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Executive Summary
This report aims to advise Forever 21 (F21), an in-demand American Fashion
retailer on a supply chain management (SCM) and customer relationship
management (CRM) cloud-based solution. The Chief Information Officer (CIO)
of F21 is interested in updating the current SCM and CRM systems in response to
their customers changing demands. The report adheres to the CIOs key
priorities which are as follows:
(i)
(ii)
(iii)

Enhance the efficiency and effectiveness of the companys supply

network;
Tailor product mix for specific retail outlets (including online stores),
and;
Improve customer satisfaction and retention.

In order to achieve this, the report will address the following:

1. Examine pros and cons of cloud-based SCM and CRM solutions as
compared to their more traditional on-site counterparts
2. Evaluate how Forever 21s customer satisfaction and retention could be
improved by leveraging on: (a) cloud-based SCM solution to enhance the
efficiency and effectiveness of the companys supply network, as well as;
(b) cloud-based CRM solution to tailor the companys product mix to meet
market demands.
3. Outline the main IS/IT security, ethics and privacy issues that Forever 21
should take into account when leveraging on cloud-based SCM and CRM
solutions as part of an integrated enterprise system strategy.
4. Recommend specific cloud-based SCM and CRM solutions in the market
that Forever 21 should adopt with the inclusion of a scoring model

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Table of Contents
Executive Summary ................................................................................................... 3
Introduction .................................................................................................................. 5
Pros and cons of cloud-based SCM and CRM solutions compared to
their on-site counterparts ...................................................................................... 5
Improvement of customer satisfaction and retention ................................ 6
Main ethics, security and privacy issues ........................................................... 9
Recommendations................................................................................................... 10
Conclusion .................................................................................................................. 13
Overview ..................................................................................................................... 14
References .................................................................................................................. 15

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Introduction
Forever 21(F21) is an international fashion company with department stores
targeted towards young female adults with sophisticated fashion sense and everchanging preferences. The purpose of this report is to advise F21 on adopting
cloud-based solutions to upgrade their existing SCM and CRM systems, to
efficiently and effectively meet customer demands in order achieve the aims of
F21s chief information officer(refer to Appendix A for these aims).
This report will examine the cloud-computing solution and begins with a
comparison of the advantages and disadvantages of cloud computing compared
to traditional onsite counterparts. Secondly, the report will examine how cloudbased SCM and CRM can achieve organisational F21s goal and aims (refer to
Appendix A). Thirdly, the security, ethics, and privacy issues of cloud-based SCM
and CRM solutions will be explored, where suggestions will also be provided to
combat these. Finally, a scoring model for both SCM and CRM solutions will be
discussed to determine the best of breed cloud solution, that best suits F21s
needs.

Pros and cons of cloud-based SCM and CRM

solutions compared to their on-site counterparts
F21 needs to understand both the advantages and disadvantages of
implementing cloud-based SCM and CRM compared to their on-site equivalents,
to determine which platform best suits their business. These are detailed below:
Benefits of adopting cloud-based SCM and CRM solutions:
Cloud-based SCM can help F21 organise their data so that it can be accessed by
all members of the supply chain. Additionally, a cloud-based SCM dismisses
manual data updates as it has real-time, automated cloud-based updates, hence
increasing efficiency (Petett 2013, p.43).
SCM clouds automate increased supply chain visibility whereby F21 is able to
track the progress of items in the supply chain and conduct forecasting. Cloudbased SCM solutions allow F21 to track problems quicker, compared to on-site
counterparts, which is critical, as F21 is able to prevent or resolve these
problems before they worsen, maintaining their positive public presence
(Viswanathan 2010; Tiwari & Jain 2013, p.153). Hence, cloud-based logistics
management can reduce time wasted from manual data updates and thus focus
on problem solving and the management of greater shipments.
Likewise, F21s globally dispersed customer base makes it challenging to
organise customer data and identify useful patterns insights (IBM Corporation
2013). However, a cloud-based CRM can provide great benefits to F21.
A cloud-based CRM allows F21 to focus on analysing, rather to identifying
customers in-store purchase to help create unique, suitable product mixes. This
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in turn allows F21 to enhance customer satisfaction and correspondingly

