Question: How can integrating SCM, CRM and ERP help improve business operations at Shell?

Answer:

Shell Corporation is one of the largest global corporations.  This global group of petrochemical and energy consists of about 94000 employees operating in over 70 countries and territories. They are well known for usage of technologies and known for their innovative approach to creating a sustainable future. (About Shell)

ERP or Enterprise Resource Planning is one of the major IT applications used across organizations for streamlining processes to create innovation, introduce cost reductions, elimination of data redundancy and sizing operations centrally. Thus, ERP can help business operations including operations of well extraction as well as mine extraction encompassing oil and gas pumps. Thus this has helped in highly manual process streamlining done by the third party contractors submitting invoices and information regarding repairs.

Further, extension of ERP components has further helped in business operations improvement at Shell. The solution provided by ERP has helped in providing solutions to the inadequacies by an integrated web service order provision as well as introduction of invoicing and the payment delivery systems.

Thus, third party contractors are enabling for direct order entry into the ERP system via web access provided from all areas.

The invoices are summarized annually or monthly are automatic generated for contractors and the information is directly fed into the ERP’s system unit for account payable maintenance for initial and final processing. The whole process of maintenance is speeded up along with introduction of efficient practices in the operations related to repair at the wells, refineries and other sites as per the requirement.(Koch, 2001)

The whole processes involved have a great dependency on the suppliers and contractors in search at the organization’s website.

The complexity of the software leads to prevention of any form of customization even if possible. One of the simple reasons for this is the fact any change that is made in a single product has to be replicated simultaneously over all other products as well as any new software releases. This tends to enhance the life cycle costs substantially. Further the risk associated with quality as well as operational problems is increased.(Songini, 2002)

 Further, some product customizations are impossible due to the complexity of the tasks and the diversity of the operations. Thus, the need of adaptive infrastructure means that customer relationship management and supply chain management efficiency is introduced. In the long term, the industrial standards for any form of application communication are formulated based on the XML and web services leading to a more flexible architecture for ERP.(Ross, 1999)

Customer relationship management (CRM) has always been the integral part of any organization. Customer centric approach has been the basis for most organizations. In this part of the process, any form of customer queries regarding the customer product, any requests regarding customer process inefficiencies are registered within the system and a quick resolution is demanded. Thus, presence of a customer relationship management system becomes vital and need of the hour. (Tam, Yen, & Beaumont, 2002)

Creating a layer of customer relationship management over the ERP can help in making the process more streamlined as well as reduce the data complexities faced while implementation of an ERP system. Further, the costs turn low as a more accurate forecasting is possible. In case of Shell, we realize the presence of B2B as well as B2C channels. The accurate product demand in both channels can be forecasted based on accurate ERP data as well as the customer responses recorded by the CRM.(Sawhney, 2001)

Some of the steps necessary while implementations are:

• Operational data virtualization: Collation and collaboration of a database that is centrally managed and distributed. It is based on the fact that all data is managed centrally and accessed from a single source point(Future-Proofing ERP and CRM: Considerations for building an adaptive infrastructure, 2003)
• Implementation of a ERP based data warehouse where all the data is used in for planning, forecasting, reporting and data extraction and mining purposes
• Creating a 360º view for customers such that all the data is collected efficiently and an understanding of location of data exists. This can be used in strategy formulation in various CRM segments such as customer care, market reach and identifying the target audience as well as in opportunity management(Cheng, 2009)
• While movement towards a universal access is enabled, access of any application is possible from anywhere routing to the source. Standards should be more open and thus relevant standards can be leveraged properly\
• Data privacy and protection are of utmost importance. Any protection associated with customers, introduction of standard measured to prevent identity thefts as well as protection of transaction information have emerged as the major challenges within the organization while running an efficient CRM system. Further, prevention of any form of intrusion, spamming, phishing are also some security segments worth noticing while creating a healthy and efficient customer relationship management system(Guerra, 2003)

Supply Chain Management is another integral part of any business. Retrieval of raw materials from various vendors at the processing end and also understanding various distributors and suppliers at the product end when it is provided to the consumers from the manufacturer’s point.

Supply chain management also involves a major segment of inventory management. Inventory contributes to costs in form of holding costs and carrying costs associated with moving the goods. Inventory goods add up to forecasts made for the organization as well as provision to make orders. It is very important to know that inventories are a major cost chunk eliminated by real time monitoring system being introduced. ERP information collected at various points helps in real time access. Further, understanding customer relationship systems helps in a more centralized efficient system with integration of all the three practices. (Freeland, 2003)

SCM, ERP and CRM together form the three major pillars which make the whole business run in capacity. We need to grasp the fact that when any organization like Shell runs the process, it is a part of Supply chain management. Detailed information recording centrally happens through the well-established ERP systems. ERP processes makes the data easier and accessible at all points. CRM makes sure that customer needs are met and proper forecasting is ensured. Thus, business is run with most efficient practices by integrating all the above systems.

References

1. Future-Proofing ERP and CRM: Considerations for building an adaptive infrastructure. (2003).Retrieved August 16, 2015, fromHarvard Research Group.
2. About Shell. (n.d.). Retrieved August 16, 2015, from Shell: www.shell.com/global/aboutshell
3. Cheng, H. (2009). An integration framework of ERM, SCM and CRM.Retrieved August 16, 2015, fromManagement and Service Science, 1-4.
4. Freeland, G. G. (2003). The Ultimate CRM Book.Retrieved August 16, 2015, fromNew York: Accenture.
5. Guerra, A. (2003). Merrill Lynch Brings Mainframe to Web with X4ML.Retrieved August 16, 2015, fromWallstreet and Technology Online.
6. Koch, C. (2001). Why Your Integration Efforts End Up Looking Like This. Retrieved August 16, 2015, fromCIO Magazine.
7. Ross, J. W. (1999). The ERP Revolution: Surviving vs. Thriving. Retrieved August 16, 2015, fromMIT: Sloan WP 4086.
8. Sawhney, M. (2001). The Synchronized Organization. Retrieved August 16, 2015, fromHarvard Business Review.
9. Songini, M. L. (2002). ERP Effort Sinks Agilent Revenue.Retrieved August 16, 2015, fromComputer World.
10. Tam, J., Yen, D., & Beaumont, M. (2002). Exploring the rationales for ERP and SCM integration. Retrieved August 16, 2015, fromIndustrial Management and Data Systems.