13 May 2010

Sample Essay: PP Recruitment Agency

Introduction

When John and Janet started their company, PP Recruitment Agency, they had prepared a strategy to enhance their company’s image. Because the company was started as a small office, they were able to spend a lot of time with their clients and customers; clients being the companies which required their service and customers were candidates who approached them for jobs. This strategy was extremely successful as the company could get an idea of what their client wanted, and also, understand their customer’s background and strength. This helped the team of John and Janet immensely and the company began to show growth. What was also working in their favour was that because of their closed-unit approach, their success spread around through word of mouth. Their professionalism increased their reliability and approach, which led to more number of candidates and clients approaching PP for services.

As business expanded, John and Janet expanded PP Recruitment Agencies operations to Manchester, Leeds and Nottingham. With their expansion, John and Janet found it difficult to offer the same kind of personalised service to all their clients. With offices in Manchester, Leeds and Nottingham, PP had to recruit more staff to handle their expanding operations, and this hampered their personal services. After five years of trading where revenue and annual profits consistently increased, year on year, profits declined as did revenue. The number of clients and candidates decreased and it became difficult to monitor the operations of each branch to make an assessment. While each branch had a branch manager; a team of five or six dedicated consultants who dealt with clients and candidates directly, and at least one administrative assistant to handle all correspondence with clients and candidates and maintain branch records, the Sheffield Branch had, apart from Janet Doe and John Smart, their personal assistant May Help and an accountant, Fred Beancounter plus his team. Without a proper information system in place, PP operations began to go haywire, as a result of which, details of clients and candidates were held up at branch levels. Without a proper link between branches and HO, searching for suitable candidates across branch offices became difficult, if not impossible.
While Fred tried to implement a system to retrieve information from branches using spreadsheet, it was messy and time-consuming. Because PP had no centralised information system in place:

Collating and analysing data was difficult

They couldn’t answer client’s queries on market trends

Analysis

What John and Janet didn’t expect was for their personalised service to be affected due to their expansion. The problem with such an operation is that unless you are present for every meeting; be it with client or with candidates, it becomes difficult to assess the client’s requirement or the candidate’s strength. Both John and Janet were able to do this exceptionally well when they started, but as the organisation got bigger, they failed to make the required changes. The company didn’t have a proper Information System in place to handle the wider database created by the increased number of branches, and they couldn’t host their client’s requirements on a system which could be accessed by all the branches and HO, resulting in delayed transmission of information and poor service.

While recession could have been a cause for the decrease in business, it was because of the inefficiency by PP to meet their client’s needs in time which cost them dearly.

Another issue with PP was that the company did not meet the requirements of training their personnel to meet the demands of the market. As long as John and Janet were running the show, they were able to entertain all their clients and candidates evenly, however, when they expanded and recruited new staff for the branches, they failed to train their staff in handling clients and candidates, as a result of which, quality suffered.

Therefore, it was these two factors; an improper Information System, and non-trained personnel, which led to the fall of PP operations.

Literature Review

Information Systems are the software and hardware that support data-intensive applications. Many scholars believe that the business world is moving from an industrial economy to an information economy. “The convergence of computing, telecommunications, and software is not only enabling new forms of competition, but the digital convergence of various states of information; data, text, voice, graphics, audio, and video, is also spawning new business opportunities and new ways of communicating.” While not many would argue that all spheres of business and economic activity today harbors on information technology, it would be unimaginable to live in this world of business without information. Business managers spent much of their time on information processing, and do so through technological tools such as “executive information systems, groupware, video-conferencing, and so on (Currie, 1999).

Computers are multi-dimensional operating systems which have immense usage. It could be used as a calculator, a notepad, it could be used for drawing graphical representations, or it could be used for generating account statements and so on. Apart from these, the commercial aspect of a computer is that it can help people take decisions using data which is available to them. Decision-making couldn’t have been easier if not for computers. Decision making process should be focused to avoid unnecessary time wastage. Computer applications such as MacProject and MultiPERT enable decision makers to plan out the projects while experimenting with “what if” scenarios and monitoring the actual effects of implemented decision.

No product or company can survive competition or sustain its identity without asserting itself on two basic components in marketing: Image, and people. If not managed properly, these components can break a product, or in other words, a brand. Brands and people have to be owned, nurtured and developed by an organization. They are the ultimate differentiators and value creators. Companies such as Pepsi, Coca cola, Levis, and Cadburys are a few examples of well managed brand companies, whereas Enron and Anderson are the adversaries. So powerful is this medium, that unless harnessed properly, sustainability, popularity, and growth are at risk.

Thus, the elements that affect an individual’s relationship with a brand are:

The relationship between the product and the customer

The type of person the brand represents. The consumer obviously would like the personality traits to be that of his own.

A customer’s relationship with an organisation is built on trust and reliability. A Customer Relationship Strategy fundamentally reshapes the thought process of an organisation to build a strong customer base. Focusing on people, business processes, performance management systems and technologies are sure ways to satisfying customer needs.

