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Business Driven Information Systems, Chapter 9 by Baltzan & Phillips

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Business Driven Information Systems discusses various business initiatives first and how technology supports those initiatives second. The premise for this unique approach is that business initiatives should drive technology choices. Every discussion first addresses the business needs and then addresses the technology that supports those needs. This text provides the foundation that will enable students to achieve excellence in business, whether they major in operations management, manufacturing, sales, marketing, etc. BDIS is designed to give students the ability to understand how information technology can be a point of strength for an organization.ISBN: 0073195588Copyright year: 2008All works belong respectively to:Baltzan, Paige, and Amy Phillips. Business Driven Information Systems. Columbus: McGraw Hill, 2008.The publishing of these presentation slides are in no way intended to advertise the information was written by anyone but the original authors. The information is for supplemental use to the textbook written by these respected authors. I do not take credit for the information provided, and in no way mean to infringe on any copyrights imposed by The McGraw-Hill Companies.
Transcript:

Business Driven Information Systems 2e

CHAPTER 9 CUSTOMER RELATIONSHIP MANAGEMENT AND BUSINESS INTELLIGENCEMcGraw-Hill/Irwin 2009 The McGraw-Hill Companies, All Rights Reserved

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Chapter Nine OverviewSECTION 9.1 CUSTOMER RELATIONSHIP MANAGEMENT Customer Relationship Management Fundamentals Using IT to Drive Operational CRM Using IT to Drive Analytical CRM CRM Trends: SRM, PRM, ERM The Ugly Side of CRM

SECTION 9.2 BUSINESS INTELLIGENCEBusiness Intelligence Operational, Tactical, and Strategic BI Data Mining Business Benefits of BI

SECTION 9.1

CUSTOMER RELATIONSHIP MANAGEMENT

McGraw-Hill/Irwin

2009 The McGraw-Hill Companies, All Rights Reserved

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LEARNING OUTCOMES1. Compare operational and analytical customer relationship management 3. Explain the formula an organization can use to find its most valuable customers 5. Describe and differentiate the CRM technologies used by sales departments and customer service departments

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LEARNING OUTCOMES Describe and differentiate the CRM technologies used by marketing departments and sales departments

Compare customer relationship management, supplier relationship management, partner relationship management, and employee relationship management

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CRM FUNDAMENTALS Customer relationship management (CRM) involves managing all aspects of a customers relationship with an organization to increase customer loyalty and retention and an organization's profitability Many organizations, such as Charles Schwab and Kaiser Permanente, have obtained great success through the implementation of CRM systems

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CRM FUNDAMENTALS CRM overviewPicture 5

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CRM as a Business Strategy CRM is not just technology, but a strategy, process, and business goal that an organization must embrace on an enterprisewide level CRM can enable an organization to: Identify types of customers Design individual customer marketing campaigns Treat each customer as an individual Understand customer buying behaviors

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Business Benefits of CRM Organizations can find their most valuable customers through RFM - Recency, Frequency, and Monetary value How recently a customer purchased items (Recency) How frequently a customer purchased items (Frequency) How much a customer spends on each purchase (Monetary Value)

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Evolution of CRM CRM enables an organization to: Provide better customer service Make call centers more efficient Cross sell products more effectively Help sales staff close deals faster Simplify marketing and sales processes Discover new customers Increase customer revenues

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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

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Evolution of CRM Three phases in the evolution of CRM include reporting, analyzing, and predictingPicture 5

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Evolution of CRMPicture 4

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Operational and Analytical CRM 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

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Operational and Analytical CRMPicture 6

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USING IT TO DRIVE OPERATIONAL CRMPicture 4

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Marketing and Operational CRM Three marketing operational CRM technologies: List generator compiles customer information from a variety of sources and segment the information for different marketing campaigns Campaign management system guides users through marketing campaigns Cross-selling and up-selling Cross-selling selling additional products or services Up-selling increasing the value of the sale

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Sales and Operational CRM The sales department was the first to begin developing CRM systems with sales force automation a system that automatically tracks all of the steps in the sales process

