Customer relationship management

SJ-AP-I/CA/SOC

History of CRM
B&S
Time line Late 80s Early 90s Mid 90s 2002 - Future

RM

CIMS

CRM

e-CRM

B&S Buying & Selling RM Relationship Marketing CIMS Customer Information Management Systems CRM Customer Relationship Management e-CRM- A subset of CRM that focuses on enabling customer interactions via e-channels (The web, email and wireless)
2 SJ-AP-I/CA/SOC

Customer Relationship Management

What is a customer? A person who buys What is a relationship? The state of being connected What is management? The science of controlling So CRM should mean controlling the relationship

with a customer. How do you control a relationship? Isnt a relationship a two-way thing?
3 SJ-AP-I/CA/SOC

Customer Relationship Management (CRM)

Traditional Marketing Goal: Expand customer base, increase market share by mass marketing Product oriented view Mass marketing / mass production Standardization of customer needs Transactional relationship
4 SJ-AP-I/CA/SOC

CRM Goal: Establish a profitable, longterm, one-to-one relationship with customers; understanding their needs, preferences, expectations Customer oriented view Mass customization, one-to-one marketing Customer-supplier relationship Relational approach

Customer Relationship Management

Customer

Relationship Management (CRM) is a strategy that focuses on building strong relationships with customers and potential customers for creating and maintaining a loyal customer base. CRM works across all departments to harmonize customer-centric thinking. It reduces costs, increases efficiency and improves customer satisfaction.

SJ-AP-I/CA/SOC

 Process

of creating and maintaining relationships with business customers or consumers

A holistic process of identifying, attracting,

differentiating, and retaining customers

CRM is basically for developing long lasting

relationship with a customer.

SJ-AP-I/CA/SOC

Definition of Customer Relationship Management (CRM)?

CRM is the development and maintenance of mutually beneficial long-term relationships with strategically significant customers
(Buttle, 2000)

CRM is an IT enhanced value process, which identifies, develops, integrates and focuses the various competencies of the firm to the voice of the customer in order to deliver long-term superior customer value, at a profit to well identified existing and potential customers.
(Plakoyiannaki and Tzokas, 2001)

SJ-AP-I/CA/SOC

Information Technology and CRM

Technology plays a pivotal role in CRM Technological approaches involving the use of databases,

data mining and one-to-one marketing can assist organisations to increase customer value and their own profitability This type of technology can be used to keep a record of customers names and contact details in addition to their history of buying products or using services This information can be used to target customers in a personalised way and offer them services to meet their specific needs This personalised communication provides value for the customer and increases customers loyalty to the provider
SJ-AP-I/CA/SOC 8

Advantages of CRM over traditional massmedia marketting

Reduces advertisement cost Focus on customer needs Easier to track the effectiveness of a given

campaign Compete for customers based on services not prices Prevents overspending on low-value clients Speed the time to develop and market the product Improves the use of customer channel

SJ-AP-I/CA/SOC

10

SJ-AP-I/CA/SOC

Types of CRM
Strategic CRM Operational CRM Analytical CRM Collaborative CRM

11

SJ-AP-I/CA/SOC

12

SJ-AP-I/CA/SOC

Operational CRM
Operational CRM is mainly focused on automation,

improvement and enhancement of business processes which are based on customer-facing or customer supporting. The main importance of a CRM system lies on how the selling, marketing and service oriented processes are automated

13

SJ-AP-I/CA/SOC

Operational CRM
Marketing automation Sales-force Automation Service Automation

14

SJ-AP-I/CA/SOC

Marketing automation Basically focused on automating marketing processes

management involves marketers to use customer specific information to determine, evaluate and develop communications that are targeted to customers in individual as well as multilevel or multichannel environment. Campaigns developed to communicate customers individually are easy and involves unique and direct communications. For multichannel environment the implementation of marketing strategies and campaign management is quite difficult and challenging. For handling this, a CRM marketing strategy called eventbased marketing is inherited. Using event based marketing communication and offers are presented to SJ-AP-I/CA/SOC 15 customers as and when they are required.

campaign

Sales-force Automation
A CRM system is not only used to deal with the existing

customers but is also useful in acquiring new customers. Sales cycle The process first starts with identifying a customer and maintaining all the corresponding details into the CRM system. This process can be distributed into many stages which includes generation of lead and then qualifying those leads as prospects. Automation of selling process is efficiently handled by Sales-force automation which automates all the methodologies or sales cycle and above described process sophisticatedly.
16 SJ-AP-I/CA/SOC