With an effective Customer Relationship Strategy, an organization can:

Identify, acquire, retain and develop more profitable customers

Align the business, marketing, and sales strategies with customer care

Achieve a customer centric organization with a clear contact management strategy (Hitachi, 1994).

Customer Relationship Management

This came about because of the change in consumer buying behaviour. The consumer had become knowledgeable and demanding, and this forced companies to shift their priorities to accommodate these. This gave rise to the growing concentration on customer relationships; customer retention became the core focus of corporate and other companies in their marketing activities. This is founded on the belief that customer retention leads to economic performance in terms of both, turnover and costs, said Anderson et al., (2000, p.869-882).

This is where relationship marketing assumes significance.

‘Relationship marketing covers all actions for the analysis, planning, realization   and control of measures which initiate, stabilise, intensify and reactivate business relationships with a company’s stakeholders, namely its customers, and in the creation of a mutual value.’

Customer relationships is critical in the success of a business, and its quality is dependent on the kind of relationship that company maintains with their stakeholders (Bruhn, 2003, p.2-11).

E-Business has revolutionised commerce and trade. Gone are the days when business transactions were done manually, for today, in a highly charged up competitive market, it is important for businesses to have information at their finger tips to cater to customer demands. It is information technology that drives today’s business. For fashion retailers, maintaining cordial relations and offering customer-oriented service is what will help it stand in the forefront of competition. Through the introduction of Customer Relationship Management (CRM), fashion retailers can draw the advantage of customer expectations, restructuring its corporate and communication network and implement strategies that offbeat competition. Strategy is vital to the success of any organisation, and it’s no different with the fashion industry. Strategic management is the organizing of products, services, processes and systems to meet customer needs. Strategy process addresses:

The perceived strengths and weaknesses of the current practices

A customer’s behavior (likes and dislikes)

The identification and implementation of technology that can overcome the present inefficiencies

It is no secret that today’s business is based on customer satisfaction and relationship. Thus whatever be the strategy, it must be customer-centric (Pettinger, 2004, p.215-217). It is in this context that many organisations today consider the introduction of Customer Relationship Management (CRM). This technology will not only enhance customer service, but most importantly, improve customer relationship, so vital for an organisation’s success.

Case Study: The Great British Outdoor Market

In 60 years since the Second World War, the UK outdoor clothing and sports gear industry has witnessed phenomenal growth, thanks to the intrinsic relationship between industry bosses and sports personnel. The growth brought to eminence brands like Karrimor and Berghaus, now internationally known for their durability, weather proof comfort and style. Changes were mandated by the post-war economic growth which resulted in abundant leisure time, better communication networks, easier product access and a renewed focus on marketing activities. New product development in the materials sector, including nylon and other plastics-based products, set the tone for innovation to meet the growing need of sportspeople.

Initially, the industry bosses, being enthusiasts in sports, developed products suitable for sports through their extensive network of personal friends and family members. The entrepreneurs’ innovation was based on their personal experience and conducted through social contact, leading to profitable gains. Also, since the products were developed through their extensive network of social contacts, the products were produced with great care and craftsmanship, reflecting a deep understanding of the needs of the end-users. It also resulted in commercial benefits, as the sold products could be photographed on the sportsperson and used to promote the products to a wider audience, through advertising and catalogues.

Gradually, the entrepreneurs began to extend their network beyond their immediate circle of friends and family members to generate information and expertise which could be used to expand their customer base. The new initiative instilled contractual agreements and strategic alliances, such as those between Karrimor and BM Coatings (rucksacks) and Berghaus and Gore-Tex (clothing). This marriage between the companies resulted in sharing of knowledge and innovation apart from a profitable distribution channel and licensing arrangements. Retailers assumed significance for collection of data about products between customers and manufacturers. And suddenly, customers became the source of inspiration for further product development. The wider the network, the more radical became the innovation, leading to a higher market growth (Harwood et al., 2006, p. 105-111).

Customer Relationship Management

Customer Relationship Management (CRM) is an important tool in customer-centric strategies today (O’Brien, 2003, p.182). It not only enhances the quality of service, but also adds more strength to compete in the highly competitive service industry. According to Dong (2007), CRM systems are enterprise applications that support and integrate customer-oriented business processes such as marketing, sales, and customer services to manage business interactions with customers. This can be done by analysing and distributing a customer’s personal details and needs to the concerned departments within a retail fashion business for personalised services. CRM can also help initiate guest preferences, by which customers feel elated of being recognised without a formal introduction. Their personal preferences, billing details, method of payment, and dressing habits can be optimised to create an atmosphere of showing how important that individual is to the retail business. This will elicit a warm response from the customer who could recommend or vouch the retail business house to his/her friends, increasing the volume of sales of the fashion business.

Siebel Systems, Oracle, PeopleSoft, and SAP are leading CRM software vendors, who offer solutions that integrate and automate customer processes to allow fast, convenient, reliable, and consistent services to their customers.

The latest from SAP CRM, delivers customer-inspired innovations and state-of-the-art, Web-based user interfaces that enables the organisation to delight its customers, empower their support team, and improve their business.

