Comparison of CRM implementation in Hero Honda (now Hero Motocorp) and TVS Motors
Group 9 Avnish Chawla (12P015) Amanpreet Singh (12P123) J Abhinav (12P140) Vaibhav Gupta (12P172) Varun Gopal (12P174)
Table of Contents TVS Motors.............................................................................................................................................. 2 CRM Initiatives of TVS Motor Company ............................................................................................. 3 SAP Business Intelligence ................................................................................................................ 3 Dealer Management Systems ......................................................................................................... 4 Customer Loyalty Program – Smiles Forever .................................................................................. 7 Product Lifecycle Management ...................................................................................................... 8 Hero Honda (now Hero Motocorp)......................................................................................................... 9 CRM practices at Hero Honda (now Hero Motocorp) ...................................................................... 10 ERP ................................................................................................................................................ 10 Supplier and Customer Relationship Management ...................................................................... 10 The Hero Honda passport programme ......................................................................................... 11 More Value added services ........................................................................................................... 11 Keeping in touch – all year through .............................................................................................. 11 Special privileges – All the way ..................................................................................................... 11 Special Invitations ......................................................................................................................... 12 Security for Customers and family ................................................................................................ 12 Rewards and Points Programme................................................................................................... 12 Star Club and Treasured Rewards ................................................................................................. 12 Treasured Reward ......................................................................................................................... 13 SBI-Hero Honda Credit Card.......................................................................................................... 13 Implementation of my SAP CRM................................................................................................... 13 References ............................................................................................................................................ 14
1
TVS Motors TVS Motor Company is the third largest two-wheeler manufacturer in India and one among the top ten in the world, with annual turnover of more than USD 1 billion in 2008-2009, and is the flagship company of the USD 4 billion TVS Group. The company has a production capacity of 2.5 million units a year. TVS Motor's strength lies in design and development of new products - the latest launch of 7 products on the same day seen as a first in automotive history. TVS deliver total customer satisfaction by anticipating customer need and presenting quality vehicles at the right time and at the right price. The customer and his ever changing need is a continuous source of inspiration. Over the years TVS Motor has grown to be the largest in the group, both in terms of size and turnover, with four state of the art manufacturing plants in Hosur, Mysore and Nalagarh in India and Karawang in Indonesia. TVS Motor is credited with many innovations in the Indian automobile industry, notable among them being the introduction of India's first two-seater moped, the TVS 50cc. The company became the leader in its category of sub 100 cc mopeds, having sold 7 million units. It also introduced the TVS Scooty, which is India's second largest brand in the scooterette segment. The TVS Jive launched in November 2009 became India's first clutch-free motorbike aimed at a stressfree rider experience while the unisex scooter TVS Wego is targeted at urban couples, featuring body-balance technology for easier handling. On 1 June 2012, TVS Motors reported a dip of 5% in its total sales for May 2012. In July 2012, TVS Motors and BMW Motorrad were reported to be in talks for technology sharing. 0n 8 April 2013, BMW Motorrad and TVS Motor Company signed a cooperation agreement with the aim to develop and produce motorcycles in the segment below 500cc. In July 2013, TVS Motor announced plans to construct a motorcycle assembly plant in Uganda and to introduce two new models suited to the East African environment. The new plant is expected to become operational in 2014.
2
CRM Initiatives of TVS Motor Company SAP Business Intelligence
India’s third largest two-wheeler manufacturer, TVS Motor Company, was finding it tough to make insightful decisions about manufacturing and sales real time. The senior management at TVS wanted a single report on sales performance, which could show the past, present, and the future growth trends across its customers and vehicle models for any given period. However, integrating data from its various enterprise applications to generate such a report was time consuming, leading to clear business case for BI. With BI, TVS Motor Company could generate accurate and reliable reports on inventory, sales, billing, and orders placed on its dealers. BI was seen useful also in analyzing customer-complaints to ensure quick response and thus improve quality of service. The solution implemented was of SAP Business Intelligence system. The following departments could use the BI system at TVS Motors: Top management Information technology Finance and accounts Manufacturing and production Marketing and sales Quality assurance Post-sales service And it covered the following aspects: Analytics Dashboards Querying and reporting Benefits delivered TVS Motor Company has achieved time savings eliminating the need to manually search for and collate information from various sources. 3
Real time data provided to the field executives has helped the company to improve its monthly sales volumes. With BI, TVS Motor Company is able to gauge individuals spends with greater clarity and thus prepare more accurate budget plans. Sales service reports have helped its customer support teams to coordinate with the quality control department for improvement of product quality and
reduction of customer complaints. This has also helped the company to make its processes speedy and efficient as the right decisions are taken on time.
