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.
FORM 10-K. Lexis-Nexis™. URL: http://80-web.lexis-nexis.com.ezproxy.lib.depaul.edu/universe/document?_m=f19800026f9387e66fd70ccef3d79403&_docnum=1&wchp=dGLbVzb-lSlzV&_md5=5d86a10161c676254c2ee1ebbe59210b
“About Moore,” MooreMedical.com URL: http://www1.mooremedical.com/index.cfm?PG=Gen&FN=AboutMoore&CS=HOM
“Our History,” MooreMedical.com. URL:
“Executive Summary,” MooreMedical.com URL: http://www1.mooremedical.com/index.cfm?PG=Gen&FN=execsummary&CS=HOM
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