Dhruv Tanwar

By making a success of connecting to dealers and customers, Tata Motors has got into cruise control in a critical sphere of its business

Given that the customer is king (or queen), it would be logical to presume that establishing — and nurturing — a relationship with such royalty is a priority for enterprises looking to sell a product or service. Fact is, it may be a priority but organisations rarely pay more than lip service to what goes by the grandiose nomenclature of customer relationship management. For Tata Motors, though, this has always been an imperative.

It made eminent sense for India’s premier automobile company — with over 1 million customers, 22,000 employees and a geographically fragmented business that operates out of 1,600 locations in a notoriously cyclic business environment — to put many eggs in the relationship management basket. But this was an idea cooked in the cauldron of adversity.

Tata Motors got started on what it has tagged the customer relationship management-dealer management system (CRM-DMS) at the turn of the millennium, when it was battling to regain relevance at a difficult time in its history. That’s when it realised that survival in the auto business depended on managing its relationships with its customers, dealers and anyone else who had a deep connection with the mother company.

This was no mean task, considering the scale and complexity of the issues involved. Two parameters — customers, and their interface with the company, the dealers — were the critical links in a complex chain that Tata Motors had to deal with. The solution led to the emergence of Tata Motors’ integrated CRM-DMS, which is today the largest such application in the automobile industry worldwide, linking to more than 1,200 dealers across India and tracking the needs of some 25,000 customers.

Tata Motors had no standard or benchmark to model its solution on when the relationship concept was first considered, back in 2002. The company realised that it had to look at the business in a fundamentally different way. Instead of selling to the customer, Tata Motors embarked on an ambitious programme to make its extended organisation get into the customer’s shoes and envision each little detail as if it was meant to serve him.

The challenge was taken on by over 40 cross-functional teams, comprising one member each from design, manufacturing, sales and marketing, and service. Based on the output of this ‘quality functional deployment’ exercise and customer satisfaction surveys, Tata Motors came up with the top 25 issues that it needed to address from the customer’s point of view.

To standardise the sales process, the company broke it up into a four-part cycle: enquiry, warm prospect, hot prospect (industry terminology for potential buyers), and completion of sale and vehicle delivery. Using statistical analysis on the segmented data, the company was now able to predict its sales patterns.

Once standardisation was carried out across the dealer network, results were visible almost immediately. Accurate sales forecasts, reduced inventory for the company and the dealer, and better production scheduling were only some of the benefits. A shorter delivery cycle for the customer was an important fringe advantage.

Tata Motors then embarked on implementing a solution that also facilitated the free flow of information across the enterprise. It put in place a robust information technology platform in the form of an innovative dealer management system, which automated sales processes for its 1,600 dealer locations, allowing them more time to focus on the customer.

Tata Motors chose Siebel for its CRM programme, which with its user-friendly interface simplified the process of training the company’s 15,000-plus dealer sales force. To support each dealer — who is actually a business partner representing the company with the end customer — Tata Motors involved dealers throughout the configuration and deployment process.

“Integrating the Siebel Automotive CRM with our system ensured that our dealers would immediately see the value in the solution,” says KR Sreenivasan, head of CRM and DMS. “This helped us overcome the usual resistance to change and gain rapid acceptance from our dealers.”

Its CRM-DMS initiative, which has cost Tata Motors about Rs35 crore to date, has enabled the company to connect with 1,200 dealers online (the number is expected to rise to 1,600 in the next few months) and has allowed it to monitor finances and inventory at the dealer level, and services, spares and complaints at the customer end.

CRM-DMS has helped Tata Motors enormously in getting a firmer handle on its business. The system was implemented in three phases, the objective being to achieve success in one before moving on to the next:

• Phase 1 focused on capturing customer and vehicle data and automating routine tasks.
• In phase 2 this data was used to improve customer interactions and streamline product development and planning.
• Phase 3, now underway, concentrates on tuning the system and delivering additional value-added services to customers.

The CRM-DMS platform has been integrated with a wide array of back-office applications, including inventory management, fulfilment and parts location. Pricing and tax calculations can now be adjusted for each dealer’s requirements. The comprehensive sales and reporting functionality built into the Siebel solution allows Tata Motors to distribute sales targets directly to its dealers and roll up sales numbers across the country in real time.

Tata Motors' dealers are a happy lot, too. The dealer management system has meant a gross reduction in the amount of working capital needed to run their businesses. Transactions between the company and dealers, which earlier took up to 60 days, are now completed online and sealed in under seven days.

Even the service bays at the workshops have happy stories to tell. The system-based job card enables the mechanic to follow a checklist and diagnose faults through a process of elimination of probable causes,
slashing diagnosis time. Simultaneously, the stores manager uses the system-based job card to assort a basket of the spare parts needed to fix the fault, and they are ready for pickup even before the mechanic walks into the stores.

With zero waiting times built into the service process, the system generates a dashboard for the workshop supervisor, indicating idle capacity and process times, and highlighting bottlenecks to optimise the use of service bays. The recent implementation of an SMS capability means that the system directly pings the customer when the job card is closed on the system and his vehicle is ready.

The company can also now track each vehicle right through its operating lifetime, giving it valuable insights on product performance over time (earlier this was limited to the warranty period, after which scant information was forthcoming).

“Overall, we have transformed our organisation and made it truly customer-centric,” says Sreenivasan. “One of our first dealers to install the system doubled his sales volume in three months without the need for additional manpower. Another said that he can, for the first time, view his entire stock of vehicles and see how his inventory was ageing.”

But, as the old cliché goes, the proof of the pudding is in the eating. The real reward comes from the customer. With a product line spanning commercial, utility, and passenger vehicles, Tata Motors is on the road to forging ever stronger relationships with the people who have bet their money on the company’s products.

Uploaded in December 2007