Week 10 - Customer Relationship Management & Business Intelligence

1.     What is your understanding of CRM?

Customer relationship management is the managing of ones customer’s relationships within a company in a way to enhance and increase the customer loyalty whilst also retaining the customer and the company’s profitability.

Definintion of CRM

2.       Compare operational and analytical customer relationship management.

Operational customer relationship management ‘supports traditional transactional processing for day-to-day front office operations or systems that deal directly with the customers.’ (Baltzan et al, 2010)

Analytical customer relationship management ‘supports back office operations and strategic analysis and includes all systems that do not deal directly with the customers.’ (Baltzan et al, 2010)

Analytical customer relationship deals with the back office operations such as accounting, HR and database warehousing, whilst operational customer relationship management deals with the front office operations systems including sales, customer service and billing.

Source: www.csulb.edu/~paustin/is300/ch9.ppt

3.     Describe and differentiate the CRM technologies used by marketing departments and sales departments

Source: Lecture Slides, C.Maker 2011

Marketing departments use customer relationship marketing technologies such as a list generator, campaign management and cross-selling and up-selling.

§  List generator: A list generator ‘compiles customer information from a variety of sources and segments the information.’ (Baltzan et al, 2010)

§  Campaign management: Campaign management ‘guides users through marketing campaigns.’ (Baltzan et al, 2010)

§  Cross-selling and up-selling: Cross selling involves ‘selling additional products or services’ whereas up-selling involves ‘increasing the value of the sale’ (Baltzan et al, 2010)

Marketing departments and the CRM technology they use differentiate from that of the sales department because they use different technologies within the broader customer relationship marketing and utilise them to their respective goals.

Sales customer relationship management technologies include sales management, contact management and opportunity management. Where:

§  Sales management is the ‘automation of each phase of the sales process helping individual sales representatives coordinate and organise all of their accounts.’ (Baltzan et al 2010, adapted from www.csulb.edu/~paustin/is300/ch9.ppt)

§  Contact management ‘maintains customer contact information and identifies prospective customers for future sales.’ (Baltzan et al 2010, adapted from www.csulb.edu/~paustin/is300/ch9.ppt)

§  Opportunity management ‘targets sales opportunities by finding new customers or companies for future sales.’ (Baltzan et al 2010, adapted from www.csulb.edu/~paustin/is300/ch9.ppt)

4.     How could a sales department use operational CRM technologies?

A sales department could use operational customer relationship management technolog to enhance its sales, customer and opportunity management techniques and the way in which it undertakes its operation.  The operational customer relationship technologies could be used by sales representatives to help combat the overwhelming amounts of customer account information that they need to maintain. Operational management can also be used with struggling companies and the issue that has arisen of the vital customer and sales information required to be known and understood by their sales representatives.

CRM in sales

5.     Describe business intelligence and its value to businesses

What is Business Intelligence?

Business intelligence is the ‘applications and technologies used to gather, provide access to, and analyse data and information to support decision making efforts.’ (Baltzan et al 2010). Business intelligence is a valuable decision making process application that can be used by businesses.

The Value Of Business Intelligence

As many businesses struggle to meet the needs and wants of different customer segments, business intelligence will then provide valuable information, such as:

§  ‘Determine who are the best and worst customers thereby gaining insight into where it needs to concentrate more for its future sales.

§  Identify exceptional sales people

§  Determine whether or not campaigns have been successful

§  Determine in which activity they are making or losing money.’ (Baltzan et al, 2010)

Business intelligence also has operational value in which it ‘shortens the latencies so that the time frame for opportunistic influences on customers, suppliers and others is faster, more interactive, and better positioned.’ (Baltzan et al 2010)

Source: Lecture Slides, C. Maker 2011

6.     Explain the problem associated with business intelligence. Describe the solution to this business problem

The problems associated with business intelligence include the fact that many businesses are data rich and information poor. That is, businesses do not understand their strengths and weaknesses which then leads to business intelligence issues.

