1. Customer Relationship Management Systems
Management Information Systems
Robert Monroe
September 6, 2010

2. Quiz
True or false: according to the textbook, two categories of CRM systems are operational and analytical.
__________ 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
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. 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 company’s relationship with its customers, and retain its customers

4. Architecting IT Infrastructure

5. Putting It All Together: IT Infrastructure
Chips
RAM
Disks
PCB’s
Output
Devices
Input
Server
Operating System
Server
Network
Mgmt Sys
Chips
RAM
Disks
PCB’s
Output
Devices
Input …
Operating System
Server
Server
Firewall
SAN
PDA
PDA PC PC PC
Smart
Card PC
Components
IT Devices
IS Infrastructure

6. 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. Systems Architecting: Building Blocks
Client machines
PC’s
PDA’s
Cell phones
Etc…
Servers
File Servers
Web Servers
Mail Servers
Software
Operating systems
Web, application, 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. Example: System Architecture Diagram

9. The Data Center
A data center provides the technical physical infrastructure to run your web business

10. The Data Center

11. 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. 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. TCO Exercise:
Write down five recurring expenses that an organization incurs in running a large information system in a data center.

14. 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. 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 organization’s data?

16. Network Operations Center (NOC)
A NOC provides:
System monitoring
Tech support calls
On-site technicians
Network security
Platform admin
Application admin

17. 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, , IM)
Troubleshooting guides
Processes for common requests
Escalation procedures
etc.

18. Customer Relationship Management

19. Let’s 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. Let’s 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. CRM Systems Consolidate Interaction Points
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
CRM
Company
Customers

22. 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 company’s business operations
Includes software modules that provide tools that enable a business & its employees to provide fast, convenient, dependable, consistent service.

23. 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?
“I’m sorry Mr. Monroe but I don’t have that information. I’ll have to transfer you to another office…”
“I’m sorry Mr. Monroe, the representative you spoke with previously isn’t 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. 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. Major CRM Modules
Source: O’Brien-Marakas, Management Information Systems, 7th ed.

26. 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. 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. Three Phases of Customer Lifecycle With CRM
CRM systems provides value at three customer lifecycle stages:
Shared Customer Database
Source: O’Brien-Marakas, Management Information Systems, 7th ed

29. 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. 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. 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. 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
KFC example: Abid
For each example:
Is this an example of an effective, or ineffective interaction with a customer (from the business’s perspective)?
- Do you think the business was using a CRM system?
- Is a CRM system required to provide this level of service? Would a CRM system make it easier to provide this level of service?
If they are using a CRM system:
which stage of the customer lifecycle are they helping with?
what functionality / module are they using?
is it an analytic or operational system?

33. 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
Qatar Airways example: [Aliah Dehdary]
For each example:
Is this an example of an effective, or ineffective interaction with a customer (from the business’s perspective)?
- Do you think the business was using a CRM system?
- Is a CRM system required to provide this level of service? Would a CRM system make it easier to provide this level of service?
If they are using a CRM system:
which stage of the customer lifecycle are they helping with?
what functionality / module are they using?
is it an analytic or operational system?

34. 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
Fitness club example: [Nada Mohsin]
For each example:
Is this an example of an effective, or ineffective interaction with a customer (from the business’s perspective)?
- Do you think the business was using a CRM system?
- Is a CRM system required to provide this level of service? Would a CRM system make it easier to provide this level of service?
If they are using a CRM system:
which stage of the customer lifecycle are they helping with?
what functionality / module are they using?
is it an analytic or operational system?

35. 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
MS Office example: Waleed Ali Khan
For each example:
Is this an example of an effective, or ineffective interaction with a customer (from the business’s perspective)?
- Do you think the business was using a CRM system?
- Is a CRM system required to provide this level of service? Would a CRM system make it easier to provide this level of service?
If they are using a CRM system:
which stage of the customer lifecycle are they helping with?
what functionality / module are they using?
is it an analytic or operational system?

36. 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. 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. 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. References
[HBP09] Stephen Haag, Paige Baltzan, and Amy Phillips, Business Driven Technology, 3rd Edition, McGraw-Hill Irwin, 2009, ISBN [OM05] James O’Brien, George Marakas, Management Information Systems, 7th Edition, McGraw-Hill Irwin, 2005.