Introduction
Contemporary business environment makes companies compete in new, creative and more innovative ways, which enable sustainable competitive advantage through intangible assets. While some time ago, radical and breakthrough innovation could guarantee the leading position of the company, the reality of today’s business illustrates the ease of imitability of physical assets and tangible resources. Recognizing the need to differentiate itself through human capital, transition knowledge and unique proposition to the clients, companies more and more focus on flexibility and adaptability to the external market requirements and constantly changing customer expectations.
With the above in mind, the investment I technology and internal capabilities for transactional data and analytical capacity of upstream and downstream activities is one of the central elements of organizational strategies. The purpose of this documents it to look at the latest trends in technology and competitive strategies of the company through effective applications of Business Intelligence (BI) solutions. Increasing internationalization of the businesses, supply chain complexity and improvement of Information Technology (IT) infrastructure in developing and developed countries, accompany these trends and create opportunities and synergies between commerce and trade and IT solutions. The reality shows that the development of BI and IT solutions in general often outpaces the rate of IT projects implementation by the companies. This inevitably leads to the reduction of effectiveness of the BI solutions and, consequent growth in costs of upgrade and development in IT sector. Many companies recognize the threats, which automation of information flow and data management can bring to the organization and the customers and the decisions, taken by the management should involve the analysis of the risks and the long-term costs of BI adoption. The complexity of the relationship between the BI sector and the industry or an organization is determined by at least four elements: financial considerations, safety and security, integration opportunities and limitations as well as the long-term viability of the programs, based on the need for renewal and continuous upgrade of the interdependent systems.
Considering the challenges and tasks, which have to be addressed by the company at the tie of the decision-making process and adoption of BI solutions, it is interesting to look at an isolated company, who positions itself as the early adopter of the BI solutions on a high scale and international business arena. One of the industries, which heavily rely on BI, is the shipping and supply chain, where the profit margins depend on cost-efficiency and customer intelligence is central to securing high revenue tenders and long-term contracts. With that in mind, this document will look at the potential improvement, which one of the cutting edge BI solutions can offer to a major shipping company CMA CGM.
Company Background
CMA CGM is one of the leading worldwide shipping companies, operating in all major segments, such as breakbulk, container, and car carriers. Founded in Marseille in 1978, the company is present today in 160 countries, employing over 29,000 employees. Operations of the organizations are complex, as the vessel fleet is comprised of 538 own vessels with monthly service to over 420 commercial ports in all the continents. One of the distinguishing characteristics of the organization is the “family governance” structure, and CMA CGM prides itself on demonstrating how the family organization can be efficient in a long-run. The announced revenue for 2015 is USD 21 million, bringing a company to the top league of international trade Groups (CMA CGM 1). Importantly, the company works with strong physical infrastructure, which does not account only for the vessel assets, but relies on 650 offices in 160 countries, controlling over 200 services and thousands of clients in the spot, Key Account, and non-vessel operating cargo carrier (NVOCC) segments. Such operational structure demands strong internal control and analytical capabilities measure and predict demand, optimize operational margins and guarantee the long-term sustainable of the services through fixed client contacts.
BI Solutions and Benefits
Interestingly, many modern companies, especially those corporations, where strategic sales and marketing decisions are based upon the information about the client, internal stakeholders, and processes, attempt to incorporate various mechanisms to messy and non-organized data into a structured information flow, which helps decision-making process and ensures accurate use of information with application of real-time and historical data. The purpose of the business Intelligence as a whole is to support these decisions and actions and lead to improve business performance, by improving the core business processes within three areas: business information quality, business analysis quality and business decision-making quality. As a result of effective implementation of BI, organizations can improve their costs, sales and, consequently profit margins.
Recommended BI Application for CMA CGM
CMA CGM is facing one of the major challenges, determining the direction of its business strategy and demands for the quality of internal processes, to adequately respond to competition and other external pressure. The insight into the organizational development and activities allows identifying the core is of strategic focus:
Cost-optimization through fleet operations;
Revenue generation through effective sales and marketing strategy;
Understanding of customer needs and psychology;
Personalization of solutions in transportation and supply chain with existing fleet and technology.
