A New Perspective On Business
Over years, a wide range of management studies have come to a conclusion that any business organization has to be viewed from a new perspective, a systems perspective. Yet, decades of management training and practices in the workplace have not followed from this perspective. Only recently, with significant changes facing companies and how they operate, have managers and team members come to face this new way of looking at things. This interpretation has brought about a tremendous change in the way management studies and approaches organizations.
The whole system is a systems thinking view of the complete organization in relation to its environment. It provides a means of understanding, analyzing and talking about the design and construction of the organization as an integrated, complex composition of many interconnected systems that need to work together for the whole to function successfully.
An organization as an entity can suffer systemic failure. This happens in the whole system or high-level system where there is a failure between and within the system elements that need to work together for overall success. Factors in systemic failure may include confused goals, weak system-wide understanding, individual incentives that encourage loyalty to sub-ordinate (rather than super-ordinate) goals, inadequate feedback, poor cooperation, lack of accountability, etc.
Thus, the business world is experiencing a rising demand for software infrastructure, designed specifically to ensure a smooth and cooperative work process within the organization. A complete system includes hardware and software infrastructure, data collection, procedures and employees with specific roles in collecting or using data. Advances in computer and web application development technology have contributed to a number of common web based systems being developed in businesses.
Examples Of System Development
Below we will have a look at few different types of system development within the organization, by analyzing their benefits for a business and discussing examples of famous brands using a particular system software.
Customer Relationship Management
Customer relationship management, or CRM, is a marketing-based system of collecting and analyzing customer data, interpreting it to develop targeted marketing programs and implementation of those programs. CRM can be defined as an organizational approach that seeks to understand and influence customer behavior through meaningful communications in order to improve customer acquisition, retention, loyalty and profitability. Computer hardware and database software programs provide the tech infrastructure used to collect data, including customer names, addresses, phone numbers and transaction histories.
Procedures involving searching through data to formulate market segments, target specific customers with promotional campaigns and service customer accounts. In a CRM system, all company employees take on a customer-centric role, though marketing and IT are especially involved in pulling data for marketing use. CRM web application development software is a useful tool for your marketing team, transforming your employees into wizards being able to read the mind of your customers and predict their further actions, needs and preferences.
Zara, one of the leading clothing brands, recognize the crucial role of CRM software in their company to help them understand the needs of their customers, what they like and don’t like. They use this information to better relate to them as well as find ways of boosting their profile and profits. Zara has developed effective relationships with its customers, and thanks to the benefits of CRM, its customers are loyal and make continued visits throughout the year, with the average customer visiting 17 times compares to other stores’ average of four. What’s impressive about Zara is that it is able to have such a dedicated and loyal customer base despite the lack of advertising.
Using CRM software, Zara is able to collect information about sales and work out which products are popular, and with this data easily to hand, designers are able to produce new items quickly based on the latest trends and in styles and colors preferred by their shoppers. Using CRM software, Zara has streamlined its customer data collection and found ways to improve its products and services as well as connect with customers at a more informed level.
Supply Chain Management
Supply chain management, or SCM, is the collaborative process of manufacturers, wholesalers and retailers working together to give the consumer the best value. In today’s global, interconnected supply chain, the technology and software solutions a manufacturer deploys are just as important as a company’s supply logistics and management strategies. SCM is driven by supply chain software programs and integrated computer networks that allow suppliers and buyers to share inventory data. The goals of supply chain management are to have just-in-time inventory and optimized inventory control costs. Transportation and logistics procedures are integral in SCM, and logistics managers oversee a particular company’s role in coordinating supply chain relationships and activities.
What does this mean for the future of technology in the supply chain? No longer will it be viable to simply deploy the technology flavor of the week. Rather, manufacturing companies must strive for greater insight into their overall supply situation and how to successfully position the right products in front of the right customer at the right time.
