Business Driven Technology 6th Edition by Paige Baltzan

Exercise 15

Revving Up Sales at Harley-Davidson
Harley-Davidson produces 290,000 motorcycles and generates over $4 billion in net revenues yearly. There is a mystique associated with a Harley-Davidson motorcycle. No other motorcycle in the world has the look, feel, and sound of a Harley-Davidson, and many people consider it a two-wheeled piece of art. Demand for Harley-Davidson motorcycles outweighs supply. Some models have up to a two-year wait list. Harley-Davidson has won a number of awards including:
Rated second in ComputerWorld' s Top 100 Best Places to Work in IT.
Rated 51st in Fortune' s 100 Best Companies to Work For.
Rated first in Fortune' s 5 Most Admired Companies in the motor vehicles industry.
Rated first in the Top 10 Sincerest Corporations by the Harris Interactive Report.
Rated second in the Top 10 Overall Corporations by the Harris Interactive Report.
Harley-Davidson's Focus on Technology
Harley-Davidson's commitment to technology is paying off: In 2003 it decreased production costs and inventories by $40 million as a direct result of using technology to increase production capacity. The company's technology budget of $50 million is more than 2 percent of its revenue, which is far above the manufacturing industry average. More than 50 percent of this budget is devoted to developing new technology strategies.
Harley-Davidson focuses on implementing ebusiness strategies to strengthen its market share and increase customer satisfaction. More than 80 projects were in development in 2003, and the majority of the new projects focused on sharing information, gaining business intelligence, and enhancing decision making.
Talon, Harley-Davidson's proprietary dealer management system, is one of its most successful technology initiatives. Talon handles inventory, vehicle registration, warranties, and point-of-sale transactions for all Harley-Davidson dealerships. The system performs numerous time-saving tasks such as checking dealer inventory, automatically generating parts orders, and allowing the company to review and analyze information across its global organization. Talon gives Harley-Davidson managers a 360-degree view into enterprisewide information that supports strategic goal setting and decision making throughout all levels of the organization.
Building Supplier Relationships
Harley-Davidson invests time, energy, and resources into continually improving its companyto- company strategic business initiatives such as supply chain management. The company understands and values the importance of building strong relationships with its suppliers. To develop these important relationships the company deployed Manugistics, an SCM system that allows it to do business with suppliers in a collaborative, web-based environment. The company plans to use the SCM software to better manage its flow of materials and improve collaboration activities with its key suppliers.
Building Customer Relationships
Each time a customer reaches out to the company, Harley-Davidson has an opportunity to build a trusting relationship with that particular customer. Harley-Davidson realizes that it takes more than just building and selling motorcycles to fulfill the dreams of its customers. For this reason, the company strives to deliver unforgettable experiences along with its top quality products.
Harley-Davidson sells more than $500 million worth of parts and accessories to its loyal followers. Ken Ostermann, Harley-Davidson's manager of electronic commerce and communications, decided that the company could increase these sales if it could offer the products online. The dilemma facing Ostermann's online strategy was that selling jackets, saddlebags, and T-shirts directly to consumers would bypass Harley-Davidson's 650 dealers, who depend on the high-margin accessories to fuel their businesses' profits. Ostermann's solution was to build an online store, Harley-Davidson.com, which prompts customers to select a participating Harley-Davidson dealership before placing any online orders. The selected dealership is then responsible for fulfilling the order. This strategy has helped ensure that the dealers remain the focal point of customers' buying experiences.
To guarantee that every customer has a highly satisfying online buying experience, the company asks the dealers to agree to a number of standards including:
Checking online orders twice daily.
Shipping online orders within 24 hours.
Responding to customer inquiries within 24 hours.
The company still monitors online customer metrics such as time taken to process orders, number of returned orders, and number of incorrect orders, ensuring that Harley-Davidson delivers on its message of prompt, excellent service consistently to all its loyal customers. The company receives more than 1 million visitors a month to its online store. Customer satisfaction scores for the website moved from the extremely satisfied level to the exceptional level in a year.
Another of Harley-Davidson's customer-centric strategies is its Harley's Owners Group (HOG), established in 1983. HOG is the largest factory-sponsored motorcycle club in the world with more than 600,000 members. HOG offers a wide array of events, rides, and benefits to its members. HOG is one of the key drivers helping to build a strong sense of community among Harley-Davidson owners. Harley-Davidson has built a customer following that is extremely loyal, a difficult task to accomplish in any industry.
Harley-Davidson's Corporate Culture
Harley-Davidson employees are the engine behind its outstanding performance and the foundation of the company's overall success. Harley-Davidson believes in a strong sense of corporate ethics and values, and the company's top five core values serve as a framework for the entire corporation:
1. Tell the truth.
2. Be fair.
3. Keep your promises.
4. Respect the individual.
5. Encourage intellectual curiosity.
The company credits its core values as the primary reason it won the two prestigious awards from the Harris Interactive Report, one of the most respected consumer reviews for corporate sincerity, ethics, and standards. Sticking to strong ethics and values is and will continue to be a top priority for the company and its employees.
To enhance its enterprise further Harley-Davidson plans to keep taking advantage of new technologies and strategies including a web-based approach to accessing information and an enterprisewide system to consolidate procurement at its eight U.S. facilities.
How could Harley-Davidson's SCM system, Manugistics, improve its business operations