Dealer Management Systems
The Dealer Management System (DMS) at TVS Motors was an ERP for the dealers that help provide a standardized way of working at dealerships and also valuable customer information. Since the dealers are the touch-points with the customers, they have to make customer experience standard across the country. The objective of the DMS was to help understand the profile of the customers and also get relevant retail data that can be used to take certain strategic initiatives. The company had been using a SAP ERP system since two years. However, some mechanism was needed at the dealers end to monitor and meet customer needs. So TVS Motors stepped in to ease its dealers’ burden by employing a DMS system. Each dealer contributed around a lakh and a half towards the project, which included the charges for the hardware infrastructure, software, and the support. The DMS had finance management, inventory management, service, and customer analysis modules. It was not just the dealers, but the parent company also stood to benefit in the long run. Issues like selection of vendors, hardware, and maintaining network availability for the dealers were typical challenges faced during the implementation. An automobile dealership deals with the Vehicle Sales, Spares Sales and Servicing of Vehicles. Primary objective is to help the management by providing the information about the business at various levels and to pass the 4
required data to the manufacturer to enable data analysis on a daily basis. The business information shall be drilled down from a macro / consolidated level in to any micro / transaction level. Secondary objective is to help the operators through easy transactions as it happening in front of the customers. The architecture of the system (DMS) is designed in such a way that, the business flow and the technology merged together to achieve the ultimate goal of customer satisfaction. Wallcliffs Systems was appointed as the Implementation Partner for TVS Motors for their Dealership Management System Project to Implement DMS in all their Dealers & Sub-Dealers in India. It successfully Implemented DMS in 1200+ Dealerships across India and still the count goes on.
Area of Coverage Vehicle Sales
Vehicle Ordering to the Manufacturer PDI Process Inventory Management (with multiple storage locations) Vehicle Allotments to Bulk / Individual Customers Project Management System (PMS)
Customer Relation Management
Enquiry Handling & Follow-up Vehicle Booking Customer Invoicing Accessory Invoicing Registration & Insurance Processes
5
Spares Sales
Spares Purchase Ordering to the Manufacturer GRN Inventory Management (with multiple storage locations) Counter Sales Bulk Sales Service Counter Issues
Service
Service Reminders & Follow-up Jobcard Handling Parts Issue to Jobcard On MRP On Manufacturer Warranty On Goodwill Warranty Labour Entries Outside Labour Entries Service Invoices
Integrated Reporting
Customer Traffic Analysis - Sales Customer Traffic Analysis – Service Mean time between Failure – Analysis Mean time between replacement – Analysis Integrated Dash Board
Before the implementation, getting secondary sales numbers and information about products was a herculean task. The sales staff used to call dealers and get the sales numbers, which was then sent to the headquarters for compiling. A huge amount of time and effort was spent in getting the sales numbers. Today, this solution with modules for sales, service, spares and accounting is used by the dealer for running the day-to-day business.
6
At the end of the day, all relevant data gets replicated at the headquarters. This enables TVS Motors to get information on dealership performance in addition to information related to secondary sales and service. The logistics team also has the visibility of the dealer stock, which enables it to plan their dispatches based on requirements. This has helped in improving the working capital management of the dealer. Information related to sales and service is now available to all sales and service staff at their fingertips. As a result, the sales team spends more time with customers and less in collating data for reporting. Keeping in mind the fact that the dealership network is spread across India with varying connectivity needs, the firm decided to design a solution that could work in an offline mode and then synchronize the relevant information to a centralized database. This has enabled the dealers to operate independently. This has also helped in de-risking the dealer from connectivity related challenges. The data transfer between the dealer location and the central database is seamless and does not require any additional effort on both sides. A replenishment system between the dealer and TVS Motors reduced the average inventory from 15 days of stock to seven days of stock. The ROI for the dealer management system has exceeded expectations. The annual saving per dealer amounts to Rs 1.3 lakh; if one calculates the total for 600 dealers, the annual savings come to approximately Rs 7.8 crore. There also been a marked improvement in quality of service. Post deployment of the system, the customer satisfaction index has improved from 740 to 780. It has also been able to improve service level for after-sales spares parts from 78 percent to 90 percent. Apart from this, the firm has been able to reduce the number of repeat jobs from 8 percent to 3 percent. Customer Loyalty Program – Smiles Forever
Smiles forever includes data analytics, warehousing, despatch, customer call centre and Direct Marketing programs. It is a complex customer lifecycle management program that has more than 1 million member base. Smiles forever has been upgraded and revamped. The current customer base of the 7
CRM programme is over 4.3 lakh members. Product Lifecycle Management
During the year 2007-08, the Company has implemented Product Lifecycle Management system to digitize the new product development process. This solution will help in faster introduction of new products into the market. It integrates different processes within the Company and enables electronic collaboration with product development vendors.
