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CHAPTER 11 : BUILDING A CUSTOMER CENTRIC ORGANIZATION - CUSTOMER RELATIONSHIP MANAGEMENT

Learning outcomes

11.1 Compare operational and analytical customer relationship management.

11.2 Identify the primary forces driving the explosive growth of customer relationship management.

11.3 Define the relationship between decision making and analytical customer relationship management.

11.4 Summarize the best practices for implementing a successful customer relationship management system.

Customer Relationship Management (CRM)

CRM is a business philosophy based on the premise that those organizations that understand the needs of individual customers are best positioned to achieve sustainable competitive advantage in the future.

- A customer strategy starts with understanding who the company's customers are and how the company can meet strategic goals.

- As the business world increasingly shifts from product focus to customer focus, most organizations recognize the treating existing customers well is the best source of profitable and sustainable revenue growth in the age of e-business, however, an organization is challenged more than ever before to truly satisfy its customers.

Recently, Frequency, and Monetary Value

An organization can find its most valuable customers by using a formula that industry insiders call RFM-recency, frequency, and monetary value. In other words, an organization must track:

- How recently a customer purchased items (recently)

- How frequently a customer purchases an item (frequently

- How much a customer spends on each purchase (monetary value)

The evolution of CRM

Knowing the customer, especially knowing the profitability of individual customers, is highly lucrative in the financial service industry.

There are three phases in the evolution of CRM:

1.                               CRM Reporting technology help organizations identify their customers across other applicants

2.                               CRM analysis technology helps organizations segment their customers into categories such as best and worst customers.

3.                               CRM predicts technological help organizations make predictions regarding customer behavior such as which customers are at risk of leaving.

The Ugly Side of CRM: Why CRM Matters More Now than Ever Before

Now companies have no choice as the power of the customer grows exponentially as the internet grows. In every case, customers have become an integral part of the action as a member of the aggregated, interactive, self-organizing, auto-entertaining audience on businesses. However, this should no be a surprise, since it was the customers crazy passion and hobbies and obsessions-that build up the web in the first place.

Customer Relationship Management's Explosive Growth

When customers buy on Internet, they see, and they steer, entire value chains.

- Customer web interaction become conversations, interactive dialogs with shared knowledge, not just business transaction. Web- based customer care can actually become the focal point of customer relationship management and provide breakthrough benefits for both the enterprise and its customers, substantially reducing costs while improving service.

- Current users allow allocating 20 percent of their IT budget to CRM solutions.

DISPLAY THE TOP CRM BUSINESS DRIVERS

Using Analytical CRM to Enhance Decisions

The two components of a CRM strategy are:

- Operational CRM supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers.

- Analytical CRM supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers.

The primary difference between operational CRM and analytical CRM in the direct interaction between the organization and its customers.

-Personalization occurs when a website can know enough about a person's likes and dislikes that it can fashion offers that are more likely to appeal to that person. Many organizations are now utilizing CRM to create customer rules and templates that marketers can use to personalize customer messages.

Customer Relationship Management Success Factor

CRM solutions make organizational business processes more intelligent. This is achieved by understanding customer behavior and preferences, then realigning product and service offering and related communications to make sure they are synchronized with customer needs and preferences. If an organization is implementing a CRM system, it should study the industry best practices to help ensure a successful implementation.

Using he analytical capabilities of CRM can help a company Anticipate customer need and proactively serve customers in way that build relationship, create loyalty, and enhance bottom lines.

Assalamualaikum ....

CHAPTER 10 : SUPPLY CHAIN MANAGEMENT

Learning outcomes

10.1 List and describe the components of a typical supply chain.

10.2 Define the relationship between ecision making and supply chain management.

10.3 Describe the four changes resulting from advances in IT that are driving supply chains.

10.4 Summarize the best practices for implementing a successful supply chain management system.

 

 Supply Chain Management

- Companies that excel in supply chain operations perform better in almost every financial measure of success, according to a report from Boston-based MR Research Inc.

- These companies understand that value chain performance translates to productivity and market-share leadership.

Basics of Supply Chain

- A supply chain consists of all parties involved, directly or indirectly, in the procedurement of a product or raw material.

- Organization must embrace technologies that can effectively manage and oversee their supply chain.

- supply chain management involves the management of information flow between and among stages in a supply chain to maximize total supply chain effectiveness and profitability.

- SCM is becoming increasingly important in creating organizational efficiencies and competitive advantages.

