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LECTURE NOTES 6 Achieving Operational Excellence and Customer Intimacy (Enterprise Applications) SPRING 2010 PowerPoint Presentation
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LECTURE NOTES 6 Achieving Operational Excellence and Customer Intimacy (Enterprise Applications) SPRING 2010

LECTURE NOTES 6 Achieving Operational Excellence and Customer Intimacy (Enterprise Applications) SPRING 2010

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LECTURE NOTES 6 Achieving Operational Excellence and Customer Intimacy (Enterprise Applications) SPRING 2010

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  1. LECTURE NOTES 6Achieving Operational Excellence and Customer Intimacy (Enterprise Applications)SPRING 2010 MANAGEMENT INFORMATION SYSTEMS (MIS)

  2. Achieving Operational Excellence and Customer Intimacy • This chapter focuses on how firms use Enterprise-wide Systems to achieve Operational excellence, Customer Intimacy, and improved Decision making. • Enterprise Systems, and Systems for Supply Chain Management and Customer Relationship Management help companies integrate information from many different parts of the business, forge closer ties with customers, and coordinate firm activities with those of Suppliers and other business partners. • As IT professionals, you would be excepted to evaluate and install Software for Enterprise Applications and help your companies redesign their Business Processes to work with the new Software.

  3. Achieving Operational Excellence and Customer Intimacy ENTERPRISE SYSTEMS Enterprise Systems are also known as Enterprise Resource Planning (ERP) Systems. Enterprise Systems feature a set of Integrated Software Modules and a Central Database that enables data to be shared by many different Business Processes and functional areas throughout the Enterprise. • The Central Database collects data from a large number of key business processes in Manufacturing, Finance and Accounting, Sales and Marketing and Human Resources, making the data available for Applications that support nearly all of an Company's internal Business activities • When new information is entered by one business process, the information is made immediately available to other business processes.

  4. ENTERPRISE SYSTEMS (Continued) • Imagine that you run a business based on Information Systems from tens of different Databases and Application Systems, none of which could communicate to one another. • To make the case even more dramatic, imagine that the company had 10 different major Product Lines, each line is produced at separate factories, and each with separate and incompatible sets of Application Systems controlling production, warehousing, and distribution. • Your decision making would be difficult to really understand what was happening in the business as whole. You would have a very poor grasp of how profitable the company was as a whole, or what your costs were. • Thus, companies are increasingly becoming more connected, both internally and with other companies.


  6. ENTERPRISE SYSTEMS For Example: If a Salesman places an Order for a car tyre, the ERP System proceeds as follows: • Verifies the Customer’s credit limit • Reserves the items in Inventory (stock) • Identifies the best Shipping route • Schedules the Shipment If Inventory Stock were insufficient to fill the order, the system; • Schedules the Production of more tyres, • Order the needed materials from the Suppliers • Sales Forecast and Production Forecast are immediately updated • General Ledger and Corporate cash levels are automatically updated with revenue and cost information from the order. • Users could tap into the system and find out the statues of the order at any minute. • Management could obtain information at any point in time about how the business was operating. • Management could also obtain Enterprise-wide data for Management Analyses of product Cost and Profitability

  7. ENTERPRISE SOFTWARE • Enterprise Software is built around so many predefined Business Processes that reflect “Best Practice”. • Best Practices are the most successful solutions or problem-solving methods in a particular industry for consistently and effectively achieving a business objective. Best Practices emerge from two sources: • Consulting Firms (Who work for many firms in the industry) • Software firms ( Who develop industry expertise by working with clients) When a firm hire a Consulting Firm or a Software Firm to help build Enterprise Systems, in reality hiring the knowledge base of best practices accumulated by these companies over many years. Companies implementing Enterprise Software would have to: - Select the functions of the systems they wish to use - Map their business processes to the predefined processes in enterprise software

  8. ENTERPRISE SOFTWARE (Continued) • A firm would have to use “ Configuration Tables” provided by the Software to tailor a particular aspect of the System to the way it does business. • e.g. A firm could use configuration tables to select whether it wants to track revenue by product line, by geographical unit or by distribution channel. • If the Enterprise Software does not support the way organization does business, companies can rewrite some of the software to support the way their business processes work. Enterprise Software is unusually complex, and extensive customization may be required to make it suitable for your business. The customization may degrade the system’s performance, and also compromise the Information and process integration that are the main benefits of theenterprıse systems. • If a company wants to reap the maximum benefits from enterprise software, it must change the way it works to conform to Business processes in the software.

