Traditional Management Systems VS. CRM And SCM Essay

Traditional Management Systems VS. CRM And SCM - Essay Example The paper shall first compare traditional management with CRM in the first section then secondly, it shall compare traditional management with SCM. In conclusion, it is evident that both customer relationship management systems and supply chain management systems create increased efficiency, achieve more costs savings and generate greater profits for organizations that implement them. Customer Relationship Management (CRM) is a strategy used to learn more about customers’ needs and behaviors in order to solidify their loyalty to the business’s offerings (Wailgum & Patton, 2011; â€Å"What Is CRM?,† 2010). This strategy enables businesses effectively utilize their resources to increase their knowledge of the behavior and value of their target customers. This increased insight enables businesses to identify and target the best customers, customization and/or personalize their products and services, track customer contacts, add cross-sell and upsell opportunities, reduce costs and increased overall profitability. CRM may mean different things to different industries but, ultimately, its purpose is to help organizations derive competitive advantages that will sustain their long-term profitability. This section shall differentiate traditional management systems from CRM in terms of differences in approaches, achieving efficiencies, costs savings, a nd firm profitability. Differences in approaches (empowering customers, becoming a trusted partner) A good example that could be used in comparing traditional management systems with CRM is the marketing function of an organization. Under traditional management systems the marketing was product-based and company focused. Management was more concerned with how much control they have on the message conveyed to the customer. In these cases the company was the active participant in the marketing process whereas the consumer was inactive or passive. In contrast under CRM, customers are empowered for example Dell customers can configure their computers prior to ordering through Dell’s website. CRM enables companies to ensure that only those products or services that consumers want are produced. This alters organizations’ marketing strategies from the traditional push to pull strategies. Furthermore, the increased consumer participation that is encouraged by CRM enables organ izations to understand their customer requirements better. This makes organizations that have CRM become more trusted partners than those firms that are stuck on traditional management systems. Achieving efficiencies CRM management systems are generally supported by information and technology (IT) solutions that are designed for the unification of customer information (Kumar, 2011). Where these solutions are well integrated with other business systems in an organization and /or with partner organizations, the company can be able to centralize all its customer information in a few IT applications. This means that senior management can easily be presented