- It improves ways for companies to find the raw components they need to make a product or service, manufacture that product or service, and deliver it to customers.

Information Technology's Role in the Supply Chain

- The notion of virtually seamless information links within and between organizations is an essential element of integrated supply chain.

- Information technology's primary role in SCM is creating the integration or tight process and information linkages between functions within a firm.

- Information technology integrates planning, decision -making processes, business operating processes, and information sharing for business performance management.

- Considerable evidence shows that this type of supply chain integration results in superior supply chain capabilities and profits.

+VISIBILITY

Supply chain visibility is the ability to view all areas up and down the supply chain.

Bullwhip effect occurs when distorted products demand information passes from one entity to the next through the supply chain.

*Information technology allows additional visibility in the supply chain.

+CONSUMER BEHAVIOR

Demand planning software generates demand forecasts using statistical tools and forecasting techniques.

Ones an organization understand customer demand and its effect on the supply chain it can begging to estimate the impact that its supply chain will have on its customers and ultimately the organization's performance.

+ COMPETITION

Supply chain management can be broken down in"

Supply chain planning software: uses advanced mathematical algorithms to improve the flow and efficiency of the supply chain while reducing inventory. SCP depends entirely on information for its accuracy.

Supply chain executive (SCE) software automates the different stems and stages of the supply chain.

+SPEED

During the past decade, competition has focused on speed. New forms of severs, telecommunications enabling companies to perform activities that were once never thought possible.

Another aspect of speed is the company's ability to satisfy continually changing customer requirements efficiently, accurately, and quickly.

Supply Chain Management Success Factors

To succeed in today's competitive markets, companies must align their supply chains with the demands of the markets key serve.

To achieve success such as reducing operation costs, improving asset productivity, and compressing order cycle time, and organization should follow the seven principles of SCM outlines.

One of the benefits is to know immediately what is being transacted at the customer and of the supply chain instead of waiting days or weeks for the information to flow.

Organizations should study industry best practices to improve their chances of successful implementation of SCM systems. The following are keys to SCM success.

+ MAKE THE SALE TO SUPPLIERS

The hardest part of any SCM system is its complexity because a large part of the system extends beyond the company's walls.

+ WEAN EMPLOYEES OF TRADITIONAL BUSINESS PRACTICES

Operations people typically deal with phone calls, faxes, and orders scrawled on paper and will most likely want to keep it that way.

+ENSURE THE SCM SYSTEM SUPPORTS THE ORGANIZATIONAL GOALS

It is important to select SCM software that give organizations and advantage in the areas most crucial to their business success.

+ DEPLOY IN INCREMENTAL PHASES AND MEASURE AND MOMMUNICATE SUCCESS

Design the deployment of the SCM system in incremental phases.

+ BE FUTURE ORIENTED

The supply chain design must anticipate the future state of the business.

SCM Success Stories

The following picture depicts the top reasons more and more executives are turning to SCM to manage their expended enterprises.

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CHAPTER 9 : ENABLING THE ORGANIZATION ( DECISION MAKING )

Learning outcomes

9.1 Define the systems organizations use to make decisions and gain cimpetitive advantages.

9.2 Describe the three quantitative models typically used by decision support systems.

9.3 Describe the relationship between digital dash-boards and executive information systems.

9.4 List and describe four types of artificial intelligence systems.

                                     MODEL

A model is a simplified representation or abstraction of reality.

-Models can calculate risks, understand uncertainly , change variable, and manipulate time.

- Decision-making information systems work by building models out of organization information to lend insight into important business issues and opportunities.

Each system uses different models to assist in decision making, problem solving, and opportunity capturing. This system includes:

-Transaction Processing System.

-Decision Support Systems.

-Executive Information Systems.

·                                 Transaction Processing Systems

The structure of a typical organization is similar to a pyramid. Organizational activities occur at different levels of the pyramid. People in the organization have unique information needs and thus require various sets of IT tools.

- Online transaction processing is the manipulation of information to create business intelligence in support of strategic decision making.

·                                 Decision Support System

A decision support system (DSS) models information to support managers and business professionals during the decision making process.

Three quantitative models are typically used by DSSs:

-Sensitivity analysis is the study of the impact that changes in one (or more) parts of the model have on other parts of the model.

-What-if analysis check the impact of change in an assumption on the proposed solution.

- Goal -seeking analysis finds the inputs necessary to achieve a goal such as a desired level of output.