  9. ENTERPRISE SOFTWARE (Continued) • Software Vendors such as SAP, Oracle, SSA Global, Lawson Software, and Microsoft (Dynamic Software Suite) are major Enterprise Software Vendors. • There are versions of enterprise software which can be obtained from Application Service Providers over the Web. • Enterprise Software initially designed to automate the companies' internal “Back-office” business processes, then become more externally oriented and capable of communicating with customers, suppliers, and other organizations.

  10. BUSINESS VALUE OF ENTERPRISE SYSTEMS ERP Systems provide value both by increasing operational efficiency and providing organization-wide information to help managers make better decisions. Large companies with many operating units at different geographical locations worldwide have used ERP Systems to enforce standard practices and data so that everyone does business in the same way . For example: Due to lack of standard company-wide business processes, prevented Coca Cola company from leveraging its worldwide buying power to obtain prices for raw materials and from reacting rapidly to market changes. Coca Cola have implemented SAP Enterprise Systems to standardise and coordinate important Business Processes in 200 countries.

  11. BUSINESS VALUE OF ENTERPRISE SYSTEMS (Continued) • ERP Software helps firms respond rapidly to their customer requests for information on products and services by integrating order, manufacturing and delivery data. • Manufacturing is better informed about producing only what customers have ordered, • Buying exactly the right amount of components or raw materials to fill actual orders, • Staging Production, • Minimizing the storage time of components and finished products ERP Software includes Analytical tools for using data captured by the System to evaluate overall Organizational performance. ERP System data have common standardized definitions and formats that are accepted by the company. ERP Systems allow companies’ Senior Management to easily find out how a particular Organizational Unit is performing or to determine which Product are most or least profitable at any moment.

  12. SUPPLY CHAIN MANAGEMENT (SCM) SYSTEMS A large firm that produces many complex products and services has tens and even hundreds of suppliers and sometimes the firm’s suppliers each have their own sets of suppliers. In that event the company will need to coordinate the activities of many supplier firms in order to produce their products and services. Supply Chain Management Systems, are an answer to these problems of supply chain complexity and scale. SUPPLY CHAIN A firm’s Supply Chain is network of organization, organizations’ bbusiness processes for procuring raw materials, transforming raw materials into intermediate and finished products, and distributing the finished products to customers. Supply Chain links all participants listed below from source to consumption: - Suppliers - Manufacturing plants - Distribution centres - Retailers - Customers

  13. SUPPLY CHAIN MANAGEMENT (SCM) SYSTEMS Materials, information, and payments flow through the Supply Chain in both directions. • Goods start out as raw materials and, as they move through the Supply Chain, they are transformed into intermediate products (Components or parts) , and finally , into finished products. • The finished products are shipped to distribution centres and from there to retailers and eventually to customers. • Returned items flow in the reverse direction from the buyer back to the seller. Example: NIKE designs, markets, and sells sneakers, socks, athletic clothing and accessories throughout the word. Nike’s primary suppliers are contract manufacturers with factories in China, Indonesia, Brazil Thailand and several other countries. However, Nike’s contract suppliers do not manufacture sneakers from scratch. They obtain components from other sand then assemble them into finished sneakers. These component suppliers in turn have their owns suppliers and the chaıın contınues.

