Competitive Business Environment - Essay Example

 The business world is changing at a very fast pace which is forcing companies to restructure their operations and make changes to transform the company into streamlined efficient entities that have adapted to survive in the competitive business environment of the 21st century. Change has been a part of the business environment for centuries and the employees as well as the owners have always been able to adapt to the new challenges that are part of the evolving process of maintaining organization going to meet society’s goals. In the past industries such as the agriculture and manufacturing industry have been radically changed by the new world order and technological advantages. Developed countries realized that emerging nations such as China had completely taken over light manufacturing operation and the best course of action is to import or outsource manufacturing to economies such as China to be able to compete (CultureGrams, 2007). In the agricultural sector new technologies such as generic engineering have changed the way farmers operates and has introduced new products such as organic products into the marketplace. The economies of developed countries have moved from a manual to a knowledge economy in which the service industry is the backbone that creates job opportunities for the citizens of such a nation. A new tendency which is affecting the way organization the business environment and the service function within firm related to customer service and vendor relationship is being handled by companies in the 21st century. This essay discusses the change that has taken place in the way services are being rendered by enterprises in today and the tendencies that will manifest themselves in the future. Customer service is an important function that adds value to business. Companies realize that the service a firm provides to its customers is a critical success factor that allows customer retention and provides an edge in a competitive business environment. Service is an intrinsic variable that provides added value to a product that makes the goods offered by a particular company more attractive that than similar items sold by a competitor (Hadi, 1999). For example a customer knows that the software items offered by Microsoft Corporation includes an outstanding long term implied service in form of updates, improvements, assistance from the company to the client that purchases their product. A small software firm may not have the capability to offer a high level of service, thus they are not able to compete at the same level with firms that provide superior service value in for their products. In order to provide the best possible service to a larger customer base a company must find solution that enabled them to reduce the cost providing the desired level of service to its customers at the minimum cost possible. The factor that allows organization to achieve high levels of service offering while at the same time dealing with the cost constraint which inhibits offering good service without exceeding the a company budget is technology (Moscove & Simkin & Bagranoff, 1999). Technological advancement has influenced many business processes in the past and it is currently doing the same for the service function of organizations. The way to provide the best possible service to a large customer base is to know exactly what are the things the customer the desires. This focus is part of a total customer focus strategy a company must apply through out the entire organization. The technological advancement that allows an organization to obtain the information needed to improve its service levels is a system called customer relationship management (CRM). A CRM refers to the methodologies and tools utilized by a business organization to assist a company in managing customer relationships which typically involves a computerized system with software and browser applications that help collect and organize customer information (Ward, 2007). A CRM is both a technological solution as well as a management operational approach that allows the managers of a company to obtain control over the information system of a company in order to achieve various operational goals on how to improve the efficiency of an organization by utilizing data to improve relationships with customers, suppliers, partners and other stakeholders of a firm. In basic terms the CRM is module that is added to the company’s information system which is integrated into the entire system to provide greater functionality to it. A customer relationship system is provides improvement in basic dimension to the service function of a company. First it serves as a tool that enhances the operation of the entire company. The CRM serves as a database that is constantly adding data about the different stakeholders of a business such as the customers. The work of different business department such as accounting, marketing, sales team and design team among other is facilitated since these professionals gain access to valuable data concerning the client base of the firm. An accountant gains information about clients request such as refund, warranty or missed payments from a customer. The marketing people can have updated information about the activity related to sales of the company while a particular campaign was running in a particular location. The second dimension which a CRM provides support to the employees of the company is through enhanced collaboration. Enhanced collaboration in a CRM system is accomplished because the CRM is a door that allows customers to provide feedback about the services and products of a company. Feedback is the process through which a receiver communicates to the sender by returning a message (Schermerhorn & Hunt & Osborn, 2003). Based on this feedback the product designing team can utilized this input to make changes to the designs of future products based on the expectations of the customer. The third dimension of a CRM system is the analytic dimension of the system. The information input of the CRM can be used for example by the sales team to perform sales forecasting based on customer tendencies. The logistic department can utilized the CRM data to perform analysis about way to improve its purchasing and distribution functions based on information such as knowing the location of where the majority of the firm’s sales are being generated. A lot of companies no longer provide services themselves and prefer to outsource the function to specialized firms. An example of service outsourcing are call center operation that are hired by companies