New Study Shows Consumer Goods Company CJ Corporation Achieves Double-Digit Returns with CRM from SAP
mySAP™ Customer Relationship Management Continues to Deliver ROI Success Through Increased Revenues, Reduced Costs
WALLDORF, Germany - December 16, 2003 - SAP AG (NYSE: SAP) today announced the latest in a series of studies that highlight the significant return on investment (ROI) companies are achieving using mySAP™ Customer Relationship Management (mySAP CRM). The study, conducted by the ROI Review, a publication of Peppers and Rogers Group, concludes an internal rate of return (IRR, returns after break-even) of 15 percent over three years for Korean consumer goods manufacturer CJ Corporation (CJ), a worldwide producer of sugar, flour, cooking oil and processed food.
After evaluating a competing CRM point product, CJ saw significant value in SAP's integrated approach to CRM as a way to deliver a more customer-focused business strategy. By leveraging its existing enterprise resource planning (ERP) infrastructure from SAP with mySAP CRM, CJ was able to increase revenues, improve customer acquisition and reduce marketing costs by more effectively using customer data -- a direct result of integrating marketing, sales and service processes with critical back-office operations.
CJ Integrates Supply and Demand Chains to Revamp Customer-Focused Strategy
Prior to using mySAP CRM, CJ outsourced a variety of discrete consumer marketing campaigns and was unable to share, manage or use campaign information since it was held by a third party. CJ now executes its 94 annual campaigns in-house, achieving a total cost reduction of $839,000 (KRW 987 million). Using mobile sales capabilities with mySAP CRM, CJ's sales force has immediate access to promotional, product and service information for improved customer retention and acquisition. CJ has already seen an increase in sales of $252,000 (KRW 297 million) by better identifying revenue opportunities with existing customers. CJ's interaction center also contributes $1.3 million (KRW 1.5 billion) to the company's overall IRR calculation by improving service levels based on more accurate business-to-business (B2B) and business-to-consumer (B2C) customer profiles -- information that can also be leveraged to impact the company's marketing and product development efforts. Increased customer service and refined marketing initiatives for existing customers are expected to help CJ realize $1.2 million (KRW 1.4 billion) in retained revenue by June 2005.
"As the results of the ROI study demonstrate, SAP was the right choice for executing our customer-focused strategy," said Jong-Hyun Kim, CIO, DNS team at CJ Corporation. "We approach everything we do at CJ with "Only One Spirit' and this is the driving force behind our decision to deploy a full suite of integrated solutions from SAP. With mySAP CRM, we are better positioned to act on customer insight to increase sales, improve service and refine product development. By integrating our supply and demand chains to leverage the wealth of valuable data stored across the organization, we're improving efficiency at a low total cost of ownership and significant rate of return."
"Consumer products companies such as the CJ Corporation increasingly recognize SAP as the CRM vendor of choice for our unparalleled industry expertise and ability to deliver CRM as a deeply integrated part of the enterprise, with significant impact on the bottom line," said Peter Kirschbauer, extended board member at SAP. "This report demonstrates that mySAP CRM can help drive CP companies' business processes throughout the extended organization, linking valuable customer insight to improve product development cycles, inventory management, collaboration with retailers, and customer satisfaction."
CJ Corporation is among a number of companies that have achieved positive returns using mySAP CRM. The ROI Review study on CJ Corporation and additional ROI reports on mySAP CRM are available for download at: http://www.sap.com/solutions/crm/customersuccess/roi.asp.
Note to the Editor -- Internal Rate of Return (IRR)
The IRR methodology is used to compare various investment options which differ in time periods, initial investments and variability of returns in order to establish a single common denominator. IRR by definition asks what it would take, looking at interest rates, to equate the returns (in the various years) with the initial investment. Therefore, by definition, zero (0%) is the reference basis where the returns recoup the initial investment, anything above 0% is the outcome after recouping the initial investment.
About ROI Review & About Peppers and Rogers Group
The ROI Review is published by the Peppers and Rogers Group, a management-consulting firm founded in 1993 by Don Peppers and Martha Rogers, Ph.D. Headquartered in Norwalk, Connecticut, Peppers and Rogers Group is recognized as the world's leading authority on customer-based business strategy.
About SAP
SAP is the world's leading provider of business software solutions. Through mySAP™ Business Suite, people in businesses around the globe are improving relationships with customers and partners, streamlining operations, and achieving significant efficiencies throughout their supply chains. The unique core processes of various industries, from Aerospace to Utilities, are supported effectively by SAP's 23 industry solution portfolios. Today, more than 20,500 customers in over 120 countries run more than 67,500 installations of SAP software. With subsidiaries in over 50 countries, the company is listed on several exchanges including the Frankfurt stock exchange and NYSE under the symbol "SAP." (Additional information at http://www.sap.com)
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