Service Automation
Service automation deals with managing organizations

service. The actual interactions with customers such as contact, direct sales, direct mail, call centers, data aggregation systems, web sites and blogs etc. are examples of operational CRM. Any one in the organization can have access to this information about customer which gives a clear view of customers needs and important information on the customer such as products owned, prior support calls etc The customer can easily be contacted at right time at the right place.
17 SJ-AP-I/CA/SOC

Analytical CRM
Analytical

CRM is designed to analyze deeply the customers information and data and unwrap(remove) or disclose the essential convention and intension of behavior of customers on which capitalization can be done by the organization. Primary goal of analytical CRM is to develop, support and enhance the work and decision making capability of an organization by determining strong patterns and predictions in customer data and information which are gathered from different operational CRM systems.

18

SJ-AP-I/CA/SOC

key features of analytical CRM:

Seizing all the relevant and essential information of customers from

various channels and sources and collaboratively integrating and inheriting all this data into a central repository knowledge base with a overall organization view. Determining, developing and analyzing inclusive set of rules and analytical methods to scale and optimize relationship with customers by analyzing and resolving all the questions which are suitable for business. Implementing or deploying the results to enhance the efficiency of CRM system and processes, improve relationship and interaction with customers and the actual business planning with customers. Combine and integrate the values of customers with strategic business management of organization and the value of stakeholders.

19

SJ-AP-I/CA/SOC

Advantages of implementing and using an analytical CRM are described below.

Leads in making more profitable customer base by

providing high value services. Helps in retaining profitable customers through sophisticated analysis and making new customers that are clones of best of the customers. Helps in addressing individual customers needs and efficiently improving the relationships with new and existing customers. Improves customer satisfaction and loyalty.

20

SJ-AP-I/CA/SOC

Analysis is done in every aspect of business

Customer Analytics- This is the base analytic used to analyze customer

knowledge base. It provides a better view of customer behavior and by modeling, assessing customer values and assessing customers portfolio or profiles and creates an exact understanding of all the customers.
Marketing Analytics- This helps discovering new market opportunities and

seeks their potential values. It also helps in managing marketing strategies and scale and plan marketing performance at district, regional and national levels. Marketing analytics also focus on campaign management and planning, product analysis and branding.
Sales Analytics- Sales analytic provides essential environment to plan, simulate

and predict sales volumes and profits by constantly analyzing organizational sales behavior. It helps in pipelining all the selling opportunities in an efficient way by indulging and improving the sales cycle.
Service Analytics- Analytical CRM has major role in enhancing the services

which answering all the questions regarding customer satisfaction, quality and cost of products, complaint management etc. It even helps in improving and optimizing the services by sophistically analyzing the service revenue and cost.
Channel Analytics- This type of analysis helps to determine the customer
SJ-AP-I/CA/SOC 21 behavior on channel

preferences, like web channel, personal interaction, telephone channel etc. This information is efficiently integrated in customers

Collaborative CRM
Collaborative

CRM deals with synchronization(organization) and integration of customer interaction and channels of communications like phone, email, fax, web etc. with the intent of referencing the customers a consistent and systematic way. The idea is not only enhancing the interactions but also to increase and improve customer retention and liberty ( Freedom).

22

SJ-AP-I/CA/SOC

Collaborative CRM can be broadly identified by two aspects:

Interaction Management
This management process deals with designing

the communication or interaction channel process within an organization which is specific to customer interaction and finally enhancing the extent of communication between both the parties.
Channel Management
After analyzing and implementing the interaction

medium its important to enhance the power of channels through which the customers are interacted.
23 SJ-AP-I/CA/SOC

Advantages of Collaborative CRM:

Enables valued customer interaction across the

channels. Entangles( catch up) web or online collaboration to cut down service cost of customers. Integrates customer interaction with call centers to enable multi-channel interaction with customers and helps them make understand the overall process vales. Describes a view of integrated customers details during interaction to server them in a better way.
24 SJ-AP-I/CA/SOC

Strategic CRM
Maintain Long Term Relationship with Customers The aim of strategic CRM is to concentrate and

enhance the knowledge about customers and use this knowledge to improve and customize the interactions with customers to maintain a longterm relationship with them.

