Tim Coltman

Why Invest in CRM Programs When So Many Appear to Fail?

Tim Coltman — Mon, 07 Nov 2011 14:20:41 PST

Unpacking the ERP investment decision: An empirical assessment of the benefits and risks

Byron Keating et al. — Mon, 07 Nov 2011 14:20:38 PST

Most leading organizations, in all sectors of industry, commerce and government are dependent upon

ERP for their organizational survival. Yet despite the importance of the decision to adopt ERP and its

impact on the entire firm’s performance the IT literature has been in the large part silent on the nature

of the ERP investment decision. This study is the first of its kind to determine the preference structure

of senior managers around the organizational benefits and risks of adopting ERP. We present the

results which provide interesting insights into how managers’ perceive the benefit and risk factors

salient to the organization’s adoption decision. In line with prior research we found that improved

productivity, and information and planning are important drivers of the ERP adoption decision.

Moreover our findings reveal that the benefits of ERP are weighted almost twice as important as the

risks when making an ERP investment decision. However when it comes to risk, interestingly

managers consider issues such as top management commitment and vendor support as more

important than financial risk

Best–Worst Scaling Approach to Predict Customer Choice for 3PL

Tim R. Coltman et al. — Wed, 19 Oct 2011 20:30:00 PDT

This study describes a simple, theoretically based methodology to analyze the nature of customer demand for third-party logistics provider service components. The method overcomes limitations in prior studies and enables us to examine the relative importance of product and service attributes as they pertain to the choice of third-party logistics providers. Two distinct types of customers populate our data: those professing operational attributes and those seeking relational attributes. The theoretical and practical implications are that improved supply chain models can be developed when separate demand structures are taken into account.

What drives the choice of a third-part logistics provider?

Edward J. Andersson et al. — Wed, 19 Oct 2011 20:24:35 PDT

It is generally believed that companies choose supply chain partners on the basis of their distinctive value propositions — a fact one would also expect holds true when companies choose a logistics service provider. However, faced with the complexities of varied customer demands, it can be difficult for logistics service companies to obtain an effective understanding of how customers differentially value the service components they offer. In this paper, we address this issue by identifying the factors that are important in a customer’s choice of a logistics service provider. Using stated choice methods we explore the relative importance of seven service attributes using a sample of 309 managers with a central role in purchasing logistics services across a range of industries and countries. The results reveal that three distinct decision models populate our data where the preferences for different logistics service attributes - such as price and delivery performance — vary greatly between customer groups represented by these models. Strategically, our findings provide themanagement of a third-party logistics provider with a logical starting point from which to determine the goals that are set for their operations, particularly in choosing the customer segments to service.

Customer Relationship Success

Tim Coltman et al. — Wed, 23 Feb 2011 18:30:49 PST

What makes companies such as National Australia Bank in Australia, Otto Versand in Germany, Tesco in the United Kingdom and Capital One in the US so much better at managing customer relationships than their competitors? This question was the basis of a large survey of senior managers in medium to large Australian companies. The ﬁndings demonstrate that relationship leaders outperform their rivals by proactively identifying new market developments and seeking to meet latent or unarticulated needs of their customers. To punch above their weight in today’s competitive environment, companies need databases and software to gain a deep understanding of customer needs and behaviours. Yet, technology alone is insufﬁcient for success. What sets relationship leaders apart from the rest is an ability to create the deeply-seeded organisational change required to support the open sharing of customer information.

What do 3PL customers really want?

Tim Coltman et al. — Tue, 22 Feb 2011 20:57:59 PST

Successful companies understand what their customers want and are able to reverse engineer their supply chains to meet this demand in ways that make business sense. Less successful companies often find it hard to obtain a good understanding of what their customer’s value, and spend considerable time hustling to do things that are not fully appreciated by their customers. The lessons here are quite straightforward; rewards accrue to those organizations that are “best” able to match “appropriate” supply chain activities to the latent needs of their customers.

