Dr. Michael Williams MBAM 603 Fall 2007
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Transcript of Dr. Michael Williams MBAM 603 Fall 2007
Dr. Michael WilliamsMBAM 603Fall 2007
Competition, Strategy & IT
Class Agenda
• 6:00- Introduction
• 6:10- Quiz
• 6:20- Presentation
• 7:05- Debriefing
• 7:20 - Break
• 7:35 - EPR/CRM
• 8:35- Strategy & IT
• 9:40- Self-reflection
1:00 - Introductory comments1:10 - Quiz1:25 Presentation - ERP2:15 - Break2:30 - ERP Review3:00 - Presentation - CRM3:45 - Break4:00 - Presentation Review4:15 - Customer Relationship
Managemet4:40 - Self-Reflection
Quiz
Finishing ERP…
Why ERP?
Acct.
HR
Mktng
SalesMfgr.
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
ERP Primer
• What is ERP?– ENTERPRISE resource planning– Generic representations of typical
business processes (e.g., financials, HR, manufacturing)
• What are the benefits of ERP?– Shared data– Shared interfaces– Best practices
ERP Vendor/Products
• Who are the primary vendors of ERP systems?– SAP– Oracle / PeopleSoft / JDEdwards– Many niche players (e.g., SCT)
• What is the ERP Product line?– Usually varies by industry
• An example- OneStart at IU
ERP Costs
• Varies widely based on– Firm size, Existing IT infrastructure,
Organizational complexity, Functional modules (e.g., financials, HR…), Amount of process redesign
• According to a study by Meta Group (survey of 124 firms)– Average implementation time took 24
months– Hi=$300 Million, Low=$400,000,
Average=$15 Million or $53,320/user– However, it returned a median annual
savings of $1.6 million/year
ERP Costs (Cont.)
• Software expenses are often a SMALL piece of the expense– Implementation costs range from 5x to 10x the
price of software itself!• Don’t overlook the costs of
– Training– Integration/Testing– Consultants– Data Conversions– Increased HR values/costs– Extended ROI cycles
ERP Costs (Cont.)
• Training is a big, and necessary expense– 17% of the total cost should be training.– 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.
http://techrepublic.com.com/5100-6315_11-1054263.html
ERP Failures
• Many ERP implementation fail– Well-known examples include Hershey’s
Food, Whirlpool, FoxMeyer Drug
• However, this is almost NEVER an IT problem but a management problem
So, Managers Beware
• Carefully review your processes to decide which, if any, to keep.
• Select powerful champions across functions.
• What cultural clashes will standardized data create? How will you overcome those?
• What are the ethical (i.e., power) considerations of the project?
Customer Relationship Management
A review of how technology enables closer relationships with
customers
…a little history
1990’s - ERP
Then…
Early 2001 -
Technology tends to move in waves…
What’s the problem?
• Who are your customers?
• What do they want?
• How can you drive demand for your products?
• What new products would be most appealing to them?
• What ad dollars $ drive new sales?
The changing face of IT
Angels & Demons
• CRM is more of a mindset than a single system.– “Customer Relationship Management”– A strategy that uses IT to capture and
manage information about customers’ needs and behaviors in order to develop stronger ties to them.
• CRM helps firms to identify and manage both “angel” and “demon” customers.
Comparing Customers
Sales Marketing Customer
Service
Returns Customer
DecisionUnder $300 5 Touches Low High ??
Average $500 3 Touches High Low ??
Why manage customer relationships?
• Segmentation
• Prioritization
• Acquisition
• Customization
• Personalization
• Anticipation
• Education• Innovation• Cross- and Up-Selling• Loyalty through delight,
value and relationship• Retention
CRM Market: What is CRM?
PACE
Com
pany
Info
Acco
unts
& Le
dger
Products
& Inventory
Vendors& Bills
Customers
& Payments
B
CRM
Marketing Automatio
n
Sales Force
Automation
Customer Service
Pricing & Config
Engines
Lead
Distrib’n &
Mgmt
Opportunity
Manageme
nt
Acco
unt
Man
agem
ent
Conta
ct
Managem
ent
Live/Chat
Interaction
Web S
elf-
Service
Help
Desk
Call C
ente
r
Field Service
Personaliza
tion
/
Recommendati
on
Marketing
Campaign
Direct Mail/Email
Data Mining/
Warehousing
Lead
Generation
Marke
ting
Ency
clopedi
a
Knowledge Base
CRM-Sales Force Automation
• What information and processes does management need from sales staff?
