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Carnegie Mellon University ©2006 - 2010 Robert T. Monroe 70-451 Management Information Systems Customer Relationship Management Systems 70-451 Management.

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Presentation on theme: "Carnegie Mellon University ©2006 - 2010 Robert T. Monroe 70-451 Management Information Systems Customer Relationship Management Systems 70-451 Management."— Presentation transcript:

1 Carnegie Mellon University ©2006 - 2010 Robert T. Monroe 70-451 Management Information Systems Customer Relationship Management Systems 70-451 Management Information Systems Robert Monroe September 6, 2010

2 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Quiz 1.True or false: according to the textbook, two categories of CRM systems are operational and analytical. 2.__________ CRM systems are the type of CRM systems that evaluate customer data to help businesses make better decisions but do not directly interact with customers 3.The book describes a formula called RFM for identifying an organizations most important customers. Write down what either R, F, or M stand for.

3 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems After Today's Class You Should Be Able To: Understand some of the key challenges to building an effective IT infrastructure Explain why a company would invest in a Customer Relationship Management (CRM) system, and the primary uses for such a system Explain the difference between Operational CRM and Analytic CRM, and the role that each plays Explain how CRM systems can be used to acquire customers, enhance the companys relationship with its customers, and retain its customers

4 Carnegie Mellon University ©2006 - 2010 Robert T. Monroe 70-451 Management Information Systems Architecting IT Infrastructure

5 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Putting It All Together: IT Infrastructure ComponentsIS Infrastructure Server SAN Firewall PC PDA Smart Card IT Devices Chips RAM Disks PCBs Output Devices Input Devices … Operating System Chips RAM Disks PCBs Output Devices Input Devices Server Operating System Network Mgmt Sys

6 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Putting It All Together: Systems Architecting Successful information system deployment and adoption requires an IT infrastructure that is: –Reliable (highly available) –Robust –Manageable –Cost effective Achieving these goals requires careful planning, management, and investment This is the responsibility and role of a Systems Architect

7 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Systems Architecting: Building Blocks Client machines –PCs –PDAs –Cell phones –Etc… Servers –File Servers –Web Servers –Mail Servers –Etc… Software –Operating systems –Web, application, e-mail servers –Network management systems Networking equipment –Firewalls –Routers –Gateways –Load Balancers Storage systems –File servers –RAID arrays –Storage Area Networks (SANs) –Network Attached Storage (NAS) Uninteruptable power supplies Heating, Ventilation, Cooling (HVAC)

8 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Example: System Architecture Diagram

9 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems The Data Center A data center provides the technical physical infrastructure to run your web business

10 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems The Data Center

11 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Data Centers Provide Core physical infrastructure –Power –HVAC –Fire prevention and suppression –Seismic monitoring and bracing –Physical security Hardware, networking, software infrastructure –Rack space –Networking infrastructure (big pipes, lots of em) –Servers –Storage –Backup Management services (optional) –NOC

12 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Managing IT Infrastructure: TCO Total Cost of Ownership is more important than purchase price. The cost to power, support, and update hardware devices over their useful lifetime often exceeds initial purchase price. Some challenges in building a hardware infrastructure include: –Understanding where your true costs of ownership lie –Identifying what is essential and what is not –Training and managing qualified personnel –Maintenance of machines and network –Software licensing –Software and hardware obsolescence and upgrade cycles –Maintaining inventory (spares) –Power and HVAC

13 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems TCO Exercise: Write down five recurring expenses that an organization incurs in running a large information system in a data center.

14 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Backup and Disaster Recovery Provided by data centers, specialists, or in-house Put together a plan for disaster scenarios –Evaluate cost of downtime –Devise plans to handle disasters –Plan DR strategy based on cost/benefit analysis Disaster Recovery Services –Data backup and storage (hot-site, cold-site) –Data recovery and restoration –Business process fallback plans

15 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Backup and Disaster Recovery How do you know how much to spend for backup? For disaster recovery? How do you decide how often to back up your organizations data?

