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CASE 1

ACH FOOD COMPANIES TRANSFORMS ITS BUSINESS WITH ENTERPRISE


SYSTEMS

You may not have heard of ACH Food Companies, but you can probably find their products in
your pantry Mazola, Fleischmanns, Argo Spice Islands, Karos, and Durkees, to name few.
ACH is headquartered in Cordova, Tennessee, has about one thousand employees, and generates
about $1 billion in revenue. Until recently, ACH has done business primarily as a commercial
food manufacturer for the food services and food ingredients markets. Now its primary focuses
on the retail consumer and the consumer products food market. Becoming more consumer-
oriented has created more opportunities for expansion, but this move required the company to
become much more agile and flexible to accommodate new product lunches and movement into
new markets.

ACH information systems had to change to support its new strategy and methods of doing
business.ACH had been running on a series of legacy systems that were designed primarily for
its old business model as a food ingredients marker. Many applicants were 20 to 30 years old and
had been cobbled together, with too many point-to-point interfaces. It was difficult for them to
exchange data or to supply the data required for a company-wide view of firm performance.
These systems also lacked the functionality required for a consumer-branded company that
hoped to grow by acquiring more companies. ACH was not operating as efficiently as it could,
nor could it move forward strategically as a consumer-branded company.

In 2007, the company began implementing SAPs Enterprise Resource Planning (ERP)
System, using its software applicants modules for finance, order management, procure-to-pay,
and business intelligence. ERP applicants are integrated, and the software enforces a single set of
transactional and master data. According to CIO Donnie Steward, ACH very much wanted the
ability to enforce application integration across all, modules, and to break the old functional
silos that made it difficult for business functions to coordinate in its old legacy systems. SAP
had developed industry-specific ERP software for consumer food products, based on industry
best practices, and their appealed to ACH as well.
At the point, company hadnt fully transitioned to a consumer products company. So,
software required a great deal of customization to provide functionality for ACHs food
ingredients and food service businesses as well as its new consumer business. Shortly after this
ERP system went live, ACH decided to divest the commercial side of its business and focus
solely on the consumer side. That move required the company to eliminate much of the
customization work it had done to bring its old food ingredients and food service systems onto
the SAP ERP platform. ACHs information systems team then focused on creating a vanilla
ERP system where no customization was required.

In late 2009, ACH implemented additional SAP ERP functionality for product costing and
quality management as well as other applicants in the SAP suite-SAP Manufacturing, SAP
product Lifecycle Management, SAP Advanced Planning and Optimization, and SAP Recipe
Management - with extensive business intelligence capabilities.

How have the all the new systems worked out? Very well, according to ACH management.
Managers are able to make better decisions across the company because there is a consistent set
of data for the entire enterprise. All business units use the same terminology. ACH has been able
to develop its first set of company-wide Key Performance Indicators (KPIs) that span multiple
functions and its first capabilities for customer and product profitability analysis and reporting.
In the past, it took and excessive amount of time to obtain that information or it was impossible.
The company operates much more efficiency: There has been a 20 percent reduction in finished
goods inventory, a 25 percent reduction of the close process, from eight days down to six, and it
takes 75 percent less time for internal new-product initiation.
CASE - 2

OPTIMIZING OPERATIONS AT QUARKCITY: A MOVE AWAY FROM LEGACY

SYSTEMS

Quarkcity India Private Limited was incorporated in October 2003 to design, study, develop,
own, operate, buy, sell, or lease infrastructure projects and facilities. Quarkcity works on land
acquisition, project development, and construction and management services. It recently shifted
from legacy information systems to the more advanced enterprise resource planning (ERP)
system. The older system involved working with tally for accounting Quark Commerce Software
(QCMS) for purchasing, and MRP-II for material requirement planning.

The main problem with these systems was that data could not be integrated across departments in
a consistent manner. For example, Tally worked independently, performing tasks related to
financial transactions alone. Due to a lack of integration with any other software, flow of
information was restricted. Other departments needed to manually request for information.

QCMS was customized software only for material procurement. It could not handle service or
job order requirements, nor could it allow for the generation and approval of purchase orders. It
could not record or report on returns and rejections from suppliers. Moreover, only a single unit
of measurement (that is, pieces) could be used for each material. The system was not designed
for multilevel approvals of purchase orders. Local taxation policies such as the excise duty or
sales tax clauses were not incorporated in the purchase order formats. The purchase order, once
approved, could not be amended if the need arose. There was no facility for tracking budgets
against actual revenue items or capital items. Rates as well as quantities needed to be entered in
absolute numbers and not in decimals.