25

SJ-AP-I/CA/SOC

Determining and development of CRM strategies

Amplify(increase) Commitment For this each and every department should be kept informed

about all the developments and implementation of processes carried out or performed Building valuable project team Each and every member of this team should be experiences and dedicated professional as these members will be the key decision makers in the whole process. They will be responsible to communicate all the related details and benefits of the CRM strategies to all the members of the organization. These members should be from following work groups Management, Technical, Sales and Marketing, Financial, External Experts Requirement Analysis This process involves a series surveys and questionnaires with SJ-AP-I/CA/SOC 26 top level sales, marketing and financial managers to gather the actual expectations regarding the strategies to be implemented

27

SJ-AP-I/CA/SOC

CRM Business strategy

CRM strategy should be aligned to the organization's mission and

28

purpose in order to harness(bind) the power of CRM software and bring about a sustained (continuous) achievement of business objectives and profitable customer relationships. Three key phases: 1. Customer Acquisition. 2. Customer Retention. 3. Customer Extension. Three contextual factors: 4. Marketing Orientation. 5. Value Creation. 6. Innovative IT.
SJ-AP-I/CA/SOC

29

SJ-AP-I/CA/SOC

 1. Customer Acquisition - This is the process of attracting

our customer for the first their first purchase. We have acquired our customer. Growth - Through market orientation, innovative IT and value creation we aim to increase the number of customers that purchase from us for the first time. 2. Customer Retention - Our customer returns to us and buys for a second time. We keep them as a customer. This is most likely to be the purchase of a similar product or service, or the next level of product or service. Growth - Through market orientation, innovative IT and value creation we aim to increase the number of customers that purchase from us regularly.

 3. Customer Extension - Our customers are regularly

returning to purchase from us. We introduce products and services to our loyal customers that may not wholly relate to their original purchase. These are additional, supplementary purchases. Of course once our loyal customers have purchased them, our goal is to retain them as customers for the extended products or services.
Growth - Through market orientation, innovative IT and value

creation we aim to increase the number of customers that purchase additional or supplementary products and services.

4. Marketing Orientation - means that the whole organization is focused upon the needs of customers. Customer needs are addressed by the Three Levels of a Product whereby the organizations not only supplies the actual, tangible product, but also the core product and its benefit, and also the augmented product such as a warranty and customer service. Marketing orientation will focus upon the needs of consumers for all three levels of a product. (N.B. 'market' orientation(decision making process) and 'marketing' orientation (customer or product)are not the same). 5.Value Creation - centres on the generation of shareholder value based upon the satisfaction of customer needs (as 32 with SJ-AP-I/CA/SOC marketing orientation and the delivery of a sustainable competitive advantage.

33

SJ-AP-I/CA/SOC

6. Innovative IT - is exactly that - Information Technology must be up-to-date. It should be efficient, speedy and focus upon the needs of customers. Whilst(at the same time) IT and/or software are not the entire story for CRM, it is vital to its success. CRM software collects data on consumers and their transactions. Huge databases store data on individuals and groups of individuals. In some ways, CRM means that an organization is dealing with a segment of one person, since every consumer displays different purchasing habits and preferences. Organizations will track individuals, and try to market products and services to them based upon similar buyer behavior seen in other individuals (e.g. When Amazon tells you that customers that viewed/bought the same

Three phases of CRM

Acquiring New Relationships You acquire new customers by promoting your companys product and service leadership. Enhancing Existing Relationships You enhance the relationship by encouraging excellence in cross-selling and up-selling, thereby deepening and broadening the relationship. Retaining Customer Relationships Retention focuses on service adaptability delivering not what the market wants but what customers want.
35 SJ-AP-I/CA/SOC

Customer Types
Platinum Heavy, reliable users, not price-

sensitive, try new products, loyal Gold Large users who push for price breaks, shop around and not so loyal Iron Low volume or intermittent(Irregular) users; cost to serve them is quite high Lead Demanding, want special attention but dont buy much and show no loyalty

36

SJ-AP-I/CA/SOC

Disadvantages:

-Organizational wise change of priority to

customers. - Significant investment of time and money - Threatens managements control/power struggle - Heightens peoples resistance(fight) to change - Inappropriate integration leads to disaster(failure)

37

SJ-AP-I/CA/SOC

Customer Strategy
You have a clearer idea of what your customers are

likely to think, feel and spend (and perhaps even how that may change). How do you translate this into a viable customer strategy? single view of the customer - and for them, a single view of your organization - is a good start

38

SJ-AP-I/CA/SOC

Fortune

39

SJ-AP-I/CA/SOC

 Customer insight(close) and segmentation: We

help clients understand customer needs and behaviors using our BothBrain approach and develop actionable segmentation from the resulting insights. We help clients define the target customer or "sweet spot"the area of distinct advantage over competitors to inform business decisions and investment allocation. Product and category management: We help firms break down barriers(protection) to innovation and improve ongoing customer-led product development so their value proposition is differentiated and meets customer needs.
40 SJ-AP-I/CA/SOC

