Chapter 11 Building a Customer-Centric Organization Customer Relationship

Management
Customer relationship management (CRM) involves managing all aspects of a customers relationship
with an organization to increase customer loyalty and retention and an organization's profitability
Many organizations, such as Charles Schwab and Kaiser Permanente, have obtained great success through the
implementation of CRM systems

CRM enables an organization to:

Provide better customer service
Make call centers more efficient
Cross sell products more effectively
Help sales staff close deals faster
Simplify marketing and sales processes
Discover new customers
Increase customer revenues
Organizations can find their most valuable customers through RFM - Recency, Frequency, and

Monetary value
How recently a customer purchased items (Recency)
How frequently a customer purchased items (Frequency)
How much a customer spends on each purchase (Monetary Value)
The Evolution of CRM

CRM reporting technology help organizations identify their customers across other applications
CRM analysis technologies help organization segment their customers into categories such as best and
worst customers

CRM predicting technologies help organizations make predictions regarding customer behavior such as
which customers are at risk of leaving

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
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List generator compiles customer information from a variety of sources and segment the information for
different marketing campaigns

Campaign management system guides users through marketing campaigns

Cross-selling selling additional products or services
Up-selling increasing the value of the sale
The sales department was the first to begin developing CRM systems with sales force

automation a system that automatically tracks all of the steps in the sales process
Personalization when a website knows enough about a persons likes and dislikes that it can fashion offers
that are more likely to appeal to that person
Analytical CRM relies heavily on data warehousing technologies and business intelligence to glean insights into
customer behavior

CRM success factors include:

Clearly communicate the CRM strategy
Define information needs and flows
Build an integrated view of the customer
Implement in iterations
Scalability for organizational growth

Chapter 12 Integrating the Organization from End-to-End Enterprise

Resource Planning

Enterprise Resource Planning

At the heart of all ERP systems is a database, when a user enters or updates information in one module, it is
immediately and automatically updated throughout the entire system

Enterprise Resource Planning

ERP systems automate business processes

Core ERP component traditional components included in most ERP systems and they primarily focus on
internal operations

Extended ERP component extra components that meet the organizational needs not covered by the core
components and primarily focus on external operations
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Integrating SCM, CRM, and ERP

SCM, CRM, and ERP are the backbone of e-business
Integration of these applications is the key to success for many companies
Integration allows the unlocking of information to make it available to any user, anywhere, anytime

Integration Tools
Many companies purchase modules from an ERP vendor, an SCM vendor, and a CRM vendor and must integrate the
different modules together

Middleware several different types of software which sit in the middle of and provide connectivity between
two or more software applications

Enterprise application integration (EAI) middleware packages together commonly used

functionality which reduced the time necessary to develop solutions that integrate applications from multiple
vendors
Integration Tools
Data points where SCM, CRM, and ERP integrate

ERP systems must integrate various organization processes and be:

Flexible
Modular and open
Comprehensive
Beyond the company

ERP Benefits:
Integrate financial information
Integrate customer order information
Standardize and speed up manufacturing processes
Reduce inventory
Standardize human resource information

SAP boasts 20,000 installations and 10 million users worldwide

ERP solutions are growing because:

ERP is a logical solution to the mess of incompatible applications that had sprung up in most businesses
ERP addresses the need for global information sharing and reporting
ERP is used to avoid the pain and expense of fixing legacy systems
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Chapter 14 Ebusiness

Ebusiness model A plan that details how a company creates, delivers, and generates revenues on the internet
B2B
Business-To-Business applies to businesses buying from and selling to each other over the internet. Online
access to data, including expected shipping date, delivery date and shipping status, provided either by the seller
or a third-party provider.

B2C
Business to Consumers, applies to any business that sells its products or services to consumers over the internet.

C2B
Consumer to business applies to any consumer that sells a product or service to a business over the internet.

C2C
Consumer to Consumer applies to sites primarily offering goods and services to assist consumers interacting
with each other over the internet.

Primary business areas taking advantage of e-business include:

Marketing/sales
Financial services
Procurement
Customer service
Intermediaries

Online ad (banner ad) - box running across a Web page that contains advertisements
Pop-up ad - a small Web page containing an advertisement
Associate programs (affiliate programs) - businesses generate commissions or royalties
Viral marketing - a technique that induces Web sites or users to pass on a marketing message
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Mass customization - gives customers the opportunity to tailor products or services

Personalization - occurs when a Web site can fashion offers that are more likely to appeal to that
person

Blog - Web site in which items are posted on a regular basis and displayed in reverse chronological order
Real simple syndications (RSS) - a Web feed format used for Web syndication of content
Podcasting - the distribution of audio or video files, such as radio programs or music videos, over the Internet to
play on mobile devices

Online consumer payments include:

