Friday, April 29, 2011

When Social Media changes the Game


One of the unspoken occupational hazards of social media is the fact that many of our strategies are contingent upon the whims of the platforms and communities we operate within. What happens when one of the social media platforms changes the game?
For a pharmaceutical company engaging in social media, a slight shift could require drastic changes in social media strategy. It’s no secret that Facebook, Twitter and other social media platforms have demonstrated a propensity to change policies on a dime. Decisions that Facebook makes on privacy settings or changes Twitter makes to who has access to the firehouse can cause panic amongst the pharmaceutical companies operating within those communities.
People seem to forget that companies such as Facebook and Twitter are businesses too.  If a policy change is going to provide more data for advertisers or attract more page views, they are going to do it without blinking an eye.  It’s all in the name of profit.
So where does that leave the pharmaceutical industry that has sought to exact some measure of control in social media? Where does it leave a cautious industry that has designed a whole strategy aimed at staying compliant with current regulations?  If a social network can change its tune at any moment—how does a tepid industry stay prepared?
Plan better.
At a recent conference I attended I listened to a session on global implementation of a pharmaceutical social media marketing program. The session addressed the challenges of dealing with different regulations across country boundaries. The point of view shared was that you should find the most restrictive regulations and use that as your benchmark—ensuring you are in compliance in less rigid regulatory environments. In the case of the social media platform that can change its guidelines at any moment, the opposite is true. Plan for the current environment, but have a contingency plan for what you will do if the game changes. Don’t be forced into reacting to changes, address them before they even arise. Plan for the moment when social media becomes entirely community and conversation driven with no pre-moderation options.
What is your contingency plan if a conservative approach to social media is no longer an option?  There will certainly be naysayers inside the organization that will want to peel back social media engagement as a result of looser restrictions on social media platforms.  Be prepared to convince them that pulling out of these communities is the wrong decision.  Demonstrate that you have planned for this scenario and have a plan in place to step up your monitoring capabilities, fit an AE-reporting framework into the existing escalation procedures of the company and prove the benefit to continued involvement.
Changes on social media platforms will continue to occur—whether to existing sites or emerging.  Don’t be caught off guard.

Are you Balanced?


My partner is a worry wart.  She’s the type of person that will read a study about the effects of metal touching metal and immediately decide that silverware should no longer be used when cooking.  She’s constantly making sure I locked the door, buckled my seat belt and arrived safely at work.  She’s a great balance to my overly laissez faire attitude.  Unlike her, when I hear the latest study, I always quip: “you can prove just about anything if you set out to do it.”  Why sweat all the things that can go wrong?
Just like she is the ying to my yang, pharmaceutical social media programs need to find a balance (you knew there had to be a segue right?).
Like a scientist trying to prove an established hypothesis, a pharmaceutical marketer can make the case for just about any social media strategy if they look long enough.  Before conducting any type of online listening or social media research, a marketer could have already decided that Facebook is the perfect platform.  With this decision already made, the process of finding supporting research is a selective exercise.  The research that supports the conclusion is pulled to the front and the rest is simply glossed over.
It’s reasonable to walk into pharmaceutical social media planning with a hypothesis.  The danger arises when you are unwilling to change your conclusion based on the research at hand.  Social media demands an open mind.  The way people interact, the functions of community and the social currency are all unique.  A social media marketer needs to research, listen and observe and allow that to shape strategy—not the other way around.
On the flip side, there can be a tendency to get so lost in the research and data that you never emerge with a conclusion.  You can spend months rehashing the same information without forming a cohesive strategy.  While a willingness to follow research is important, decisiveness is equally important.  It’s that whole yin and yang thing again—you need balance.
Online listening is a critical step to developing a social media strategy.  It helps to inform the strategies and tactics that will best serve your audience.  Use the information gleaned from social media listening to build a social media strategy that ties directly to the patient need.  But don’t use the mountains of information as a crutch.  Don’t use it as an excuse to continue stalling engagement.
Be thoughtful.  Be flexible.  But be decisive.

Monday, April 18, 2011

CORPORATE SOCIAL RESPONSIBILITY AND GLOBAL CITIZENSHIP- A need or a passing trend?