The material requirement planning (MRP) system also had its limitations. For example, the
activity codification system had no provision for checking activity codes and consumption of
items. The inventory management system did not reflect the sub-stores, while the scarp
management system did not codify entities properly.
In face of all these challenges posed of legacy systems, Quarkcity implemented to Oracle ERP
functional suite. This helped the company avoid all issues related to data redundancy and
inconsistency. Since the ERP data was centralized, updates made to any of entities were
immediately available to all the departments. Flow of information within the organization
improved. For example, the purchase order requested by one department could be automatically
sent to the concerned persons for approval. The inventory department could check against the
same purchase order while inspecting and receiving the delivered material. The receipt of the
items purchased could then be used as a basis for invoice generation and to record the transaction
in the general ledger by the finance team. Moreover, the ERP could define each activity in
various projects with its exact start and completed on time, resulting in improved decision-
making capabilities, productivity, and efficiency at the firm.

All the processes at QuarkCity are now managed by the ERP system, right from the procurement
of materials, to their costs and consumption. Since the cost structure of each material is
accurately known, it helps QuarkCity optimally utilize its resources to earn maximum profits.
Besides, the ERP system tracks and controls all procurement activities, schedules production
processes, and finally generates information that helps QuarkCity manage its inventory better.
The ERP processes the information very quickly, which enables timely reporting of the numbers.
Though the industrys standard percentage of cement and steel wastage is approximately 5%, the
implementation of this system has reduced the wastage below this level. The firms project and
material management capabilities have also seen a marked improvement.

The inventory that sits in ones own warehouse just adds to the costs of the firm. Inventory levels
can be reached efficiency by managing the lead time required for ordering the material. The ERP
system at QuarkCity makes it possible to forecast demand of the materials and help the firm in
its timely purchase. Using the min/max formula for order planning, the ERP system alerts the
managers when the quantity of materials reaches its minimum level. With the real-estate business
growing by leaps and bounds, there is need for quality work in this sector. Quarkcity has been
able to successfully navigate its difficulties with legacy systems to implement a modern
management information system that has ultimately allowed it to improve the quality of its
business.
CASE 3

OPTIMIZING OPERATIONS AT QUARKCITY: A MOVE AWAY FROM LEGACY


SYSTEMS

Quarkcity India private limited was incorporated in October 2003 to design, study, develop, own,
operate buy, sell, lease infrastructure projects and facilities. Quarkcity works on land acquisition,
project development, and construction and management services. It recently shifted from legacy
information systems to the more advanced enterprise resource planning (ERP) system. The older
system involved working with tally for accounting, quark commerce software (QCMS) for
purchasing, and MRP-II for material requirement planning.

The main problem with these system was that data could not be integrated across departments in
a consistent manner. For example, tally worked independently, performing tasks related to
financial transactions alone. Due to a lack of integration with any other software, flow of
information was restricted. Other departments needed to manually request for information.

QCMS was customized software only for material procurement. It could not handle service or
job-order requirements, nor would it allow for the generation and approval of purchase orders. It
could not record and approval of purchase orders. It could not record or report on returns and
rejections from suppliers. Moreover, only a single unit of measurement (that is, pieces) could be
used for each material. The system was not designed for multilevel approvals of purchase orders.
Local taxation policies such as the excise duty or sales tax clauses were not incorporated in the
purchase order formats. The purchase order, once approved, could not be amended if the need
arose. There was no facility for tracking budgets against actual revenue items or capital items.
Rates as well as quantities needed to be entered in absolute numbers and not in decimals.

The material requirement planning (MRP) system also had its limitations. For example, the
activity codification system had no provision for checking activity codes and consumption of
items. The inventory management system did not reflect the sub-stores, while the scrap
management system did not codify entities properly.

In face of all these challenges posed by legacy systems, Quarkcity implemented the oracle ERP
functional suite. This helped the company avoid all issues related to data redundancy and
inconsistency. Since the ERP data was centralized, updates made to any of the entries were
immediately available to all the departments. Flow of information within the organization
improved. For example, the purchase order requested by one department could be automatically
sent to the concerned persons for approval. The inventory department could check against the
same purchase order while inspecting and receiving the delivered material. The receipt of the
items purchased could then be used as a basis for invoice generation and to record the transaction
in the general ledger by the finance team. Moreover, the ERP could define each activity in
various projects with its exact start and completion dates. This ensured that projects were
completed on time, resulting in improved decision-making capabilities, productivity, and
efficiency at the firm.

All the processes at Quarkcity are now managed by the ERP system, right from the procurement
of materials, to their costs and consumption. Since the cost structure of each material is
accurately known, it helps Quarkcity optimally utilize its resources to earn maximum profits.
Besides, the ERP system tracks and controls all procurement activities, schedules production
processes, and finally generates information that helps Quarkcity manage its inventory better.
The ERP processes the information very quickly, which enables timely reporting of the numbers.
Though the industrys standard percentage of cement and steel wastage is approximately 5%, the
implementation of this system has reduced the wastage below this level. The firms project and
material management capabilities have also seen a marked improvement.