16 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Network Operations Center (NOC) A NOC provides: System monitoring Tech support calls On-site technicians Network security Platform admin Application admin

17 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems User Support Center (Help Desk) Everything to this point has focused on keeping the system running smoothly What about handling user problems? There are analogous processes and procedures for dealing with users –User support center (phones, e-mail, IM) –Troubleshooting guides –Processes for common requests –Escalation procedures –etc.

18 Carnegie Mellon University ©2006 - 2010 Robert T. Monroe 70-451 Management Information Systems Customer Relationship Management

19 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Lets Talk Customers… Why does a business care about its customers? What makes a good customer for a business? Why might customers want to spend their money at a specific business? What are some things that businesses want their customers to do?

20 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Lets Talk CRM Systems… -CRM systems can help businesses deal more effectively with their customers -acquiring new customers -figuring out which ones are most profitable (and which ones are unprofitable) -selling more effectively to existing customers (up-sell, cross- sell) -be more responsive to customer needs and wants -make customers feel special and cared for

21 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems CRM Systems Consolidate Interaction Points CRM Systems: –Provide customer-facing employees with a single, complete view of every customer at every touch point and across all channels –Provide the customer with a single, complete view of the company and its extended channels Company CRM Customers

22 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems CRM Systems Consolidate Applications Integrate and automate many customer serving processes Create an IT framework of software and databases that integrates these processes with the rest of the companys business operations Includes software modules that provide tools that enable a business & its employees to provide fast, convenient, dependable, consistent service.

23 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems CRM Examples and Scenarios Your interactions with large companies are frequently managed by CRM systems Do you think these companies are using a CRM system? –Im sorry Mr. Monroe but I dont have that information. Ill have to transfer you to another office… –Im sorry Mr. Monroe, the representative you spoke with previously isnt available to help you now. Could you please explain the problem to me again from the beginning… –Thank you for flying Qatar Airways Mr. Monroe. I see that you prefer to have a window seat and are a gold privilege club member. Could I interest you in an upgrade to first class on this flight? We are offering a Ramadan promotion for our loyal customers with first class upgrades on sale at 30% off their regular price

24 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems CRM Benefits Enables a company to provide a consistent customer service experience Allows a business to identify its best (and worst!) customers Supports customer data mining and analytics Makes possible real-time customization & personalization of products & services based on: –customer wants and needs –buying habits –life cycles and lifestyles

25 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Major CRM Modules Source: OBrien-Marakas, Management Information Systems, 7 th ed.

26 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Major CRM System Modules Contact & Account Management –Helps capture and track relevant data about past and planned contacts with prospects & customers Sales –Provides sales reps with software tools & company data needed to support & manage their sales activities. –Helps optimize cross-selling & up-selling Retention and Loyalty Programs –Identify, reward, and market to loyal and profitable customers

27 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Major CRM System Modules (continued) Customer Service and Support –Software tools and real-time access to the common customer database –Create, assign, & manage requests for service from customers Call center software Help desk software Marketing & Fulfillment –Helps direct marketing campaigns by automating tasks –Helps capture & manage prospect & customer response data –Helps in fulfillment by quickly scheduling sales contacts & providing appropriate information on products & services to them

28 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Three Phases of Customer Lifecycle With CRM CRM systems provides value at three customer lifecycle stages: Shared Customer Database Source: OBrien-Marakas, Management Information Systems, 7 th ed

29 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Operational CRM Improving transactions and interactions with customers Lower value per-transaction but frequent transactions Salesforce automation –Generate leads and prospects –Manage contacts –Track and guide sales process and pipeline Operational CRM for marketing –List generator –Campaign management –Cross-selling and up-selling Contact center management

30 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Analytic CRM Focus on making better decisions about customers Examples of how to do this: –Give customers what they want –Find new customers similar to your best customers –Find out what your organization does best –Be proactive –Reactivate inactive customers –Let customers know they matter Source: [HBP09] page 424.

