Financial Management: Definition, Function, Purpose, and Scope

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What is meant by financial management? Definition of Financial Management is all company activities or activities related to how to obtain, use and manage company finances.

Financial management is a management activity that aims to manage funds and assets owned by the company to be used on things or activities that help achieve the company’s main goal, namely profit.

In a company or business, financial management has 3 main activities carried out by financial managers, namely:

These three things are related to internal and external funding sources of the company. Working capital and share ownership also include tasks in financial management. Deeper about the purpose and role of financial management in business will be discussed in full in this article.

Related article: Understanding of Management

The following is an explanation of financial management based on explanations from experts:

According to Bambang Riyanto, the notion of financial management is all company activities related to the business of obtaining the necessary funding with minimal costs and the most favorable conditions, and the effort to use these funds as efficiently as possible.

According to J. L. Massie, the notion of financial management is a business operational activity that is responsible for obtaining and using the funds needed for effective and efficient operational activities.

According to Agus Sartono, the notion of financial management is all that relates to the allocation of funds in various forms of effective investment and fundraising efforts for investment financing or for spending efficiently.

According to J. F. Bradley, financial management is a field of business management aimed at managing the use of capital wisely, selectively and carefully from the source of capital to enable the expenditure unit to move towards achieving its objectives.

According to Sonny S, the notion of financial management is a company activity that deals with how to get funds, use funds, and manage assets in accordance with the overall goals of the company.

According to Grestenberg, the notion of financial management is how a business is organized to obtain funds, how to obtain funds, use of these funds, and how the business is distributed.

According to Sutrisno, the meaning of financial management is all the activities of a company with efforts to obtain company funds with low costs and efforts to use and allocate these funds efficiently.

According to James VanHorne, the notion of financial management is all activities related to the acquisition of funds and management of funding, as well as for the management of assets with the aim of all company activities.

According to Weston and Copeland, the notion of financial management is a function and responsibility of financial managers. The main function of financial management is related to decisions about investment, financing business activities, and dividend distribution (read: Definition of Dividends) in a company.

As already explained in terms of financial management above as an effort to manage company assets, so this management has a special scope that must be understood by a manager including:

This includes all policies relating to how to obtain funds such as policies to issue bonds or policies to find short-term and long-term debt. The funds in question can be sourced from the company’s internal and external sources.

All related to the establishment of policies for investment such as fixed assets or fixed assets. Capital can be in the form of land, buildings or infrastructure, including production machinery. Investment (read: Definition of Investment) can also be in the form of financial assets such as securities, stocks and bonds.

Policies relating to asset management efficiently to achieve company goals.

The above has been explained that financial management is carried out as a process to control company assets, especially in the form of funds. So that financial management has several goals that must be achieved, including:

Through appropriate policies, financial management can maximize the company’s profits in the long run.

Financial managers play a role in maintaining cash flow. Every day the company will certainly issue funds for example for the purchase of raw materials, payment of member salaries, rent and other payments. So that if it is not monitored and controlled it can cause an overbudget that is detrimental to the company.

Balancing the financing that is owned with borrowed funds. The aim is to prepare a capital structure.

Financial managers act to oversee the use of company money. The budget used for activities that do not benefit the company can be cut and allocated for other activities.

Financial managers strive to provide maximum dividends to shareholders and strive to improve the stock market because it is related to company performance.

Financial managers strive to improve the efficiency of all departments within the organization. Proper distribution of funds in all aspects will have an impact in increasing the efficiency of the company.

Companies can survive in competitive business competition which is the role of the finance department. Decisions related to finance must be carried out carefully because misuse of finance can lead to bankruptcy.

With good financial management, operational risks can be minimized. Risk of uncertainty in business must be addressed with the right decisions by financial managers.

Capital structure planning must be made in such a way by financial managers so that the use of capital costs can be minimized.

Finance is the most risky component for a business or company. Finance needs to be managed and controlled properly by a financial manager. This is related to the company’s ability to survive in the financial sector.

The following are some of the financial management functions:

All company activities that are related to the use of company budget funds need to be planned properly. So that activities are not profitable, the budget can be cut or cut. Allocation of funds needs to be considered for things that can maximize company profits.

