Case Study: Tractor Manufacturer Seeks to Improve its Processes
Founded in 1995, Kimat-Dam Tractors Europe (KDTE) is a major global tractor manufacturer. With more than $300 million annual revenue, KDTE manufactures, distributes, and sells more than 12,000 tractors, warehouse equipment and related spare parts each year. It is a joint venture between two tractor manufacturers, Kimatsu Heavy Industries (based in Yokohama, Japan) and Damier Construction (based in Nuremberg, Germany). KDTE has production facilities in Japan and Germany, and offers its products to dealers and distributors in Africa, Europe, and the Middle East.
Despite a bright business outlook, there is a growing concern from the top management of KDTE: While all of the business departments within KDTE help support dealers, dealer requests and enquiries are currently managed using ad-hoc, disparate processes and systems. For example, some departments use Microsoft Office Excel spreadsheets or Microsoft Office Access databases to manage dealer contacts and information. Other departments use paper-based methods to manage requests and enquiries from dealers. "Manually processing dealer requests and enquiries does not allow us to track the required information efficiently. Requests can be easily lost and left unanswered," says Mr. Gerry Davies, CIO for KDTE. As a result, KDTE does not have a single, consolidated view of dealer information across the company. "Without a single, integrated system to manage contacts and information from dealers, it is very difficult for us to get a holistic view and good business insight into what our dealers need from us", explains Davies. "Mistakes will always occur, but we need to find a way to minimise that risk".
In addition, KDTE wants to identify a way to improve its order-entry process for dealers. The company currently processes more than 12,000 orders annually and is currently using a third-party, Web-based solutions for dealers to enter orders for spare parts, equipment, and other suppliers. However, these solutions did not integrate with the company's Enterprise Resource Planning (ERP) system. Orders would often get lost, and the IT department has to reboot the entire system daily in order to troubleshoot technical issues.
"We cannot manage a business by losing orders - we need to find a solution that is reliable and that we can integrate with our ERP solution. Also, not all customers are created equal; nor should they be treated equally. We need to find a way to identify who are our major customers to better serve them. But with our current processes and systems, we are unable to do so," says Davies.
Finally, customising solutions for order-entry and reporting is not only time consuming, it is also costly. If employees need new functionality, additional fields on a Web form, or new reports, they called the IT department to submit a request. Customisation requires significant development time, and with a limited number of IT support personnel, even simple requests could take months to resolve.
(a) Examine the reasons behind CRM implementation failure and suggest measures KDTE should take to prevent these failures from happening. [Select three reasons and three measures for your discussion.]
(b) One major CRM solution provider that KDTE is keen to explore is SAP. SAP CRM includes features and functions that support core business processes in areas such as Marketing, Sales and Service. KDTE seeks to implement a unified CRM solution that would accomplish the following objectives:
? Gives a single view of dealer information across all departments
? Reduces manual operations
? Streamlines how dealers place orders online and mitigate the risk of lost orders
? Easily customisable in order to keep up with rapidly changing business needs, and allow employees to make simple changes - such as modifying reports - rather than relying on thinly-stretched IT resources.
Examine how KDTE can employ suitable SAP CRM modules to improve its current business processes.
The failure rate for most Enterprise System projects is roughly 50% in the United States and about 70% to 80% in Europe. There are a variety of reasons for failure, including:
1) No clearly defined objectives.
2) No clearly defined ways to measure achievement of objectives.
3) Unclear key performance indicators.
4) Over customization of the software. Enterprise systems such as CRM and ERP are complex systems. The greater the degree of customization, the greater the cost and the greater the chance of failure.
5) No incentives for employees to use the system. This leads to issues with user adoption.
6) Insufficient user training and insufficient support.
7) Incomplete or poor data. This is a product of bad data verification during the implementation. This is an example of garbage in, garbage out. The system may be working correctly, but if the data is poor, the results will be poor as well.
8) Failure to align business operations of different departments utilizing the system. CRM systems cross departmental lines. For example, it will be used by Customer Service, Accounting and Sales. These departments may have different and sometimes contradictory goals, business practices and cultures. Prior to implementation, best business practices must be established ...
Information management for supply chain and improvement for its processes are examined.