CHAPTER 11:Building a Customer-Centric Organization – Customer Relationship Management

HOW CRM WORKS :

Customer Relationship Management (CRM)
CRM enables an organization to:

Ø  Provide better customer service

Ø  Make call centers more efficient

Ø  Cross sell products more effectively

Ø  Help sales staff close deals faster

Ø  Simplify marketing and sales processes

Ø  Discover new customers

Ø  Increase customer revenues

Recency, Frequency, and Monetary Value

Organizations can find their most valuable customers through “RFM” - Recency, Frequency, and Monetary value

Ø  How recently a customer purchased items (Recency)

Ø  How frequently a customer purchased items (Frequency)

Ø  How much a customer spends on each purchase (Monetary Value)

The Evolution of CRM

CRM reporting technology – help organizations identify their customers across other 

applications

 CRM analysis technologies – help organization segment their customers into categories 

such as best and worst customers

CRM predicting technologies – help organizations make predictions regarding customer 

behavior such as which customers are at risk of leaving

Three phases in the evolution of CRM include reporting, analyzing, and predicting

The Ugly Side of CRM

Customer Relationship Management’s Explosive Growth

CRM Business Drivers

Customer Relationship Management’s Explosive Growth

Forecasts for CRM Spending (in billions)

Using Analytical CRM to Enhance Decisions

Operational CRM – supports traditional transactional processing for day-to-day front-

office operations or systems that deal directly with the customers

Analytical CRM – supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers

Operational CRM and analytical CRM

Customer Relationship Management Success Factors

CRM success factors include:

Ø  Clearly communicate the CRM strategy

Ø  Define information needs and flows

Ø  Build an integrated view of the customer

Ø  Implement in iterations

Ø  Scalability for organizational growth

Chapter 10 – Extending the Organization – Supply Chain Management

Chapter 10 – Extending the Organization – Supply Chain Management

BASICS OF SUPPLY CHAIN

SCM – the management of information flows between and among stages in a supply chain to maximize total supply chain effectiveness and profitability

The supply chain has three main links.

1.       Materials flows from suppliers and their upstream suppliers at all levels

2.       Transformation of materials into semi-finished products, or the organization’s own production processes

3.       Distribution of products to customers and their downstream customers at all levels

INFORMATION TECHNOLOGY’S ROLE IN THE SUPPLY CHAIN

• To create the integrations or tight process and information linkages between functions within a firm such as marketing, sales, finance, manufacturing, and distribution – and between firms, which allow the smooth, synchronized flow of both information and product between customers, suppliers and transportation providers across the supply chain

Visibility

• ABILITY TO VIEW ALL AREAS UP AND DOWN THE SUPPLY CHAIN
• BULL WHIP EFFECT OCCURS WHEN DISTORTED PRODUCT DEMAND INFORMATION PASSES FROM ONE ENTITY TO THE NEXT THROUGH THE SUPPLY CHAIN
• INFORMATION TECHNOLOGY ALLOWS ADDITIONAL VISIBILITY IN THE SUPPLY CHAIN.

Consumer behavior

• DEMAND PLANNING SOFTWARE GENERATES DEMAND FORECAST USING STATITICAL TOOLS AND FORECASTING TECHNIQUES

Competition

• SUPPLY CHAIN PLANNING SOFTWARE, uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain while reducing inventory. SCP depends entirely on information for its accuracy.
•  Supply chain execution (SCE) software automates the different steps and stages of the supply chain. This could be as simple as electronically routing orders from a manufacturer to a supplier

Speed

• NEW FORM OF SERVE, TELECOMMUNICATION ENABLING COMPANIES TO PERFORM ACTIVITIES THAT WERE ONCE NEVER THOUGHT POSSIBLE.
• ABILITY TO SATISFY CONTINUALLY CHANGING CUSTOMER REQUIREMENT EFFICIENCY, ACCURATELY AND QUICKLY.

SUPPLY CHAIN MANAGEMENT SUCCESS FACTOR

·         To succeed in today’s competitive markets, companies must align their supply chain with the demands of the markets they serve.

·        

CHAPTER 9 :ENABLING THE ORGANIZATION -DECISION MAKING

sons for the growth of decision-making information systems :

- People need to analyze large amounts of information.

- People must make decisions quickly

- People must protect the corporate assets of organizational information

Transactional Processing Systems :

• Transaction processing system
• Online transaction processing (OLTP)
• Online analytical processing (OLAP)

Models is a simplified representation or abstraction of reality and IT systems in an enterprise.

Transaction Processing Systems : 

Three quantitative models used by DSS includes : 

• Sensitivity Analysis
• What-if Analysis
• Goal-seeking Analysis 

Most EISs offering the following capabilities :

• Consolidation
• Drill-down
• Slice-and-dice 

Digital dashboard integrates information from multiple components and present it in a unified display.

Artificial Intelligence :

• Intelligent systems - is the various commericial applications of artificial intelligence

• Artificial intelligence (AI) - is simulates human intelligence such as the ability to reason and learn.