Every activity that has been carried out requires a financial evaluation. So that it can be a reference for carrying out further activities.

Financial related internal audits need to be done so that they are in accordance with the rules of accounting standards and there are no deviations.

With the existence of financial management, then every year there will be financial reporting that is useful for analyzing the company’s profit and loss report ratio.

Thus a complete explanation of the notion of financial management, functions, goals and roles in the company. Hopefully this article is useful and adds to your knowledge.

Understanding ISO: Meaning, Purpose, Benefits, and Types of ISO

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What is ISO? ISO stands for The International Organization for Standardization, namely the International Organization for Standardization which sets international standards in the industrial and commercial fields of the world where it aims to increase trade between countries in the world.

Definition of ISO is one of the international standard setting bodies consisting of representatives from each country’s national standardization bodies to measure the quality of an organization. That is, every company that wants to compete globally can measure its credibility with ISO standards.

ISO organizations are parties that play a role in facilitating international trade and making everything work well. ISO provides world-class specifications for various things, ranging from products, services, and systems, to ensuring quality, safety and efficiency.

In short, companies or brands that already have an ISO certificate will be more likely to win global market competition. The reason is that the company or brand has guaranteed the quality of products (goods or services) from ISO so as to gain the trust of consumers.

Basically the purpose and benefits of ISO are to determine international standards in the industrial and commercial fields. Referring to the definition of ISO above, the benefits of ISO are as follows:

A company that establishes a quality management system in accordance with international standards will guarantee the credibility of the company. That is, all activities carried out by the company have the best standards which ultimately result in positive values ​​in terms of customer satisfaction.

Still related to point # 1, customer satisfaction is very important because it will make them trust the company more and become loyal customers.

Every company that wants to have an ISO standardization certificate must go through a definite cycle called PDCA. This cycle is applied to all types of industries, where the process of identifying, analyzing and executing a problem solving is carried out to guarantee quality according to international standards.

With ISO standards, a company will implement a special management system that can help to determine the company’s performance. When there are indications that the company’s performance is declining or the product will fail, anticipation efforts can be made immediately.

This process will indirectly prevent the occurrence of budget waste related to the poor performance and products.

Referring to the quality management principle, all standards are set to be implemented by all employees. This can motivate employees to maintain their quality, efficiency, and productivity according to the established ISO standards.

The advantage that can be felt directly by the company from ISO certification is the increasing image or company brand to be far better in the eyes of the world.

In general there are eight types of ISO standards issued by this International Organization and many have been applied in companies in Indonesia. The several types of ISO are as follows:

That is a brief description of the definition of ISO, its objectives and benefits, and several types of ISO. Hopefully this article is useful and adds to your insight.

Management Information System: Definition, Function, Purpose, Benefits, and Examples

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What is meant by a management information system? Definition of Management Information Systems is a system of planning within a company that involves internal control such as the use of resources, documents, technology, and management accounting as one of the strategies in the business.

In essence, management information systems in a business or company aim to collect, process, store and analyze information and then disseminate it for specific purposes.

Information system management is useful as a reference for decision making in an organization or company. Deeper about the management of information systems, objectives, functions and examples of their application in business will be discussed in full in this article.

Related article:

Some experts in the field of management have explained about information system management, including:

According to Raymond McLeod Jr, the notion of management information system is a computer-based system that provides information for some users who have the same needs.

This information explains the company or one of its main systems about what has happened in the past, what is happening now, and what might happen in the future.

According to Nash and Robert, management information systems are a combination of users / people, technology, media, procedures, and also controls, which have a specific purpose.

The aim is to get communication channels, process transaction types, and signal management to events within an organization / company.

According to Bodnar and Hopwood, management information system is a collection of hardware / hardware (read: Understanding Hardware) and software / software to transform data into a more useful form of information.

According to James O’Brien, management information systems are a combination of each unit managed by users or humans, hardware, software, computer networks and data communication networks, and also databases that collect, change, and disseminate information about an organization.

According to James AF Stoner, the notion of management information systems is a formal method that gives management information that is timely, reliable, and can support the decision-making process for planning, monitoring, and operating functions of a more effective organization.