Home Depot is one of the biggest retailers selling home improvement and construction products and services. With more than 355,000 employees and 2,000 superstores across the US, Canada, Mexico and China, the company is doing pretty well with its efficient supply chain and logistics strategies. The company is also investing heavily in its e-commerce (online shopping) strategies to increase its customer base and become accessible to more customers regardless of their physical location and accessibility to physical stores. Forbes has shared some insights about the company’s e-commerce strategies, which also aligned perfectly with its logistics strategies:
One solid example is the way Home Depot operates its inventory and replenishment (I&R) activities for its stores. The company used to have separate logistics management departments in every single physical store to utilize replenishment and store management-related activities. With the help of technology and right software solutions, Home Depot’s new centralized I&R department created a significant benefit for the company. The overall performance of the department improved the demand forecast accuracy and decreased the cost of operations for the replenishment orders. As a single/centralized department manages the inventory for all stores, the new method increased the bargaining power for the company against the suppliers. As a company, Home Depot was also able to benefit from this change, as it is now able to process online orders more efficiently.
Enterprise Resource Planning
Enterprise resource planning, or ERP, is a computer-driven approach to optimizing resource efficiency within a business. Conceptually, ERP is different from traditional budgeting methods because company leaders across the organization collaborate to order, store and use supplies and inventory. The goal is to avoid carrying excess inventory and wasted resources within the business. ERP works to integrate disjointed processes into one data system that the entire organization can view and act upon. All users – from executives to CIOs to customer service reps – can have access to the same real-time, up-to-date, and complete user-appropriate data and information. ERP software tools allow department managers to share a viewpoint of the current availability of various resources and to schedule department use within the company-wide system.
When the global giant – LG Electronics (LG) – having 114 subsidiaries, more than 82,000 employees across 40 countries – tried to harmonize its human resources functions, the challenges were of a similarly giant scale. High maintenance costs, local controls lacking transparency, inefficient decision making, under-utilization of resources, manual processes, etc. made it difficult for LG to operate as a global company, which then decided to take the ERP route. The challenges for LG were: Location specific processes lacking transparency and automation needs for a global reporting; De-motivated employees, limited outlook, no room for information or best practices sharing; Limited localized resources for employee learning & training; Challenges with decision making, with significant business impact.
LG’s familiarity with Oracle technology due to earlier Oracle usage made it easier to finalize a solution. It offered large data hosting, seamless migration of old data, easy scalability, multiple modules addition as needed and centralized access and control. LG hired Oracle Consulting to build a single centralized system which integrates available Oracle HR modules for uniform use at global level, thereby replacing location specific system dependency.
The ERP solution, which included a data mart, performance management system, staff portal, and e-learning application, enabled the following benefits for LG: Centrally managed a single system with minimal maintenance costs; Transparency in the recruitment and employee appraisal processes; Real time reporting for higher management and tracking of set goals and objectives; Informed decision making due to readily available real time reports; Cost savings due to not having to maintain multiple systems; Easy sharing of best practices across the various centers; Increased employee morale, productivity and engagement.
Financial management is more of a general term used to describe an array of finance-based systems developed in many organizations. Companies rely on integrated financial software tools to join activities in purchasing, accounting and finance departments. In essence, the computer tools allow each purchase and revenue transaction to get recorded once, yet appear in the records and reports used in each of these finance-related departments. The goal is to optimize record-keeping efficiency and to avoid redundant transaction entries. Often, accounting software provides the foundation for data entered and used across the company.
Denver Zoo, one of the largest and most popular zoos in the United States, had an IT infrastructure made up of disparate financial systems. This made it difficult for employees to access the financial data they needed to operate effectively. Therefore, the company has decided to integrate financial management software, which as a result, provided Denver Zoo employees with faster and easier access to real-time financial data.
With all financial information fully integrated, employees can gain a complete picture of operations. They can begin to introduce new areas of analysis, such as cross-referencing budgets against activities and between departments. For example, each department has its own set of expenses. Now the system is completely integrated, users can cross-check budgets and more effectively allocate spend against the right budget holder.
To keep your business growing at the dramatic rates you plan for, it is essential to have business software applications integrated around a single codebase, database and business process. The advantages of designing your systems in this manner yield tremendous cost savings and improved business productivity.
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