• What information and processes do sales staff need to achieve superior results?
CRM-Customer Service
The Firm
Web
Catalog
Phone
Store
Web
Catalog
Phone
Store
Customer Information Communication EffortsWITHOUT CRMWITH CRM
One message to customers
One message to customers
CRM - Marketing Automation
The effective management and tracking of all marketing media to personalize your message to each customer and
increase marketing ROI.
Customer Knowledge ManagementCapture, 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 TechnologyA 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 ContactsDevelop 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 OrganizationThe organization must evolve a consistent customer-centric philosophy across human resource management and internal communications.
CRM
CRM Components
CRM Technologies• No single “CRM” technology, but there are attempts at one-
stop CRM solutions– Microsoft CRM– Oracle/Siebel Systems– SalesForce.com
• Some “CRM” technologies include– Data warehouse– Data mining– Intelligent agents– Unified marketing management– Unified Multi-channel customer contact technologies (web,
email, chat, voice)– Contact management– Web-based customer self-service
CRM Costs
• It depends on your “target”
• Single applications can cost as little as $10,000-$50,000. But these usually don’t provide too much value.
• CIO Magazine’s 2001 survey found that 50% of firms (n=1600) had a CRM budget of less than $500,000.
• That same survey showed some firms spend > $10 M on CRM projects.
Benefits of CRM
• Discover, Acquire, and Retain Customers
• Increase Customer Satisfaction and Profitability
• Help Sales Staff Close Deals Faster
• Cross Sell Products More Effectively
• Make Call Centers More Efficient
• Simplify Marketing and Sales Processes
• Purchase Inventory with Better Accuracy
• Allocate Labor Dollars More Strategically
• Streamline the Supply Chain
Where and How to Start?
• Give every customer a unique ID• Capture transaction data• Capture human insights• Create and articulate a customer strategy• Create a customer-focused organization• Identify useful information & benefiting users• Provide simple, fast, convenient access to customer
information and knowledge• Don’t irritate or stalk customers & employees• Start small, solve problems, add value,
build on successes
CRM Target and Lessons
What was unique, interesting, insightful, or revelatory about the
Goodhue et al. article?
CRM Targets
Install individual customer-oriented applications (e.g., database marketing 56%, call centers 53%, web portals 40%…)
Build CRM infrastructure into organization (e.g., network and consistent data)
Transform the organization to customer centered (e.g., process redesign)
Source: Goodhue et al., 2002 MISQE 1:2
CRM Lessons
1. Each target has unique costs and benefits
2. Sponsorship varies by target3. Each target evolves4. Each target is messy5. Scalability is key since each target
evolves6. Targets involve increasing role from
users
Presentation Review
Get together with your teams and answer the following.
• What was the most compelling content provided in the presentation?
• What content area of the presentation needed more development?
• What can you learn from this to improve your next presentation?
Post your answers in the Discussion Board in Bb
For the presenting team, answer the following:– What did I learn about myself
from this team experience?– What did I learn about
working with others from this team experience?
– What will I do differently next time?
Post your answers in the Digital Dropbox.
Team Exercise
• In your teams, review the Tesco, UK case on p. 59 in the textbook. (10 minutes)– Discuss the three questions following the brief
case.– Post your responses in Blackboard.
Self Reflection
…every experience in life enriches one’s background and should teach
valuable lessons. Mary Gilson, Economist
What’s Past is Prologue 1940
IT & Strategy
Strategy and IT
How are / might Information and Process Systems
help your firm address these strategic challenges and opportunities?
Achieving a Competitive Advantage
Strategy and the Internet
What was unique, interesting, insightful, or revelatory about the
Porter article?
Strategy and the Internet
• 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…)
Discussion QuestionsIn your teams discuss the following and submit
your answers to Blackboard:• Who will capture the economic benefits that the
Internet creates?
• Will all the value end up going to customers, or will companies be able to reap a share of it? How?
• What is the Internet’s impact on industry structure?
Happy Birthday!