Dr. Michael Williams MBAM 603


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  • Most software trends start in the Enterprise The early/mid-90’s were all about ERP… … after that, Y2K took over for awhile… … then came CRM Early Enterprise CRM was all about automating new departments 2 angles: sales & support Convergence drove consolidation and new market entrants (ERP vendors) Then came the web and e-CRM was born Integrating the web with your sales efforts Multi-channel became key Automating the marketing department began to enter the fray Why not just put the app on the web and the birth of ASP CRM
  • Use the tablet to draw time on the bottom and value on the side.
  • 80% of Best Buy’s profits come from 20% of their customers. These customers pay full price, keep the product, and have few complaints. They are angels. Demon customers are those that use
  • Cornerstone of most CRM applications Grounded in contact management/PIM All about getting a sale to closure… “tracking the touches” Key functionality: Contact/Account Management Lead capture & distribution Opportunity management Information sharing Management reporting & forecasting Pricing & configuration Management needs consistent, reliable information from salespeople. Management needs to train and embed best practices into the sales process. Sales staff needs consistent approach to meet quarterly commitments
  • Traditionally, software to help manage call centers and help desks “ Oldest” part of CRM Include queue mgmt, case assignment, escalation and tracking and telephony integration First big step was integration with SFA/ERP for holistic customer view Not relevant to small businesses Key current trend is toward eService Leveraging your web presence for improved customer service Call centers not as relevant…small business opp’y Key eService functionality Web-based self-service Inbound e-mail management Livecommunications (chat & click-to-call)
  • Hottest area of CRM…biggest valuations e.Piphany @ 50x revenue (450x in March) But smallest segment in sales and penetration Least applicable to small businesses Rely on relevant volumes of data Key functionality: Development & distribution of collateral Campaign mgmt tools for multiple communication channels Email marketing (the “killer” app) Personalization tools that analyze web behavior and recommend action Data extraction, warehousing and mining Across ERP, CRM and e-Business applications
  • Oracle logon: michael.williams@pepperdine.edu michelle In the afternoon class, let them view these in their teams and write up a comparison of the technologies.
  • Marble slab has a prolbem…customized mix-ins are premium priced! But..customers are hesitant to experiment with more than one mix-in. How do we get customers to pay for multiple mix-ins? Old POS systems simply kept track of charges, not products. New CRM system allows them to monitor emerging flavor combinations and then promote them.
  • Teresa La
  • Dr. Michael Williams MBAM 603

    1. 1. Dr. Michael Williams MBAM 603 Fall 2007 Competition, Strategy & IT
    2. 2. <ul><li>6:00- Introduction </li></ul><ul><li>6:10- Quiz </li></ul><ul><li>6:20- Presentation </li></ul><ul><li>7:05- Debriefing </li></ul><ul><li>7:20 - Break </li></ul><ul><li>7:35 - EPR/CRM </li></ul><ul><li>8:35- Strategy & IT </li></ul><ul><li>9:40- Self-reflection </li></ul><ul><li>1:00 - Introductory comments </li></ul><ul><li>1:10 - Quiz </li></ul><ul><li>1:25 Presentation - ERP </li></ul><ul><li>2:15 - Break </li></ul><ul><li>2:30 - ERP Review </li></ul><ul><li>3:00 - Presentation - CRM </li></ul><ul><li>3:45 - Break </li></ul><ul><li>4:00 - Presentation Review </li></ul><ul><li>4:15 - Customer Relationship Managemet </li></ul><ul><li>4:40 - Self-Reflection </li></ul>Class Agenda
    3. 3. Quiz
    4. 4. BREAK!