Corporate Social Responsibility (CSR) is subject to a case of debate and criticism. Corporations face the dilemma of pursuing CSR or not. Over the years corporations have come to realize the need for the corporate self-regulation to be integrated in the form of a business model. Propagators of CSR have come to argue that there is a strong business case for CSR, in that the corporations would benefit in a multiple ways by operating with a broader perspective than their immediate short term goals. Critics argue that it is nothing more than putting a face to the existing chaos of insufficiency and hypocrisy. It distracts from the fundamental economic role of businesses. CSR has been redefine and evolved over the years  however it essentially tilts to aid the organization’s mission as well as a guide to what the company stands for and will uphold to its customers.
Let us consider the arguments put forth by the critics to define whether CSR actually defines to pass the criteria for being the need of the hour.
“Dilutes the primary focus of the business         Profit maximization.”   Many have stated that the corporation’s main goal is to maximize its profits and ensure that its shareholders have a substantial return of their investments in the organization. The general perception is that it is the responsibility of the individual to look forward for the well-being of him and his society. The corporation has no obligation to be concerned about the society and it would act as an additional onus on the corporation to think about the social and environmental issues.  The corporation would have to take into consideration the perspectives of the stakeholders and then formulate their pursuance of their primary objective of profit maximization.  This invariably will please the stakeholders however it will dilute the interests of the shareholders of the corporation.
Another issue that CSR induces is, confusing not only the employee but also the public about what could be ulterior motive of the corporation to adopt the social responsibility. It is perceived as a distraction adopted by the companies to counter the ethical questions raised by their core operations.
CSR on the other hand “addresses issues by using business resources and expertise.
The scale and the nature of benefits of CSR are difficult to quantify however the benefits can be attributed to various business resources and expertise. CSR uses a variety of business resources like the Human resources, business development and public relations to display its applications.
Human Resources: A CSR program can help in recruitment and staffing in the competitive high skilled graduate market. It also evokes a higher employee engagement particularly when the employees become more involved in the fundraising activities and community volunteering.
Risk Management: CSR focuses on “doing the right things at the right time” thus noting the risk involved in its operations. Risks are an impeccable part of the corporate strategies and have a high visibility in the media, regulators and courts.  Risks like corruption scandals and environmental accidents can bring down age old reputations in a matter of hours.
Brand differentiation:  CSR plays a role in customer loyalty on ethical basis. It acts as the unique selling proposition (USP) for the corporation to attract more stakeholders. Major brands like “the Corporate Group”, “the Body shop” are built on ethical values. Integrity and Best practices help the organization put up a strong brand image.
The rise of ethics training inside corporations, some of it required by government regulation, is another driver credited with changing the behavior and culture of corporations. The aim of such training is to help employees make ethical decisions when the answers are unclear. Tullberg believes that humans are built with the capacity to cheat and manipulate, a view taken from (Trivers 1971, 1985), hence the need for learning normative values and rules in human behavior (Tullberg 1996). The most direct benefit is reducing the likelihood of "dirty hands" (Grace and Cohen 2005), fines and damaged reputations for breaching laws or moral norms. Organizations also see secondary benefit in increasing employee loyalty and pride in the organization. Caterpillar and Best Buy are examples of organizations that have taken such steps (Thilmany 2007).
Increasingly, companies are becoming interested in processes that can add visibility to their CSR policies and activities. One method that is gaining increasing popularity is the use of well-grounded training programs, where CSR is a major issue, and business simulations can play a part in this.
In the documentary “the Corporation”, the history of organizations and their growth in power is discussed. Corporate social responsibility, what a company does to in trying to benefit society, versus corporate moral responsibility (CMR), what a company should morally do, are both important topics to consider when looking at ethics in CSR. For example, Ray Anderson, in The Corporation, takes a CMR perspective in order to do what is moral and he begins to shift his company's focus towards the biosphere by utilizing carpets in sections so that they will sustain for longer periods. This is Anderson thinking in terms of Garret Hardin's "The Tragedy of the Commons," where if people do not pay attention to the private ways in which we use public resources, people will eventually lose those public resources.

