Empowering competition in a customer-driven economy

Unihold, a JSE-listed e-Business solutions provider and local Applix distributor, has unveiled a new initiative dubbed Demand Chain Management (DCM) - defined as the measurement and management of customer demand to drive profitable decision-making.

Described as the convergence of BI (business intelligence) and CRM (customer relationship management), DCM could probably best be described using the Gartner Group`s renowned quadrant diagrams. Edward Carbutt, product manager: CRM at Unihold, explains: "Taking the familiar Gartner-like quadrant diagram with CRM on the Y-axis and BI along the X-axis, DCM occupies the upper right quadrant by virtue of the fact that it combines the best characteristics of both disciplines."

At an implementation level he says that business has expended much energy and resources on squeezing maximum efficiency from the supply side of the business. "However, the attention has now turned from such infrastructural issues to optimising marketing strategies, service processes and the customer/product value fit," he adds.

Confirming the international trend, Michael Scheib, vice president: European operations at Applix and a recent visitor to SA shores, says that, in today`s economy, it is no longer enough to effectively manage resources, inventory, and supplies.

"e-Businesses around the world are striving to match the supply and demand sides of their organisations in an attempt to match the right product, the right channel and the right process with the right customer. The need is to remain competitive and profitable while effectively retaining and growing customer relationships," he comments.

"The secret to business success in the twenty-first century is balance - getting the balance right by reducing the cost of sales while improving customer relationships."

Carbutt agrees: "Heightened competition in the new economy (sometimes called the global village) calls for companies to analyse profitability down to department, cost centre or even individual employee level."

These comments are consistent with the view that success depends on reducing less profitable customers and maximising business with customers that provide a higher profit-to-revenue ratio.

"This is what DCM is all about. It combines the extensive customer knowledge CRM offers with BI technology that determines exactly where costs are incurred. The result, holistically speaking, is demand chain management," concludes Scheib.