C HAPTER 2 MAJOR BUSINESS INITIATIVES Gaining Competitive Advantage with IT.
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Transcript of C HAPTER 2 MAJOR BUSINESS INITIATIVES Gaining Competitive Advantage with IT.
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CHAPTER 2
MAJOR BUSINESS INITIATIVES
Gaining Competitive Advantage with IT
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OPENING CASE: DEATH OF A TRAVEL AGENT
Because consumers are now “empowered,” travel agents have declined from 171,600 (1999) to 95,000 (2009)
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WHAT ARE SUPPLY CHAIN MANAGEMENT SYSTEMS?
Typical supply chain: lots of lag, inventory depreciates, inventory holding costs.
Just-in-time Produce/deliver product or service just at the time the
customer wants it Need to be in touch with suppliers frequently and in some
cases (like Dell) let customers order directly from suppliers Inter-modal transportation
Multiple transportation channels (railway, truck, etc) to move products from origin destination
Creates supply chain complexities Think about buying from Amazon…many different sellers
but same order from you, the customer
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SCM: OPPORTUNITIES Can lead to cost leadership (Walmart).
Can lead to reduced customer waiting time (Dell, Amazon).
Can lead to availability of products when they are needed, without running out (Walmart).
Can lead to predictability of order streams for everyone in the supply chain (Walmart).
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SCM: RADIO FREQUENCY IDENTIFICATION (RFID)
RFID
Examples On Products:
http://www.youtube.com/watch?v=_xNhL39uD7I
WristBands: http://www.youtube.com/watch?v=l62jJ20CH10
Healthcare:http://www.youtube.com/watch?v=DabzIhgyCo0
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CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS
Collects information on each customer and all their purchases
If customers have ongoing issues, it pulls up the customer profile and purchase history when they call
Allows communication via email, chat and telephone
Does data analysis to see what type of customer bought what, and makes recommendations
Can help in new product development by analyzing what kinds of products our customers are interested in.
Allows sales force to track leads and sales
Allows marketing promotions and tracking
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THE FOCUSES OF CUSTOMER RELATIONSHIP MANAGEMENT
Analytics is now a huge part of CRM. Analytics use hard data to support decision making.
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CRM: OPPORTUNITIES
Classic goals Treating customers better Understanding their needs and
wants Tailoring offerings Providing “delightful” experiences Increasing revenue (sales) Identify the products that are
selling well.
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CRM: IT/IS SUPPORT Front-office systems
Primary interface to customers and sales channels Back-office systems
Fulfill and support customer orders Both interface to CRM database and analysis and
reporting systems
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CRM: IT/IS SUPPORT
Software-as-a-service (SaaS) – software model in which you pay for software on a pay-per-use basis instead of buying the software
This reduces fixed costs and is scaleable as the business grows.
Should we buy an off the shelf CRM or get a custom developed CRM?
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WHAT IS AN ENTERPRISE RESOURCE PLANNING SYSTEM? MRP (Materials Requirement Planning) Systems
Circa 1965-1975
MRP II systems: added inventory and productivity optimization to manufacturing, link accounting to manufacturingCirca 1975-1985
ERP (Enterprise resource planning): take database applications used by diverse business functions and put them together in one large database system
Are modular and allow one to buys a few modules at a time. Is this an advantage or a disadvantage?
Force data centralization, which is a good goal.. What do ERP systems do to our competitive advantage?
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ENTERPRISE RESOURCE PLANNING
ERP is big business Federal government spent $7.7 billion on
ERP in 2009 60% of Fortune 1000 companies have ERP
systems
ERP II systems are now being used to do business intelligence analysis on the data that has been accumulated.
Data quality is important. Garbage in-Garbage out?
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ERP: FUNCTIONALITY
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ENTERPRISE RESOURCE PLANNING
The Big 4 ERP Vendors
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ERP: FUNCTIONALITY
Attempts to integrate everything CRM drives what SCM will produce Everyone works together The entire organization knows what it needs to
know about the entire organization Think about TU
Can you register for class with a bill outstanding?
Can you register for a class for which you haven’t completed the prerequisite?
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WHAT IS SOCIAL MEDIA?
Web 2.0
Social Media Social networking Social shopping Social playing Social “saving the world” Social locationing There are many more
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SOCIAL MEDIA: SOCIAL NETWORKING
Social networking site site on which you post information about yourself,
create a network of friends, read about other people, share content, and communicate with people
The big ones Facebook & LinkedIn Google+ StumbleUpon, Twitter, YouTube
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SOCIAL MEDIA: SOCIAL SHOPPING
See what other people are buying and wearing, trying to find the same, and informing others of where the best deals are. Pinterest. Instagram.
Pepsi – social vending machines Bartab Groupon/living social Reviews of products/services on amazon,
yelp
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SOCIAL MEDIA: SOCIAL PLAYING
MMORPGs (massively multiplayer online role-playing games) world of warcraft , second life
Xbox 360, Sony Ps4
Ipad, Android games
Facebook games. Farmville.
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SOCIAL MEDIA:SOCIAL “SAVING THE WORLD”
Social causes. Environmental. Protest movements.
Arab Spring
Recent riots in Kiev, Ukraine.
Kickstarter, Causes, CrowdRise.
http://socialmediasun.com/group-funding-websites/
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SOCIAL MEDIA: SOCIAL LOCATIONING
Social locationing (location-based services) Use of a mobile device and its location to
Check into locations Find friends and their locations Receive rewards Take advantage of specials based on location
Popular examples – Geoloqi, Facebook Places, SCVNGR, Google Latitude,
Foursquare,