  14. SUPPLY CHAIN MANAGEMENT (SCM) SYSTEMS The following ddiagram shows simplified Supply Chain for Nike. It shows the flow of Information and materials among Suppliers, Nike, and Nike’s Distributors, Retailers, and Customers. The Contract Manufacturers are Nike’s primary Suppliers. Suppliers of soles, uppers, laces etc. are the secondary (Tier 2) Suppliers. Suppliers to the Secondary Suppliers are the tertiary (Tier 3) Suppliers. The Upstream portion includes Nike’s Suppliers, The Suppliers’ Suppliers and the processes for managing relationships with them. The Downstream portion consists of the Nike’s Processes for Distributing and Delivering products to the final Customers

  15. SUPPLY CHAIN MANAGEMENT (SCM) SYSTEMS Companies doing Manufacturing like Nike’s Contractors also manage their own “Internal Supply Chain Processes” for transforming materials, components, and services furnished by their Suppliers into finished products (components or parts) for their Customers and for managing materials and inventory. INFORMATION AND SUPPLY CHAIN MANAGEMENT • The inaccurate or untimely information cause Inefficiencies in the Supply Chain such as: • -Parts Shortage • - Underutilized plant capacity • - Excessive finished goods inventory • - High transportation costs e.g. Manufacturing companıes may keep too many parts in their inventory, because they do not know exactly when they will receive next shipment from their suppliers. Suppliers may order too few raw materials, because they do not have precise information on demand. • The Supply Chain inefficiencies waste as much as 25% of a firm’s operating costs.

  16. INFORMATION AND SUPPLY CHAIN MANAGEMENT If a Manufacturer had accurate and timely Information about exactly how many units of Product Customers wanted, when they wanted and when they could be produced , it would be possible to implement a highly efficient Just-in-time (JIT) Strategy. Components would arrive exactly at the moments they were needed and finished goods would be shipped as they left the assembly line. Uncertainties arise in a Supply Chain, because many events connot be foreseen such as : • Uncertain product demands, • Late shipment of raw materials from suppliers, • Defective parts of raw material, • Production process breakdowns Manufacturers often deal with such uncertainties and unforeseen events.

  17. INFORMATION AND SUPPLY CHAIN MANAGEMENT In order to satisfy the Customers demands companies have to keep more raw material And finished products in inventory than what they think they may actually need as Safety Stock. The Safety Stock acts as a buffer for the lack of flexibility in the Supply Chain. Although excessive Inventory is expensive, low inventory level is also costly because business may lose a lot from cancelled orders. One recurring problem in Supply Chain Management is the Bullwhip Effect, in which information about the demand for a product gets distorted as it passes from one entity to the next across the Supply Chain. • A slight rise in the demand for an item might cause different members in the Supply Chain Distributors, Manufacturers, Suppliers, Secondary and tertiary Suppliers to stockpile Inventory so each has enough “Just in Case” . • These changes ripple throughout the Supply Chain, magnifying what started out as a small change from planned orders, creating excess Inventory, Production, Warehousing, and Shipping costs.

  18. INFORMATION AND SUPPLY CHAIN MANAGEMENT The diagram below shows how inaccurate information can cause fluctuations in demand for a product to be amplified as one moves further back in the Supply Chain. Mirror fluctuations in Sales of a Product can create excess Inventory for Distributors, Manufacturers and Suppliers

  19. INFORMATION AND SUPPLY CHAIN MANAGEMENT The Bullwhip effect can be eliminated or minimized by reducing uncertainties about Demand and Supply by having accurate and up-to-date information and sharing dynamic information about inventory levels, production schedules, forecasts and shipments amongst the participants. Supply Chain Management Systems provide the kind of information that helps members of the Supply Chain make better purchasing and scheduling decisions.

  20. SUPPLY CHAIN MANAGEMENT APPLICATIONS • Supply Chain Planning Systems • Supply Chain Execution Systems • 1. SUPPLY CHAIN PLANNING SYSTEMS Help the firm to generate Demand Forecasts for a product and to develop sourcing and manufacturing plans for that product. Supply Chain Planning Systems help companies make better operating decisions, such as: - Determining how much of a specific Product to be manufactured in a given time period establishing raw materials, components or parts, and finished goods inventory. - Determining were to store finished goods - Identifying the transportation mode to use for product delivery.

