Aligning Strategy and Technology Choices

Four barriers to KCRM Actualization

1. Environment: Market Trends, Competitive Threats, Regulatory Controls

2. Strategic context: Product/Services, Market Opportunities, Customer Segments, Value Proposition alliances

3. KCRM Strategy:  E-Business Strategy, Competitive Differentiation, Knowledge, Digital Capital, Adaptability

4. KCRM Technology: E-Business Infrastructure, KCRM Architecture, Interaction Channels, Integration

Outcome Indicators of Effective KCRM Strategy Formulation

The objective of implementing a KCRM strategy is to enhance and apply a business’ digital capital, that is, its relationships and knowledge. The outcomes supported by KCRM include assimilation and deployment of digital capital that provides your business a source of sustainable competitiveness.

VRIN Framework

Knowledge strategy begins with a business vision, a penultimate long-term strategic intent. Effective KCRM must result in networked knowledge and relationship capital that is valuable, rare and inimitable which would help the company to gain competitive advantage. In an attempt to build digital capital it must ensured that there is no other substitutable digital capital available for the competitors to imitate.

Analyzing The Business Environment

The four goals of CRM- identification, differentiation, interaction and customization have evolved ever since the introduction of e-commerce and now further with the evolution of e-business.

Gap Analysis: The process of analyzing what is and what should be in terms of strategy, markets, knowledge assets, and relationship assets. Evaluating these gaps provides the business with an accurate picture of market segments that it can viably compete in.

Strategic gap: The gap between what your business must do and what it can feasibly do in order to fill existing market

Knowledge gap: The gap between what your business must know and what it actually knows about its customers and business partners

Relationship gap: The gap between the strength of relationships that your business must have in order to fill the existing target market gaps and the relationship capital it has

Exploitation vs Exploration

The degree to which your business exploits its existing knowledge and relationships for short-term gains is known as its exploration level. However, exploitation must also be accompanied by exploration of new business possibilities of internal and externally assimilated knowledge and creating of new knowledge through various mechanisms and interaction channels.

Mapping Knowledge Assets:

Knowledge is categorized into three clusters 1.Innovative: this will eventually become common place as it is replicated by competitors over a period of time 2.Advanced: Innovative deteriorates to the level of advanced level 3.Core: Innovative knowledge further deteriorates to become core knowledge, which is offered by every player in the same market place. What is innovative today will become core tomorrow.

Knowledge maps provide relative comparisons. Depending on whether your business emerges as an innovator, market leader, competitive threat, struggler, or an exit candidate, you can determine whether the cost of pursuing a certain market and decide on whether to invest in playing catch-up or focus on a different market segment.

Drivers of Knowledge Management

The knowledge based, web connected business environment is one that favors knowledge rich but asset poor organization structures. Seventeen drivers account for the knowledge economy based, technological, structural, process-focused, and increasing returns economic characteristics of the e-business environment.

Functional Convergence: Convergence of knowledge workers from different areas of specialization and across traditional departments such as marketing, sales, finance and manufacturing. To bring together collective expertise, employees work n parallel to complete assignments that span traditional departmental and diverse organizational boundaries.

The web makes new ways of relationship building feasible:

Self-service, collaborative communities, intelligent personalization, and knowledge based adoption provide individualization at mass-market cost-efficiency.

Self-service: FedEx distributes its powership software free of charge to all customers. Customers can electronically schedule shipments, maintain address books, manage accounts, track packages, order supplies, and print shipping labels on FedEx-provided label stock.

Collaborative Communities: web also facilitates formation of Virtual communities at a relatively low cost. Amazon.com is a classical example of such communities that can form around interest areas in the B2C context. The customers can see what other customers with interest similar to hers actually purchased. By allowing customers to leave feedback and opinions on a particular product (reviews), amazon.com creates an implicit community of buyers who share similar interests.

Adaptive Real-Time Cross-Selling: offering related items at the time of sale can be managed in the web environment. If you are buying a laptop online, the system recognizes the related items, such as screen guard, pen drive, external hard disk, speakers and offers them to the buyers as you get ready to check out. By being able to integrate purchases, the system may reorder items that were most frequently purchased along with a given item, and offer them first. In addition, some web businesses offer special bundle deals on such purchases. The key point here is that the web provides a highly suited environment for cross-sell offers, and these can be made more effective by integrating aggregated knowledge gained from past buyers.

Intelligent personalization: Technology tools such as intelligent agents apply artificial intelligence techniques for learning about customer behavior though passive observation. Microsoft Word’s assistants-though not always a pleasant example—are examples of such intelligent agents. As a customer interacts with a system, the agent (or set of agents) begins to deduce patterns in his behavior. Based on these deductions, agent based tools can increasingly personalized offers for that user.