The cost of fuel and surcharge prediction, based on transactional data.
Customer segmentation strategy to ensure maximization of revenue and profit.
An analysis of the existing market solutions, based on the understanding of the CMA CGM needs as a customer for BI solutions, it is recommended to focus on the implementation of the personalized BI solutions, offered by IBM. The company is one of the leaders in tailor-made solutions for their customers, which many other organizations on the market cannot attend. The challenge for the organization, offering a solution to CMA CGM is the integration of the applications, programs, and processes with the systems, unique to the company. The Research & Development (R&D) behind the IBM Software Group offers the required knowledge and experience, to support this need. Another important aspect is the user-friendly interphase, enabling different levels of security and data access as well as continuous support from the IBM call center and dedicated team of solution developers. Finally, the solution cost distribution and return on investment (ROI) offers an optimal solution for the company, while building on the competitive advantage on the market. The point that should be made here is that, while the initial investment in development, pilot, and implementation of the programs and interfaces overweight most of the existing solutions on the market, the long-term costs are significantly lower, as the company offers low zero external maintenance costs, utilization of cloud computing and strong focus on RFID, allowing data mining, analysis and evaluation through the use of internal IT resources (Leat 3-8).
IBM offers a variety of standard solutions for the companies, while also working with larger organizations on personalized development. To optimize the cost fo BI implementation it is recommended to work on the blend solution with IBM on an integration of IBM Cognus Analytics and its further adaptation and integration with existing system and capacity management solutions within the CMA CGM (IBM 1). This tailor-made solutions, global presence and strong market position of the IBM company is the major advantage of the recommended option as it can respond to the needs of a large international company and customize the service, which is unlikely to be offered by smaller scale BI companies. The major advantage of the IBM pre-made solutions is low costs, which, according to the corporate information go as low as to USD 4,000 one time charge per business unit. This cost is a strong competitive proposition and can be explained by the large part of in-house solutions and the scale of IBM operation.
When it comes to the review of the synergies and the core business differential, outlined by the market analysists and the IBM management themselves is the understanding of the organizational needs for diversity and scale of the data analysis. The system does not only cross-functional data usage and analysis, addressing customer, supplier, financial and employee data. Additionally, the warehousing and analytical environment, which can be integrated with external stakeholders (Leat 7-10). With that in mind, it is important to look at the stakeholders at CMA CGM, which will be primary customers of the recommended BI solution.
Stakeholder Overview
CMA CGM organizational structure is comprised of commercial and operational organizations. The commercial organization includes Sales, Key Account and Marketing, Human Resource Management and Finance and Administrative functions departments. Operational structure involves Capacity Management, Port Operations Management, and Operations. Governance structure within the organization is presented by a mixed management hierarchy with Top, Line and junior management levels of “leading others” employees and tactical levels, working with a large number of “leading self” employees. It is expected that the BI should be accessible to all the employee levels with a diversification of the access level and the depth of analytical capacity, based on seniority levels.
Additionally. CMA CGM works with a number of strategic long-term partners and customers, which require access to the transactional data of the company, as core criteria of choosing the shipping company as their partner. These external stakeholders can be classified in the following categories: container slot and capacity suppliers, Key Account, NVOCC.
Finally, as the publicly listed company, CMA CGM is responsible for providing accurate financial and operational data to the public authorities and its stockholders, which outline the third type of stakeholder.
Taking into consideration the large number of stakeholders, involved in the usage of the BI systems and information, it is possible to see the actual value, which this BI solution can give to each of the users. Internal stakeholders are, surely, the primary users of the systems and the BI can benefit these stakeholders, by helping to analyses the data and apply this knowledge to the improvement of commercial and operational processes. Additionally, the possibility to differentiate the access level improves data safety and managerial control. For the external stakeholders, BI solution is a way to integrate the internal BI of these companies with their logistics and supply chain costs, driven by CMA CGM. Finally, stockholders and public authorities benefit from information transparency and the structured and standardized approach to data presentation with historical data sets (Simon, 22-34).