A solution for this can be seen in this video clip:

 

7.     What are two possible outcomes a company could get from using data mining?

Data mining is simply ‘the application of statistical techniques to find patterns and relationships among data and to classify and predict’ (Baltzan et al 2010)

Using data mining can allow a business to use cluster analysis and statistical analysis giving them two possible outcomes that could be used.

§  Cluster analysis is 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’ (Baltzan et al, 2010). The outcome this gives businesses is that they can clearly identify and see the different groups and the mutually exclusive groups.

§  Statistical analysis allows business to ‘perform such functions as information correlations, distributions, calculations and variance analysis.’ (Baltzan et al 2010). By using forecasts and time-series information, statistical analysis gives a positive outcome to business as they can clearly see all the statistics that are used within their business.

References

Anonymous c2011, Customer relationship management,  <www.csulb.edu/~paustin/is300/ch9.ppt > Accessed on 25 October 2011

Week 9 - Operations Management and Supply Chain

1. Define the term operations management

Operations management is the management of systems or processes that convert or transform resources into goods and services.

Definition of Operations Management

2. Explain operations management’s role in business

Operations management role in business is a fundamental one, encompassing many aspects of business life. It uses such things as production, production management, and transformation processes.

Source: Lecture Slides, C.Maker 2011

3. Describe the correlation between operations management and information technology

The correlation between operations management and information technology is that managers use I.T to heavily influence the operations management decisions that need to be made. (Source: Lecture Slides) These include questions such as:

§  What: What resources will be needed and in what amounts?

§  When: When should the work be scheduled?

§  Where: Where will the work be performed?

§  How: How will the work be done?

§  Who: Who will perform the work?

4. Explain supply chain management and its role in a business

Supply Chain management involves the management of information flows between and among stages in a supply chain to maximise total supply chain effectiveness and profitability. (Baltzan et al, 2010)

Source: Lecture Slides, C.Maker 2011

Supply Chain management plays a fundamental role in business as it allows the business to track and fully understand where their products are and what is happening to them. This essential aspect of business, allows a company to fully utilise their supplies and understand where there products are going and where the inputs are coming from. It enables ‘customers to order from retailers, who in turn order from distributors, who in turn order from manufactures, who in turn order from suppliers.’ (Baltzan et al 2010)

5. List and describe the five components of a typical supply chain

Source: Lecture Slides, C.Maker 2011

The five components of a typical supply chain are:

§  Plan: the strategic portion of supply chain management. A plan must be in place to manage all the resources that go towards meeting customer demand. This includes using the metrics to monitor the supply chain to ensure that the supply chain is both cost effective and effective with high quality and value delivered to its customers.

§  Source: The source in the supply chain includes the suppliers. A company must choose its suppliers carefully to ensure that deliveries are made on time. This includes developing a series of plans on pricing, delivery and payment for the suppliers.

§  Make: the make step in the supply chain is the actual manufacturing of the products/services. This may involve scheduling activities that are needed for production, packaging and delivery.

§  Deliver: The Delivery, or logistics, encompasses a set of process that plans for the efficient and effective transportation and storage of the products. Customers are able to place orders with the business, which can then be fulfilled during this step.

§  Return: this step can have problematic implications for the supply chain. Businesses must ensure that there is a network established for receiving products that may be viewed as defective or excess. They then must offer customer services in the form of supporting those customers who have returned an item to the business.

6. Define the relationship between information technology and the supply chain.

Information and technology has enhanced and furthered the supply chain and its five components.  An advance in information technology has created a way in which the three segments of supply chains (Upstream, Internal and Downstream) can further be enhanced, allowing for quality products being delivered within an efficient time. It has also allowed for the development of new software to enhance the supply chain. This new software includes:

§  ‘Demand planning software: generates demand forecasts using statistical tools and forecasting techniques.

§  Supply Chain planning software – uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain.

§  Supply chain execution software – automates the different steps and stages of the supply chain.’ – Source: (Baltzan et al 2010)