  21. SUPPLY CHAIN MANAGEMENT APPLICATIONS • SUPPLY CHAIN PLANNING SYSTEMS Example: If a customer places a large order than usual or changes that order on short notice, it can have a widespread impact throughout the supply chain. • Additional raw materials or different mix of raw materials may need to be ordered from suppliers. • Manufacturing may have to change job scheduling • Transporter may have to reschedule deliveries. • The Supply Chain Planning Software makes the necessary adjustment to Production and Distribution Plans. • Information about changes is shared among relevant supply chain members so that their work can be coordinated.

  22. SUPPLY CHAIN PLANNING SYSTEMS • One of the most important and complex supply Chain Planning function is ‘’Demand Planning’’. • Demand Planning determines how much product a business needs to make to satisfy all its customers’ demands. • CAPABILITIES OF SUPPLY CHAIN PLANNING SYSTEMS • a) Order Planning • b) Advanced Scheduling and Manufacturing Planning • c) Demand Planning • d) Distribution Planning • e) Transportation Planning

  23. CAPABILITIES OF SUPPLY CHAIN PLANNING SYSTEMS • a) Order Planning • Selects an Order fulfilment plan that best meets the desired level of service to the customer given existing transportation and manufacturing constraints. • Advanced Scheduling and Manufacturing Planning • Provides detailed coordination of scheduling based on an analysis • of changing factors, such as: • Customer orders, • Supply interruptions, • Equipment outages. • Scheduling modules, • Create job schedules for the manufacturing process and supplier ogistics.

  24. CAPABILITIES OF SUPPLY CHAIN PLANNING SYSTEMS • Demand Planning • Generates demand forecasts from all business units using statistical tools and business forecasting techniques. • Distribution Planning • Create operating plans for logistic management for order fulfilment based on Input from demand and manufacturing modules. • Transportation Planning • Tracks and analyze inbound, outbound , and inter-company movement of materials and products to ensure that materials and finished goods are delivered at the right time and places at the minimum cost.

  25. SUPPLY CHAIN MANAGEMENT APPLICATIONS • 2. SUPPLY CHAIN EXECUTION SYSTEMS • Supply Chain Execution Systems manage the flow of products through Distribution Centres and Warehouses to ensure that the products are delivered to the right locations in the most efficient manner. • Supply Chain Execution Systems tracks :- • The physical status of goods, • The management of materials, • Warehouse and transportation operations • Financial information involving all parties • CAPABILITIES OF SUPPLY CHAIN EXECUTION SYSTEMS • a) Order commitment • b) Final production • c) Replenishment • d) Distribution management • e) Reverse distribution

  26. CAPABILITIES OF SUPPLY CHAIN EXECUTION SYSTEMS • Order Commitment • Enable company to quote accurate delivery dates to customers by providing more real-time detailed information on the status of orders from availability of raw materials and inventory to production and shipment status. • b) Final Production • Organize and schedule final sub-assemblies required to make each final product. • Replenishment • Coordinate component replenishment work so that warehouses remain stocked with the minimum amount of inventory in the pipeline. • Distribution Management • Coordinate the process of transporting goods from the Manufacturer to Distribution Centres and to the Final Customer. Provide online customer access to shipment and delivery data. • Reverse Distribution • Track the Shipment and Accounting for Returned Goods or Re-manufactured Products.

  27. SUPPLY CHAIN MANAGEMENT AND INTERNET • SUPPLY CHAIN - Before The Internet Era: • Supply Chain coordination was hampered by the difficulties of making information flow smoothly among disparate internal Supply Chain Systems for Purchasing , • Material Management, Manufacturing, and Distribution. • It was also difficult to share Information with External Supply Chain Partners because the Systems of Suppliers, Distributors, or Logistics provides were based on incompatible Technology platforms and standards. Enterprise Systems could supply some integration of Internal Supply Chain Processes but they were not designed to deal with External Supply Chain Processes. SUPPLY CHAIN WITH INTERNET Some Supply Chain Integration is supplied inexpensively using Internet Technology such as Intranets and Extranets. • Firms use Intranets to improve coordination among their Internal Supply Chain Processes, • Firms use Extranets to coordinate Supply Chain Processes shared with their Business Partners.