According to Danu Wira Pangestu, management of information systems is a collection of interactions of information systems that are responsible for collecting and processing data to provide information that is useful for all levels of management in planning and controlling activities.

According to Gordon B. Davis, management information system is an integrated system between humans and machines that is able to provide information in such a way as to support the operations, management, and decision-making functions within an organization / company.

According to Azhar Susanto, management of information systems is a group / group of any sub-system / component, both physical and non-physical which are interrelated with each other and have functions in terms of evaluation, control and continuous improvement.

According to Joel D. Aron, management information system is an information system that provides information / data needed by a manager in making decisions.

In accordance with the explanation above, as one form of strategy within the company’s internal implementation of the management information system has the following objectives and functions:

Management information system has a main function that must be useful in the operations of an organization, among them:

In large and long-standing companies, information systems are usually very well structured and programmed. Management information system regulates how interactions within companies and companies with the environment can work in accordance with applicable procedures, for example in production information systems, marketing information systems and in other activities.

Some examples of the application of information systems in companies include:

The company uses an ERP system to manage and carry out integrated supervision in accounting, finance, marketing, human resources, operational and inventory management units.

As the name suggests, Supply Chain Management moves to present integrated data related to raw material supply, such as suppliers, producers, retailers to the last consumer.

A program that is useful for large amounts of processes that occur regularly. Usually applied to salary and investment management.

OAS is most often applied, both in large and small companies that are useful for launching information systems through the integration of computer servers within the company.

IMS is useful to support a spectrum of tasks within the company and can be used to assist decision making. In its application, several information functions are put together through computerized programs such as e-procurement.

KWS will integrate one new knowledge into the company. With this new knowledge, it is expected that experts can apply it to their work.

This information system serves to support a spectrum of various jobs within the organization. IMS is also used to help make decision-making analysis, and can bring together several computerized program information functions, such as e-procurement.

DSS can help managers make decisions by observing the environment of an organization. For example, the Electronic Link at Tunas Bangsa school, which observes the amount of income or new student registration every year.

This management information system basically uses artificial intelligence to analyze problem solving using the knowledge of experts who have been programmed into it. For example, a mechanical schedule system.

The ESS system will help managers in interacting with the organization / company environment by holding on to graphics and other communication supporters.

In essence, management information systems are the company’s efforts to coordinate with each other through a computer system that is arranged in such a way that it can be used to collect data and information more efficiently.

Logistics Management: Definition, Functions, Tasks, Objectives, and Benefits

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What is meant by logistics management? In general, the understanding of logistics management is an application of management principles in logistics activities with the aim that the movement of personnel and goods can be carried out effectively and efficiently.

Logistics management is part of the supply chain management process that has an important function in planning, implementing, and controlling the effectiveness and efficiency of storage and flow of goods, services and information, to the point of consumption to meet consumer needs.

From this explanation, we can conclude that logistics management is all activities related to logistics management.

In its implementation, logistics management has several important functions that are interrelated with each other. The logistics management functions are as follows:

Logistics management functions as a designer and determinant of the needs of each organizational program. This includes analysis activities related to products to be used, availability and priority scale.

This planning activity must pay attention to the budget that is owned by the organization, aspects of availability, and also the ease of access to get goods.

This function aims to ensure that the requirements for procurement of goods are in accordance with the budget. If the costs of logistics budgeting are not in accordance with the budget, changes in planning are needed.

Basically logistics management is more focused on the procurement of goods and is a must. When there is a budget mismatch and it is difficult to change planning, the logistics manager must improvise to manage logistical activities on a limited budget.

This is a process where the items that have been obtained are stored where they should be. Furthermore, the goods are then channeled to other interested parties in accordance with the standard operating procedures.

In the logistics management process also includes maintenance of goods. In general, the purpose of maintaining logistics goods is to make sure the items stored are not damaged quickly.

In logistics management activities there are also deletion activities. In this case the deletion function is to separate damaged items, repair damaged items, and replace damaged items accordingly.

The control function is carried out by a logistics manager with stages in accordance with the functions mentioned above. The purpose of this control is to ensure that every logistical management function can run as expected.

