Operational management technique
The processes occurring at the present stage in the world economy have led to a revival and development of estimate activity, urgency, and demand for results in market conditions. The predictive analytics and its key category – ROI – are a complex indicator of expediency, utility, and importance of this or that result of any activity in the sphere of market relations.
The problem addressed in the article covers the impact of predictive analytics (PA) tools on the development of operational management for a previous couple of years. Operational management is the main part of overall management. Operational management includes all kinds of activity connected with the deliberate transformation of materials and information or buyers. Operational management consists of both ineffective and rational management of all the operations. Thus, the opportunities and challenges addressed in the article include the improvement of the operational management within the companies by means of PA and customer relationship management (CRM). The solution to the problem includes the creation of the algorithms and models of the implementation of the PA tools, aimed at the increase of the return on investments (ROI).
The PA assessment represents an ordered, purposeful process of determination of costs of a company in money equivalent taking into account potential and real income brought at a given time in the conditions of the definite market. The features of the PA process of a company, undoubtedly, include its market character. It means that the PA tools are not limited to the calculation of the future costs for the creation or acquisition of the estimated object, it necessarily considers the whole set of market factors such as a time factor, a risk factor, market conditions, a level, and competition model, economic features of the estimated object, it’s market reputation, and also macro and microeconomic environment. (Barkin, 2011).
In order to use the PA tools effectively, it is necessary to understand what project management is and how it should be planned. Project management is the process of application of knowledge, skills, methods, means, and technologies to the project activity aimed at the achievement or excess of expectations of project participants. Systematic project management planning is the basis of a successful implementation of the project. It should be carried out by levels in order to achieve the put goals. Project management planning includes the following levels:
- Structural plan
- Implementation plan
- Temporary plan
- Capacity plan
- Expenditures plan
- Total expenditures
- Quality plan
The project planning work gives the chance to supervise a work course, to define the critical factors for the prevention of a threat to the project, to carry out the application of design resources focused on the main goal. The opportunities for the solution of the problem addressed in the article are solved partially. The limitations of the PA technique include 4 main stages of the project, namely initiation, planning, accomplishment, and control and completion.
There are the following takeaways from the article:
- PA tools help to analyze and forecast the ROI. The PA is the analysis in the process of which an expected net income of a company and also such factors as a capital structure, quality of management, qualification of workers, etc. are determined. The PA is specially-economic research of the fluctuations from the balance of supply and demand according to definite market segments, intended for forecasting market segments development in a long-term prospect.
- CRM is important for the success of any organization. The main thing at efficiency increase is to provide the fulfillment of the operations in order to satisfy the inquiries of the customers. CRM is closely connected with the control of its change from the point of view of identification of adverse deviations of a labor productivity level indefinite periods of time.
- Social networking has a lot of business benefits, increasing the marketing potential, and improving the CRM. Authentication and transparency constitute a direct consequence of social networks – the managers receive the necessary information about their existing and potential clients.
How Operational management techniques relate to Customer relationship management
Customer Relationship Management (CRM) is the integral functional area of the modern complex information system of a company. CRM is the concept of management of the relations with clients in the conditions of active competition, aimed at the maximum development of the potential of each client and a partner for the sake of a company. CRM tasks include the following ones:
- Studying of the market and consumer activity, assessment of demand and needs of clients;
- Planning and implementation of the target marketing campaigns;
- Introduction of new products and services to the market;
- Planning and forecasting of sales;
- Customer service: registration of transactions and maintenance of the relations with customers;
- Development and implementation of loyalty programs;
- Processing of client inquiries: commercial, service, advertising, etc.
The CRM concept assumes a regular collection and analysis of the information about each existing and potential client, namely how a client reacted to a definite business offer, whether he is happy with the quality of service, whether his preferences change over time, how accurately he fulfills the assumed obligations, and how much income the client brings (or could bring) for a company.
The knowledge of a client, who makes or does not make a profit, is the essence of one of the most popular techniques used by the OM – predicative analytics. The CRM principles include the forecasting of the special conditions for those clients who spend a lot of money in a company and the reduction of the costs of service of those clients who spend a little. The obtained information can be used for the research of the ways of receiving additional profit from the client or improvement of quality and efficiency of service. The main goal of the PA includes the retention of a client. The majority of companies change their policy from the attraction of new clients to the increase of loyalty of the most profitable clients. The prediction of the profitability of a client is one of the main indicators of the OM.
Dashboard or monitoring is also one of the most widely spread OM techniques. More and more companies of all sizes use social networking, such as Facebook and Twitter for the attraction of clients and increase sales. The social CRM allows defining the target marketing objects for the key segments. Using the conversations of the clients, location, demographical and other data, collected from the different social networks, the marketing experts can use this data for the creation of the definitely focused message to the targeted group of clients, motivating them to fulfill the definite actions and to increase a company’s profit. (Barkin, 2011).
Monitoring of social networks allows tracing the discussion of a company’s products/services and also their competitors. The social CRM allows the companies to identify the potential and existing clients and also those who influence the other clients. The collection of these discussions allows tracing the volume of conversations about a company’s brand or product market during a long period of time and using this information for more active interaction with clients.
The decision support system is aimed at the satisfaction of the business requirements, automatization of the working processes of the client support departments, and decrease of the expenditures for support operations. The decision support system provides the powerful solution of a workflow, which provides excellent service and cuts down operating expenses. This system also includes a reporting subsystem, which provides the data necessary for the adoption of reasonable business decisions.
The decision support system is the unique complex offer, which supports a full cycle of interaction with clients from their attraction before the implementation of transactions; it provides the representation of a uniform foreshortening of a client with the analytical means ready to application and integration with the opportunities of strategic business management; it uses the advantages of a modern portal of a company and a means of exchanging data in the whole chain of creation of additional cost.
The decision support system at CRM provides full, complete information on clients and is aimed at the solution of the tasks actual for definite branches. These processes cover all channels of communication with clients in the sphere of sales, marketing, and customer service. They allow making decisions having a serious impact on a company’s activity.
Reference
Barkin, E. (2011). CRM + Predictive Analytics: Why It All Adds Up. Customer Relationship Management, 15(5): 2011, pp. 21-23.