  28. INTERNETS AND EXTRANETS FOR SUPPLY CHAIN MANAGEMENT • Intranets integrate information from isolated Business Processes within the Firm to help manage its Internal Supply Chain. • Access to the private Intranets can also be extended to Authorized Suppliers, Distributors, Logistic Services, and sometimes to Retail Customers to improve coordination of External Supply Chain Process.

  29. DEMAND DRIVEN SUPPLY CHAINS • Supply Chain Management Systems facilitate efficient Customer response, enabling the workings of business to be driven more by Customer Demand as well as reducing costs. • PUSH-BASED SUPPLY CHAIN MANAGEMENT MODEL • In a Push-based Model Production Master Schedules are based on Forecasts or best guesses of Demand for Products, and Products are “Pushed” to Customers. • Earlier SCM Systems were driven by a Push-based model known as Build-to-Stock • model. • PULL-BASED SUPPLY CHAIN MANAGEMENT MODEL • With new flow of information made possible by Web-based tools, SCM more easily follows a Pull-based Model also known as Build-to-Order Model , or “Demand-driven Model” • In the Pull-based Model actual Customer Orders or Purchase trigger events in the • Supply Chain . • Transactions to Produce and Deliver only what Customers have Ordered move up the • Supply Chain stream from Retailers to Distributors to Manufacturers and eventually to Suppliers.

  30. DEMAND DRIVEN SUPPLY CHAINS • Only Products to fulfil the Orders move back down the Supply Chain to the Retailer. • Manufacturers use only actual Order demand information to drive their Production Schedules and the Procurement of Components or raw materials. • The difference between Push-based Models and the Pull-based Models is summarized by the slogan “Make what we sell, not sell what we make”

  31. DEMAND DRIVEN SUPPLY CHAINS • The Internet and Internet Technology make it possible to move from Sequential Supply Chains, where information and materials flow sequentially from company to company, to concurrent Supply Chains, where information flows in many directions simultaneously among members of a Supply Chain network. • Members of the network immediately adjust to changes in schedules or orders. • Ultimately, the Internet could create a ‘’Digital Logistics Nervous System’’through the Supply Chain. • Digital Logistics Nervous System permits simultaneous multidirectional communication of information about supply chain participants Inventories, • Orders and capacities, optimizing the activities of individual firms and groups of firms interacting in e-commerce marketplaces.

  32. THE FUTURE INTERNET-DRIVEN SUPPLY CHAIN The future Internet-driven Supply Chain operates like a Digital Logistics Nervous System. The Future Internet-driven Supply Chain provides multidirectional communication among firms, networks of firms, and e-marketplaces so that entire networks of Supply Chain partners can immediately adjust Inventories, Orders and Capabilities.

  33. BUSINESS VALUE OF SUPPLY CHAIN MANAGEMENT SYSTEMS • Supply Chain Management Systems enable firms to streamline both their internal and external Supply Chain Processes and provide Management with more accurate information about what to produce, store, and move. • By implementing a Networked and Integrated Supply Chain Management System, companies: • . Match Supply to Demand, • Reduce Inventory levels, • Improve Delivery service, • Speed Product time to market, • Use Assets more effectively. • Total Supply Chain Costs represent the majority of Operating expenses for many • businesses and in some industries approach 75% of the total Operating budget. • Reducing Supply Chain Costs may have a major impact on firms profitability. • In addition to reducing Costs , SCM Systems help increase sales. • Also Control of Supply Chain, enhances the firm’s ability to have the right product available for Customer purchase at the right time,.