We help resolve the pricing paradox(statement)pricing is almost always the #1 profit lever, yet it remains under-developed in most companiesby building long-term pricing capabilities and capitalizing on in-year-revenue opportunities. Sales and channel effectiveness: We help companies identify quick, targeted, customized solutions as well as strategic and operational improvements to boost underperforming sales organizations. Marketing and brand strategy: We help companies align marketing and brand strategy with overarching business objectives; ensure marketing investments are generating highest returns and reinforcing (strengthen) the brand positioning; and SJ-AP-I/CA/SOC 41 build a loyal customer base through branding that

Pricing:

 Customer experience: We work with companies

to develop a series of positive interactions with the customer to earn their advocacy(promotion) and inform consistent(reliable) delivery of experiences to drive top-line growth. Loyalty: We help companies nurture (raise) promotersloyal customers who are more profitable, and who are active proponents(supporter) of your business in good times and bad.
42 SJ-AP-I/CA/SOC

What is a product strategy?

A product strategy identifies, in broad terms, how you

plan to sell your products to your marketplace. It documents how the people in your marketplace (your clients) think about your products and business. It documents how your business positions its products and services and it contains your strategies for selling. A product strategy can encompass any number of products, depending on the nature of your business. You could have one strategy for each major product or, perhaps, the same strategy for all of them. A more diverse organization selling different products such as finance, travel and music into different markets would need several product strategies.
43 SJ-AP-I/CA/SOC

Why is a product strategy important?

The

product strategy forms the basis for executing a product roadmap and subsequent product releases. The product strategy enables the company to focus on a specific target market and feature set, instead of trying to be everything to everyone.

44

SJ-AP-I/CA/SOC

Elements of a product strategy

Who are you selling to? Define your target customer or

45

market. Identify whom you are selling to, and what that market looks like. What are you selling? Describe how potential customers will perceive (recognize) your product compared to competitive products. Understand what makes your product unique in the market . What value do you provide your customers? Determine what problems your product solves for customers. You cannot be everything to everyone within a particular market, but you can help to solve specific problems. Create a value proposition to position the value you provide and the benefits that customers will receive with your solution. How will you price your product? State how you will SJ-AP-I/CA/SOC price the product. Include its perceived value and a pricing model.

Creating your product strategy

To create your product strategy, start with identifying

the market problems you would like to solve. This includes interviewing your target market, understanding the competitive landscape and identifying how you will differentiate yourself. Your product strategy will change over time as you learn more about your market, and as (if) you decide to enter different markets. Listening to your market and developing your product strategy is a circular process; as you learn more, you will evolve your product strategy and the problems you solve.
46 SJ-AP-I/CA/SOC

47

SJ-AP-I/CA/SOC

48

SJ-AP-I/CA/SOC

Power of the product strategy

The power of a product strategy comes from what

you define as well as what you exclude. By identifying a particular target market in your product strategy, you are also excluding other markets. This helps your company to understand which projects fall outside the product strategy and distract(divert) from strategic goals.

49

SJ-AP-I/CA/SOC

Channel Strategy
Introduction Traditional and Electronic Distribution
Channel decision at the retail level Channel decision at the wholesalers

The evaluation criteria of customer Channels from the organizations perspective

Market coverage by using current channels Market coverage by using new channels Dual channel distribution Multi channel distribution

Channel-Modification Decisions Qualitative

Factors
50 SJ-AP-I/CA/SOC

Introduction

51

SJ-AP-I/CA/SOC

Channel Strategy
The number and type of channels that customers are

using has rapidly grown to include the Internet, smart phones and a host of social media options. The result is an increase in possible customer touchpoints presenting more and different opportunities for organizations to interact with their customers. The broad principles by which the firm expects to achieve its distribution objectives for its target market(s)

52

SJ-AP-I/CA/SOC

What is a marketing channel?

A marketing channel consists of Individuals and firms involved in the process of making a

product or service available for consumption or use by consumers and industrial users. Role of the channel in marketing strategy Links a producer to buyers Performs sales, advertising, and promotion Influences the firms pricing strategy Affects product strategy through branding policies, willingness to stock and customize offerings, install, maintain, offer credit, etc.
53 SJ-AP-I/CA/SOC

The Channel-Selection Decision Fundamental Questions

Who are potential customers? Where do they buy? When do they buy? How do they buy? What do they buy?