8
Hero Honda (now Hero Motocorp) The company, established in 1985 as a joint venture between Hero Group of India and Honda of Japan, holds a 50% market share in India. In the next six years Hero Honda’s sales volume grew by 400%. It’s no wonder that Hero Honda has won accolades in the New Delhi business press. In fact, in 2001 Hero Honda’s chairman Brijmohan Lal Munjal received the “Ernst & Young Entrepreneur of the Year” award for India, and in 2005 he was presented with the “Padma Bhushan,” a prestigious award from the Indian government. Hero Honda now supplied motorcycles through more than 500 dealers and 700 service points, institutions, and overseas customers. The challenge for Hero Honda: cut time and waste out of its supply chain and add more flexibility in meeting the fast-changing dynamics of the modern market in India. Hero Honda claims to be the world’s largest two wheeler company in its advertising. To reach the heights that it has, Hero Honda has successfully leveraged the IT advantage. During the 1980s, the company introduced motorcycles that were popular in India for their fuel economy and low cost. A popular advertising campaign based on the slogan 'Fill it – Shut it – Forget it' that emphasised the motorcycle's fuel efficiency helped the company grow at a double-digit pace since inception. The technology in the bikes of Hero Honda for almost 26 years (1984–2010) has come from the Japanese counterpart Honda. Hero Honda has three manufacturing facilities based at Dharuhera, Gurgaon in Haryana and at Haridwar in Uttarakhand. These plants together are capable of churning out 3 million bikes per year. Hero Honda has a large sales and service network with over 3,000 dealerships and service points across India. Hero Honda has a customer loyalty program since 2000, called the Hero Honda Passport Program. The company has a stated aim of achieving revenues of $10 billion and volumes of 10 million two-wheelers by 2016–17. This is in conjunction with new countries where they can now market their two-wheelers following the disengagement from Honda. Hero Honda hopes to achieve 10 % of their revenues from international markets, and they expected to launch sales 9
in Nigeria by end-2011 or early-2012. In addition, to cope with the new demand over the coming half decade, the company is coming up with their fourth factory in Neemrana, Rajasthan while their fifth factory is planned to be set up in Gujara
CRM practices at Hero Honda (now Hero Motocorp)
Hero Honda Motors launched a Customer Relationship Program in the year 2001. The program was completely managed manually and was difficult to manage and there were always challenges in ensuring authenticity of the data. With the introduction of a software and online process (right from online form filling to redemption of gifts) there is complete authenticity of information captured and retrieved. The use of technology has increased management efficiency of the CRM program by providing real time information of the customers. Authenticity of information is no more questionable, the processing time has reduced from approximately three months to five days. Status of points and gifts redemption is visible to dealers as well as customers. Dealers' overhead costs have reduced because of a completely paper-less process also dealers now have access to lot more analytics to help them do target marketing. ERP
As the management knew that the implementation of ERP would take some time, they wanted to use that time to introduce an IT culture in the company. The move was to implement ERP in order to integrate various functions and control its operations. The company went live with SAP R3 on February 1, 2001. It uses modules like production, materials, finance, marketing, assets, quality sales and distribution. The ERP implementation presented a high level of data integration. “ERP has helped the company immensely. Today nobody asks any other department for information. One can log in and see reports online,” says Mukesh Malhotra, DGM, Hero Honda Motors. Because of this the company also became ready for future SCM and CRM implementations. Supplier and Customer Relationship Management
Hero Honda had already been using the my SAP™ ERP solution for its core applications but until January of 2004, the company continued to enter its customer orders manually .For example, they might have ordered 100 units 10
but the supplier delivered 110. In February 2004, Hero Honda began a pilot test, bringing in mySAP Supplier Relationship Management (my SAP SRM) as well as mySAP Customer Relationship Management (my SAP CRM), both solutions in the mySAP Business Suite family of business solutions. For example, to confirm that they can handle a certain variation and to confirm that they’ll meet the delivery schedule.