In accordance with several functions of logistics management mentioned above, the following are the objectives to be achieved in the implementation:

Basically the specific purpose of logistics management activities is to focus on achieving organizational goals effectively and efficiently.

There are three specific objectives to be achieved in Logistics management activities, namely;

Indeed the main task of logistics management is to ensure a balance between income and costs to generate profits. To achieve this goal, there are several other important tasks that must be done, including:

Implementing good logistical management activities on an ongoing basis will provide great benefits for an organization. The benefits of logistics management are as follows:

With good management logistics, the availability of goods will be guaranteed so that the company’s operational activities can run smoothly.

Logistics activities certainly require transportation equipment so organizations that have good logistics management will ensure the availability of transportation for goods distribution.

In addition to transportation equipment, there are various logistical facilities needed so that logistics activities can run well. With the logstics management, the organization can find out the facilities needed to support its activities.

Providing good service to customers is very important for every company. The service is not only for consumers but also for other stakeholders, such as suppliers.

Every management process is always supported by administrative activities. The aim is to ensure that every activity is properly and regularly recorded so that information on logistics activities can be found easily when needed.

This activity aims to handle the distribution of goods and raw materials from suppliers to companies. With good inventory management, the company is more likely to cooperate with suppliers who have good quality goods and adequate availability.

This activity handles distribution from company to consumer and ensures the delivery of goods can run well.

In the process of providing goods, there will definitely be problems that may occur. With good logistical management, problems can be anticipated and resolved appropriately, quickly and accurately.

In general, consumers track the shipment of goods ordered. With good logistics management, the delivery of information related to the distribution of goods can be done more organized.

The best service to consumers, whether it’s the provision of information, the accuracy of distribution, and good service, will ultimately result in a greater level of consumer confidence in the company. This will then foster customer loyalty to a company.

Thus a brief description of the understanding of logistics management, functions, tasks, and benefits for a business. Hopefully this article is useful and adds to your insight.

Performance Management: Definition, Purpose, Benefits, and Terms

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What is meant by management performance (performance management)? Definition of performance management is a managerial activity that aims to ensure that organizational goals have been achieved consistently in various effective and efficient ways.

There is also a definition of work management (MK) as an activity to ensure that organizational goals are achieved consistently through the process of planning, implementing, evaluating and evaluating the performance of the organization’s devices.

Performance management is not only related to the performance of employees personally, but also related to the performance of an organization as a whole. In other words, the Constitutional Court is closely related to the process and results of work based on the strategic goals of an organization, namely customer satisfaction and contributing to the economy.

In order to better understand what is meant by performance management, we can refer to the opinions of the following experts:

According to Bacal (1999), the notion of performance management is continuous communication and carried out in partnership between an employee and directly managing it. This process includes activities to build clear expectations and understanding of the work to be done.

According to Armstrong (2004), performance management is a strategic and integrated approach to deliver sustainable success to the organization by improving the performance of employees who work in it and by developing the ability of individual teams and contributors.

According to Castello (1994), performance management is the basis and driving force behind all organizational decisions, work effort, and resource allocation.

According to Schwarz (1999), performance management is a management style based on open communication between managers and employees regarding the achievement of the goal of providing feedback from managers to employees and vice versa, as well as performance appraisals.

According to Baird (1986), the definition of performance management is a work process from a group of people to achieve a predetermined goal, where the work process takes place in a continuous and continuous manner.

Basically the purpose of performance management or performance management can be divided into three, namely:

Strategic goals relate to employee activities in accordance with organizational goals. The implementation of a strategy requires an explanation of the results to be achieved, behavior, employee characteristics needed, development of measurements, and a feedback system for employee performance.

Administrative purposes relate to job evaluation for the purposes of administrative decisions, studies, promotions, termination of employment, and others.

Performance management also aims to develop the capacity of employees who have potential in their fields of work, provide training for employees whose performance is not good, and place employees in the right position.

In addition, there are several specific objectives of performance management, namely:

According to Wibowo (2010), performance management provides benefits for the company as a whole, managers, and also every individual in the organization. Here’s the explanation;

There are several tools and conditions for carrying out performance management. Some of these tools are ISO Quality Management, Malcolm Baldridge (MBNQA), Lean Six Sigma, Balanced Scorecard (BSC), Six Sigma, and others.