SAP solutions and applications support a wide range of business processes related to Customer Relationship Management applications, including:

Category management

Multi-channel retailing

Price management

Price optimisation

Sales order management (SAP.com)

The following block diagram No.1, gives a fair idea of how a CRM system design would look like.

Block Diagram Courtesy: www.crm-strategy.net/crmpres.htm

While many companies have realised that the traditional approach of introducing CRM is purely as a tool for front-office operations, many have gone a step further to include not just data from front-office, but also enterprise-wide information about customers’ buying habits and profitability. Moreover, fast and flexible deployment to focus on strategic business priorities is critical for any CRM implementation. CRM provides a platform for business agility, enabling a company to adapt its processes easily to constantly changing business dynamics, manipulate business processes across and beyond the enterprise, and transform itself into a customer-centric enterprise.

In a nutshell, CRM will:

Evolve as business grows with support for end-to-end business processes

Empower Users with Role-Relevant Customer Insights

Gain Immediate Value

Increase Customer Satisfaction

Reduce Cost of Ownership (mySAP, 2005).

Many organisations have been known to strategise based on their requirement and interest. This led to poor customer response and sales. It was then that many began to focus their strategies on customer needs. For, from a customer’s perspective, if a product or service was variable in quality and/or complex, and if that product was intangible in nature, the resultant outcome led to risk and uncertainty. Customers would stay away from making any attempt to test these grounds. Risk reduction and reduced uncertainty are factors which customers find particularly important within the context of some markets says Morgan and Hunt (1994).

The more a customer builds a relationship with an organisation, the more knowledgeable the organisation becomes about a customer’s requirements and needs. Thus, having a long-term, ongoing, stable relationship with a particular fashion retailing house will obviously reduce uncertainty and risk and enhance their relationship. The relationship becomes so obvious, that even in cases where customers are aware of some competitors who offer the same or better service, they will choose to stay in the relationship due to its predictability and comfort (Harwood et al., 2006, p.107-111).

Training

For a workforce to perform at the highest level, employees need training on a regular basis. The importance of training the workforce has become such an important part of an organisation’s success that many companies with some form of training programmes spent a part of their median of labour budget on training, and that those with highly effective programmes were spending much more of their median of labour budget on training programmes. Training and development of personnel is a continuous process and organisations which ignored this sphere of HR activity, were most likely to succumb to competition. In a highly charged-up competitive world, success comes with innovation and technology. Organisations continue to introduce new manufacturing processes, information technologies, and equipment to stay competitive, and this prerogative mandates the introduction of training programmes to acclamatise and master production strategies. This can come about only through continuous training of staff. Also getting the staff to work on the different machinery and tools will only enhance production prospects and decrease monotony among the workforce, and in the process increase retention prospects. Despite changes, many organisations still fail to come to terms with the fact that well-funded employee development programmes are most important in the success of their business.

Training employees will not only lead to a healthy work environment, but it will also enhance productivity and lead to all-round development of employees and organisation.

Providing support and resources for continuous performance improvement is a vital part of the HR functionality (Weston, 1995).

Working in collaboration with line managers and other employees, HR specialists can help identify new skills or competences that are required to train and develop the workforce in enhancing their performance (Weston, 1995).

References

Anderson Eugene W. and Fornell Claes, 2000, Total Quality Management & Business Excellence: Quality Assurance & Total Quality Management, Volume 11, Issue.7 September 2000, pages 869 – 882

Bruhn, Michael, (2003), Conceptualization and empirical results of a pilot study in

Switzerland, European Journal of Marketing, Vol. 37 No. 9, 2003, p.1187-1024

Currie, Wendy, 2000, The Global Information Society, Market as Opportunity: Developing Business-to-Business Internet Commerce, John Wiley & Sons, West Sussex, UK

Harwood, Tracy G and Garry, Tony, 2008, Relationship marketing: why bother?

Journal: Handbook of Business Strategy, Volume: 7, Issue: 1, p.105-111, ISSN: 1077-5730, DOI: 10.1108/10775730610618701, Emerald Group Publishing Limited

Hitachi Consulting, Customer Relationship Strategy, 1994, http://www.hitachiconsulting.com/page.cfm?id=customerrelationshipstrategy

Morgan R. M, and Hunt S. D, 1994, The Commitment-Trust Theory of Relationship Marketing, Journal of Marketing, 58, p.15-40

mySAP, Customer Relationship Management: Solution Overview, 2005, http://www.sap.com/solutions/business-suite/crm/pdf/BWP_mySAP_CRM_Solution_Overview.pdf

O’Brien J, 2003, Management Information Systems (6th Ed) The McGraw-Hill Companies, p.175-190

Pettinger, Richard, 2004, Contemporary Strategic Management, Palgrave Macmillan, ISN 1-4039-1327-7

Weston, F.C, 1995, What Do Managers Really Think of the ISO 9000 Registration Process? Quality Progress, Volume. 28, Issue.10, p.67-73′, in Christine Avery and Diane Zabel’s, 1997, The Quality Management Sourcebook: An International Guide to Materials and Resources, Routledge, London, p.178

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