Designing 3PL Services: Valuable insights from customers

Eddie Anderson et al. — Tue, 22 Feb 2011 20:22:10 PST

As markets become more global and competition continues to intensify, firms are beginning to realize that competition is not exclusively a firm versus firm domain but a “supply chain against supply chain” phenomenon. For the providers of supply chain services the implications of even a modest increase in strategic importance implies greater complexity, as their operations are now more important to a thickening web of stakeholders that are more discerning and market literate. In this study we seek to open the black box of customer demand by identifying those factors that contribute most to the selection of a supply chain supplier.

Customer Relationship Management and Firm Performance

Tim Coltman et al. — Thu, 17 Feb 2011 18:24:43 PST

In this paper, we examine the impact of customer relationship management (CRM) on firm performance using a hierarchical construct model. Following the resource-based view of the firm, strategic CRM is conceptualized as an endogenously determined function of the organization’s ability to harness and orchestrate lower order capabilities that comprise physical assets, such as IT infrastructure, and organizational capabilities, such as human analytics and business architecture. Our results reveal a positive and significant path between a superior CRM capability and firm performance. In turn, superior CRM capability is positively associated with human analytics and business architecture. However, our results suggest the impact of IT infrastructure on superior CRM capability is indirect and fully mediated by human analytics and business architecture. We also find that CRM initiatives jointly emphasizing customer intimacy and cost reduction outperform those taking a less balanced approach. Overall, this paper helps explain why some CRM programs are more successful than others and what capabilities are required to support success.

What Drives the Choice of a Third Party Logistics Provider?

Edward Anderson et al. — Thu, 17 Feb 2011 18:24:43 PST

It is generally believed that companies choose supply chain partners on the basis of their distinctive value propositions – a fact one would also expect holds true when companies choose a logistics service provider. However, faced with the complexities of varied customer demands, it can be difficult for logistics service companies to obtain an effective understanding of how customers differentially value the service components they offer. In this paper, we address this by identifying the factors that are important in a customer’s choice of a logistics service provider. Using stated choice methods we explore the relative importance of seven service attributes using a sample of 309 managers with a central role in purchasing logistics services across a range of industries and countries. The results reveal that three distinct decision models populate our data where the preferences for different logistics service attributes – such as price and delivery performance – vary greatly between customer groups represented by these models. Strategically, our findings provide the management of a third party logistics provider with a logical starting point from which to determine the goals that are set for their operations, particularly in choosing the customer segments to service.

RFID Adoption Issues: Analysis of Organizational Benefits & Risks

Samuel Fosso-Wamba et al. — Thu, 17 Feb 2011 16:26:12 PST

What makes companies such as Wal-Mart in the U.S., Metro Group in Germany and Tesco in the United Kingdom, so willing to adopt RFID technology? More precisely, what are those factors that matter most and least to firms when considering an investment in RFID? And how does the importance of such factors vary between adopters and non-adopters? The answers to these questions are important because they indicate where future development effort should be directed to increase the rate of RFID adoption. To begin, we conducted a large survey of 133 RFID Journal readers. The industries represented in the sample include: wholesale trade, retail trade, transportation and communications, business services, communication services, manufacturing, finance and insurance, mining, government administration and defense. Firm size was well distributed, with 39% of the sample from small sized firms (less than 20 employees), 21% from medium sized firms (20 to 200 employees) and 40% from large firms (more than 200 employees). The methodology used to conduct this study allowed us to calculate the relative importance of 21 attributes that influence the decision to invest in RFID. The results indicate that those factors that matter “most” during the RFID investment decision are: (1) the benefits that RFID offers in terms of improved data quality, reliability and timeliness, (2) the amount of top management commitment by senior managers to provide resources that will support investment in RFID, and (3) improved alignment of information between suppliers and customers. One of the most interesting aspects of the study is that it shows quite clearly which attributes respondents are willing to abandon first. In other words, the factors that matter “least” to the RFID investment decision are: (1) privacy threats, (2) security threats and (3) standards ambiguity. Finally, the results reveal important differences between RFID adopters and non adopters. In the case of adopters, the perceived opportunity to derive strategic benefits from RFID through improved decision making is critical. Not surprisingly, the non adopting firms are primarily concerned with the high acquisition and other costs associated with RFID technology.