31 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Discussion: Operational vs. Analytic CRM What types of operational and analytic functionality might the following modules provide? –Contact and account management –Sales –Retention and loyalty programs –Customer service and support –Marketing and fulfillment

32 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Customer Experience Example: KFC I usually place food orders from the restaurants around Education City. … the first time I placed a food order through KFC, I was asked to provide my contact information, location and other relevant information. I was delivered the order and a week after I decided to order a different meal and called. The customer service person only asked for my cell phone number and as soon as he entered the cell phone number into the database, the rest of information (contact info and other) was uploaded to the system. This system is fascinating, it accelerates the process, takes less time and it is very efficient for both parties involved. -- Abid

33 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Customer Experience Example: Qatar Airways Prior to my arrival to Qatar for the start of the semester, I went online and checked my ticket reservation by simply entering my Qatar Airways privilege card number. I was able to check my frequent flyer miles and new promotions specifically to destinations I fly to most often and they know this information through the information saved on my membership card. The QA membership card has made my life easier and has made the reservation process much more efficient and convenient. Furthermore, when I go to check-in at airports, QA staff/crew acknowledge me as a QA silver member and allow excess luggage weight, priority in waiting inqueues, and sometimes upgrades my seating depending on the situation and total number passengers on the flight. This CRM is most beneficial to Qatar Airways' business as it creates a stronger relationship with its customers and enhances and efficiency and quality of its service. -- Aliah

34 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Customer Experience Example: Fitness Club I used go to Al-Thuraya fitness club. All members have different privileges depending on the facilities they like (such as the spa, swimming pool, gym, aerobics classes, and the beauty saloon). All information name, mobile number, membership number and combination of facilities chosen are all found on the membership card. This membership card has the same ID number as the Qatari ID. Whenever someone forgets the card, they can give the reception their Qatari ID to scan which will recall all the information from club system found on the membership card. Iif they have the card with them they can just scan it at the doors and it will allow them to go where they are privileged to. -- Nada

35 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Customer Experience Example: Microsoft Office When I first used Microsoft Office 2003, I was asked if I would like to participate in the "Customer Experience Improvement Program" where the Microsoft Corporation would collect information about my activities on the Office applications periodically. Since I did not feel the need to keep my activities on MS Office hidden, I clicked "yes". I do not believe that I had anything to lose. Now that I use Office 2010, I look back at this system and I believe that the intelligence they gathered allowed their future products to be more user friendly. They gathered information about the most frequently used functions and made them more accessible, hence increasing the speed of my MS-Office dependant activities. -- Waleed

36 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Building CRM Capabilities Incrementally Operational CRM –Baseline capability –Track and manage customer interactions Analytical CRM –Analyze customer behavior and demands to better meet needs Collaborative CRM –Integrate CRM efforts with customers, suppliers, partners Portal-Based CRM –Move customer interactions to the web and mobile devices Portal- Based CRM Collab. CRM Operational CRM Analytical CRM

37 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems Why Is Implementing CRM So Hard? They are big, complex undertakings Changing both business processes and info systems CRM implementations involve integrating many: –Business functions –Legacy information systems –People –Processes Failure to fully grasp scope of the project –Which leads to lack of understanding and preparation CRM is not a silver bullet!

38 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems CRM Summary Used effectively, a CRM system can provide tremendous benefits to a company throughout the full customer lifecycle Unfortunately, it is very difficult to: –Implement a broad enterprise-grade CRM system effectively –Use it effectively once it is implemented and deployed –Avoid harming your relationships with your customers through careless application of the system Do the benefits outweigh the costs and risks?

39 Carnegie Mellon University ©2006 – 2010 Robert. T. Monroe 70-451 Management Information Systems References [HBP09] Stephen Haag, Paige Baltzan, and Amy Phillips, Business Driven Technology, 3rd Edition, McGraw- Hill Irwin, 2009, ISBN 978007337645. [OM05] James OBrien, George Marakas, Management Information Systems, 7 th Edition, McGraw-Hill Irwin, 2005.


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