ERP solutions are great, but successful implementation requires careful thought, consideration and engagement from all stakeholders. This article discusses two examples for ERP solution of different scenarios, scales and requirements. Covered examples include existing challenges, selection criteria of implemented solutions and benefits achieved thereof.
LG implementation of HRMS
When the global giant - LG Electronics (LG) - having 114 subsidiaries, more than 82,000 employees across 40 countries - tried to harmonize its HR functions, the challenges were of a similarly giant scale. High maintenance costs, local controls lacking transparency, inefficient decision making, under-utilization of resources, manual processes, etc. made it difficult for LG to operate as a global company, which then decided to take the ERP route.
The challenges for LG:
- Location specific multiple systems leading to unclear top-level reporting, lack of optimum resource utilization
- Location specific processes lacking transparency and automation needs for a global reporting
- Disengaged employees, limited outlook, no room for information or best practices sharing
- Limited localized resources for employee learning & training
- Challenges with decision making, with significant business impact
Selection criteria for ERP solutions:
LG’s familiarity with Oracle technology due to earlier Oracle usage made it easier to finalize a solution. It offered large data hosting, seamless migration of old data, easy scalability, multiple modules addition as needed and centralized access and control. LG hired Oracle Consulting to build a single centralized system which integrates available Oracle HR modules for uniform use at global level, thereby replacing location specific system dependency.
The ERP solution, which included a data mart, performance management system, staff portal, and e-learning application, enabled the following benefits for LG:
- Centrally managed a single system with minimal maintenance costs
- Transparency in the recruitment and employee appraisal processes which enabled hiring, engaging and rewarding performance based on the right competencies and proven performance
- Real time reporting for higher management and tracking of set goals and objectives
- Informed decision making due to readily available real time reports
- Centralized control over HR processes, with region level flexibility to implement localized changes
- Efficiency improvement for HR functions and processes
- Cost savings due to not having to maintain multiple systems
- Easy sharing of best practices across the various centers
- Easy access self-service function made available for employee self-help
- Easy learning facilitated for common tasks through document sharing and online tutorials, resulting in time and cost savings
- Increased employee morale, productivity and engagement
Benefits surely look attractive, but it was not a cakewalk, given the large and distributed scale of ERP system implementation. Spanned over 5 years (2002-2006) in five planned phases with clearly set objective, the ERP solution enabled LG to mitigate the challenges posed by vastly spread global centers, for its Human Resource Management System requirements. Today, LG continues to benefit with the automated ERP solution, and continues to enhance it further as needed.
Webhosted ERP solution for Fuze Energy Drinks:
Challenges: Fuze Energy Drinks, going through a rapid growth path, found its existing systems obsolete to meet the growing business needs. Primary challenge areas identified were:
- Management of rapidly growing stocks and inventory
- Planning and managing production matched to demand and supply
- Reporting needs for financial decision making
ERP solution selection criteria:
Fuze were looking for a cost effective, easy to maintain solution, without getting into the hassles of computer maintenance. Their ERP vendor (Pyramid Consulting) offered Sage Accpac ERP solution, which was completely web-hosted and was a proven system for the manufacturing industry, with specific modules matching their needs. It offered automation for inventory management, production lines and real-time financial reporting with no on-site maintenance, allowing Fuze to concentrate on its core business instead of adding overhead for computer system maintenance.
- Automation modules for inventory ensured timely controls on products going out of stock; combined with order management automation, this allowed full control on production as per the demand
- Being in the beverages space, automation ensured timely reporting and action planning for stock that was “past the expiry date” or “about to expire”.
- Reporting based on accounting entries ensured timely decision making based on real time data
- Production reporting resulted in full control on production lines, as per the demand and supply status
- Web hosted solution ensured no in-house computer hardware purchase, resulting in low cost solution within expected budget
- Web hosting also ensured easy and timely access to the system from variety of devices
- Off site computer hosting ensured significantly low costs limited to annual maintenance charges
- Quick and easy setup without a lengthy setup period and no installation costs
- Contract ensures vendor engagement and availability for any ad hoc training, as needed
The Bottom Line
ERP systems are usually big ticket projects with high costs and varying timeframes. Case studies of successful ERP implementations allow for the careful selection of vendors, systems and solutions; a clear understanding of existing gaps and objectives to be met; sufficient and continuous engagement from the client with the vendor, as requirements keep changing dynamically over the implementation phase. Simply leaving implementation to the vendor may not be the best idea. Working with the vendor in a partnering role produces the best results.
LG Electronics & Experience Tracking
Posted December 9, 2011by MESH Planning ,MESH Experience
MESH Planning has been working with LG Electronics to reach their goal of being number one in the home electronics market. Using Experience Tracking, LG has been able to understand the role and persuasiveness of each touchpoint along the customer journey.
LG Electronics is a brand looking to be number 1 in the US home electronics and appliances market. Its brand TV advertising was performing well but there are many other touchpoints, particularly retail experiences, that are important to the final purchase decision.