54

SJ-AP-I/CA/SOC

Traditional and Electronic Distribution

55

SJ-AP-I/CA/SOC

Traditional Marketing Channel Designs

56

SJ-AP-I/CA/SOC

The Design of Marketing Channels

57

SJ-AP-I/CA/SOC

The Design of Marketing Channels

Direct distribution is typically used when: Buyers are easily identifiable Personal selling is a major component of the

communication mix Organization has a wide variety of offerings for the target market Sufficient resources are available Intermediaries are not available for reaching target markets Intermediaries do not possess the capacity to service the requirements of target markets
58 SJ-AP-I/CA/SOC

The Design of Marketing Channels

Indirect distribution must be considered

when:
Intermediaries can perform distribution functions more efficiently and less

expensively Customers are hard to reach directly Organization does not have resources to perform distribution function
59 SJ-AP-I/CA/SOC

Representative Electronic Marketing Channels

Disintermediation

60

SJ-AP-I/CA/SOC

Channel Selection at the Retail Level Channel Selection Decisions

1. Which channel and intermediaries will provide the

best coverage of the target market? 2. Which channel and intermediaries will best satisfy the buying requirements of the target market? 3. Which channel and intermediaries will be the most profitable?

61

SJ-AP-I/CA/SOC

Channel Selection at the Retail Level Target Market Coverage

62

SJ-AP-I/CA/SOC

Channel Selection at the Retail Level

Effective Distribution occurs when a limited number of retail outlets account for a

significant fraction of the market potential. Example: A marketer distributes the product through 40% of available outlets, but these outlets account for 80% of the market. Satisfying Buyer Requirements Information Convenience Variety Attendant services
63 SJ-AP-I/CA/SOC

Channel Selection at the Retail Level Profitability

Margins = Revenues Channel Costs Channel costs are: - Distribution costs - Advertising costs - Selling costs

64

SJ-AP-I/CA/SOC

Channel Selection at Other Levels of Distribution Types of Wholesaler

Specialty wholesaler Limited line of items within a product line General-merchandise wholesaler Wide assortment of products General-line wholesaler Complete assortment(variety) of items in a

single retailing field Combination

65

SJ-AP-I/CA/SOC

The evaluation criteria of customer

66

SJ-AP-I/CA/SOC

The evaluation criteria of the customer

Information characteristics , price and service of

products Communication-customer needs are identified Transaction-exchanging of orders, invoices and payment from the customer Distribution product delivery at the convenience of customers Service customer should receive good service

67

SJ-AP-I/CA/SOC

Channels from the organizations perspective

68

SJ-AP-I/CA/SOC

 Market coverage by using current channels

No overlap and No conflict Significant overlap and conflict Minimal overlap and small conflict

Market coverage

Market coverage by using new channels

Scenario planning(identify unfulfilled or changed

customer needs and changes) Dissatisfied customers(indication of unfulfilled customer needs) New technology
Control(control of its sales channels.ie standard

product) Conflict(change channels structures) SJ-AP-I/CA/SOC Profitability 69 Support(activities of company)

Dual Distribution
when an organization distributes its offering through two or more different marketing channels that may or may not compete for similar buyers the main consideration is whether it will provide incremental sales revenue or cannibalize existing sales When is it used own brand and private store brand distribution to large and small retailers Multi brand strategy geographic factors Example: Sells Hallmark brand cards through SJ-AP-I/CA/SOC 70 Hallmark stores and selected department stores
Occurs

Multi-Channel Marketing
Multi-channel marketing involves the Blending of an electronic marketing channel

and A traditional channel in ways that are mutually reinforcing in attracting, retaining, and building relationships with customers.

71

SJ-AP-I/CA/SOC

Multi-Channel Marketing
Justifications An electronic marketing channel can provide incremental

revenue (Victorias Secret) An electronic marketing channel can leverage(Control) the presence of a traditional channel (Ethan Allen) Multi-channel marketing can satisfy buyer requirements (Clinique division of Este Lauder) Considerations Actual incremental revenue or merely cannibalization ? Incremental cost to launch and sustain an electronic forefront Disintermediation a traditional intermediary member is replaced by electronic storefront
72 SJ-AP-I/CA/SOC