    5. 5. Finishing ERP…
    6. 6. Why ERP? Acct. HR Mktng Sales Mfgr. Dist = Data reqs. = Information Systems Who tracks sales? Who’s data is right? ENTERPRISE SYSTEM NOTE: Most IS and data are now in ERP, but not all. The Silo Organization
    7. 7. ERP Primer <ul><li>What is ERP ? </li></ul><ul><ul><li>ENTERPRISE resource planning </li></ul></ul><ul><ul><li>Generic representations of typical business processes (e.g., financials, HR, manufacturing) </li></ul></ul><ul><li>What are the benefits of ERP? </li></ul><ul><ul><li>Shared data </li></ul></ul><ul><ul><li>Shared interfaces </li></ul></ul><ul><ul><li>Best practices </li></ul></ul>
    8. 8. ERP Vendor/Products <ul><li>Who are the primary vendors of ERP systems? </li></ul><ul><ul><li>SAP </li></ul></ul><ul><ul><li>Oracle / PeopleSoft / JDEdwards </li></ul></ul><ul><ul><li>Many niche players (e.g., SCT) </li></ul></ul><ul><li>What is the ERP Product line? </li></ul><ul><ul><li>Usually varies by industry </li></ul></ul><ul><li>An example- OneStart at IU </li></ul>
    9. 9. ERP Costs <ul><li>Varies widely based on </li></ul><ul><ul><li>Firm size, Existing IT infrastructure, Organizational complexity, Functional modules (e.g., financials, HR…), Amount of process redesign </li></ul></ul><ul><li>According to a study by Meta Group (survey of 124 firms) </li></ul><ul><ul><li>Average implementation time took 24 months </li></ul></ul><ul><ul><li>Hi=$300 Million, Low=$400,000, Average=$15 Million or $53,320/user </li></ul></ul><ul><ul><li>However, it returned a median annual savings of $1.6 million/year </li></ul></ul>
    10. 10. ERP Costs (Cont.) <ul><li>Software expenses are often a SMALL piece of the expense </li></ul><ul><ul><li>Implementation costs range from 5x to 10x the price of software itself! </li></ul></ul><ul><li>Don’t overlook the costs of </li></ul><ul><ul><li>Training </li></ul></ul><ul><ul><li>Integration/Testing </li></ul></ul><ul><ul><li>Consultants </li></ul></ul><ul><ul><li>Data Conversions </li></ul></ul><ul><ul><li>Increased HR values/costs </li></ul></ul><ul><ul><li>Extended ROI cycles </li></ul></ul>
    11. 11. ERP Costs (Cont.) <ul><li>Training is a big, and necessary expense </li></ul><ul><ul><li>17% of the total cost should be training. </li></ul></ul><ul><ul><li>Companies that budget less than 13% of their costs for training are three times more likely to see their ERP projects run over time and over budget when compared with companies that spend 17% or more on training. </li></ul></ul>http://techrepublic.com.com/5100-6315_11-1054263.html
    12. 12. ERP Failures <ul><li>Many ERP implementation fail </li></ul><ul><ul><li>Well-known examples include Hershey’s Food, Whirlpool, FoxMeyer Drug </li></ul></ul><ul><li>However, this is almost NEVER an IT problem but a management problem </li></ul>
    13. 13. So, Managers Beware <ul><li>Carefully review your processes to decide which, if any, to keep. </li></ul><ul><li>Select powerful champions across functions. </li></ul><ul><li>What cultural clashes will standardized data create? How will you overcome those? </li></ul><ul><li>What are the ethical (i.e., power) considerations of the project? </li></ul>
    14. 14. Customer Relationship Management A review of how technology enables closer relationships with customers
    15. 15. … a little history 1990’s - ERP Then… Early 2001 - Technology tends to move in waves…
    16. 16. What’s the problem? <ul><li>Who are your customers? </li></ul><ul><li>What do they want? </li></ul><ul><li>How can you drive demand for your products? </li></ul><ul><li>What new products would be most appealing to them? </li></ul><ul><li>What ad dollars $ drive new sales? </li></ul>
    17. 17. The changing face of IT
    18. 18. Angels & Demons <ul><li>CRM is more of a mindset than a single system. </li></ul><ul><ul><li>“ Customer Relationship Management” </li></ul></ul><ul><ul><li>A strategy that uses IT to capture and manage information about customers’ needs and behaviors in order to develop stronger ties to them. </li></ul></ul><ul><li>CRM helps firms to identify and manage both “ angel ” and “demon” customers. </li></ul>