References
http://blog.marketingdoctor.tv/2008/03/28/dr-tantillos-30second-how-to.aspx
http://www.careers.ed.ac.uk/STUDENTS/Careers/Corporate%20Social%20Responsibility%20and%20Ethical%20Careers.html

Tuesday, April 12, 2011

Zara came a long way


Zara’s Business issues
  • There was a need to respond quickly to the demands of fashion conscious consumers, with high volatility in the forecasting abilities.
  • Store Managers used to decide on what was likely to sell and then placed the orders accordingly, without consulting the headquarters.
  • No Advertising – Only did promote twice a year annual sales and opening of new stores which resulted in a marketing expenditure of just 0.3% i.e. tenth of industry average of 3%- to- 4%. Zara spent  heavily on stores to get a prime location, 
  • Zara customers were aware of the frequent change in the design and the short span of availability if the stock, average stock of 3-4 weeks and they also knew that to get the latest design, they should visit the store more frequently.
  • Inventory management was a very good, no old inventories were stored, and produced as per the demand, and very less storage time in DC 
  • The whole designing, estimation and delivery was based more on intuitive estimation, and the future demands were based on the current trends, which virtually negated the possibilities of stock-outs or replenishments.
Information Technology issues
  • Age-Old Point of Sales( POS) system- DOS operating system was  no longer supported which meant that there could be  Requirement FOR UPGRADE
  • Managers had to manually check the stock and estimate the new order quantity. The current IT systems were unable to give accurate inventory estimates
  • Although they had an IT department, it wasn’t a robust structure with no CIO, no definite budget, no formal justification of the costs and cost benefit analysis. The IT was rudimentary in their approach of a “Need Based Action
  • The record keeping and data transmission was not correct and many irregularities were seen like theft, damage, losses etc.
  • The IT approaches were quite peculiar in the sense that most of their systems were developed internally rather than buying commercially available software.
Analysis:
Despite of so many issues Zara had managed to lead the fashion industry, which implies they were managing their business well with whatever IT services they had.
It wouldn’t be a good advice for Zara to change their Point of Sales (POS) systems with immediate effect. The POS could be replaced over time to handle the compatibility issues.  Before moving ahead to change in the POS, Zara should build a strong inter store network such that the store managers have a better estimate of the Inventory. 
If the store managers could get the trends of competitors as well as more definite figures about Zara’s own sales, then they could come up with a better forecast.
Zara’s IT strategy needs a robust central structure with the stores connected to the headquarters. 
Salgado was ensuring that the vendors didn’t change the POS terminals such that they couldn’t work on DOS any longer. Along with that he engaged himself in the thoughts of developing the IT infra-structure.


Heading the Services way


Otis Elevator a long established company that revolutionized the world by creating the first passenger elevator in the 1800s. Otis is an example of how an innovative company cannot stay in the “status quo” and needs to evolve and adapt to the rapidly changes of the economy, technology and client needs. Otis Elevator was able to transform from the manufacturing industry into the logistic and service industry, leveraging its transformation with the use of IT and information management systems.
The key issue - moving from the largest manufacturer to the service industry
  • The elevator industry entered in a wave of transformation and it is clear that not only the quality of the product, responsiveness and price were key drivers for clients when selecting an elevator service company, but also the cost of service became a major consideration as building aged and competition for tenants increased. 
  • Small companies dedicated solely to the elevator service increased the competition in the maintenance area. As a result, it was clear that Otis needed to change the company culture from an operation and manufacturing company to a service oriented business. 
IT initiatives taken by Otis to address the key issue
Several IT initiatives were taken by Otis in order to become a company that envisions to “maintain elevators and service customers through logistics and information management”.

IT Initiatives
Purpose
Benefits / Results
OTISLINE®
Create a centralized customer service system to dispatch service mechanics and call backs reports to do the proper follow ups
  • 24 x 7 customer service
  • Responded to a customer in less than a second
  • Savings due to restructure of the company
REM
Elevator monitoring to control the overall performance of elevators
  • Produced reports that allow mechanics to solve problems before the elevator went out of service before customer were even aware of them
SIMBA
Standard-interface for product strategy, product development and  production
  • Lowered project costs throughout the value chain

IT Initiatives
Purpose
Benefits / Results
e*LogisticsTM
Integration and automatization of the supply chain in order to generate real time information flow from sales, factory and filed operations via Web