Four common categories of Al include :

1. Expert systems - for EXAMPLE: Playing Chess
2. Neutral Network - for EXAMPLE : Washing machines that determine by themselves how much water to use or how long to wash.
3. Genetic algorithm - for EXAMPLE : Business executives use genetic algorithm to help them decide which combination of projects a firm should invest.
4. Intelligent agent - for EXAMPLE : Shopping bot.software that will search several retailer's websites and provides a comparison of each retailer's offering including prive and availability.

 what is the DATA MINING : 

Common forms of data-mining analysis capabilities includes :

• Cluster analysis - a technique used to divide an information set into mutually exclusive groups such that the members of each group are as close together as possible to one another and the different groups are as far apart as possible.

• Association detection - reveals the degree to which variables are related and the nature and frequency of these relationship in the information.

• Statistical analysis - performs such functions as information correlations, distributuion, calculations, and variance analysis.

CHAPTER 8 : ACCESSING ORGANIZATIONAL INFORMATION-DATA WAREHOUSE 

Example of data warehouse

•  Information cleaning or Srucbbing is :

• Accurately and complete information 

• Information cleansing activities 

• Business Intelligence is the information that people use to support their decision-making efforts
• Principle BI enablers include :

                      - Technology

                      - People

                      - Culture

CHAPTER 7:STORING ORGANIZATIONAL INFORMATION—DATABASES

 What is INFORMATION?

RELATIONAL DATABASE FUNDAMENTALS

• Information is everywhere in an organization
• Information is stored in databases

Database – maintains information about various types of objects (inventory), events (transactions), people (employees), and places (warehouses)

RELATIONAL DATABASE FUNDAMENTALS

Database models include:

·         Hierarchical database model – information is organized into a tree-like structure (using parent/child relationships) in such a way that it cannot have too many relationships

·         Network database model – a flexible way of representing objects and their relationships

·         Relational database model – stores information in the form of logically related two-dimensional tables

Entities and Attributes

·         Entity – a person, place, thing, transaction, or event about which information is stored

The rows in each table contain the entities

·         Attributes (fields, columns) – characteristics or properties of an entity class

The columns in each table contain the attributes

Keys and Relationships

Primary keys and foreign keys identify the various entity classes (tables) in the database

·         Primary key – a field (or group of fields) that uniquely identifies a given entity in a table

·         Foreign key – a primary key of one table that appears an attribute in another table and acts to provide a logical relationship among the two tables

RELATIONAL DATABASE ADVANTAGES

Database advantages from a business perspective include

·         Increased flexibility

·         Increased scalability and performance

·         Reduced information redundancy

·         Increased information integrity (quality)

·         Increased information security

·         Increased Flexibility

A well-designed database should:

·         Handle changes quickly and easily

·         Provide users with different views

·         Have only one physical view

Ø  Physical view – deals with the physical storage of information on a storage device

·         Have multiple logical views

Ø  Logical view – focuses on how users logically access information

Increased Scalability and Performance

A database must scale to meet increased demand,  while maintaining acceptable performance levels

·         Scalability – refers to how well a system can adapt to increased demands

·         Performance – measures how quickly a system performs a certain process or transaction

Reduced Information Redundancy

Databases reduce information redundancy

·         Redundancy – the duplication of information or storing the same information in multiple places

Inconsistency is one of the primary problems with redundant information

Increase Information Integrity (Quality)

Information integrity – measures the quality of information

Integrity constraint – rules that help ensure the quality of information

·         Relational integrity constraint

·         Business-critical integrity constraint

Increased Information Security

Information is an organizational asset and must be protected

Databases offer several security features including:

·         Password – provides authentication of the user

·         Access level – determines who has access to the different types of information

·         Access control – determines types of user access, such as read-only access

DATABASE MANAGEMENT SYSTEMS

Database management systems (DBMS) – software through which users and application programs interact with a database

DATA-DRIVEN WEBSITES

Data-driven websites – an interactive website kept constantly updated and relevant to the needs of its customers through the use of a database

DATA-DRIVEN WEBSITE BUSINESS ADVANTAGES

·         Development

·         Content Management

·         Future Expandability

·         Minimizing Human Error: 

·         Cutting Production and Update Costs

·         More Efficient

·         Improved Stability

DATA-DRIVEN BUSINESS INTELLIGENCE

BI in a data-driven website

INTEGRATING INFORMATION AMONG MULTIPLE DATABASES

·         Integration – allows separate systems to communicate directly with each other

·         Forward integration – takes information entered into a given system and sends it automatically to all downstream systems and processes

·         Backward integration – takes information entered into a given system and sends it automatically to all upstream systems and processes

INTEGRATING INFORMATION AMONG MULTIPLE DATABASES

Forward integration and backward integration

INTEGRATING INFORMATION AMONG MULTIPLE DATABASES

Building a central repository specifically for integrated information