·                                 Executive Information Systems

-Consolidation involves the aggregation of information and features simple rollups to complex groupings of interrelated information.

-Drill-down enables users to get details, and details of details, of information viewing monthly, weekly, daily, or even hourly information represents drill down capability.

-Slide-and-dice is the ability to look at information from different perspectives.

+DIGITAL DASHBOARDS

A common feature of EIA is digital dashboard. Digital dashboards integrate information from multiple components and tailor the information to individual preferences. Digital dashboards commonly use indicators to help executives quickly identify the status of the key information or critical success factors.

- Digital dashboards, whether basic or comprehensive, deliver results quickly.

- EIS systems such as digital dashboards, allow executives to move beyond reporting to using information to directly impact business performance.

- Digital Dashboards help executives react to information as it becomes available and make decision, solve problems, and change strategies daily instead of monthly.

Artificial Intelligence(AI)

Executive information systems are starting to take advantage of artificial intelligence to help executives make strategic decisions.

Phili Lumish said that competing in the internet arena is competing with the entire world rather than a store down the block or a few miles away.

- Intelligent Systems are various commercial applications of artificial intelligence. --

- Artificial intelligence (AI) simulates human intelligence such as ability to reason and learn.

AI systems dramatically increase the speed and consistency of decision making, solve problems with incomplete information, and solve complicated issues that cannot be solved by conventional computing. There are many categories of AI systems:

-Expert System

-Neural Networks

-Genetic Algorithms

-Intelligent agents

+ Expert system are computerized advisory program that imitate the reasoning processes of experts in solving difficult problems.

+A neural Network, also called an artificial neural network, is a category of AI that attempts to emulate the way the human brain works.

- Fuzzy logic: It is an artificial method of handing imprecise or subjective information.

+A genetic algorithms is an artificial intelligence system that mimic the evolutionary, survival-of-the-fittest process to generate increasingly better solutions to a problem.

+ Intelligent agents is a special-purpose knowledge-based information system that accomplished specific task as on behalf of its users. A shopping both is simple example of an intelligent agent.

- Shopping bot is the software that will search several retailer websites and provide a comparison of each retailer's offering including price and availability.

Multi-Agent Systems and Agent Modeling

By observing the ecosystem like ant or bee colonies, artificial intelligence scientists can use hardware and software models that incorporate insect characteristics and behavior to:

- Learn how people-based system behave

- predict how they will behave under a given set of circumstances

- improve human system to make them more efficient and effective.

This concept of learning from ecosystems and adapting their characteristics to human and organizational situations is called biomimicry.

+ Data Mining

- Data miming system sift instantly through the information to uncover patterns and relationships that would elude an army of human research.

- Data-mining software typically includes many forms of AI such us networks and expert system.

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CHAPTER 8 : ACCESSING ORGANIZATIONAL INFORMATION ( DATA WAREHOUSE)

Learning outcomes

·         8.1 Describe the roles and purposes of data warehouses and data marts in an organization.

·         8.2 Compare the multidimensional nature of data warehouses (and data mats) with the two-dimensional nature of databases.

·         8.3 Identify the importance of ensuring the cleanliness of information throughout an organization.

·         8.4 Explain the relationship between business intelligence and a data warehouse.

Accessing Organizational Information

The company also uses data warehouse information to perform the following:

·         Base labor budgets on actual number or guests served per hour.

·         Develop promotional sale item analysis to help avoid losses from overstocking or understocking inventory.

·         Determine theoretical and actual costs of food and the use of ingredients.

                                    History of Data Warehousing

Operational systems typically include accounting, order entry, customer service, and sales and are not appropriate for business analysis for the following reasons:

·         Information from other operational applications is not included.

·         Operational systems are not integrated, or not available in one place.

·         Operational information is mainly current—does not include the history that is required to make good decisions.

·         Operational information frequently has quality issues —the information needs to be cleansed

·         Without information history, it is difficult to tell how and why things change over time.

·         Operational systems are not designed for analysis and decision support.

Data Ware house Fundamentals

A data warehouse is a logical collection of information—gathered from many different operational databases—that supports business analysis activities and decision-making tasks.

Extraction, transformation, and loading (ETL), which is a process that extracts information form internal and external databases, transforms the information using a common set of enterprise definitions, and loads the information into a data warehouse.

 MULTIDIMENSIONAL ANALYSIS AND DATA MINING

A cube is the common term for the representation of multidimensional information.

Data mining is the process of analyzing data to extract information not offered by the raw data alone.

