Introduction to Information Systems Chapter 11 PDF

Introduction to Information Systems Rainer, Prince, Sanchez-Rodriguez, Splettstoesser Hogeterp, Ebrahimi Fifth Canadian Edition Chapter 11 Customer Relationship Management and Supply Chain Management Copyright ©2021 John Wiley & Sons Canada...

Introduction to Information Systems Rainer, Prince, Sanchez-Rodriguez, Splettstoesser Hogeterp, Ebrahimi Fifth Canadian Edition Chapter 11 Customer Relationship Management and Supply Chain Management Copyright ©2021 John Wiley & Sons Canada, Ltd. Learning Objectives 1. Identify the primary functions of both customer relationship management (CRM) and collaborative CRM strategies 2. Describe how businesses might use applications of each of the two major components of operational CRM systems 3. Explain the advantages and disadvantages of mobile CRM systems, on-demand CRM systems, open-source CRM systems, social CRM systems, and real-time CRM systems 4. Describe the three components and the three flows of a supply chain 5. Identify popular strategies to solving different challenges of supply chains 6. Explain the utility of each of the three major technologies that supports supply chain management Copyright ©2021 John Wiley & Sons Canada, Ltd. 2 Chapter Outline 1. Defining Customer Relationship Management 2. Operational Customer Relationship Management Systems 3. Other Types of Customer Relationship Management Systems 4. Supply Chains 5. Supply Chain Management 6. Information Technology Support for Supply Chain Management Copyright ©2021 John Wiley & Sons Canada, Ltd. 3 11.1 Defining Customer Relationship Management Customer Relationship Management (CRM) Customer Touch Points Data Consolidation: process of gathering data from various sources and storing it in a single location Copyright ©2021 John Wiley & Sons Canada, Ltd. 4 Customer Relationship Management (CRM) CRM: treat customers differently because their needs differ and their value to the company may also differ o Customer intimacy o Lifetime value- total revenue a customer generates for a business. o Customer churn o CRM strategy versus CRM systems o Low-end CRM systems versus high-end CRM systems Copyright ©2021 John Wiley & Sons Canada, Ltd. 5 FIGURE 11.1 The customer relationship management process Copyright ©2021 John Wiley & Sons Canada, Ltd. 6 FIGURE 11.2 Customer touch points Numerous and diverse interactions an organization has with its customers. Copyright ©2021 John Wiley & Sons Canada, Ltd. 7 Data Consolidation Data consolidation using a data warehouse enables: o 360-degree view of a customer o Collaborative CRM o Customer identity management Copyright ©2021 John Wiley & Sons Canada, Ltd. 8 Components of a CRM system Typically, a CRM system in an organization contains two major components: Operational CRM systems and Analytical CRM systems Copyright ©2021 John Wiley & Sons Canada, Ltd. 9 11.2 Operational CRM Systems Operational CRM systems support front-office business processes. Front-office processes are those that directly interact with customers; that is, sales, marketing, and service. Two major components of Operational CRM: Customer-facing applications: enables an organization’s sales, field service, and customer interaction centre representatives to interact directly with customers. Face to Face. Customer-touching or electronic CRM (e-CRM) applications: here, customers interact directly with these technologies and applications. Copyright ©2021 John Wiley & Sons Canada, Ltd. 10 Customer-Facing Applications Customer service and support (CIC) and call centres Salesforce automation (SFA) Marketing Copyright ©2021 John Wiley & Sons Canada, Ltd. 11 Customer service and support Customer service and support systems that automate service requests, complaints, product returns, and requests for information. Copyright ©2021 John Wiley & Sons Canada, Ltd. 12 Sales Force Automation SFA contains the following sub-systems: Contact management system Sales lead tracking system Sales forecasting system Product knowledge system Configurators Copyright ©2021 John Wiley & Sons Canada, Ltd. 13 Marketing Data mining tools are used to develop customer purchasing profiles that could lead to: Cross selling is the marketing of additional related products to customers based on a previous purchase. Up selling is a sales strategy in which the business provides to customers the opportunity to purchase higher-value related products or services in place of, or along with, the consumer’s initial product or service selection. Bundling is a form of cross selling in which a business sells a group of products or services together at a price lower than their combined individual prices. Copyright ©2021 John Wiley & Sons Canada, Ltd. 14 Benefits of Operational CRM Systems o Efficient and personalized marketing, sales, and service o A 360-degree view of each customer o The ability of sales and service employees to access a complete history of customer interaction with the organization, regardless of the touch point Copyright ©2021 John Wiley & Sons Canada, Ltd. 15  Customer-Touching Application (a.k.a. e-CRM) In customer-touching applications, customers interact directly with online technologies and applications rather than interact with a company representative. Customers typically can use these applications to help themselves Search and comparison capabilities Technical and other information and services Customized products and services Personalized webpages FAQs Email and automated response Copyright ©2021 John Wiley & Sons Canada, Ltd. 16 Analytical CRM Systems Analytical CRM systems analyze customer data for a variety of purposes, including: o Designing