The Hero Honda passport programme
The Hero Honda passport programme is one of the first of its kind in India. The company has secured over 1 million members in the last three years with the Passport Programme, which involves offering members a small card/booklet that looks like the Indian passport, complete with ''visa'' stamps for points, similar to those offered by credit card companies and airlines. The only difference in this programme is that the member need not always spend money to obtain points. With the passport programme, each time a Hero Honda customer visits a service centre, he gets points and depending on the profile submitted by the customer, he gets benefits like free passes to a cricket match sponsored by the company. More Value added services
In tune with effective customer relationship management, HHML has come up with the fresh idea of mobile service workshops: a complete workshop incorporated into trucks that travel predetermined routes, visiting small towns and villages where existing customers reside. Customers are informed that a workshop will be coming, so that they don’t have to travel hundreds of kilometres to an authorized workshop for servicing or repairs. These mobile workshops also double as sales outlets and spare-part distributors. Keeping in touch – all year through
An effort to be in constant touch with the customers through quarterly newsletter, "Suhana Safar". The newsletter gives an insider's view to the company, Hero Honda Motors Ltd. along with the latest happenings in the Hero Honda Group companies. Special privileges – All the way
Special discounts on spares and free services for Hero Honda motorcycle along with attractive gifts at various milestones. This is companies way of making 11
sure that every time customer come to showroom for servicing the motorcycle, they take away more than just the benefit of world class servicing in their automated workshops. Special Invitations
For active members of the Hero Honda Passport Program the chance of being invited to special events like Musical nights, Movie screenings, Award shows, etc. Security for Customers and family
The moment customers apply for Hero Honda Passport they are automatically covered for a free Rs.100, 000 Personal Accident Insurance policies for one year or for three years, as applicable. Rewards and Points Programme
All these amazing rewards and benefits come to the customer as they earn points in the Different CRM Programme. Once become a member, they earn points for a host of regular transactions that they conduct at their local Hero Honda authorized Dealership or Service Centres. These include: Purchase of Hero Honda genuine spares Purchase of accessories Servicing of motorcycle Bonus points on: Free Service Paid service Referrals Star Club and Treasured Rewards
This unique club has been introduced for those members who get their bikes serviced regularly from authorized Hero Honda Service Centres. The Star Club membership not only identifies the member as special for the HHPP family, but also brings in some added benefits like: 30% discount on labour 7.5% discount on spares, till the validity of the Passport
12
Treasured Reward
For Passport Programme members who have crossed the 1 lakh point mark in the Hero Honda Passport Programme. The HHPP Treasured Rewards available at 8 prescribed milestones beginning from 1.25 lakh points and ending at 3 lakh points, with each milestone at a gap of 25,000 points. In other words, the milestones are placed at 1.25 lakhs, 1.5 lakhs and so on till 3 lakhs. Each time a member reaches a milestone a Motorcycle Privilege Voucher of Rs. 1250/- will be given to him. This voucher may be used to avail a discount on the purchase of a new Hero Honda motorcycle. This voucher is transferable and can be given to friends or relatives who may be planning to buy a new Hero Honda motorcycle. SBI-Hero Honda Credit Card
Another customer service initiative launched jointly by Hero Honda and State Bank of India is a co-branded credit card. This time SBI Cards & Payment Services (SBI Card) has teamed up with Hero Honda Motors to offer the Hero Honda SBI Card, the first card for the two-wheeler industry in India. SBI card is said to be India's No 1 Visa card-issuer with over 11lakh cards issued. The cobranded card is designed to strengthen Hero Honda's Passport Programme. Implementation of my SAP CRM
In India’s highly competitive motorcycle manufacturing sector, streamlined operations and effective business relations are essential. To improve information exchange with its many partners, Hero Honda decided to introduce leading-edge supplier and customer relationship management capabilities. We wanted to enable our dealers and suppliers to perform online transactions, explains S.R.Bala subramanian (Bala), vice president of information systems at Hero Honda, and this was something that our legacy solution could not support. Hero Honda opted for the powerful self-service features of my SAP Supplier Relationship Management (my SAP SRM), plus the e-commerce capabilities of my SAP Customer Relationship Management (my SAP CRM).
13
References http://www.informationweek.in/informationweek/case-study/174643/tvs-motors-takes-dealerrelationship-level http://www.cxotoday.com/story/tvs-motors-implements-dealer-management-system/ http://www.dynamiccio.com/2012/03/tvs-motors-dealer-management-system-heads-for-thecloud.php http://www.wallcliffssystems.com/dealer_management_systems.aspx http://searchbusinessintelligence.techtarget.in/survey/TVS-Motor-Company-speeds-upoperations-with-BI http://en.wikipedia.org/wiki/Hero_MotoCorp http://en.wikipedia.org/wiki/TVS_Motor http://www.business-standard.com/article/companies/two-wheeler-makers-ride-high-in-may110060200091_1.html http://www.hindustantimes.com/business-news/CorporateNews/Higher-royalty-for-Honda-insplit-from-Hero/Article1-638869.aspx
14