  34. CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRM) • The following Slogans make more sense than ever before. • ‘’The Customer is always right’’ OR ‘’Customer Comes First’’. • Competitive Advantage based on an innovative new product or service is often very short lived, companies are realizing that their only enduring competitive strength may be their relationships with their Customers. • Nowadays, Competition has switched from ‘’Who sell the most products and • services to ‘’Who owns the Customer’’ , and that Customer Relationships • represent a firm’s most valuable assets. • What kind of information would you need to build and nurture strong, • long-lasting relationship with Customers? You need to know exactly: • Who your customers are; • How to contact your Customers; • Whether they are costly to service and sell to; • What kind of Products ands Services they are interested in; • How much money they spend on your products and services.

  35. CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRM) • In a small business operating in a neighbourhood , it is possible to know • customers on a personal, face-to-face basis. But in a large business operating on a metropolitan, regional national or even global basis, it is impossible to know customers in the intimate way. • Because there are many Customers and too many different ways that • customers interact with the firm (over Web, phone, fax and face-to face). • It becomes especially difficult to integrate information from all theses sources and to deal with the large number of Customers. • Customer Relationship Management Systems help to solve the above mentioned problems. • Customer Relationship Management Systems (CRM) capture and integrate customer data from all over the organization, consolidate and analyze the data, and then distribute the results to various Systems and Customer touch points or Contact point across the enterprise.

  36. CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRM ) • A Touch Point is a method of interaction with the Customer, such as by telephone, fax, e-mail, service desk, mail, web site, wireless device, or at retail store. • Well designed CRM Systems provide a single enterprise view of customers that is useful for improving both sales and customer service. • CRM also provides a single view of the customer to the company regardless of what touch point the customer uses. (figure below)

  37. CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRM ) • CRM Systems examine Customers from a multifaceted perspective. • CRM Systems use a set of integrated applications to address all aspect of the • Customer Relationship, including Customer service, Sales, and Marketing. • Good CRM Systems provide Analytical tools for answering questions such as : • What is the value of a particular customer to the firm over his/her lifetime? • Who are the most loyal Customers? • Who are the most profitable customers? • What do these profitable customers want to buy? • Firms use the answers of the above questions to : • Acquire new Customers, • Provide better services and support to existing Customers, • Customize their offerings more precisely to customer preferences, • Provide ongoing value to retain profitable Customers.

  38. CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRM) Customer Relationship Management Software (CRM) Packages range from niche tools that perform a limited functions, such as personalizing Web Sites for specific customers, to Large-scale Enterprise Applications that capture myriad interactions with customers and analyze them with sophisticated Analytical and Reporting Tools, and link customers to other major Enterprise Applications, such as Supply Chain Management and Enterprise Systems. The more comprehensive CRM Packages contain modules for : Partner Relationship Management (PRM) System Employee Relationship Management (ERM) System.

  39. CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRM ) • Partner Relationship Management System (PRM) uses many of the same • data, tools, and Systems as Customer Relationship Management to enhance • collaboration between a company and its selling partners. • If a company does not sell directly to Customers but rather works through Distributors or Retailers, PRM helps these channels sell to Customers directly. • PRM provides a company and its selling partners with the ability • to trade information and distribute leads and data about customers, integrating lead generation, pricing, promotions, order configurations and availability. • PRM also provides a firm with tools to assess its Partners’ performance so it can make sure its best partners receive the support they need to close more business.

  40. EMPLOYEE RELATIONSHIP MANAGEMENT SYSTEMS (ERM SYSTEMS) • Employee Relationship Management (ERM) Software deals with Employee issues that are closely related to CRM, such as: • - Setting objectives • - Employee Performance Management • - Performance based compensation • - Employee training etc…..

  41. CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRM) • Customer Relationship Management Systems (CRM) typically provide Software and Online Tools for Sales, Customer Services and Marketing business functions. CRM Systems contain the following Modules - Sales Force Automation - Customer Service - Marketing Automation SALES FORCE AUTOMATION MODULE (SFA) Sales Force Automation Modules in CRM Systems help Sales staff increase their productivity by focusing sales efforts on the most profitable customers, who are good candidates for sales and services.