But whatever tools are used, the application of performance management must meet the following basic requirements:

Basically, performance management can succeed if all elements of the organization carry out their roles with dedication. That is a brief explanation of the notion of performance management, goals, benefits, and several conditions. Hopefully this article is useful and adds to your insight.

Definition of Effectiveness: Criteria, Aspects, and Examples of Effectiveness

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What is meant by effectiveness? In general, the notion of effectiveness is a condition that shows the level of success or achievement of a goal measured by quality, quantity, and time, in accordance with what was previously planned.

Some also explain the meaning of effectiveness is a level of success produced by a person or organization in a certain way in accordance with the objectives to be achieved. In other words, the more plans that are successfully achieved then an activity is considered more effective.

According to the Large Indonesian Language Dictionary (KBBI), effectiveness is usability, activeness, and the suitability in an activity between someone who performs the task with the objectives to be achieved.

Effectiveness Formula

Effectiveness = (Actual Output / Target Output) ≥ 1

In order to better understand what effectiveness is, then we can refer to the following expert opinion:

According to Ravianto (2014: 11), the notion of effectiveness is how well the work is done, the extent to which people produce output as expected. That is, if a job can be completed in accordance with planning, both in time, cost, and quality, it can be said to be effective.

According to Gibson (Bungkaes 2013: 46), the notion of effectiveness is an assessment made in relation to the achievements of individuals, groups, and organizations. The closer they are to the expected achievement (standard), the more effective they are.

According to Prasetyo Budi Saksono, the notion of effectiveness is how much the level of attachment between output (output) is achieved with the expected output of the number of inputs (inputs) in a company or someone.

According to Sondang, the notion of effectiveness is a utilization of infrastructure, resources in a certain amount that have previously been determined to produce a number of goods or services for activities to be carried out by a person or company.

According to Schemerhon John R. Jr., the meaning of effectiveness is the achievement of output targets that will be measured by comparing the budget output or OA (supposed) with the realization output or OS (actually). If OA> OS, it will be considered effective.

An activity or activity can be said to be effective if it meets certain criteria. Effectiveness is closely related to the implementation of all the main tasks, the achievement of goals, timeliness, and the existence of an active effort or participation from the executor of the task.

In general, some benchmarks or effectiveness criteria are as follows:

There are aspects of effectiveness to be achieved in an activity. Referring to the notion of effectiveness above, here are some aspects:

Regulations are made to keep the continuity of an activity in accordance with the plan. Regulations or provisions are something that must be implemented so that an activity is deemed to have run effectively.

Individuals or organizations can be considered effective if they can perform their duties and functions properly in accordance with the provisions. Therefore, every individual in the organization must know their duties and functions so that they can carry out them.

An activity can be considered effective if it has a plan that will be implemented to achieve the objectives to be achieved. Without a plan or program, goals cannot be achieved.

What is meant by ideal conditions or goals is the target to be achieved from an activity oriented to the planned results and processes.

There are many forms and examples of effectiveness in various fields of work and organizations. The examples of effectiveness in an organizational environment include;

Thus a brief explanation of the meaning of effectiveness, criteria, aspects, and examples. Hopefully this article is useful and adds to your insight.

Asset Management: Definition, Purpose, and Asset Management Cycle

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What is meant by asset management? Definition of asset management is a decision-making process and its application in accordance with the acquisition, use, and distribution of an asset.

In addition, there are also those who explain that asset management is a systematic process that aims to maintain, uphold, and operate assets economically through the acquisition, creation, operation, maintenance, rehabilitation and elimination of assets so that the objectives can be achieved effectively and efficiently.

In other words, the core of asset management is the management of assets related to technical, financial, and good management practices. Asset management is needed to decide what is needed to achieve business objectives, and then to obtain and retain assets during the lifetime of the asset to disposal.

In order to better understand what asset management is, then we can refer to the following expert opinion:

According to Gima Sugiama (2013), asset management is a science and art to guide wealth management which includes the asset needs planning process, obtaining, inventorying, legal audit, valuing, operating, maintaining, making or eliminating, and transferring assets effectively and efficiently.