  • Project Proposal – Automatization of main elements: gathering account information, determining elevator configuration and proposal preparation
  • Sales Processing - Improved lead times, reduce inventory levels and reduced costs across the value chain
  • Order Fulfillment - Flexible and globally integrated supply chain  by managing factories, suppliers, field feedback and product improvement process
  • Field Installation - Reduced inconsistencies, maintain lean manufacturing and low inventory levels by generation e-mail remainders  of job status 
Relevance and analysis
  • Otis was able to shift from a manufacturing company to a service oriented business by leveraging in the use of technology, network, Web and new computer and software’s that are product of the overall evolution of the world economy. This highlights the importance of a business to keep up with the technology development in order to obtain competitive advantages and develop key success factor within the industry.
  • An additional factor that the Otis case illustrates is the importance of how IT is tight to the strategy of a company. The shift in Otis strategy and vision was product of the proper implementation of IT systems that were align with the overall strategy that the company needed to develop in order to keep up with the new market waves.
  • Future challenges for Otis will relied in ability to fully integrated the e*Logistics program with the other 50 financial systems and 15 different manufacturing systems that are currently operating all around the world. In addition, it is important for Otis to fully integrated the new global orders through the e*Logistics system in order to replicate the success that were achieved in the UK market.

Do they need a CRM?


 Moore Medical’s critical needs
  • They have an ERP system that was unable to forecast demand because it is reactive to market conditions. 
  • The ERP system was extremely cumbersome in creating a bid and/or quote for customers and the related information between customers and their quotes.
  • The ERP system was not flexible enough to handle Moore’s preferred pricing method.
  • Customer service representatives were taking longer to handle orders because the system was more vertical and difficult to navigate horizontally.
  • Account setup was in itself a two-fold problem. First, new accounts could not be reviewed against existing accounts. This led to the second problem where information could be entered into the system more than once.
  • 84% of Moore’s non-perfect orders stemmed from split shipments and back-orders. This pointed at the lack of an efficient forecasting ERP.
  • Unable to determine why churn rate for customers was higher than the industry average.
  • Moore’s product line was not broad enough for it to be considered a true “one-stop” shop for all the customer’s needs to be filled.
First, the cost/benefit ratio would be a factor in deciding how to allocate funds for each of the systems. By the end of 1999, Moore Medical had spent almost $7 million with Arthur Andersen Consulting and an ERP system designed by J.D. Edwards. Their CRM initiative began to take shape at the beginning of 2001with Clarify Consulting responding to a Request for Proposal 
Second, the success of a CRM system depends heavily on the vision of the company.. 
Objectives for CRM:
  • Increase rep effectiveness and efficiency.
  • Introduce single point of contact philosophy by providing cradle to grave customer data/ history information
  • Increase customer interaction consistency among all reps by increasing company control and manner of customer interaction.
  • Minimize loss of customer interactions (via transfers or rep time off) by tracking interactions from start to finish regardless of channel.
  • Increase cross-sell and up sell options for reps.
  • Increase effectiveness  of campaigns and promotions
  • Increase and measure success rate of bids and quotes by introducing scheduled follow ups.
  • Introduce accuracy and accessibility of information obtained from customers.
  • Introduce business consistent customer interaction dispositioning regardless of interaction channel. 
  • Improve sales forecasting and supply chain management by providing sales pattern information for use with data mining and forecast modeling.
  • Reduce inventory shelf time.
  • Reduce learning curve for new reps.
  • Increase cross utilization of reps between departments.
  • Reduce time to implement script changes for outbound prospecting/ customer service
  • Capture and present data in a Window GUI based environment on the rep desktop.
In order for Moore to pursue the development of CRM, they will need to take care of a few things first. First, they will need to make sure that their Vision and Strategy are in-line with the CRM initiative. Next, Moore will need to focus both externally (to customers’ values) and internally (organization-wide acceptance) in order to gain momentum. Following, these two major building blocks, the CRM processes, information requirements and technology needs must be well defined before looking at “what’s out there.” This way, the company can focus on what the needs are instead of what they may want. Finally, Moore must take a hard look at what metrics will need to be collected and analyzed for forecasting into the future and meeting their customers’ needs.
Some of the critical success factors that directly impact Moore are: 
  • To know which strategies will support the corporate goals and to tie measurement processes to them.
  • To ensure that the skills, knowledge and associated behaviors required by the workforce support the enterprise’s CRM strategy.
  • To change the compensation of the workforce to achieve the desired behaviors and cultural shift and motivate employees to rally behind the strategy.
The benefits to implementing the CRM system would improve customer relations and profitability. Some of the benefits that Moore could realize include consistency across channels, employee empowerment and compensation, and involvement of collaborative partners. Retaining customers in turn could in turn increase profits for Moore and take care of their high churn rate. 
Conclusion
Moore Medical has a number of issues it needs to address before it can really make a good decision. The answer could have been found in acquiring a CRM system, adding bolt-on modules to the existing ERP system, or going some other non-technological route. In understanding where the needs are and what the benefit would be in investing in these areas, it is imperative that Moore continue to fund the IT side of their business, as well as develop their overall business plan in order to harmonize the systems with the company’s vision and goals. 
Moore employees will need to be thoroughly trained in using the system and understanding the benefits that come with it. Also, the web site will need to be optimized to meet the needs of the customer and free up sales people to actually make sales. 
Building the system that would accommodate Moore’s needs would take time and investment of dollars. However, both the short and long-term ROI’s should be realized as long as they stay customer-focused and true to their aim of being a one-stop shop that meets all their customers’ needs.
References
McAfee, Andrew. Moore Medical Corporation. Harvard Business School Case, Harvard Business School (Cases) and Harvard Business, rev.February12, 2003.
“Our History,” MooreMedical.com. URL:
“Executive Summary,” MooreMedical.com URL: http://www1.mooremedical.com/index.cfm?PG=Gen&FN=execsummary&CS=HOM