Main Competitive Advantage
The analysis of the recommended solution outlines a number of advantages for the company. While some of the BI solutions and systems outline the basic organizational need, others can be seen as the competitive advantage, building on "desire" of CMA CGM as a client, rather than basic demand. Such features include the possibility to align the internal IBM solution interface with the existing systems and programs, run the company. As such, IBM Congos Analytics is a standardized solution in terms of user-interface, but given the demand for blended solution, IBM will be able to bring the "look" of the systems closer to the other CRM, Operational and Financial interfaces, making the application and integration more intuitive and, consequently, reducing resistance, errors, and frustration among the primary stakeholders. This advantage, along with an extremely personalized approach to data access and the levels and security layers constitute the major competitive advantage of the IBM solution (IBM 1).
Additionally, IBM, unlike wise most of its smaller competitors can enable specific R&D environment, which allows internal CMA CGM IT specialists make changes, manage and maintain the system, without the attraction of external team. The maintenance process, therefore, is simplified and can offer very cost-effective solution in a long-term.
Implementation Challenges
As much as the strong partner in BI solutions, such as IBM can offer a number of competitive advantages to the organization, it is important to recognize that the more complexity we add to the systems and processes, the more challenges the organization has to address when implementing the solution. These challenges can be analyzed from the three-dimensional perspective:
HRM Challenges;
System Integration Challenges;
Infrastructure Challenges
When the company decides to change the existing processes, implement new solutions and adjust add complexity, it inevitably faces the response from its stakeholders. This response is seen in cognitive and emotional behaviors. It is natural for individuals to resist change and oppose anything new. With that in mind, CMA CGM should create strong and accurate change management process, training program and communication strategy, which will ensure that employees feel part of this process and develop the positive attitude towards the changes in processes. To achieve this attitude and positive response, the management should demonstrate the benefits of the BI solution on all organizational levels and make employees feel comfortable using it in a short term.
System integration for a company with the scale and size of operations like CMACGM involves numerous technical complexities, which will limit, challenge and make it impossible to fully integrate data, translate various data structures in a unique information flow. Given the operational complexity of the company and the use of multiple operational and commercial applications, the implementation process will require a large number of customization within the existing and new systems. This will increase the pilot and implementation times and will demand dedication of time and financial resources.
Finally, the BI solutions will be implemented by the organization in all locations. The differences in physical and other infrastructures across the countries and offices will add complexity to the process and will challenge the standardization and equal use of the BI across the functions and locations of the company (Williams and Williams 35-74).
Conclusion
Business Intelligence in its contemporary form can bring significant competitive advantages to the modern organizations. It is important that the organization understands the needs and evaluates the benefits, which given BI solution can give, relative to financial and time investment into the BI systems. Many companies can be satisfied with the standardized solutions, while other, such as CMA CGM demand more personalized approach and, thus, bigger partners, such as IBM. The solution, recommended in this document will demand high initial investment, but will benefit the organization in a long-term by increasing sales and market intelligence and strategies, optimization of the internal and outsources capacity in all transportation segments and the possibility for more accurate middle and long term forecasting and cost prediction for fuel and port surcharges. Given the competitive market environment and tight profit margins, such BI solution is an essential competitive tool.
Works Cited
CMA CGM. CMA CGM: A Leading Worldwide Shipping Group. Statistics New Zealand, Tatauranga Aotearoa. Web 1 March 2016, https://www.cma-cgm.com/the-group/about-us/presentationSocial Media. New York: Green Line Publications.
Williams, Steve, & Williams, Nancy. The Profit Impact of Business Intelligence. London: Morgan Kauffman. 2010. Print.
Leat, Vince. Introduction to Business Intelligence. ASEAN SV Group. Web January 2007, http://www-07.ibm.com/sg/events/blueprint/pdf/day1/Introduction_to_Business_Intelligence.pdf
IBM. Cognos Analytics. IBM Official Website [Online]. Web January 2015, http://www.ibm.com/analytics/us/en/technology/products/cognos-analytics/
Simon, Alan. Modern Enterprise Business Intelligence and Data Management: A Roadmap for IT Directors, Managers, and Architects. London: Morgan Kauffman Publishing. 2014. Print.