Channel-Modification Decisions Qualitative Factors

73

SJ-AP-I/CA/SOC

Channel-Modification Decisions Qualitative Factors

1. Will the change improve the effective coverage of the
74

target markets sought? How? 2. Will the change improve the satisfaction of buyer needs? How? 3. Which marketing functions, if any, must be absorbed in order to make the change? 4. Does the organization have the resources to perform new functions? 5. What effect will the change have on other channel participants? 6. What will be the effect of the change on the achievement of long-range organizational objectives?
SJ-AP-I/CA/SOC

Infrastructure strategy
organizational infrastructure is comprised of a policy

and governance(authority) framework, collaborative processes and accountability mechanisms on which the strategy is being implemented This is done by meeting or exceeding the balanced scorecard objectives, achieving a culture of mutual trust and respect, and being recognized by all customers as a benchmark. Infrastructure strategy is supported that there should be process stability, manpower stability, increased productivity, one piece flow, and a continuous improvement culture.
75 SJ-AP-I/CA/SOC

ELEMENTS OF ORGANIZATIONAL INFRASTRUCTURE

There are five basic elements common to all

organizational infrastructures Goals, People, Process, Structure and Results.

76

SJ-AP-I/CA/SOC

77

SJ-AP-I/CA/SOC

Goals and Results

Goals

and Results form the template for infrastructure development. The organization's Value Goal defines how the organization creates value that its customers are willing to pay for. The Results the organization measures and rewards establish priorities across the organization. When the Value Goal is aligned with the Results it creates the blue print for building organizational infrastructure.
78 SJ-AP-I/CA/SOC

People
People what they do and how they do it. Infrastructure defines the roles people play and

assures people have the ability and willingness to achieve high performance in these roles. Infrastructure institutionalizes high performance by getting the right people doing the right things.

79

SJ-AP-I/CA/SOC

Process
Process the policies, procedures and rules an

organization establishes. Processes define how things get done inside organizations how plans are made, goals are set, priorities are established, funds are distributed, people are hired, products are developed, money is spent, communications takes place, decisions are made, problems are solved, finances are managed and people are rewarded. Processes increase performance by taking discreet(careful) tasks and organize them into a predecessor and successor relationship. Driving out deviation in processes through methods SJ-AP-I/CA/SOC 80 like statistical process control maximizes organizational efficiency.

Structure
Structure creates focus and control. It creates focused action by breaking the organization

81

into distinct areas of responsibility Research is responsible for technology development, Development is responsible for new products, Manufacturing is responsible for building products and Sales for selling the products that are built. Each organizational unit is focused on, and held accountable for, its unique area of responsibilities. Structure creates control by distributing authority throughout the organization. A boss has the authority to hold his or her people accountable to create compliance to roles and rules. Bosses use authority to make sure people play their assigned roles, follow the rules and remain focused on their area of responsibility. Structure increases performance by setting priorities and minimizing SJ-AP-I/CA/SOC redundancy of action.

 Infrastructure organizes people, process and

structure to get the right people, doing the right things, at the right time, right the first time. It maximizes performance creating the ability, willingness and opportunity for people to achieve high performance.

82

SJ-AP-I/CA/SOC

DEFINING AND ANALYZING EXISTING INFRASTRUCTURE

The

83

first step in defining an organization's infrastructure is to articulate the organization's Goal and Result. Goals and Results are not to be confused with the organization's Vision or Mission. Vision and Mission define the business; Goals and Results define the infrastructure that will allow the organization to achieve its Vision or Mission. In an automobile metaphor, the car is the Vision while the engine and drive train are the infrastructure that allows the car to move. 'The second step is to place your people, process and structure on a continuum from integration to SJ-AP-I/CA/SOC differentiation .

 Differentiation
Organizations differentiate people, process and

structure to create efficiency and maximize its ability to do things right the first time.
Integration
Organizations

integrate people, process and structure to create effectiveness and maximize its ability to do the right tings.

84

SJ-AP-I/CA/SOC

85

SJ-AP-I/CA/SOC

BUILDING NEW AND CHANGING EXISTING INFRASTRUCTURE

If you don't know where you going, any infrastructure will get you there.

Therefore the first step in building or changing infrastructure is to establish the organization's Goal (how it adds value) and it's Results (key metrics). Trying to build and organizational infrastructure without a clear Goal and Result inevitably leads to high levels of personality and politics. Therefore establish Goals and Results is a critical first step in infrastructure development. If the Goal is effectiveness and the measure is innovation, you will want to move to the left side of the Playing Field and integrate these elements. to create an infrastructure more to the right (differentiation) to control costs and build the product right the first time.

86

SJ-AP-I/CA/SOC