The inventory that sits in ones own warehouse just adds to the costs of the firm. Inventory levels
can be reduced effectively by managing the lead time required for ordering the material. The
ERP system at Quarkcity makes it possible to forecast demand of the material and help the firm
in its timely purchase. Using the min.max formula for order planning, the ERP system alerts the
managers when the quantity of material reaches its minimum level. With the real-estate business
growing by leaps and bounds, there is need for quality work in this sector. Quarkcity has been
able to successfully navigate its difficulties with legacy systems to implement a modern
management information system that has ultimately allowed it to improve the quality of its
business.
Case study questions:

1. Discuss the problems associated with the three legacy systems that were earlier in use at
Quarkcity.
2. Discuss how these problems were solved by the implementation of the ERP software.
3. Visit www.sap.com and study the various applications of the SAP tool for managing
business organizations.
CASE 4

SOCIAL CRM: CONNECTING WITH CUSTOMERS THROUGH SOCIAL


NETWORKS

With the exponential increase in social media users, firms have shifted from the customer push
model of branding to the customer pull model. Organizations have started to tweak their
conventional customer relationship management (CRMs) to remold them, so as to enable
interaction with customers via the internet. The older, conventional CRM model followed a
closed relationship with customers. The company executives had one-to-one conversation with
customers through the phone, e-mails, or chats. The whole focus of the conventional CRM was
limited to sales or, at the most, grievance handling. But the current times call for a change in this
approach. India has emerged as a leading internet hub of the world, with an increasing number of
tech-savvy young people who use new forms of social media to express themselves. Firms too
have had to use social media to reach out to customers. This has lead to the emergence of social
CRM. Social CRM is an open CRM model that advocates real-time interaction with customers,
to come up with ideas for innovation, product development and pricing, and also get instant
product reviews and opportunities for word-of-mouth marketing. The social CRM model is
rather complex and uncontrolled, as the customers can express their thoughts or feedback
regarding a companys product or service on various social networking sites like Facebook,
Twitter, LinkedIn, and so on. The social CRM enables organizations to be equipped to handle
such expressions of ideas. For effective relationship building, organizations need to capture this
information and actively engage with a diverse set of customers. In addition, companies also
need to create an environment where customers can interact with each other.

The use of social CRM as a marketing tool has given rise to viral marketing, brand building,
market research, and effective competition analysis. For instance, when ford launched fiesta,
instead of spending huge amounts of money on conventional forms of marketing, it invited 100
social agents (users who were active on social media) to try the Fiesta and share their
experiences with the online launched its Old Spice campaign (Smell like a man, man) on
YouTube, which turned out to be a huge success. Organizations are applying social CRM in
product development too. P and G launched its connect and develop initiative to get product
ideas from online users and, now, more than 30% of P&Gs new products come through this
initiative.

The Indian banking sector has also shifted from using conventional CRM to social CRM.
According to Anand Sinha, the erstwhile deputy governor of the Reserve Bank of India (RBI)
and chairman of the Institute for the Development and Research in Banking Technology
(IDRBT), bank communications can no longer ignore social media. New-age customers have
different expectations from banks. They want to be engaged in a different manner. The noted
expert in CRM, Paul Greenbag, says, The underlying principle for social CRMs success is very
different from [that of] traditional CRM, which was based on an internal operational approach
to manage customers relationships effectively. But social CRM is based on the ability of a
company to meet the personal agendas of its customers while, at the same time, meeting the
objectives of its own business plan. It is aimed at customer engagement rather than customers
management. The need of the hour is to listen to customers and engage with them. Users want
banks to respond to their queries through online social platforms. The presence of the banks on
the social media helps resolve issues before they get out of control. Social media is a rich source
of information as far as understanding emerging customer trends and preferences is concerned.

To effectively utilize the full potential that social CRMs have to offer, banks need to see
customers as more than just targets for selling their service to. They need to acknowledge that
customers have the great power of choice and that their satisfaction is of utmost importance.
Banks are, therefore, trying to find out more about each individual customer to raise awareness
and spread information among them. Bank policies like KYC norms, government regulations,
and credit card dos and donts are being communicated to customers effectively. ICICI Bank
launched an interesting initiative in 2013 called pockets. This facility was aimed at allowing fund
transfers through Facebook. There are now more than 30,000 active pockets users. Banking
operations can also be carried out through through Twitter hash tags. For example, account
balance can be obtained by using the hashtag, #ibal. Similarly #itran and #topup are used to view
recent transactions and recharge prepaid mobile phones, respectively. Currently 90% of CRM
spending is directed towards operational CRM initiatives like sales force automation, but will
drop to 70% of spending by 2020. Meanwhile, spending on social CRM initiatives like customer
communities and social media monitoring will grow from less than 1% to 10% by 2020, says
Barney Beal, former News Directors for TechTargets Business Applications and Architecture
Media Group.