to perform service function such as picking up sales orders, provide support to the customer and general customer service calls. Outsourcing of service is done as a measure for obtain savings by reducing labor costs. Specialized call center firms are able to perform the same function at a much lower cost because their operation are optimized to perform such duties at much lower cost than a regular business. The automation of services is a movement in today business environment which has no turning back. Companies are constantly looking for ways to automate service functions in order to eliminate the labor involved with performing certain tasks. The banking industry is an example of a place where service automation takes place. A banking company that is a model for banking automation is the online bank PayPal. PayPal is the world’s leading online bank. The institution follows the same regulations any other bank in the United States since its deposits are guaranteed by the FDIC. A person that calls PayPal for any type customer service calls is greeting by an machine that provides several options for the customer to choose from. The machine uses some artificial intelligence to enable it to respond to the customer inquiries without the need of an actual person attending the call. If the machine options are not able to satisfy the needs of the customer then and only then is the call forwarded to an actual person for customer support. The website of this company is a model that illustrates how to take advantage of the build-in browsing capabilities of a website to provide extensive information to the customer to answer most types of service inquiries. Proving information through a website for troubleshooting and other types of service inquiries is a way to achieve self-attained customer service since the customer becomes the person responsible for obtain the information needed a about a product themselves by utilized the corporate website. Appendix A shows a snapshot of the PayPal website. It shows the different options provided by PayPal through its help center in its corporate website. Companies are streamlining service in all aspects of their operations. In the past businesses purchased from many suppliers in order to obtain the best price at the moment. This practice is no longer desired since it involves a lot of labor in the relationships and maintenance that must be provided to each different supplier. The new trend is to minimize suppliers to a few key suppliers and to establish close relationships with each one of them. A lot of the service functions with the supplier are performed with the assistance of the CRM system (Kotler, 2003). By building a close relationship with a selected number of supplier company’s are able to create a bond among businesses which transform their relationship from a simple buy and purchase scenario into a partnership relationship in which both companies assist each other in different ways to accommodate each others requests. The type of one-one service that used to be common between a salesperson and the customer is a rare occurrence in today’s business environment. In the past there were salespeople all throughout a store in different departments. Today stores are sometimes not even real and only exist in virtual environments. E-commerce has created new ways for customer to obtain the merchandise and services they need and desired. In an online store the customer perform the entire checkout and payment of an item without the assistance of any employees to guide them through the process. Actual personalized customer service within an e-store does not exist. The customers make the decision themselves on whether or not to purchase an item. The typical way customer can receive some time of service from an e-store is by communication any concern to the administration of the e-store through email systems. Email has become the most popular way for businesses to communicate with customers because of its low costs and the ability an email provides to store the information in the company CRM or information system for future reference. Microsoft Dynamics is one of many CRM systems with capability to archive the information of an email into the system which can be retrieved at any time in its original form or the data may be manipulated to create other managerial reports (c360, 2007). Service is a function that has changed over the years with the wave of changes which are common in a business environment. In the past companies had to go out of their way to provide customer with exceptional levels of service which at times cost the company more than the customer was worth. This was the norm and companies knew they were expected to provide high levels of service to its clientele. Major changes began to occur in the 1990’s and more changes came at the turn of the century. American companies in order to compete with international competition were forced to find ways to reduce cost, service one of the functions that felt the budgetary squeeze. Technology was the savior that allowed firms to reduce its costs while at the same time keeping acceptable levels of service in place. Service has become more automated and customers have gotten accustomed to doing things themselves and to communicate electronically with companies in order to receive the service needed from corporations. In the future service will even become more automated as artificial intelligence technology continues to evolve. Customer should expect more changes in customer service in the future as innovation and technology will continue to provide new business solutions. References C360.com (2007). C360 Products. Available from < http://www.c360.com/EmailLink.aspx> [Accessed 16 December 2007]. CultureGrams (2007). Country Profile:China. Available from [Accessed 15 December 2007]. Hadi, A. (1999). The importance of customer service: Part I. Available from < http://www.pakistaneconomist.com/issue1999/issue30/f&m2.htm> [Accessed 15 December 2007]. Kotler, P. (2003). Marketing Management (11th). New Jersey: Prentice Hall. Moscove, S., Simkin, M., Bagranoff, N. (1999). Core Concepts of Accounting Information Systems (6th). New York: John Wiley & Sons. Paypal.com (2007). Help Center. Available from < https://www.paypal.com/us/cgi-bin/help> [Accessed 15 December 2007]. Shermerhorn, J., Hunt, J., Osborn,R. (2003). Organizational Behavior (8th ed.). New York: John Wiley & Sons. Ward, S. (2007). CRM (Customer Relationship Management). Available from < http://sbinfocanada.about.com/cs/marketing/g/crm.htm> [Accessed 15 December 2007]. Appendix A: PayPal Help Center (Paypal, 2007). Read More