3. Learning Objectives
• Identify and give examples to illustrate the
following aspects of customer relationship,
enterprise research, and supply chain
management systems
• Business processes supported
• Customer and business value provided
• Potential challenges and trends
4. Customer Relationship Management
• A customer-centric focus
• Customer relationships have become a company’s
most valued asset
• Every company’s strategy should be to
find and retain the most profitable
customers possible
5. Case 1: Business Benefits of CRM
• Forex Capital Markets trades $20 billion
worth of currency per month
• 12,000 clients in 70 countries
• Tracking sales leads and prospects
• Began with Excel spreadsheets
• Switched to Access database
• Volume forced move to CRM system
• Access controlled through data security
and information sharing privileges
6. Case 1: Business Benefits of CRM
• Wyse Technology
• World leader in thin-client computing
• Revenues in excess of $180 million
• Doubled sales within 12 months of installing
CRM system
• No additional staff needed
7. Case Study Questions
• Why can’t Microsoft Excel spreadsheets and
Access database software handle the customer
relationship needs of companies like FXCM?
• What functions do CRM systems like Salesforce
provide to a company that these software
packages do not?
• What business benefits has the Salesforce
CRM system provided to FXCM?
• To Wyse Technology?
8. Case Study Questions
• Salesforce.com is an example of an ASP
(application service provider), which was
discussed in Chapter 4.
• What benefits do you see in this case for that
method of providing a CRM system to a company
versus installing a CRM software package?
• What disadvantages might arise?
• Which method would you prefer?
9. What is CRM?
• Managing the full range of the customer
relationship involves
• Providing customer-facing employees with a
single, complete view of every customer at
every touch point and across all channels
• Providing the customer with a single, complete
view of the company and its extended channels
• CRM uses IT to create a cross-functional
enterprise system that integrates and automates
many of the customer-serving processes
11. Contact and Account Management
• CRM helps sales, marketing, and service
professionals capture and track relevant
data about
• Every past and planned contact with prospects
and customers
• Other business and life cycle events of customers
• Data are captured through customer touchpoints
• Telephone, fax, e-mail
• Websites, retail stores, kiosks
• Personal contact
12. Sales
• A CRM system provides sales reps with the
tools and data resources they need to
• Support and manage their sales activities
• Optimize cross- and up-selling
• CRM also provides the means to check on a
customer’s account status and history before
scheduling a sales call
13. Marketing and Fulfillment
• CRM systems help with direct marketing
campaigns by automatic such tasks as
• Qualifying leads for targeted marketing
• Scheduling and tracking mailings
• Capturing and managing responses
• Analyzing the business value of the campaign
• Fulfilling responses and requests
14. Customer Service and Support
• A CRM system gives service reps real-time
access to the same database used by sales
and marketing
• Requests for service are created, assigned,
and managed
• Call center software routes calls to agents
• Help desk software provides service data
and suggestions for solving problems
• Web-based self-service enables customers
to access personalized support information
15. Retention and Loyalty Programs
• It costs 6 times more to sell to a new customer
• An unhappy customer will tell 8-10 others
• Boosting customer retention by 5 percent can
boost profits by 85 percent
• The odds of selling to an existing customer are
50 percent; a new one 15 percent
• About 70 percent of customers will do business
with the company again if a problem is quickly
taken care of
16. Retention and Loyalty Programs
• Enhancing and optimizing customer retention
and loyalty is a primary objective of CRM
• Identify, reward, and market to the most loyal
and profitable customers
• Evaluate targeted marketing and relationship
programs
18. Benefits of CRM
• Benefits of CRM
• Identify and target the best customers
• Real-time customization and personalization
of products and services
• Track when and how a customer contacts
the company
• Provide a consistent customer experience
• Provide superior service and support across
all customer contact points
19. CRM Failures
• Business benefits of CRM are not guaranteed
• 50 percent of CRM projects did not produce
promised results
• 20 percent damaged customer relationships
• Reasons for failure
• Lack of understanding and preparation
• Not solving business process problems first
• No participation on part of business stakeholders
involved
20. Trends in CRM
• Operational CRM
• Supports customer interaction with greater
convenience through a variety of channels
• Synchronizes customer interactions consistently
across all channels
• Makes the company easier to do business with
21. Trends in CRM
• Analytical CRM
• Extracts in-depth customer history, preferences,
and profitability from databases
• Allows prediction of customer value
and behavior
• Allows forecast of demand
• Helps tailor information and offers to
customer needs
22. Trends in CRM
• Collaborative CRM
• Easy collaboration with customers,
suppliers, and partners
• Improves efficiency and integration
throughout supply chain
• Greater responsiveness to customer needs
through outside sourcing of products
and services
23. Trends in CRM
• Portal-based CRM
• Provides users with tools and information
that fit their needs
• Empowers employees to respond to
customer demands more quickly
• Helps reps become truly customer-faced
• Provides instant access to all internal and
external customer information
24. ERP: The Business Backbone
• ERP is a cross-functional enterprise backbone
that integrates and automates processes within
• Manufacturing
• Logistics
• Distribution
• Accounting
• Finance
• Human resources
25. Case 2: Business Value of ERP
• Autosystems produces headlamps for
major automobile manufacturers
• Until a few years ago, the manufacturing
process was managed with paper documents
• An ERP system was installed, but did not
extend to the shop floor
• Significant research was done before
deciding to add the shop floor reporting module
26. Case 2: Business Value of ERP
• Installing PCs and ERP software on the shop
floor allows Autosystems to
• Enter timely, accurate information
• Plan more efficiently
• Make production changes in order to avoid
labor or scrap problems
• Discuss these issues with employees while they
are still current and meaningful
27. Case Study Questions
• Why did Autosystems decide to install the
ActivEntry system?