Date-mining tools use a variety of techniques to find patterns and relationships in large volumes of information and infer rules from them that predict future behavior and guide decision making.

                                              INFORMATION CLEANSING OR SCRUBBING

Information cleansing or scrubbing is a process that weeds out and fixes or discards inconsistent, incorrect, or incomplete information.

Business Intelligence

Business intelligence (BI) refers to applications and technologies that are used to gather, provide access to, and analyze data and information to support decision-making efforts.

A certain school of thought draws parallels between the challenges in business and those of war, specifically:

·         Collecting information.

·         Discerning patterns and meaning in the information.

·         Responding to the resultant information.

ENABLING BUSINESS INTELLIGENCE

Technology – the most significant enabler of business intelligence.

People – Understanding the role of people in BI allows organizations to systematically create insight and turn these insights into actions.

Culture – A key responsibility of executives is to shape and manage corporate culture.

ASSALAMUALAIKUM..

CHAPTER 7 : STORING ORGANIZATIONAL INFORMATION (DATABASE)

Learning outcomes

·         7.1 Define the fundamental concepts of the relational database model.

·         7.2 Evaluate the advantages of the relational database model.

·         7.3 Compare relational integrity constraints and business-critical integrity constraints.

·         7.4 Describe the benefits of a data-driven website.

·         7.5 Describe the two primary methods for integrating information across multiple databases.

                             Storing Organizational Information

Organizational information is stored in a database.

 

                                            Relational Database Fundamentals

A database maintains information about various types of objects (inventory), events (transactions), people (employees), and places (warehouses).

In a hierarchical database model, information is organized into a tree-like structure that allows repeating information using parent/child relationships in such a way that it cannot have too many relationships.

The network database model is a flexible way of representing objects and their relationships.

The relational database model is a type of database that stored information in the form of logically related two-dimensional tables.

 

ENTITIES AND ATTRIBUTES

An entity in the relational database model is a person , place, thing, transaction, or event about which information is stored.

 KEYS AND RELATIONSHIPS

A primary key is a field (or group of fields) that uniquely identifies a given entity in a table.

A foreign key in the relational database model is a primary key of one table that appears as an attribute in another table and acts to provide a logical relationship between the two tables.

 

                                 Relational Database Advantages

From a business perspective, database information offers many advantages, including:

·         Increased flexibility.

·         Increased scalability and performance.

·         Reduced information redundancy.

·         Increased information integrity (quality).

·         Increased information security.

INCREASED FLEXIBILITY

The physical view of information deals with the physical storage of information on a storage device such as a hard disk.

The logical view of information focuses on how users logically access information to meet their particular business needs.

           INCREASED SCALABILITY AND PERFORMANCE

Scalability refers to how well a system can adapt to increased demands.

Performance measures how quickly a system performs a certain process or transaction.

 

          REDUCED INFORMATION REDUNDANCY

Redundancy is the duplication of information, or storing the same information in multiple places.

 

          INCREASED INFORMATION INTEGRITY (QUALITY)

Information integrity is a measure of the quality of information.

Within a database environment, integrity constraints are rules that help ensure the quality of information.

There are two types of integrity constraints: (1) relational integrity constraints and (2) business-critical integrity constraints.

Relational integrity constraints are rules that enforce basic and fundamental information-based constraints.

Business-critical integrity constraints enforce business rules vital to an organization’s success and often require more insight and knowledge than relational integrity constraints.

 

          INCREASED INFORMATION SECURITY

Information is an organizational asset and must be protected.

Database offer several security features including :

• password - provides authentication of the user
• Access level - determines who has access to the different types of information.
• Access control - determine types of user access,such as read-only access.

 

                                   Database Management Systems

A database management system (DBMS) is software through which users and application programs interact with a database.

 

DATA-DRIVEN WEBSITES

A data-driven website is an interactive website kept constantly updated and relevant to the needs of its customers through the use of a database.

 DATA-DRIVEN BUSINESS INTELLIGENCE

Companies can gain business intelligence by viewing the data accessed and analyzed from their website.

 

                            Integrating Information among Multiple Databases

An integration allows separate systems to communicate directly with each other.

Without integrations, an organization will (1) spend considerable time entering the same information in multiple systems and (2) suffer from the low quality and inconsistency typically embedded in redundant information.

A forward integration takes information entered into a given system an sends it automatically to all downstream systems and processes.

A backward integration takes information entered into a given system and sends it automatically to all upstream systems and processes.