    19. 19. Comparing Customers ?? Low High 3 Touches Average $500 ?? High Low 5 Touches Under $300 Customer Decision Returns Customer Service Marketing Sales
    20. 20. Why manage customer relationships? <ul><li>Segmentation </li></ul><ul><li>Prioritization </li></ul><ul><li>Acquisition </li></ul><ul><li>Customization </li></ul><ul><li>Personalization </li></ul><ul><li>Anticipation </li></ul><ul><li>Education </li></ul><ul><li>Innovation </li></ul><ul><li>Cross- and Up-Selling </li></ul><ul><li>Loyalty through delight, value and relationship </li></ul><ul><li>Retention </li></ul>
    21. 21. CRM Market: What is CRM? PACE Company Info Accounts & Ledger Products & Inventory Vendors & Bills Customers & Payments B CRM Marketing Automation Sales Force Automation Customer Service Pricing & Config Engines Lead Distrib’n & Mgmt Opportunity Management Account Management Contact Management Live/Chat Interaction Web Self-Service Help Desk Call Center Field Service Personalization/ Recommendation Marketing Campaign Direct Mail/Email Data Mining/ Warehousing Lead Generation Marketing Encyclopedia Order Management Knowledge Management Partner Management Knowledge Base
    22. 22. CRM-Sales Force Automation <ul><li>What information and processes does management need from sales staff? </li></ul><ul><li>What information and processes do sales staff need to achieve superior results? </li></ul>
    23. 23. CRM-Customer Service The Firm Web Email Catalog Phone Store Web Email Catalog Phone Store Customer Information Communication Efforts WITHOUT CRM WITH CRM One message to customers
    24. 24. CRM - Marketing Automation The effective management and tracking of all marketing media to personalize your message to each customer and increase marketing ROI .
    25. 25. CRM Components Customer Knowledge Management Capture, analyze, and apply information about customer needs, behavior, and transaction history needs to maximize value delivered to the customer and value captured by the firm across the customer lifecycle. Integrated Technology A comprehensive integrated technology architecture must be put in place that cuts across existing organizational boundaries and is founded upon a customer-centric view of the business. Optimized Customer Contacts Develop and implement business processes to ensure consistent, high-quality, and tailored interactions with customers that increases customer satisfaction and collects valuable data on their needs and preferences. Collaborative Organization The organization must evolve a consistent customer-centric philosophy across human resource management and internal communications. CRM
    26. 26. CRM Technologies <ul><li>No single “CRM” technology, but there are attempts at one-stop CRM solutions </li></ul><ul><ul><li>Microsoft CRM </li></ul></ul><ul><ul><li>Oracle/ Siebel Systems </li></ul></ul><ul><ul><li>SalesForce.com </li></ul></ul><ul><li>Some “CRM” technologies include </li></ul><ul><ul><li>Data warehouse </li></ul></ul><ul><ul><li>Data mining </li></ul></ul><ul><ul><li>Intelligent agents </li></ul></ul><ul><ul><li>Unified marketing management </li></ul></ul><ul><ul><li>Unified Multi-channel customer contact technologies (web, email, chat, voice) </li></ul></ul><ul><ul><li>Contact management </li></ul></ul><ul><ul><li>Web-based customer self-service </li></ul></ul>
    27. 27. CRM Costs <ul><li>It depends on your “target” </li></ul><ul><li>Single applications can cost as little as $10,000-$50,000. But these usually don’t provide too much value. </li></ul><ul><li>CIO Magazine’s 2001 survey found that 50% of firms (n=1600) had a CRM budget of less than $500,000. </li></ul><ul><li>That same survey showed some firms spend > $10 M on CRM projects. </li></ul>