  42. CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRM ) • CRM SOFTWARE provides: • Sales prospects and contact information, • Product configuration capabilities, • Sales quote generation capabilities. • CRM Software Assemble information about a particular customer’s past purchases to help the Salesperson make personalized recommendations. • Enables Sales, Marketing and Delivery Departments to easily share Customer and prospect Information. • Increases each Salesperson’s efficiency by reducing costs per sales as well as cost of acquiring new customers and retaining old ones. • CRM Software also has capabilities for Sales Forecasting, Territory Management, and Team Selling. -

  43. CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRM) CUSTOMER SERVICE MODULE Customer Service Modules provide Information and tools to increase the efficiency of Call Centre, Help Desks and Customer Support staff. They have capabilities for assigning and managing Customer service requests. • When a Customer calls a standard phone number, the System routes the call to the correct Service person, who inputs information about the customer into the system only once. Once the data is in the System , any Service Representative can handle the Customer Relationship.

  44. CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRM) CUSTOMER SERVICE MODULE • Improved access to consistent and accurate customer information helps Call Centres handle more calls per day and decrease the duration of each call. • Call Centres and Customer Service Groups achieve greater productivity, reduced transaction time, and higher quality of service at lower cost. • Customer is happier because s/he spends less time on phone restating his/her problem to Customer Service Representatives. CRM may also include Web-based Self-service capabilities. • Web site can provide inquiring Customer personalized Support information as well as the option to contact Customer Service Staff by phone for additional assistance.

  45. CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRM ) CRM Marketing Module provides a single point for users to manage and evaluate Marketing Campaigns across multiple channels, including e-mail, direct mail, the Web, and Wireless messages. CRM Marketing Modules also include Tools for analyzing Marketing and Customer Data to: - Identifying profitable and unprofitable Customers, - Designing products and services to satisfy specific Customer needs and interests, - Identifying opportunities for Cross-selling. Cross- Selling is the Marketing of Complementary Products to Customers. Example: In Financial Services a Customer with a Checking Account might be sold a Money Market Account or a Home Improvement Loan. CRM Tools also help firms manage and execute Marketing Campaigns at all stages, from Planning to Determining the Rate of Success for each campaign.

  46. CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRM ) CRM MARKETING MODULE • CRM Marketing Module supports Direct Marketing Campaign by providing capabilities for capturing: • Prospect and customer data, • Product and service information, for qualifying leads for targeted marketing, and for Scheduling and tracking direct-Marketing • or e-mail.

  47. CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRM ) Figure below illustrates the most important capabilities for Sales, Services, and Marketing processes that would be found in major CRM Software Products like Enterprise Software which is a business-process driven , incorporating hundreds of business processes thought to represent best practices in each of these areas. To achieve maximum benefits from CRM, companies need to revise and model their business processes to conform to the best-practice business process in the CRM Software.

  48. CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRM ) • CRM Software provides a firm with Customer Loyalty Management process to assign each customer a score, which is based on the Customer’s Value and Loyalty to the company. • The loyalty information help call centres route each customer’s service request to service agents who can best handle that customer’s needs. The CRM System would automatically provide the Service Agent with a detailed profile of the customer that included his /her score for value and loyalty. • The Service Agent would use this information to present special offers or additional services to the Customer to encourage the customer to keep transacting business with the company.

  49. CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRM) CUSTOMER LOYALTY MANAGEMENT PROCESS Figure below illustrates how a Best-practice for increasing customer loyalty through customer service might be modelled by CRM Software. The CRM Software helps firms identify High-value Customers for preferential treatment

  50. CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS (CRM ) • OPERATIONAL AND ANALYTICAL CRM • Operational CRM includes Customer-facing Applications such as tools for: • Sales Force Automation, • Call Centre and Customer Service Support, • Marketing Automation. • Analytical CRM includes Applications that analyze customer data generated by Operational CRM Applications to provide information for improving business performance. • Analytical CRM Applications are based on Data Warehouses that consolidate the data from Operational CRM Systems and Customer Touch Points for use with Online Analytical Processing (OLAP), Data Mining and other Data Analysis Techniques.