• Why did they feel it necessary to integrate
it with their TRANS4M ERP system?
• Which three business benefits of the use of
ActivEntry provided the most business value?
• What changes are already being planned to
improve the use of ActivEntry?
• What other improvements should the
company consider?
28. What is ERP?
• Enterprise resource planning is a cross-functional
enterprise system
• An integrated suite of software modules
• Supports basic internal business processes
• Facilitates business, supplier, and customer
information flows
31. Benefits and Challenges of ERP
• ERP Business Benefits
• Quality and efficiency
• Decreased costs
• Decision support
• Enterprise agility
• ERP Costs
• Risks and costs are considerable
• Hardware and software are a small part
of total costs
• Failure can cripple or kill a business
33. Causes of ERP Failures
• Most common causes of ERP failure
• Under-estimating the complexity of planning,
development, training
• Failure to involve affected employees in
planning and development
• Trying to do too much too fast
• Insufficient training
• Insufficient data conversion and testing
• Over-reliance on ERP vendor or consultants
35. Supply Chain Management (SCM)
• Fundamentally, supply chain management
helps a company
• Get the right products
• To the right place
• At the right time
• In the proper quantity
• At an acceptable cost
36. Goals of SCM
• The goal of SCM is to efficiently
• Forecast demand
• Control inventory
• Enhance relationships with customers, suppliers,
distributors, and others
• Receive feedback on the status of every link in
the supply chain
37. Case 3: Applying Lean Logistics to SCM
• The Tesco supermarket chain is a pioneer in
retailing
• Used SCM to overcome disadvantage of
weak supplier leverage and expensive logistics
• Changed product distribution methods to
reduce labor costs and inventory levels
• Got suppliers to ship in smaller quantities,
preconfigured for sales display
• Reduced total product “touches” from 150 to 50
• Reduced throughput time from 20 days to 5
38. Case Study Questions
• What key insights of Tesco’s SCM direction
Graham Booth helped revolutionize Tesco’s
supply chain and range of retail store formats?
• Can these insights be applied to any kind of retail
business?
• How did Dan Jones and the Cardiff Business
School of Wales demonstrate the inefficiencies
of the Tesco and Britvic supply chains?
• Can this methodology be applied to the supply
chain of any kind of business?
39. Case Study Questions
• What are the major business and competitive
benefits gained by Tesco as the result of its
supply chain initiatives?
• Can other retail chains and retail stores
achieve some or all of the same results?
• Defend your position with examples of
actual retail chains and stores you know.
40. What is a Supply Chain?
• The interrelationships
• With suppliers, customers, distributors, and
other businesses
• Needed to design, build, and sell a product
• Each supply chain process should add value to
the products or services a company produces
• Frequently called a value chain
42. Electronic Data Interchange
• EDI
• One of the earliest uses of information technology
for supply chain management
• The electronic exchange of business transaction
documents between supply chain trading partners
• The almost complete automation of an e-
commerce supply chain process
• Many transactions occur over the Internet, using
secure virtual private networks
46. Benefits and Challenges of SCM
• Key Benefits
• Faster, more accurate order processing
• Reductions in inventory levels
• Quicker times to market
• Lower transaction and materials costs
• Strategic relationships with supplier
48. Benefits and Challenges of SCM
• Key Challenges
• Lack of demand planning knowledge, tools,
and guidelines
• Inaccurate data provided by other information
systems
• Lack of collaboration among marketing,
production, and inventory management
• SCM tools are immature, incomplete, and
hard to implement
50. Case 4: Consequences of ERP Failure
• The goal Agilent Technologies Inc. specializes
in measurement and technology
• Its goal is to enable customers to speed
their time to market
• Achieve volume production
• Obtain high-quality precision manufacturing
• Consequences of a new ERP system
• One year to stabilize system
• $105 million in lost revenue
• $70 million in lost profits
51. Case 4: Consequences of ERP Failure
• Lessons Learned
• Disruptions can be more extensive than expected
• Enterprise resource planning is very complex
• ERP implementations are more than software
• People, process, policies, the company’s culture
should all be taken into consideration
• According to Enterprise Applications Consulting
• 99 percent of rollout fiascoes are caused by
management’s inability to spec requirements, and
the implementer’s inability to implement specs
52. Case 4: Consequences of ERP Failure
• Russ Berrie and Company
• First ERP implementation attempt took
three years and cost $10.3 million
• Litigation is pending between Russ Berrie
and SAP
• Second attempt
• Uses new applications
• Is being implement department by department
• Uses stand-alone systems
53. Case Study Questions
• What are the main reasons companies experience
failures in implementing ERP systems?
• What are several key things companies should
do to avoid ERP systems failures?
• Why do you think ERP system in particular are
often cited as examples of failures in IT systems
development, implementation, or management?