manage inventory efficiently.
Moreover, cloud computing can identify F21s valuable and dissatisfied
customers. This allows marketing to shift their focus on cross-selling and
retainment to tap into customers perspectives of F21 (Yurong et al 2002, p.442).
Besides, F21 can personalise the online experience by tailoring the product
mixture displayed and upselling to customers past purchases and demographic
data, to increase the likelihood of efficiently meeting customer needs(Netsuite
2014, p.2).
Detriments of adopting cloud-based SCM and CRM solutions:
F21 must realise that although the costs of on-site infrastructure are generally
perceived as greater than cloud; customers vying for cost-saving clouds are
likely to have to settle for commoditised services, reduced performance and poor
vendor assistance (Pakath 2015, p.10).
In addition, cloud-based solution has greater entry points for attacks compared
to an on-site mechanism. Cloud access can be given to unknown parties and can
also be accessed externally, hence posing several security risks. Moreover, in
using a cloud based CRM or SCM, F21 is exposed to the risk of infrastructure
failure and server unavailability, which could bring unfeasible complications to
the operations and image of F21. Meanwhile, on-site infrastructure would enable
F21 to have greater control over all processes (Marinescu 2013, p.14).
Notably, if customers are given access to F21s cloud-based CRM solution, they
would be required to upgrade the latest version of every release. Depending on
the frequency, this can be time consuming and frustrating for consumers, leading
to frustrated customers. Also, F21 needs to ensure they select the correct vendor,
which will be advised later in this report, if they choose to employ a cloud-based
SCM and CRM solution. This is because they will be required to sign a legally
binding contract which requires F21 to be committed to for a specified time. This
can result in further legal costs if F21 decides that the vendor selected does not
suit their needs, as well as the time and cost to set-up an SCM and CRM cloudbased solution with another vendor (Arnesen, 2013, p.45-50).

Improvement of customer satisfaction and retention by

leveraging on cloud-based SCM and CRM solutions
Considering F21 aims to improve their customer satisfaction and retention, they
are advised to leverage on a cloud-based SCM solution to enrich the efficiency
and effectiveness of their supply network as well as adopt a cloud-based CRM
solution to mould F21s product mix to meet market demands.
Forslund (2010) describes SCM as a chain or group of companies that operate
together to increase revenue, stabilise costs, heighten asset utilisation and
enhance customer satisfaction, hence enhancing the efficiency and effectiveness
of a supply network. This can be achieved via a cloud-based SCM solution which
utilises the vendor-managed inventory (VMI) approach. VMI caters to F21, a
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retail business, since this method enables F21 to manage the manufacturers
inventory levels, based on pre-established service levels. To make VMI possible
the manufacturer allows the supplier to monitor stock levels and ongoing sales
data. A cloud-based SCM solution will allow F21 to send real-time sales data with
their suppliers who maintain inventory based on pre-established agreements,
compared to sending out manual requests for additional items as needed (JDA,
2015). With a cloud-based SCM that employs VMI, F21 can take advantage of the
savings costs, minimise stock out situations. Additionally, the supplier will also
benefit from this model due to data sharing, accurate forecasts, the reduction in
ordering errors and prioritising shipment of goods (Oracle, 2006). Ultimately,
these benefits will not only improve the efficiency and effectiveness of F21s
supply networks but simultaneously keep customers pleased, giving them
minimal reason to become disloyal.
Supply chain planning (SCP) can assist F21 in creating an effective and efficient
supply network that promotes customer satisfaction and retention. There are
several components to SCP which are outlined in the table below.
Demand planning and forecasting

Distribution planning
Inventory and safety stock planning

F21 can forecast accurate demand

through collaboration across various
departments (such as the point-of-sale
system and CRM promotions) to
develop an accurate demand and
supply forecast.
Use forecasts to ensure F21 inventory
meet the demands of customers
F21 can apply analytical techniques to
estimate inventory levels

(Valverde and Saad, 2015)

