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IF View - Issue No. 31

I.T. SYSTEMS
AS A
MARKETING CHANNEL
STRATEGY ENABLER

Issue No 31

Marketing Channel Strategy Consultants
USA - EUROPE - AUSTRALIA - BRAZIL - HONG KONG
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The changing World of Information Technology (IT)

Supply chain management has become a strategic issue. How companies manage and structure customer and supplier relationships greatly affects marketing channel efficiency and the cost of marketing products or services.

Providing supply chain and channel partners with prompt operational information such as forecasts, promotional calendars, economic data, etc. allows them to improve their planning and purchasing activities, provide better service and reduce their costs.

Greater transparency of data and closer relationships are necessary to understanding end-user customer behaviour and improving customer relations. Understanding customers, their needs and preferences and providing timely and effective service is not simply a by-product of IT. It is a necessity in today's competitive and technologically advanced business environment and must drive IT's use.

Interaction via the Internet, EDI networks and mobile technology is a reality. IT is the essential enabler. IT provides the transport medium and infrastructure. It also helps automate many processes such as consolidating orders and forwarding them to suppliers, advising customers of order status, sending periodic forecasts, etc.

The Internet
The end user remains the primary focus of marketing channels and the supply chain. Delivering the right product, at the right price and at the right time and place are the most important issues.

The Internet is today's dominant IT infrastructure. The growing use and availability of the Internet brings suppliers and customers closer. Meeting customers' needs and expectations and providing quality customer service is more important that ever.

The Internet offers ease of access to suppliers and customers alike. However, its growing use requires companies to review their business processes and develop an Internet businessm strategy. As customers' expectations of Internet benefits increase, real time reactions to orders, enquiries or other communications become critical. Suppliers must develop new channel management capabilities and support their Internet sites.

However, inefficient practices will be exposed by companies' Internet use. Customer loyalty will be easily won or lost through real or perceived supplier indifference or lack or service. Internet based systems like all business operations will not look after themselves.

Optimising Internet benefits means starting with the right reasons for using it and focussing initially on the behind the scenes processes.

Similar requirements apply to wider IT capabilities. The differences lie in what is being measured.

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"FocusIT - Channels"
The ability of any technology to support an organisation's channel strategy and operational requirements is crucial to successful marketing channel and Internet strategy implementation.

IT performance can be categorised into four key measure groups:

  • Technology
  • Systems
  • Procedures
  • People

Each of the above categories comprises three segments. The specific segments will depend on what performance issue IT capabilities are being measured against. For instance, and organisation's requirement of its IT will be different if it wants to implement an ERRP, financial system or Internet solution. Each segment should be evaluated based on a performance scale. There are two over-riding attributes affecting the total score: environment longevity and its reliability.

By ensuring that the measured segments (illustrated in figure 1) relate to the requirements or the organisation's channel strategy and IT plans, we can measure the company's IT systems' abilities to act as the enabler of that channel strategy and solution.

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Figure 2 illustrates critical issues which may impede IT's effective support of an organisation's channel strategy. Increased focus on these issues is required to address performance weaknesses.

An evaluation such as the above is fundamental to ensuring effective IT support for marketing channel, supply chain and Internet strategies. It measures the state of the company's IT and systems abilities and relates them to specific business requirements. It allows the implementation plan to take the company's IT systems' strengths and weaknesses into account. By doing so we increase the channel strategy's success and minimise costs.

The development of an effective marketing channel strategy and efficient use of IT that supports it, requires an integrated IT and channel strategy where the focus is on IT as an enabler rather than an end in itself.

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