Why Invest in CRM programs when so many appear to fail?

Tim Coltman — Thu, 17 Feb 2011 16:03:39 PST

The market enthusiasm generated around investment in CRM technology is in stark contrast to the nay saying by many academic and business commentators. Building on the resource-based view of the firm this study shows the human, technological and business capabilities required to effectively execute a CRM program. Further, Further, the study demonstrates that CRM programs are most valuable when directing attention towards a proactive market orientation. Lastly, the study cautions that in seeking to compete through superior service, CRM programs must first be feasible and this requires a wider understanding of the structural and behavioural limits to performance.

RFID and Supply Chain Management: Introduction to the Special Issue

Tim Coltman et al. — Thu, 17 Feb 2011 14:48:45 PST

Much of the received wisdom emanating from modern corporations indicates that business competition is being fought “supply chain versus supply chain” rather than “firm versus firm”. The ability to deliver goods and services in full, on time and error free to customers is therefore of increasing strategic importance to any organization, independent of size or sector. From demand forecasting, to the sourcing of raw materials, right through to manufacture and dispatch- visibility in the supply chain is becoming an important facet of any modern operation. How to leverage emerging information technologies, such as radio frequency identification (RFID) to create innovative opportunities in service engineering, management and marketing are important questions for executives. This special issue invites papers in the broad domain of RFID, information systems and supply chain management.

Keeping E-Business in Perspective

Tim Coltman et al. — Thu, 17 Feb 2011 14:48:44 PST

The article reveals that not all business fit the model of electronic business (e-business). Since the bubble burst in April 2000, many have become pessimistic about the future of e-business. Having been through process reengineering, enterprise resource planning, and now e-business with disappointing results, experienced managers are wary of large IT investments. Multiple failures in B2C, B2B, and other forms of e-business have raised questions regarding the pace at which the networked economy is emerging and ultimately the suitability of e-business for many firms. Claims that e-business is driving revolutionary business change are misleading and only partly correct. The most likely path for the evolution of e-business is an incremental one, automating the existing B2B processes and extending the few B2C successes.

eCRM and Managerial Discretion

Tim Coltman et al. — Thu, 17 Feb 2011 14:48:43 PST

Most sectors of industry, commerce and government have reported variation in the performance payoff from electronic customer relationship management (eCRM). In this paper we build on a surprisingly sparse literature regarding the importance of managerial discretion, to show that the heterogeneity of beliefs held by managers about eCRM execution matter when explaining eCRM success. Drawing on a data sample comprising 50 interviews and 293 survey responses we utilise segmentation techniques to identify significant differences in managerial beliefs and then associate these belief segments with eCRM performance. Results indicate that (1) three distinct types of managers can be identified based on the heterogeneity of their eCRM beliefs: mindfully optimistic, mindfully realistic, and mindfully pessimistic. (2) Further, our results imply that there is far less homogeneity at the individual firm level than is normally assumed in the literature and that (3) heterogeneity in managerial beliefs is systematically associated with organisational performance. Finally, (4) these results serve to remind practitioners that eCRM performance is dependent upon the right balance between managerial optimism and realism.

Unpacking the ERP investment decision: an empirical assessment of the benefits and risks

Byron Keating et al. — Thu, 17 Feb 2011 14:32:50 PST

Most leading organizations, in all sectors of industry, commerce and government are dependent upon ERP for their organizational survival. Yet despite the importance of the decision to adopt ERP and its impact on the entire firm’s performance the IT literature has been in the large part silent on the nature of the ERP investment decision. This study is the first of its kind to determine the preference structure of senior managers around the organizational benefits and risks of adopting ERP. We present the results which provide interesting insights into how managers’ perceive the benefit and risk factors salient to the organization’s adoption decision. In line with prior research we found that improved productivity, and information and planning are important drivers of the ERP adoption decision. Moreover our findings reveal that the benefits of ERP are weighted almost twice as important as the risks when making an ERP investment decision. However when it comes to risk, interestingly managers consider issues such as top management commitment and vendor support as more important than financial risks.