As noted above, SCP is an ongoing process; therefore employing a cloud-based
solution will ensure supply chain networks are efficient and effective as the plan
can be easily updated to suit the ever-changing consumer demands.
Supply chain execution manages the flow of products, information and finances
in the supply chain. F21 must facilitate the distribution of its goods to their
customers and incorporate customer returns and refunds. Since F21 is a click
and mortar business, this can be difficult, although a cloud-based SCM can help
simplify this process by tracking their goods, and identifying any defects to their
products early in the supply chain (Misra and Singh, 2010). The information and
financial flow, a cloud-based SCM can make this process efficient and effective by
electronically sharing shipping orders, invoices and account details. This not
only helps the environment, saves time and money but enhances SCM, since all
partners have access to the information necessary at all times. This allows for
better customer service, therefore satisfying and retaining customers.
Furthermore, F21 operates in a competitive market, therefore they must ensure
they offer exceptional levels of customer service to keep their customers
satisfied, otherwise customers have many access to alternative fashion retailers.
In addition, F21 needs to understand their market demands and hence be able to
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tailor their product mix to satisfy customer needs (Ku, 2010). This can be
achieved by adopting a cloud-based CRM, which is architecture to incorporate
operational, analytical and collaborative CRM.
Cloud-based CRM solutions have an operational component which can ensure
F21 is able to provide personalised and highly competent customer service
(Khodakarami, et.al). Since marketing, sales and support staff work on different
aspects of the operational CRM, a cloud-based solution will allow information to
be shared about F21s interaction with the customer, irrespective of where it
occurred within the business. This allows for an enhanced CRM Delivery
Processes since successful campaign management will generate leads for F21.
Additionally, effective sales management will soon convert these leads into
potential customers and then through service management, F21 will be able to
take on a personal approach to provide ongoing support to the customer through
face-to-face and online marketing mechanisms. Finally, F21s complaints
management will improve significantly, ensuring customer satisfaction by
directly addressing customer complaints and implementing a structured followup process. In doing so, F21 will widen, deepen and lengthen their customerbase as well as heighten the level of information available, which can be used to
modify F21s product mix to meet their consumers demands.
In addition, analytical approach can also be applied to examine customer
behaviour and perceptions in order to derive the optimal product mix that will
satisfy and retain F21s customers. It should be noted that cloud-based CRM
solutions enable marketing campaigns to easily shift from a mass approach to an
individual level (Kracklauer et al. 2004). This allows for F21 to cater to their
customers specific needs, thus ensuring F21s customer retention and
satisfaction is enhanced. CRM analytical tools will allow F21 to analyse not only
their customer acquisition retention, product mix and product usage levels but
market prices, quality and demands too. This can best be achieved through
developing a loyalty program which is linked to the cloud-based CRM or by
monitoring customers online sales accounts.
Moreover, collaborative CRM can be utilised to satisfy and keep customers, as
well as identify their needs to develop F21s product mix. F21 could ensure the
entire business has access to and is able to share information on the cloud-based
CRM solution. This allows for the quality of information to strengthen and can be
used to determine the different products their consumers are interested in
purchasing. This component fosters customer communication and collaboration
with the company to allow for a streamlined customer service approach, to
better serve and retain consumers (Khodakarami and Chan, 2011). This
collaboration results in a shift of focus onto the customer, a reduction in
communication barriers and an increase in information integration. As a result
the best product mix can be devised, to ensure F21s customers are served
efficiently and effectively.

Main Ethics, Security and Privacy Issues

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If F21 leverages on cloud-based SCM and CRM solutions, they must be aware of
the ethical, security and privacy issues that may arise.
Ethics
Cloud-based solutions can give rise to ethical dilemmas; however Stephenson
(2010) believes the benefits will outweigh the concerns. Cloud computing allows
F21 to participate in networking advances whereby they are able to copy data
from various locations, accessing personal data remotely. Additionally, they can
partake in data analysis advances where F21 can abuse customer data to develop
profiles of individual behaviour. This can cause consumers to become frustrated
and unfaithful, therefore, F21 must ensure they act in an ethical manner to
protect their public presence and maintain the effectiveness of their operations.
However, due to the rapid development of cloud computing there is a time-lag
between the issues that arise and legislations to enforce what is right; hence F21
is forced to apply ethical principles to guide their decision making and ensure
they are acting in an ethical manner.
Security and Privacy issues
The main security and privacy problems of cloud-computing are outlines below:
Insider User Attacks:
Customers could use the solution to access their data, however they could
possibly assist external attackers to acquire additional information in
order to execute complex Internet-based attacks
Cloud provider controls data and thus could lose it or sell it for money
Sub-contractor of cloud computing firm., firm assisting in operation of
software, has access to data and thus is in a good position to make an
attack
External Attacks:
Remote software and hardware can attack cloud infrastructures and
applications such as a denial of service attack whereby attackers attempt
to intercept user access to cloud vendors services.
Social engineering can occur to manipulate cloud customers to provide
information by creating fake identities to gain trust as well as determine
staff roles within F21 to assist in planning an attack.
Central, transnational Information storage:
Cloud-based solutions store information centrally, therefore providing
attackers with data-rich targets whereby all of F21s information could be
accessed in a single attack
Storage of data across many legal territories means that one provider is
subject to diverse laws thus the customers local privacy and security laws
may differ to the storage facilities local territory laws (Kshetri, 2013).
To combat the above mentioned issues, F21 is advised to take the following
privacy and security measures of the vendors that F21 into account when
selecting a vendor.
Table 1.1: Important Privacy and Security measures of cloud computing

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Encryption

F21 must ensure their cloud-based solutions have

a Secure Sockets Layer (SSL), the industrystandard encryption technology that protects
messages from an outsiders decryption.