Dolli D. Siregar (2004), asset management is a profession or expertise that has not been fully developed or popular in the government or in the work unit or agency.

According to Kaganova and McKellar, asset management is a decision-making process and its implementation corresponds to the acquisition, use, and distribution of these assets.

According to Danylo and Lamer (1999), asset management is a methodology for efficiently and fairly allocating resources between valid and competing goals and objectives.

Asset management is a systematic process to maintain, renew, and operate with a cost-effective physical asset.

Basically the purpose of asset management is to help companies make the right decisions so that assets can be managed effectively and efficiently. The objectives of asset management are as follows:

In implementing asset management there are 8 steps that must be done so that the cycle can be formed. The several stages of asset management are as follows:

This is the initial stage of the asset management process where planning is done on what things are needed in managing assets. For example the need for procurement, inventory, maintenance, and so forth.

At this stage, activities are carried out to procure assets, for example goods or services that are obtained at their own expense or other parties.

At this stage there is a series of activities in the form of identifying the quality and quantity of assets, both physically / non-physically and legally / legally. Each asset is documented and given a certain code to protect the assets.

At this stage an audit is carried out regarding the status of assets, systems and procurement procedures, systems and transfer paths. In addition, identification of possible legal issues is also carried out at this stage and at the same time preparing the solution.

At this stage each asset owned is used to perform tasks and work in accordance with its function to achieve company goals.

At this stage the asset management determines the value of assets owned so that the company clearly knows the value of the assets owned, transferred and deleted.

At this stage the company will assess what assets are considered unprofitable and will be written off. The process is divided into two parts, namely:

In many cases assets that are considered unproductive can be renewed so that they can be used again until the economic age ends. Renewal or renewal is carried out in the form of repair or replacement of parts so that the asset can work as its original condition.

That is a brief explanation of the understanding of asset management, goals, cycles, and examples. Hopefully this article is useful and adds to your insight.

Understanding the System: Definition, Elements, and Types of Systems

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What is a system (system)? In general, the notion of a system is a unit, both real or abstract objects consisting of various components or elements that are interrelated, interdependent, mutually supportive, and as a whole united in one unit to achieve certain goals effectively and efficiently.

There are also those who say the definition of a system is an alloy consisting of several elements / elements that are connected into a single unit so as to facilitate the flow of information and material / energy to realize a particular goal.

Etymologically, the term “system” comes from Latin (systma) and Greek (sustma) which is often used to make it easier to describe interactions within an entity.

The term “system” is often used in various fields, so the meaning will vary according to the fields discussed. However, in general the word “system” refers to a set of objects that are interrelated with each other.

In order to better understand the definition of the system, we can refer to the opinions of the following experts:

According to Harijono Djojodihardjo, the notion of a system is a combination of objects that have a relationship between functions and relationships between each object’s characteristics, as a whole being a functioning unit.

According to Indrajit, the definition of a system is a collection of components that have an element of interrelationship with one another.

According to Jogianto, the definition of a system is a collection of elements that interact to achieve a specific goal that describes various events and real unity, such as places, objects and people that really exist and occur.

According to Colin Cherry, understanding the system is a whole that has been formed from various parts or an assambel of various types and parts of it.

According to R. Fagen and A. Hall, the definition of a system is a collection of objects that have a relationship between each object including the relationship about the properties they have.

According to Jerry FitzGerald, the notion of a system is a network of work rather than interrelated procedures, gathered together in order to carry out an activity or achieve a certain goal.

According to Andri Kristanto, the understanding of a system is a network of interrelated procedures, gathered together to be able to carry out activities or complete a certain target.

As mentioned in the initial paragraph, a system is formed by certain elements. Each system consists of four elements, namely:

While the elements forming a system can be divided into seven parts, namely:

Broadly speaking, the type of system can be divided into two categories, namely:

That is a brief explanation of the understanding of systems, elements, and types of systems in general. Hopefully this article is useful and adds to your insight.

Understanding CRM, Functions and Objectives, Components, and Stages of CRM

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What is CRM (Customer Relationship Management)? Understanding CRM is integration and strategies used by companies to handle interactions with customers. Through CRM, you can find out the most updated information about customers, starting from complaints, product requests, and types of services that need to be improved.