Financial cybermediary
Electronic check
Electronic bill presentment and payment (EBPP)
Digital wallet

Online business payments include:

Electronic data interchange (EDI)
Value-added network (VAN)
Financial EDI (financial electronic data interchange)

E-procurement - the B2B purchase and sale of supplies and services over the Internet
Electronic catalog - presents customers with information about goods and services offered for sale, bid, or
auction on the Internet

Customer service is the business process where the most human contact occurs between a buyer and a seller
e-business strategists are finding that customer service via the Web is one of the most challenging and potentially
lucrative areas of e-business
The primary issue facing customer service departments using e-business is consumer protection

Ebusiness security
Encryption
Secure socket layer (SSL)
Secure electronic transaction (SET)

Common ebusiness forms

Content providers
Informediaries
Online marketplaces
Portals
Service providers
Transaction brokers

Ebusiness revenue models

Advertising fees
License fees
Subscription fees
Transaction fees
Value-added service fees

EBUSINESS TOOLS FOR CONNECTING AND COMMUNICATING

Email
Instant messaging
Podcasting
Videoconferencing
Web conferencing
Content management system

E-Business Benefits
Highly accessible
Increased customer loyalty
Improved information content
Increased convenience
Increased global reach
Decreased cost

Chapter 17 Building Software to Support an Agile Organization

Software that is built correctly can transform as the organization and its business transforms
Software that effectively meets employee needs will help an organization become more productive and enhance
decision making
Software that does not meet employee needs may have a damaging effect on productivity and can even cause a
business to fail

As organizations reliance on software grows, so do the business-related consequences of

software successes and failures including:
Increase or decrease revenue
Repair or damage to brand reputation
Prevent or incur liabilities
Increase or decrease productivity

Systems development life cycle (SDLC) the overall process for developing information systems from
planning and analysis through implementation and maintenance

Planning phase involves establishing a high-level plan of the intended project and determining project goals
Analysis phase involves analyzing end-user business requirements and refining project goals into defined
functions and operations of the intended system

Business requirement detailed set of business requests that the system must meet in order to be successful
Design phase involves describing the desired features and operations of the system including screen layouts,
business rules, process diagrams, pseudo code, and other documentation

Development phase involves taking all of the detailed design documents from the design phase and
transforming them into the actual system

Testing phase involves bringing all the project pieces together into a special testing environment to test for
errors, bugs, and interoperability and verify that the system meets all of the business requirements defined in the
analysis phase

Implementation phase involves placing the system into production so users can begin to perform actual
business operations with the system

Maintenance phase involves performing changes, corrections, additions, and upgrades to ensure the system
continues to meet the business goals

There are a number of different software development methodologies including:

Waterfall
Agile
Rapid application development (RAD)

Waterfall methodology an activity-based process in which each phase in the SDLC is performed
sequentially from planning through implementation and maintenance

Agile methodology aims for customer satisfaction through early and continuous delivery of components
developed by an iterative process

Iterative development consists of a series of tiny projects

Rapid application development methodology (RAD) emphasizes extensive user involvement in the
rapid and evolutionary construction of working prototypes of a system to accelerate the systems development
process
The prototype is an essential part of the analysis phase when using a RAD methodology

Fundamentals of RAD
Focus initially on creating a prototype that looks and acts like the desired system
Actively involve system users in the analysis, design, and development phases
Accelerate collecting the business requirements through an interactive and iterative construction approach

The Agile Alliance Manifesto

Early and continuous delivery of valuable software will satisfy the customer
Changing requirements are welcome
Business people and developers work together
Projects need motivated individuals
Use self-organizing teams
Reflect on how to become more effective

Primary principles for successful agile software development include:

Slash the budget
If it doesnt work, kill it
Keep requirements to a minimum
Test and deliver frequently
Assign non-IT executives to software projects
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Primary reasons for project failure include

Unclear or missing business requirements
Skipping SDLC phases
Failure to manage project scope

Scope creep occurs when the scope increases

Feature creep occurs when extra features are added
Find errors early: the later in the SDLC an error is found - the more expensive it is to fix
Insourcing (in-house-development) a common approach using the professional expertise within an
organization to develop and maintain the organization's information technology systems

Outsourcing an arrangement by which one organization provides a service or services for another organization
that chooses not to perform them in-house

Outsourcing benefits include:

Increased quality and efficiency
Reduced operating expenses
Outsourcing non-core processes
Reduced exposure to risk
Economies of scale, expertise, and best practices
Access to advanced technologies
Increased flexibility
Avoid costly outlay of capital funds
Reduced headcount and associated overhead expense
Reduced time to market for products or services

Outsourcing challenges include

Contract length
Difficulties in getting out of a contract
Problems in foreseeing future needs
Problems in reforming an internal IT department after the contract is finished