and executing targeted marketing campaigns o Increasing customer acquisition, cross-selling, and upselling o Providing input into decisions relating to products and services (e.g., pricing and product development) o Providing financial forecasting and customer profitability analysis Copyright ©2021 John Wiley & Sons Canada, Ltd. 17 FIGURE 11.3 The relationship between operational CRM and analytical CRM Copyright ©2021 John Wiley & Sons Canada, Ltd. 18 11.3 Other Types of Customer Relationship Management Systems On-demand CRM systems (i.e., utility computing or SaaS)- cloud based. Mobile CRM systems- designed for mobile devices. Open-source CRM systems- Free to use. Social CRM systems- integrates social media into CRM Real-time CRM- real time tracking/instant updates. Copyright ©2021 John Wiley & Sons Canada, Ltd. 19 11.4 Supply Chains Supply Chain Supply Chain Visibility o Inventory velocity The Structure and Components of Supply Chains Copyright ©2021 John Wiley & Sons Canada, Ltd. 20 FIGURE 11.4 Generic supply chain Copyright ©2021 John Wiley & Sons Canada, Ltd. 21 The Structure and Components of Supply Chains The structure of supply chains The components of supply chains Copyright ©2021 John Wiley & Sons Canada, Ltd. 22 The Structure of Supply Chains Upstream- all activities that happen before manufacturing. Ex. Sourcing of raw materials. Internal- production stage. Downstream- distribution stage. Reverse flows or reverse logistics- flow of goods and materials backward in the supply chain Copyright ©2021 John Wiley & Sons Canada, Ltd. 23 The Components of Supply Chains Tiers of suppliers o Tier 3: Basic products o Tier 2: Sub-assemblies o Tier 1: Integrated components The flows in the supply chain o Materials flows o Information flows o Financial flows Copyright ©2021 John Wiley & Sons Canada, Ltd. 24 11.5 Supply Chain Management Five Basic Components of SCM The Push Model versus the Pull Model Problems along the Supply Chain Solutions to Supply Chain Problems Copyright ©2021 John Wiley & Sons Canada, Ltd. 25 Five Basic Components of Supply Chain Management Plan Source Make Deliver Return PSMDR Copyright ©2021 John Wiley & Sons Canada, Ltd. 26 Interorganizational Information Systems (IOS) Enable the partners to perform the following: o Reduce the costs of routine business transactions o Improve the quality of the information flow by reducing or eliminating errors o Compress the cycle time involved in fulfilling business transactions o Eliminate paper processing and its associated inefficiencies and costs o Make the transfer and processing of information easier for users Copyright ©2021 John Wiley & Sons Canada, Ltd. 27 The Push Model versus the Pull Model Push model o Make-to-stock- creating products based on high levels of customer demand Pull model o Make-to-order- a business does not start production until they have received an order from the customer. Copyright ©2021 John Wiley & Sons Canada, Ltd. 28 Problems along the Supply Chain Two main sources of problems: o Uncertainties (e.g., the demand forecast, delivery times) o The need to coordinate multiple activities, internal units, and business partners Bullwhip effect- small changes in customer demand lead to increasingly larger fluctuations in orders and inventory levels as you move upstream Copyright ©2021 John Wiley & Sons Canada, Ltd. 29 FIGURE 11.5 The bullwhip effect Copyright ©2021 John Wiley & Sons Canada, Ltd. 30 Solutions to Supply Chain Problems Vertical integration Using inventories to solve supply chain problems o Building inventories- stockpiling goods or raw materials to ensure sufficient supply for future demand. o Just-in-time (JIT) inventory system- materials and products are ordered and produced only when needed. Information sharing o Vendor-managed inventory (VMI)- supplier (vendor) takes responsibility for managing and replenishing the inventory at the customer’s (retailer or distributor) location. Copyright ©2021 John Wiley & Sons Canada, Ltd. 31 11.6 Information Technology Support for Supply Chain Management Electronic Data Interchange (EDI) XML-Based Web Services Extranets Portals and Exchanges Emerging Technologies: o Robotics, drones, autonomous (driverless) vehicles and three-dimensional (3D) printing Copyright ©2021 John Wiley & Sons Canada, Ltd. 32 FIGURE 11.6 Comparing purchase order (PO) fulfillment without EDI Copyright ©2021 John Wiley & Sons Canada, Ltd. 33 FIGURE 11.6 Comparing purchase order (PO) fulfillment with EDI Copyright ©2021 John Wiley & Sons Canada, Ltd. 34 Extranets Use virtual private network (VPN) technology Three major types of extranets: o A company and its dealers, customers, or suppliers o An industry’s extranet o Joint ventures and other business partnerships Copyright ©2021 John Wiley & Sons Canada, Ltd. 35 FIGURE 11.7 The structure of an extranet Copyright ©2021 John Wiley & Sons Canada, Ltd. 36 Portals and Exchanges Two basic types of corporate portals: o Procurement portals (i.e., sourcing portals): for a single buyer and multiple suppliers o Distribution portals: for multiple buyers with a single supplier Copyright ©2021 John Wiley & Sons Canada, Ltd. 37 Copyright Copyright © 2021 John Wiley & Sons Canada, Ltd. or the author. All rights reserved. Students and instructors who are authorized users of this course are permitted to download these materials and use them in connection with the course. No part of these materials should be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, except as permitted by law. Advice on how to obtain permission to reuse this material is available at http://www.wiley.com/go/permissions. Copyright ©2021 John Wiley & Sons Canada, Ltd. 38