Audit on Server Security

Measures

It is difficult to access vendor security information

thus audits from companies like McAfee enable
clients to gauge vendor security from an objective,
industry-standard approach.

Client Security Measures

Clients should ensure their own computers and

laptops are adequately protected with measures
like firewalls and antivirus protection.

Geographic Redundancy

The dispersal of data across difference storage

locations prevents the entire application becoming
unavailable

Backups

Backups, copying data, should be performed by

vendor (in secure, offsite location) and client.

Identity Management
mechanism(IMD) from
vendor and client

Taking additional identity recognitions steps, in

addition to passwords strengthens security.

(Newton, 2010)

Recommendation

Supply Chain Planning (SCP)

A slightly higher weighting has been imposed on SCP compared to the other
modules of SCM, since until SCP is completed, the other modules cannot be
undertaken. JDAS offers integrated solutions that address various critical
requirements of operation through a variety of strategies such as demand
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management to increase sales and profitability by developing accurate forecasts

and demand plans. It also facilitates merchandise operations whereby F21 can
integrate this into their system for greater visibility and inventory control. In
addition, to the SCP services provided by JDAS, LVS also utilises real-time alerts,
to prioritise and manage the supply chain at uttermost efficiency (Trebilcock,
2010). Since F21 is a large fashion retailer, they require a cloud-based SCM
solution that can cater for large amounts of data. Oracles programmed
forecasting, order planning, exception management, and workflow capabilities
are all driven to deal with significant amounts of data. Oracles SCM analyses the
data, produces effective plans based on business requirements, and then
presents this information for review, to users with a simple interface (Oracle, .
Moreover, Oracle differentiates itself as the best of breed since its extensive
demand planning and promotion planning capabilities provide a critical
foundation for manufacturers to proactively plan for demand, rather than react
to it (0racle, 2006).
Supply Chain Execution (SCE) and Supply Chain Visibility and Analytics
(SCVA)
F21 requires a cloud-based SCM to execute their SCP and determine whether it is
efficient and effective. Since SCE and SCVA is the implementation and analysis of
the SCP a slightly lower weighting has been utilised in the scoring model for each
criteria. Compared to all three vendors, once again Oracle is a stand out because
its cloud-based model, sustains a single projection of forecasted demand across
all channels, uses time series forecasting algorithms and contemporary
modelling techniques, monitors all variables and constraints automatically to
optimize inventory balances, develops realistic future constrained
replenishment and allocation plans and co-ordinates the movement of
merchandise and distribution information. If F21 successfully implements Oracle
as its SCM cloud-based solution, its profitability will be expected to increase due
to the reduction in stock-outs and increase in inventory turnover and reduced
costs due to lower levels of store transfers, lost sales and markdowns (Hardy,
2014; Logility Voyager Solutions; Oracle, 2006).

Vendor-Managed Inventory

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As previously mentioned, VMI permits F21 to manage the manufacturers

inventory levels, based on pre-established service levels. This collaboration can
occur through a cloud-based SCM, due to its ability to be accessed by a range of
stakeholders, anywhere, anytime. A weighting of 9/10 has been assigned to VMI,
as it is critical component of F21s supply chain. This approach can improve
efficiency, reduce buffers and cost and create a profitable supply chain, whereas
if an on-site solution this process could not occur, with its alternative being
costly and time consuming. LVS and JDAS provide basic VMI services as they
streamline the supply chain operations via effective collaboration. As a result in
utilising one of these vendors F21 can produce accurate inventory levels to suit
demand, increase their sales, improve customer service levels and develop longterm relationships with suppliers and manufacturers (Logility Voyager
Solutions; JDA, 2015). In addition to LVS and JDAS basic services Oracle
understands the ever-changing needs of consumers; hence its SCM solution
offers configurability and flexibility to help achieve F21s goals and objectives.
This is made possible via Oracles graphical configuration tools including
Business Modeller, User Workbench, and Workflow Manager. It simplistic tools
means non-IT users can construct business processes, data elements and
hierarchies, exception conditions, and workflows. This technological
development shows Oracle is the best of breed in vendor-managed inventory
as their SCM solution has proven to increase service levels by up to 30% as well
as decrease product returns and reduce warehouse and transportation costs by
at least 5% (Oracle, 2006).

