOXI[2]), with components that provide performance management, planning, reporting, query and analysis, as well as enterprise information management. BusinessObjects also offers consulting and education services to help customers deploy its business intelligence projects. Other toolsets enable universes (the BusinessObjects name for a semantic layer between the physical data store and the front-end reporting tool) and ready-written reports to be stored centrally and made selectively available to communities of the users.
Bernard Liautaud [fr] co-founded BusinessObjects in 1990 together with Denis Payre [fr], and was chief until September 2005, when he became chairman and chief until January 2008.[citation needed] The concept of BusinessObjects and its initial implementation came from Jean-Michel Cambot.[citation needed]
In 1990, the first customer, Coface, was signed. The company went public on NASDAQ in September 1994, making it the first European software company listed in the United States.[citation needed] In 2002, the company made Time magazine Europe's Digital Top 25 of 2002 and were BusinessWeek Europe Stars of Europe.
On 7 October 2007, SAP AG announced[3] that it would acquire BusinessObjects for $6.8B. As of 22 January 2008, the corporation is fully operated by SAP; this was seen as part of a growing consolidation trend in the business software industry, with Oracle acquiring Hyperion in 2007 and IBM acquiring Cognos in 2008.
BusinessObjects had two headquarters in San Jose, California, and Paris, France, but their biggest office was in Vancouver, British Columbia, Canada.[citation needed] The company's stock was traded on both the Nasdaq and Euronext Paris (BOB) stock exchanges.
On April 2, 2007, a lawsuit from Informatica (inherited by BusinessObjects from the purchase of Acta Technologies in 2002) resulted in an award of $25 million in damages to Informatica for patent infringement. The lawsuit related to embedded data flows with one input and one output. Informatica asserted that the ActaWorks product (now sold by BusinessObjects as part of Data Integrator), infringed several Informatica patents including US Patent Nos. 6,014,670 and 6,339,775, both titled "Apparatus and Method for Performing Data Transformations in Data Warehousing." BusinessObjects subsequently released a new version of Data Integrator (11.7.2) which removed the infringing product capability.[4]
1990: BusinessObjects launches Skipper SQL 2.0.x.
1994: Launches BusinessObjects v3.0 and goes public on the NASDAQ in September — the first French software company listed in the United States.[5]
1996: Enters the OLAP market and launches BusinessObjects v4.0. Bernard Liautaud named one of BusinessWeek's "Hottest Entrepreneurs of the Year."
1997: Introduces WebI thin client, which enables shared information across an extranet.[6]
1999: General Electric (GE) begins working with the company.[citation needed] BusinessObjects goes public in France on the Premier Marché. Acquires Next Action Technologies.
2000: Acquires OLAP@Work for approximately $15 million[7] and announces MDX Connect from this acquisition.[8]
2001: SAP signs an OEM and reseller agreement to bundle Crystal Reports. Acquires Blue Edge Software.
2001: Signs up its single largest global software licensing transaction with Three, formerly known as Hutchison 3G. Transaction was led by Edwin Moore Momife and Jon Stubbington of the UK Company.
2002: Acquires Acta Technologies.[9] Bernard Liautaud named to Business Week's "Stars of Europe," and the company is named one of the "100 Fastest Growing Tech Companies" by Business 2.0.[10] Informatica files a lawsuit against Acta, claiming patent rights infringement.[6]
2003: Acquires Crystal Decisions for $820 million.[11] BusinessObjects releases Dashboard Manager, BusinessObjects Enterprise 6, and BusinessObjects Performance Manager.
2004: Debuts new combined company with the slogan, "Our Future is Clear, Crystal Clear." Launches Crystal v10 and BusinessObjects v6.5.
2005: Launches BusinessObjects XI. Acquires SRC Software, Infommersion, and Medience. Launches BusinessObjects Enterprise XI Release 2.
2006: BusinessObjects acquires Firstlogic, Inc and Nsite Software, Inc.[12][13]
2006: Acquires ALG Software (formerly Armstrong Laing Group).[14] Launches Crystal Xcelsius, which allows users to transform Microsoft Excel spreadsheet data into interactive Flash media files.
2007: Continuing its string of acquisitions, BusinessObjects acquires Cartesis[15] and Inxight.
2007: In October, SAP AG's Chief Executive Henning Kagermann announced a $6.8 billion deal to acquire BusinessObjects.[16]
2008: In January, SAP absorbs all of BusinessObjects' offices, and renames the entity "BusinessObjects, an SAP company". Following the acquisition of BusinessObjects by SAP, the founder and CEO of BusinessObjects, Bernard Liautaud, announces his resignation.[17]
2009: BusinessObjects becomes a division of SAP instead of a separate company. The portfolio brand "SAP BusinessObjects" was created. Some former BusinessObjects employees now officially work for SAP.[18]
^ "Press and News | About SAP AG". SAP. Archived from the original on 2010-08-18. Retrieved 2014-04-09.
^ "How do I gain access to BOXI". University of Birmingham. Retrieved 2019-03-07.
^ "SAP to buy BusinessObjects for $6.8B". Associated Press. Archived from the original on 2007-10-12. Retrieved 2007-10-07.
^ "BusinessObjects Issues Statement on Informatica Lawsuit". BusinessObjects. Archived from the original on 26 July 2012. Retrieved 2007-06-01.
^ "Bernard Liautaud Joins MySQL Board of Directors". MySQL. Archived from the original on December 4, 2010. Retrieved October 18, 2010.
^
a b Howson, Cindi. BusinessObjects: the complete reference. RR Donnelley, 2003.
^ "BusinessObjects Acquires OLAP@Work". May 9, 2000. Archived from the original on February 9, 2013.
^ "BusinessObjects Announces BusinessObjects MDX Connect, First Product in Enhanced OLAP Strategy". Information Management Online. June 27, 2000.
^ Whiting, Rick (July 15, 2002). "BusinessObjects To Buy Acta In Analysis Software Deal". InformationWeek.
^ Evers, Joris (July 18, 2003). "BusinessObjects to acquire Crystal Decisions". InfoWorld.
^ Kirk, Jeremy (2006-12-01). "BusinessObjects acquires SaaS firm Nsite | Business". InfoWorld. Retrieved 2014-04-09.
^ "Press and News | About SAP AG". SAP. Retrieved 2014-04-09.[permanent dead link]
^ Preimesberger, Chris (2006-09-13). "Business Objects Acquires ALG Software for $56M". eWEEK. Retrieved 2021-04-13.
^ Whiting, Rick (Apr 23, 2007). "BusinessObjects To Acquire Cartesis". CRN. Archived from the original on June 6, 2020. Retrieved October 18, 2010.
^ Ferranti, Peter Sayer and Marc (2007-10-07). "Update: SAP to buy Business Objects in $6.8B deal". Computerworld. Retrieved 2021-04-13.
^ Havenstein, Heather (January 30, 2008). "BusinessObjects founder resigns after SAP acquisition". Computer World.
^ "SAP BusinessObjects Business Intelligence". element61. 2016-06-20. Retrieved 2021-03-04.
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