Competition, Strategy & IT

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17 Φεβ 2014 (πριν από 3 χρόνια και 1 μήνα)

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Dr. Michael Williams

MBAM 603

Fall 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 comments

1:10

-

Quiz

1:25

Presentation
-

ERP

2:15

-

Break

2:30

-

ERP Review

3:00

-

Presentation
-

CRM

3:45

-

Break

4:00

-

Presentation Review

4:15
-

Customer Relationship
Managemet

4:40

-

Self
-
Reflection


Quiz


Finishing ERP…

Why ERP?

Acct.

HR

Mktng

Sales

Mfgr.

Dist

= Data reqs.

= Information Systems

ENTERPRISE SYSTEM

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

Decision

Under $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

B

CRM

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

Email

Catalog

Phone

Store

Web

Email

Catalog

Phone

Store

Customer Information

Communication Efforts

WITHOUT CRM

WITH CRM

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 Management

Capture, 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 Technology

A 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 Contacts

Develop 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 Organization

The 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 target

3.
Each target evolves

4.
Each target is messy

5.
Scalability is key since each target
evolves

6.
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 Questions

In 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!