Designing IS service strategy: an information acceleration approach

Pierre Richard et al. — Thu, 17 Feb 2011 14:13:48 PST

Information technology-based innovation involves considerable risk requiring foresight; yet our understanding of the way in which managers develop the insight to support new breakthrough applications is limited and remains obscured by high levels of technical and market uncertainty. This paper applies discrete choice analysis to support improved empirical explanation of how and why decisions are made in information systems. A new experimental method based on information acceleration is also applied to improve prediction of future IS service strategies. Both explanation and prediction are important to IS research and these two behaviourally sound methods complement each other. Specifically, the combination of information acceleration and discrete choice analysis removes misspecification artefacts from response variability and generates more accurate parameter estimates that better explain IS decision making.

Bridging micro and macro through experimental information acceleration

Tim Coltman et al. — Wed, 16 Feb 2011 18:06:49 PST

Among leading organizations in all sectors there is evidence that successful managers possess the capability to deal with contradictory tensions within their “macro” competitive and institutional environments. Furthermore, the strategic thinking and decision-making capabilities expected of managers highlight the importance of “micro” processes within organizations. Although macro and micro perspectives are intuitively linked, the empirical literature often separates these two perspectives into either strategy content or process. This paper demonstrates how an experimental method based on “discrete choice analysis” and “information acceleration” can be used to bridge the divide between “micro” managerial processes and the “macro” environmental contexts framing them. This method is behaviorally sound and provides greater control over alternate explanations. Practically, we unpack the role managers play as orchestrators of exploitation and exploration.

Supply Chain Contract Evolution

T. Coltman et al. — Wed, 16 Feb 2011 18:06:48 PST

This paper draws together theories from organisational and neo-institutional literatures to address the evolution of supply chain contracts. Using a longitudinal case study of the Norwegian State Railways, we examine how firms move through the stages in an inter-organisational process of supply chain contract evolution and how they can cooperate to ensure efficiency and equity in their contractual relationship. The findings suggest that inefficient and inequitable initial contracts can occur in part, because of the cognitive shortcomings in human decision-making processes that reveal themselves early in the arrangement before learning and trust building can accumulate. We then reveal how parties can renegotiate towards a more equitable and efficient supply chain contract.

Realigning service operations strategy at DHL express

Tim Coltman et al. — Wed, 16 Feb 2011 18:06:47 PST

This paper describes the approach that DHL used to respond to aggressive revenue and profit targets set by its Asia-Pacific regional management board. DHL’s reaction to these targets was to redefine its strategic service vision by systematically aligning its internal support functions with distinct buyer behavior structures. Specifically, we developed a model based on the tangible and intangible factors that directly influence a customer’s choice of a third-party logistics provider. Next, we reverse engineered the service provider’s delivery system to align with each customer’s preferred buying behavior. DHL’s share of wallet and profitability immediately improved, enabling the company to maintain its leading position in the market. Quantitative and qualitative results show an improvement in DHL’s market share, customer satisfaction scores, and employee opinion survey results.

In pursuit of a sustainable supply chain: insights from Westpac Banking Corporation

Byron Keating et al. — Wed, 16 Feb 2011 18:06:46 PST

Purpose – The aim of this paper is to provide clues to industry and academia on how best to approach the challenge of developing a sustainable supply chain.

Design/methodology/approach – A case study was undertaken of the Westpac Banking Corporation – one of the world’s most socially responsible banks – to examine how they approached the challenge of managing corporate social responsibility (CSR) in their supply chain.

Findings – This paper highlights some of the challenges and opportunities associated with extending corporate governance beyond the firm boundary. Specific attention is given to a discussion of assessment and governance tools.

Research limitations/implications – The use of a single case study limits the generalizability of these findings. Future research can build on these findings by extending the scope to include additional firms, regions and methods.

Practical implications – A best practice model is developed from the discussion to provide practical guidance to firms.

Originality/value – While the extension of CSR to the supply chain is an emerging area of interest, the literature provides few clues on how best to pursue sustainable supply chain management. This paper provides a valuable and timely contribution to this topic by reviewing the lessons and practices of a recognised CSR leader.