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e-CRM for Cost Reduction


e-CRM for Cost Reduction

A major opportunity for cost reduction is in publishing marketing and technical information. The cost of publishing information online is significantly lower than publishing by traditional means, that is, hard copy brochures. IBM saved between 10 per cent and 20 per cent in supplying brochures online. E-target.com recently reported that significant savings could be achieved in preparation and dispatch of results data to customers. A reduction of US $1 per result was achieved and delivery speed was reduced from two to three days to instantaneous.

Web-enabling systems and providing 'straight-through processing' reduces costs. One packaged consumer goods company selling through distributors achieved a cost saving of US $50 per order processed. At Cisco Systems, 81 per cent of queries are handled online. Estimated savings are US $150 per transaction. IBM found that the time to enter a customer order reduced from 30 minutes to 5 minutes and time to respond to enquiries reduced from 15–20 minutes to real time. In 2000, IBM handled around 99 million customer transactions involving self-help services, up from 14 million in 1998, and achieved a saving of US $20 per customer on self-service information enquiries.

The Internet is increasingly used to reduce the cost of distributing advertising material. IBM found that the cost of downloading a television advertisement was approximately US $50 less than the manual process, that is, transfer to tape and courier.

Many divisions in an organization purchase their own Web services or Internet technology either internally or from external 'boutique' suppliers. As a result it is often difficult to manage the digital brand because each department controls its own Web site, often in isolation, and there is little reuse of Web content. This disparate approach also creates inefficiencies in Internet infrastructure. IBM achieved a reduction in costs of between 10 and 20 per cent by consolidating its infrastructure.



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