    28. 28. Benefits of CRM <ul><li>Discover, Acquire, and Retain Customers </li></ul><ul><li>Increase Customer Satisfaction and Profitability </li></ul><ul><li>Help Sales Staff Close Deals Faster </li></ul><ul><li>Cross Sell Products More Effectively </li></ul><ul><li>Make Call Centers More Efficient </li></ul><ul><li>Simplify Marketing and Sales Processes </li></ul><ul><li>Purchase Inventory with Better Accuracy </li></ul><ul><li>Allocate Labor Dollars More Strategically </li></ul><ul><li>Streamline the Supply Chain </li></ul>
    29. 29. Where and How to Start? <ul><li>Give every customer a unique ID </li></ul><ul><li>Capture transaction data </li></ul><ul><li>Capture human insights </li></ul><ul><li>Create and articulate a customer strategy </li></ul><ul><li>Create a customer-focused organization </li></ul><ul><li>Identify useful information & benefiting users </li></ul><ul><li>Provide simple, fast, convenient access to customer information and knowledge </li></ul><ul><li>Don’t irritate or stalk customers & employees </li></ul><ul><li>Start small, solve problems, add value, build on successes </li></ul>
    30. 31. CRM Target and Lessons <ul><li>What was unique, interesting, insightful, or revelatory about the Goodhue et al. article? </li></ul>
    31. 32. CRM Targets <ul><li>Install individual customer-oriented applications (e.g., database marketing 56%, call centers 53%, web portals 40%…) </li></ul><ul><li>Build CRM infrastructure into organization (e.g., network and consistent data) </li></ul><ul><li>Transform the organization to customer centered (e.g., process redesign) </li></ul>Source: Goodhue et al., 2002 MISQE 1:2
    32. 33. CRM Lessons <ul><li>Each target has unique costs and benefits </li></ul><ul><li>Sponsorship varies by target </li></ul><ul><li>Each target evolves </li></ul><ul><li>Each target is messy </li></ul><ul><li>Scalability is key since each target evolves </li></ul><ul><li>Targets involve increasing role from users </li></ul>
    33. 34. Presentation Review <ul><li>Get together with your teams and answer the following. </li></ul><ul><li>What was the most compelling content provided in the presentation? </li></ul><ul><li>What content area of the presentation needed more development? </li></ul><ul><li>What can you learn from this to improve your next presentation? </li></ul><ul><li>Post your answers in the Discussion Board in Bb </li></ul><ul><li>For the presenting team, answer the following: </li></ul><ul><ul><li>What did I learn about myself from this team experience? </li></ul></ul><ul><ul><li>What did I learn about working with others from this team experience? </li></ul></ul><ul><ul><li>What will I do differently next time? </li></ul></ul><ul><ul><li>Post your answers in the Digital Dropbox. </li></ul></ul>
    34. 35. BREAK!
    35. 36. Team Exercise <ul><li>In your teams, review the Tesco, UK case on p. 59 in the textbook. (10 minutes) </li></ul><ul><ul><li>Discuss the three questions following the brief case. </li></ul></ul><ul><ul><li>Post your responses in Blackboard. </li></ul></ul>
    36. 37. Self Reflection … every experience in life enriches one’s background and should teach valuable lessons. Mary Gilson, Economist What’s Past is Prologue 1940
    37. 38. IT & Strategy
    38. 39. Strategy and IT <ul><li>How are / might Information and Process Systems help your firm address these strategic challenges and opportunities? </li></ul>
    39. 40. Achieving a Competitive Advantage
    40. 41. Strategy and the Internet What was unique, interesting, insightful, or revelatory about the Porter article?
    41. 42. Strategy and the Internet <ul><li>With your team identify and define at least 6 terms in the Porter paper that are new and relevant (i.e., switching costs, barrier to entry…) </li></ul>
    42. 45. Discussion Questions <ul><li>In your teams discuss the following and submit your answers to Blackboard: </li></ul><ul><li>Who will capture the economic benefits that the Internet creates? </li></ul><ul><li>Will all the value end up going to customers, or will companies be able to reap a share of it? How? </li></ul><ul><li>What is the Internet’s impact on industry structure? </li></ul>
    43. 46. Happy Birthday!