For some divisions, information from CRM is very important where you can see the problems faced by customers until the trend is in vogue. Today many companies that try to be active on social media can be closer to their customers. From here you can also see, such as whether the customers define the company (read: corporate understanding) on ​​social media; satisfying or otherwise?

This form of CRM has traditionally been customer service connected via telephone, but now it is in the form of software that can also be connected to social media so that it is easier and does not need to lose track. Even more flexible functions.

Customer Relationship Management (CRM) in Indonesian means Customer Relationship Management. Some management experts have explained about customer relationship management, including:

According to Kalakota and Robinson, the notion of CRM is the integration of coordinated sales, marketing and service strategies.

According to Laudon and Traver, the notion of CRM is the process of storing customer information and recording all contacts that occur between customers and companies, as well as creating customer profiles for company staff who need information about these customers.

According to Kotler, the notion of CRM is the process of supporting companies to provide customer service in real time and establish relationships with each customer through the use of information about customers.

According to Haryati S, the notion of CRM is a series of managed systematic activities as an effort to increasingly understand, attract attention, and maintain a profitable customer loyalty (Most Profitable Customer) to achieve a healthy company growth.

Whatever the form of Customer Relationship Management (CRM), the system from the CRM must be able to perform the following functions:

In its implementation, the main component of customer relationship management is Sales Force Automation (SFA). SFA can help Sales Representatives to manage customers’ accounts and track opportunities, manage contact lists, manage work schedules, and so on.

Referring to the notion of CRM, here are some components in customer relationship management:

Customers are all parties who will, ever, and are using the services or services provided by the company, both in the process of seeing, making purchases, or maintenance.

For the record, only a small percentage of customers are potential customers. Generally, 80% of company profits are obtained from 20% of potential customers.

When building relationships with customers, companies must pay attention to two-way communication. The purpose of the relationship is to provide long-term satisfaction between the two parties, the customer and the company.

Customer relationship management focuses on managing and improving the relationship between the company and the customer. With the existence of a solid relationship between the company and the customer, it will help the company in developing competitive advantage.

After understanding the meaning of CRM, then we also need to know what are the stages. According to Kalakota and Robinson there are several stages in customer relationship management, including:

This can be achieved by providing easy access to information to prospective customers. In addition, the existence of innovations and attractive services also provide an important role in the process of getting new customers.

In this case the company seeks to improve its relationship with existing customers by providing the best service, for example receiving and handling complaints, giving rewards to loyal customers.

Furthermore, implementing cross selling or up selling will increase the company’s sales and reduce costs to find new customers.

No business wants to lose its customers. Companies must have the business of getting customer loyalty by trying to meet the customer’s expectations.

There are two terms that must be known in customer relationship management, namely “CRM on-premise” and “Cloud CRM”. Both have many advantages and there are also disadvantages. But for several reasons, companies often choose the first.

ON-Premise CRM is a customer relationship management software tool that is carried out on the company’s own server. Companies can customize the system as needed. Because it is managed by itself, the company feels the data is safe. Unfortunately, this system cannot use cloud.

Coud CRM is also known as CRM Online, SaaS CRM and on-Demand CRM that are managed on external servers or service providers. This server can be accessed via a browser on the internet and can be accessed anywhere so the work is more flexible.

Even cloud servers don’t need installation and maintenance. As long as there is internet, everyone can reach CRM from certain devices and places.

Entity CRM is software that is used to manage customer data in the system. So the contents are about the company’s database, starting from the telephone number to the Lead record.

In addition, CRM also has a name template. Usually companies use the Lead and Contact templates or usually called Accounts. In addition there are Deal (opportunity), quotes, orders and others. Everything can be customized.

The consideration of the advantages of using another CRM system is a matter of flexibility where all data is managed automatically and work can be done anywhere. Besides that, this CRM is able to be a source of company information regarding the tendency of products that are less preferred or less than optimal, so that the company can determine more advanced steps to improve performance both in terms of service and real products.

Such is the explanation of the meaning of CRM or customer relationship management, CRM goals, CRM components, CRM functions, and several terms in CRM. May be useful.