Using continuous Experience Tracking since the beginning of 2010, LG has been able to understand the role and persuasiveness of each touchpoint along the customer journey. This has highlighted the importance of Online and In Store experiences at the moments close to purchase and Seeing in Someone’s Home at the beginning of the journey.
LG has used the data to determine the success of investment in retail and digital marketing initiatives and to track its performance on key metrics against its competitors to take quick action when required. Benchmarks are also in place for all above the line communications to understand how every element of a campaign is working.
The marketers challenge
Not that long ago, it used to be enough to look at retail audit data along with brand and advertising tracking to understand how your brand was performing.
Such a lot has changed! On December 4th 2009 in New York the ARF held its ?rst 360 Measurement Day re? ecting the importance of new research measures in this area. There’s been the explosion in online and social media, the realisation of the importance of word of mouth and an appreciation that it isn’t enough just to understand the sales and distribution through different retail channels but the response from real people in those stores too.
All marketers are aware of the importance of the retail channel to their brand’s success but how pervasive and persuasive are these experiences? Does the retail experience make or break a sale? With face to face experiences, advertising of in store brands and online retail, how important is the multitude of retail touchpoints to a manufacturer’s brand?
The importance of retail
Retailers like Wal-Mart in the US and Tesco in the UK hit the headlines for their dominance. In the UK, Tesco enjoys a 30% share of the grocery trade with pro? ts of £3bn. For the fiscal ending January 31st 2009, Wal-Mart reported a net income of $13.6bn on $404bn revenue. Not only is it the biggest grocery retailer in the US but it is the largest private employer too.
It’s convenient for people to get everything they need in one place and at a good price, but not everyone feels comfortable with this. Purchasers see smaller local shops going out of business. Manufacturers need to ensure they establish strong and profitable relationships that ensure their brands get prominent display and recommendation.
This raises questions for manufacturers. How much should I be paying through the retail channel versus brand advertising? Where is my money best deployed? Should it be shelf features or special displays? How well is the retail support being implemented? What happens to my brand online through the retail and comparison website touchpoints?
Research needs to help answer these questions.
Wouldn’t it be great to track how people really come into contact with brands, from the TV ad to the comparison website to the store visit in real time?
Currently the Experience Tracking market is tiny. But it will grow quickly as companies realise the potential of the data that is being gathered.
Historically Brand Tracking has enabled us to monitor the health of our brand and communication awareness and diagnostics have shown us whether our TV ad has been performing well or not. In the fast-moving world we are now working within, brand metrics, whilst important, are a lagging indicator. We understand whether the health of our brand is improving or declining but we often don’t know why. When we see something unusual, this sparks another set of research, like group discussions, to find out what is going on. This can be hard to determine because we have developed a mindset that the brand’s health relates to the communications (largely brand advertising). But what if something is happening in store that has nothing to do with our brand ads? What if the word of mouth from existing customers is causing a change in brand metrics? What if….?
There are many things that can affect brand health. Unless we look at EVERY way that someone is coming into contact with brands it will be extremely difficult to work out what it is that is causing the effect.
Not only are we seeing brand metrics being questioned in terms of their decision-making ability, but customer satisfaction metrics often fail to deliver easy to implement decisions. We know the metrics are moving up or down but we don’t necessarily understand why and therefore what to do. Maybe brand touchpoints (like TV advertising) impact strongly on customer satisfaction scores? Perhaps website and call centre touchpoints impact strongly on brand metrics?
Regardless of whether we are looking at a ‘brand’ (e.g. TV, Billboard) or ‘customer satisfaction’ (e.g. Call Centre, Website) touchpoint, we are looking at the experience the customer has had with the brand. The combination of these experiences effect brand metrics.
So Experience Tracking in real-time is enabling us to see a detailed picture of what activity is impacting on our brand most effectively. It is enabling us to answer new questions that we haven’t been able to answer before. We are working with MESH Planning using their TROI approach to tracking experiences.
The LG Business Issues
LG is a relative newcomer into the home electronics sector. Brands like Sony and Samsung dominate but LG has strong ambitions with an end goal of reaching number 1 in the flat panel TV marketplace.
In the US market where LG has 8% market share, the team realised that it was important to understand the detail of the customer journey and how different touchpoints impacted on decision-making. With the economic climate changing rapidly towards the end of 2008 it was vital to see what strategies LG could put in place to generate sales whilst continuing to grow strong brand equity.
Further to that LG also wanted to continue to grow its partnership with key retailers by bringing new insights and working even more closely with them on innovative shopper solutions. It was agreed that LG commission a project to understand the flat screen TV shopper journey. Having worked with MESH Planning and Spring Research in the UK and read ‘The Glue’ describing how TROI had helped Iris and Sony Bravia develop their retail strategy, we commissioned these sister agencies to conduct this project.