Picture 5

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Sales and Operational CRM Sales and operational CRM technologies Sales management CRM system automates each phase of the sales process, helping individual sales representatives coordinate and organize all of their accounts Contact management CRM system maintains customer contact information and identifies prospective customers for future sales Opportunity management CRM system targets sales opportunities by finding new customers or companies for future sales

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Sales and Operational CRM CRM Pointers for Gaining Prospective Customer1. 2. 3. 4. 5. 6. Get their attention Value their time Overdeliver Contact frequently Generate a trustworthy mailing list Follow up

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Customer Service and Operational CRM Three customer service operational CRM technologies:1. Contact center (call center) 2. Web-based self-service system Click-to-talk 3. Call scripting system

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Customer Service and Operational CRM Common features included in contact centers Automatic call distribution Interactive voice response Predictive dialing

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CRM Metrics Sales Metrics Number of prospective customers Number of new customers Number of retained customers Number of open leads Number of sales calls Amount of new revenue Amount of recurring revenue Number of proposals given

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CRM Metrics Service Metrics Cases closed same day Number of cases handled by agent Number of service calls Average number of service requests by type Average time to resolution Average number of service calls per day

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CRM Metrics Marketing Metrics Number of marketing campaigns New customer retention rates Number responses by marketing campaign Number of purchases by marketing campaign Revenue generated by marketing campaign Customer retention rate

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USING IT TO DRIVE ANALYTICAL CRM Personalization when a Web site knows enough about a persons likes and dislikes that it can fashion offers that are more likely to appeal to that person Analytical CRM relies heavily on data warehousing technologies and business intelligence to glean insights into customer behavior These systems quickly aggregate, analyze, and disseminate customer information throughout an organization

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USING IT TO DRIVE ANALYTICAL CRM Analytical CRM information examples1. 2. 3. 4. 5. 6. Give customers more of what they want Value their time Overdeliver Contact frequently Generate a trustworthy mailing list Follow up

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CRM TRENDS: SRM, PRM, AND ERM Current trends include: Supplier relationship management (SRM) Partner relationship management (PRM) Employee relationship management (ERM)

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THE UGLY SIDE OF CRMPicture 3

Business 2.0 ranked You the customer as the number one person who mattered most

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OPENING CASE QUESTIONS Customer First Awards1. Summarize the evolution of CRM and provide an example of a reporting, analyzing, and predicting question Progressive might ask its customers 3. How could Progressives marketing department use CRM technology to improve its operations? 5. How could Minis sales department use CRM technology to improve its operations?

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OPENING CASE QUESTIONS Customer First Awards1. How could Progressive and Minis customer service departments use CRM technology to improve their operations? 3. Define analytical CRM and its importance to companies like Progressive and Mini

SECTION 9.2

BUSINESS INTELLIGENCE

McGraw-Hill/Irwin

2009 The McGraw-Hill Companies, All Rights Reserved

9-33

LEARNING OUTCOMES1. Explain the problem associated with business intelligence. Describe the solution to this business problem 3. Describe the three common forms of data-mining analysis? 5. Compare tactical, operational,

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LEARNING OUTCOMES1. Explain the organization-wide benefits of BI 3. Describe the four categories of BI business benefits

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BUSINESS INTELLIGENCE Business intelligence (BI) applications and technologies used to gather, provide access to, and analyze data and information to support decision-making efforts Parallels between the challenges in business and challenges of war Collecting information Discerning patterns and meaning in the information Responding to the resultant information

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The Problem: Data Rich, Information Poor Businesses face a data explosion as digital images, email in-boxes, and broadband connections doubles by 2010 The amount of data generated is doubling every year Some believe it will soon double

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The Solution: Business Intelligence Improving the quality of business decisions has a direct impact on costs and revenue BI systems and tools results in creating an agile intelligent enterprise

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The Solution: Business Intelligence BI enables business users to receive data for analysis that is: Reliable Consistent Understandable Easily manipulated

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The Solution: Business Intelligence BI can answer tough customer questionsPicture 3

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OPERATIONAL, TACTICAL, AND STRATEGIC BI Claudia Imhoff, president of Intelligent Solutions, divides the Spectrum of data mining analysis and business intelligence into three categories: Operational Tactical Strategic

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OPERATIONAL, TACTICAL, AND STRATEGIC BIPicture 3

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OPERATIONAL, TACTICAL, AND

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