BI at Canadian Tire


BI and Canadian Tire
BI is the consolidation and analysis of internal and/or external data for the purpose of effective decision making. BI would help Canadian Tire with the integration of the set of applications and governance procedures that enables sophisticated analytics and smooth flow of information among its functions and sub functions.
Four imperatives were designed to address the BI strategy at Canadian Tire:
    1. Implementing the CIO governance council, they assumed the responsibility to develop an enterprise standard to monitor IT spending, annual IT planning, monitoring the IT strategy.
    2. The Organizational program would specify the core capabilities and roles of the IT services. It would help Canadian Tire to lay down an IT strategy for Business consulting, integrated solutions. 
    3. Process improvements included the co-ordination of the annual IT strategy planning to be based on the corporate strategic planning. 
    4. Technological direction was laid down for the re-structuring the organization. 
Organizational structure influencing the BI initiative.
  1. The change of CTR image from wholesaler to retailer, which would result in more data processing.
  2. FRAG was analyzing and making reports for the marketing department, hence they demanded more data.
  3. IT would be more technical focus and enable other groups to take more informed decisions by providing better and standardized data.
  4. BI would make the groups more structured and better organized.
Challenges for the implementation of the BI initiative:
                1. Data quality” would be a base to other challenges of CTC.
                2. Better data processing could be ensured by providing better services to end- business users. Due to diversity of organization every user had different needs; BI would address to this issue and offer need based solutions. 
                3. All the processes needed standardization. BI would ensure data integration by standardizing the processes.
                4. Process standardization would reduce cost thus increasing profitability in turn affecting budget and justifying return on investment (ROI).
                5. Shadow IT groups provide an alternative source of IT resources to the use groups. These outside groups were involved with technology acquisition, application development, technical support etc. for different departments like finance and supply chain but work outside the governance of the IT function. The biggest challenge was to streamline functions and communicate between both departments. Shadow IT groups interacted with end users thus; they knew the requirement and expectations. Thus, communication between both departments was a test.
The current BI infrastructure system used information warehouse (IW) to organize and extract data to the users. These requests were processed in batches by programs and processes.  The future BI would use Enterprise Data Warehouse which will ensure a real time data processing system. This Enterprise Data warehouse would interact with Supply chain, vendor data, marketing data & HR Data Servers. These data would be compiled to the dashboard and provide real time data to the super users. The challenge to such an infrastructure would be communication, quality and timeliness of queries and data between different servers.

