Week 7: CRM, Business Intelligence and Knowledge Management

1. Week 7: CRM, Business Intelligence and Knowledge Management MIS5001: Management Information Systems David S. McGettigan Adapted from material by Arnold Kurtz, David Schuff, and Paul Weinberg

2. Agenda • Prior Lecture Recap • Customer Relationship Management • Business Intelligence • Knowledge Management Discussion (time permitting) • Case: American Express • Next Week

3. Prior Lecture Recap

4. Prior Lecture Recap • ERP • From the “ground up” integration of business processes • Software solutions include: SAP and Oracle • A single application ties together multiple business functions • Benefits of Integration • Drawbacks: Cost, Complexity, Culture

5. Customer Relationship Management Your most unhappy customers are your greatest source of learning. Bill Gates, Business @ The Speed of ThoughtUS computer software designer & industrialist (1955 - )

6. Customer Relationship Mgmt • Use of technology and human resources to gain insight into the behavior of customers and their value • Objective is to understand customer’s needs, ultimately enhancing service and profitability. • Brings together information regarding customers, sales, marketing, and products http://www.cio.com/research/crm/edit/crmabc.html

7. Customer Relationship Management • Multiple Contact Points • The goal is to provide a single, integrated view of all customer activity, available to all employees who interact with the customer. • Feedback, Individual Needs, and Cross Selling • Having better information enables workers to provide better service, meet the individual needs of each customer.

8. CRM Supports Three Major Functions • Sales: • Evolved from “Contact Management” • Usually includes live connection to “back-end” applications. • Marketing: • Business Intelligence • Data Mining • Customer Service: • Computer – Telephone Integration • Work flow • Data Sharing

9. CRM Demonstration • SAP Customer Relationship Management • Compliant Handling for Logistics Service Providers • Improving Order Management

10. CRM: Management Issues • Data Sharing and Data Ownership: • Sales force may not want to share. • Some customer service data might not be suitable for sharing. • Privacy Issues • Technology Issues: • As with any ERP, CRM can be a high cost, high risk undertaking.

11. CRM: Myths • CRM System Guarantees Marketing Success • CRM must be organized by Customer rather than Product • CRM Requires a Large Customer Database • CRM is a “turnkey product” Source: Gray, Paul. Manager’s Guide to Making Decisions about Information Systems

12. Why Does CRM Fail? 50% of implementations fail: • Clearly defined objectives • Data capture • Integration with other systems • Complexity of implementation • Clarity of ownership • Support (especially w/ sales force) • Budget • Emphasis on technology Note: Siebel Systems are now part of Oracle

13. Business Intelligence Many difficulties which nature throws in our way, may be smoothed away by the exercise of intelligence. Titus LiviusRoman author & historian (59 BC - 17 AD)

14. Goals of Business Intelligence • Knowledge about your customers, competitors, partners, competitive environment, and internal operations • Enables users to identify and understand the key trends and events driving their businesses • Allows employees to sift through and analyze large amounts of data that the company makes available for them • Also known as Data Mining and OLAP (Online Analytical Processing) • Finding non-obvious patterns in data • Data Mining generally implies using statistical techniques • correlation analysis • clustering to find patterns and relationships in large databases

15. What is BI Used For? • To perform trend analyses on product, sales, event (i.e. promotions and advertising campaigns) and financial information. • Sales per office or region and then drill down to lower level details to uncover what is driving the trends. • It is also used for exception-reporting and for budgeting, planning, and forecasting.

16. Challenge: Legacy Systems • Most organizations (and business units) historically developed their own custom information systems • These systems need to be connected when • Business buy other businesses • Business units merge • Organizational structure changes • What were the challenges faced by Wendy’s fast food chain in this CIO Article?

17. Legacy Systems Issues • Technical – How do we hook these things together? • Different systems may have conflicting data values and formats • Personnel – How do we find people skilled in older technologies? • Documentation may be out of date or non-existent

18. Legacy Systems Issues: Integration Strategy decisions decisions decisions decisions decisions Tactics Accounting Production Sales Human Resources Marketing Operations data data data data data

19. Legacy Systems Issues: Integration • Example: what information would we need to assess this gas station’s performance and understand if it requires additional investment or should be divested? Source: freephoto.com

20. Some Leading BI Vendors • Enterprise Query/Reporting: • Actuate • Crystal Reports • Information Builders / WebFocus • Information Builders OverviewOR • Information Builders Demo • OLAP (Data Mart and Cube Based): • MicroStrategy (shown right) • Hyperion • SAP Business Objects • Cognos http://www.microstrategy.com

21. Case: American Express • Consider, as a whole, American Express’ social strategy. Name and describe the major components of their social strategy? • What were the goals of each component? • How does each component serve their overall corporate strategy? • How does it tie to their strengths as an organization? • What are some of the tangible benefits American Express hoped to garner from its social strategy? Be specific (i.e., don’t just say “increased revenue”).

22. Case: American Express • Consider American Express’ use of external social media platforms. • How did their use of Facebook and Twitter differ from their use of Foursquare? • What kinds of data can the company gather by looking at activity in these social networks? • What insight could the company gain into its customers by analyzing this data? • If you were Berland, would you choose the “broad” option or the “deep” option, as outlined at the end of the case?

23. Knowledge Management The only source of knowledge is experience. Albert Einstein

24. Knowledge Management • Knowledge is comprised of Insights and experiences comprise knowledge, either embodied in individuals or embedded in organizational processes or practice • Knowledge management comprises a range of strategies and practices used in an organization to identify, create, represent, distribute, and enable adoption of insights and experiences. • Tools include: company intranets, document management, search engines, e-learning, communities of practice, blogs and wikis. http://en.wikipedia.org/wiki/Knowledge_management

25. Communities of Practice • Concept • Groups of people who share a concern or a passion for something they do and learn how to do it better as they interact regularly. • What types of problems do they address in the organization? • What are the implications of joining? • How does this differ from Communities of Interest? http://www.ewenger.com/theory/index.htm

26. Next Week Managing Project Priorities