Integrating customer relationship management and supply chain management 487
Both of these franchises need cost-effective
SCM and effective CRM to support them.
Competing through capabilities
As the power of the brand declines, organiza-
tions are having to reappraise their traditional
definitions of strengths and weaknesses. The
view now gathering ground is that the real
opportunities for differential advantage come
from capabilities or the things we excel at, our
‘distinctive competencies’.
Thus, in a market characterized by short-
ening life cycles, for example, the ability to get
new products to market in ever-shorter time
frames becomes a source of competitive advan-
tage. Likewise, information systems that can
capture demand as it happens and production
systems that can respond rapidly are a major
strength in a volatile market. Similar advan-
tages accrue to organizations with order fulfil-
ment and logistics systems that enable superior
levels of customer service to be achieved.
None of this is to deny the importance of
strong brands supported by motivated employ-
ees, but they are no longer enough by them-
selves. Conversely, strong brands and
motivated employees supported by best-in-
class capabilities will be difficult for com-
petitors to attack. Indeed, wherever enduring
leadership in any market is encountered it
tends to support this contention – names such
as McDonald’s, Sony and Disney come to
mind.
The more that organizations come to rec-
ognize the importance of competing through
capabilities, the more they will be forced to
accept the need to switch the focus in the
business away from managing functions to
managing the key activities or processes that
create those capabilities. A major change that
has taken place in the way in which we think
about organizations has been the realization of
the importance of processes. Processes are the
ways in which firms create value for their
customers; they are fundamental and, to a large
extent, generic across business types.
Processes are ‘horizontal’ in that they cut
across traditional ‘vertical’ functions, and by
definition they are interdisciplinary and cross-
functional. The four ‘high-level’ business pro-
cesses that are common to most firms are: The market understanding process.
The innovation management process.
The supply chain management process.
The customer relationship management
process.Figure 19.2 illustrates these four ‘high-level’
business processes. Within these generic
processes there will be further processes (or
‘sub-processes’) which again will need to be
managed across functions. Let us now examine
each in turn.The market understanding process
Successful marketing strategies are built
around a deep understanding of the market-
place. In particular, the motivations of buyers
and the things they value must be the founda-
tion of any marketing strategy. Being in close
contact with customers is a prerequisite in fast-
changing markets. It is not only the responsibil-
ity of the marketing department to have close
contact with customers, it is actually important
that all parts of the business are informed by
customers. It is just as critical that human
resources, production management and pro-
curement, to take three examples, are as closely
connected to needs of customers as the market-
ing or sales staff.
Being customer-focused has always been,
and always will be, a fundamental foundation
of a market-oriented business. However, the
requirement today is to be idea-driven and
customer-informed, and for the organization to
extend its knowledge and to leverage that
knowledge in ways which create value for
customers. In today’s marketplace, knowledge
management is a critical element of market
understanding.