The research design
We took a two phase approach:
Phase 1 (MESH Planning): TROI touchpoint purchase process study with nationally representative sample (576 participants considering buying a flat screen TV in the next 6 months, with 2/3rd planning to buy within the next 3 months) during October to November 2008. In addition to the standard TROI approach described earlier, we added TROI Intercepts – voice activated telephone interviews. Every time a participant left a retail store we asked them to phone a number on their mobile and answer 10 questions including leaving a voicemail about the overall experience. This gave us much more depth of information about the retail environment than a text could provide (a bit like an exit interview without the logistics of setting these up with different stores).
Phase 2 (Spring Research): ‘Snakes and Ladders’ qualitative shopper ethnographies (30 x 1 hour interviews with recent TV purchasers, mainly in home, where purchasers told us their stories in their own words) conducted in the New York area during November and December 2008. Decision Watch UK, presented at the MRS Conference in 2005 describes the approach behind Snakes and Ladders.
All findings were brought together for a one day workshop to ensure that we captured the detail of the two studies in an integrated way and also to encourage buy in from our team at LG with actions being taken subsequently. The key ? ndings are listed below.
#1 Importance of In Store and Online
In spite of the amount of advertising over the Christmas period, In Store and Online were the two biggest touchpoints for flatscreen TV brands (see chart on previous page). Not only are they pervasive, they are also persuasive. We can see this from the high Purchase Intent scores coming from the texts. There was a strong interplay between In Store and Online as people used both interchangeably to try to find the right TV for them.
“Mostly carried the Vizio brand. Good prices. I would probably shop online at this store and then buy in the store where I could see it in person.” (Vizio, Internet, Target, Fairly Positive, Might Buy)
“Sony 46 inch, fantastic resolution, $1300 at Circuit City, will have to compare online and see if I can get a better deal.” (Sony, In Store, Very Positive, Definitely want to Buy)
#2 Retailers’ impact
Beyond the retail environment, retailers were seen to have a big impact on brand metrics and purchase decisions by promoting brands through their own TV ads, websites, press ads and leaflets. Their influence was pervasive and deeply entwined with the way people were coming into contact with TV manufacturer communications.
The majority of TV ad experiences were not from manufacturers like LG and Sony, but from retailers like Wal-Mart and Best Buy.
“The ad for an LG TV available at Best Buy was viewed on TV during the Seattle Seahawk versus Tampa Bay football game. It was pointing out the picture clarity, and left me with a favourable impression, considering that this was the only brand mentioned in this Best Buy commercial.” (LG, TV ad, Fairly Positive, Might Buy, TROI participant)
The deals and emails sent by retailers were driving action.
“I just noticed this, it’s a much better deal because this bundle also included a blu-ray DVD player.” (Sony, press insert, Very Positive, Much more likely to buy)
Leaflets sent out from retailers might not look pretty but they were poured over avidly and were highly influential to those in the market to buy a flatscreen TV. They accounted for 42% of all newspaper experiences, more than ads or manufacturer inserted leaflets.
They were especially noticed on a Sunday when people were relaxing and the fact that there were often leaflets from multiple retailers was encouraging people to go in store and check out the different brands and models.
Within the store there were certain elements that were particularly powerful. The short blurb next to the TV is the most powerful POS in the store. People want to touch and feel the TVs and they also want to know the key features. There was a distinct lack of brochure/literature about the TVs which suggested an opportunity area to help people through the maze of TV purchase.
Special brand zones were giving people a high value emotional experience. The ability to sit on the sofa and watch TV for real makes them feel at home and be able to imagine having the TV in their own house.
“Absolutely WONDERFUL! They had this set up in it’s own little viewing section. It was like a mini-theatre in the middle of the TV section. Beautiful! Excellent visual and sound quality! Priced competitively! Just beautiful set up. I wanted to take the whole thing home; tv, dvd, speakers, couch...” (Panasonic, In Store, Best Buy Very Positive, Definitely want to Buy)
#3 LG, the innovative newcomer
LG’s brand communications were working well to position the brand as the innovative newcomer, snapping at the heels of Sony. People loved the TV ads for LG (30% of texts for LG TV advertising were Very Positive) and the website was also ‘Best in Class’.
“These TVs just look really awesome! I cannot wait to get one! They look really clear and like they are ‘true’ HD” (LG, TV ad, Fairly Positive, Definitely want to Buy)
“This one caught my attention because it has a sensor that uses the light in the room to aid in giving the best picture quality. I think that would be a cool feature to have.” (LG, TV ad, Fairly Positive, Definitely want to Buy)
Once people became more aware of LG (which they did through the ‘hot housing’ of this study) they became much more likely to consider buying an LG TV. ‘It’s the first brand of TV I’d consider but I might look at others as well’ went from 12% to 19%, a significantly positive shift.
This content is an excerpt from a report with further detailed findings and results, click here to download the full report "Pervasive and Persuasive", jointly written by LG and MESH for the ARF Re-Think Event in 2010. This content was provided by MESH Planning. Visit their website at www.meshplanning.com.