Implementing BI and understanding the value of such investments


CORE BUSINESS: Canadian Tire Corporation (CTC) is an enterprise that includes a network of businesses including retail, financial services, and petroleum operations. CTC operations were divided into five main categories including Canadian Tire Retail (CTR), Canadian Tire Financial Services (CTFS), Canadian Tire Petroleum (CTP), and PartSource (specialized automotive product servicing company), and Mark’s Work Wearhouse (retail provider of casual and work wear for men and women)  
MARKET TRENDS
Competitive market forces within the retail sector: Historically, retail organizations have invested significantly less than other industries in IT infrastructure (2% versus 5% revenue expenditure, respectively). They had traditionally focused on POS and supply-chain management. However, due to increasing competition, retailers began switching to Business Intelligence to improve sales and better serve their customer base. Recently, however, large North American companies with sales over $1 billion intended to make Business Intelligence (BI) analytics their second-largest IT investment after their Web Portal investments. 
Business Intelligence: Consolidation and analysis of internal/external data to enable effective decision making. At the core of all BI initiatives, there is a data warehouse that contains the data and analytics software that stores data from operational systems in the organization and restructures it to enable queries and models to extract decision support reports. The BI industry is expected to grow from $30 billion to $75 billion by 2005
Challenges: Despite the benefits from BI and data warehousing investments, implementation of these projects consumed huge organizational resources and was difficult. Some of the challenges to achieve success in implementing BI were related to budgetary constraints and their justification, understanding and managing user expectations, and logistics related to its implementation.
HOW BUSINESS INTELLIGENCE ALIGNS WITH THE CORPORATE VISION AT CTC
Change of image: Development of the Information Warehouse (IW), which was implemented by the CTC IT group, was prompted by a paradigm shift in CTR’s image from a wholesaler to that of a retailer. This meant that more data was required in order to begin analyzing data like a retailer, including sensitization to product, store, and margin trends. This eventually led to the development of the Finance Retail Analytics Group (FRAG) that fulfilled the marketing needs at CTC and provided the relevant reports that enabled strategic business decisions.
Barriers to BI success at CTC:  Despite the vision, there were a few transitory challenges that CTC had to address prior to integrating BI with their daily business operations. 
  1. Resource constraints: Due to limited resources, storage and querying of the IW was not possible. While this cut down query duplication, it resulted in limited data access across the breadth of business operations
  2. Lack of standardized definitions: This meant that the same IW could be interpreted in different ways by different users. For instance, depending on the interpretation, one could end up with six different levels of inventory. This delayed the decision-making process.
  3. Lack of available data: Multiple data resources were not available. Thus, the data model was not exhaustive and failed to reflect the data requirements of the business. 
REMEDIAL MEASURES TO ENSURE LONG-TERM SUCCESS OF CTR WITHIN CTC 
The retail IT segment within CTR identified several short-term initiatives, including development of dedicated resources to implementing quick-win projects and finalizing a detailed strategy-and-planning document to guide business operations for the next three years. Broadly, they intended to address the aforementioned challenges through
  1. Systemic information sourcing and organization: developing standardized data formats and a central data warehouse. Essentially, this would collate, organize, and provide easy access to data and meta-data.
  2. Developing data marts/views: To enable timely decision-making while masking the complexities associated with access to the full corporate data structure. 
  3. Quick-win assessments: These comprised short-term IT projects that improved BI capabilities and provided users with new information. These included opportunities such as providing access to daily promotional sales data and market-basket analytical capabilities
RECOMMENDATIONS FOR FURTHER IMPROVEMENT
  1. Data privacy: While there is emphasis on improving data auditing and archiving, issues such as privacy and security are important within the retail IT segment to ensure integrity of the data. The current and the future IT system do not factor this within the scheme of priorities.
  2. Data cleansing and governance: Detecting and removing data that is out-of-date (incomplete or redundant) is considered to be one of the most important, costly, and time-consuming activities within any BI initiative. Further, identifying irrelevant information is not confined to the IT department. This requires a collective engagement of the HR, Operations, Marketing, and Vendor divisions within CTC. 
  3. Senior management commitment: Finally, for most organizations, an enterprise-wide approach to managing data analytics is a major departure from the current practice. Therefore, a robust IT infrastructure needs to be well-supported by a committed senior IT management, which must establish and rigorously enforce data management policies and high-quality data that is scalable, well-integrated, and consistent.

Friday, April 1, 2011