Customer Relationship and Delivery Process

F21 requires a CRM that supports the maintenance of customer needs,
motivations, and behaviours, facilitates the utilisation of customer experiences to
improve the relationship and incorporates marketing, sales, and customer
support activities to measure and evaluate the process of knowledge acquisition
and sharing (Hardy, 2014). Since NetSuite has been described as the only cloud
CRM mechanism that provides an immediate 360-degree view of the customers
experience including lead, sales order management, upsell, renewals and service,
it is ideal for F21 due to the large number of customers and their varying
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geographic location (Kracklauer, et al. 2009). Hence, NetSuite has been identified
as the best of breed which can improve F21s sale performance, productivity
and encourage collaboration between departments.
CRM Support Processes
Moreover, F21 needs a CRM that can provide market research and loyalty
management. Infusion Soft is quite basic in this offering, since this solution will
track the visitors on F21s website and automatically insert customer
information into the system. On the other hand, NetSuite provides excellent
tracking of customer interactions and tracking leads for greater targeting and
customer segmentation (Purch, 2015). This can help F21 optimise their
marketing activities, through the in depth data analysis of customers. They can
use this data to send more tailored communications to customers, based on their
individual needs. This leads to a more relevant interaction with customers, and
ultimately greater sales outcomes. Similarly to SalesForce, NetSuite allows users
to send emails straight from the cloud-based CRM (Beasty, 2007). If F21 adopts
NetSuite which has differentiated itself from other vendors, it will not only
attract new customers but strengthen its existing relationships with customers.
CRM Analysis Processes
Additionally, F21 needs a best of breed CRM that can master lead management,
customer profiling and feedback management, to gain new customers and retain
and satisfy them too. Infusion Soft assign scores to customers to determine how
likely these customers will become loyal (Purch, 2015). Similarly, SalesForce will
allow F21 to closely track each individual customer and tailor marketing
campaigns, in an attempt to entice them to make purchases (SalesForce, 2015).
However, since the retail industry has numerous competitors globally, F21
should seek a CRM that caters for a mass marketing approach. NetSuites cloudbased CRM allows for automated mass updates of leads and locations, allowing
managers to tailor these based on geographic location, which can be vital in
strengthening F21s online customer base (Edwards, 2007).

Conclusion
Hence, F21 is recommended that they adopt a cloud-based SCM solution with
Oracle and a cloud-based CRM solution with NetSuite. This is because our
scoring model shows that Oracle and NetSuite have developed mechanisms that
are highly technical, compared to other vendors and simultaneously address the
CIOs goals and objectives. This is based on our analysis of the scoring model. In
addition, F21 should have a deep understand of the advantages and
disadvantages related to a cloud-based SCM and CRM compared to their on-site
equivalents, recognise how cloud-based SCM and CRM can be adopted to
improve customer satisfaction and retention and be wary of the potential ethical,
security and privacy issues they may come across when implementing a cloudbased SCM and CRM.

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Overview (461 words)

1.0 Tutorial and Lecture Content
Dr Lims discussion of CRM and SCM helped begin writing our corresponding
sections because we deepened our understanding on these areas and apply this
to F21s situation. He showed the importance of information systems to maintain
a competitive edge-especially in important areas such as SCM and CRM. For
instance, IT drastically affects CRM because it determines the number of contact
points between customers and service provider, as well as, ways by which
customers can interact with service provider. This means there are many
opportunities to satisfy or disappoint customers. Additionally, Dr Lim discussed
the movement from web 1.0 towards web 2.0 whereby customers are finding
more ways to provide feedback to firms and use socially media to effect firms
reputations-the power harboured by contemporary customers highlights the
importance of satisfying every customer.
Additionally, the content covered in class was helpful in explaining the key
definitions and uses of cloud based solutions. The concepts of CRM systems were
also covered in great detail within multiple class discussions and debates. This
was then embedded through the case studies we analysed in class. This helped
us learn and understand their true potential and usefulness in todays digitalized
world. The security and ethical issues of such systems were also covered in good
tutorial discussions and presentations, which opened our eyes to the numerous
issues rising with companies.
2.0 Textbook Content
The textbook served as a reliable source as it provided a background of SCM and
CRM models, as well as detailed an example of a scorecard analysis for our
recommended vendors. We mainly consulted to Chapter 6 as it provided
background knowledge on SCM and CRM, including its advantages and
disadvantages and how leveraging on these cloud-based solutions can assist in
improving customer satisfaction and retention. Chapter 12 also mentions cloud
computing in general, therefore we skimmed through this section to refresh our
memories on what we should be recommending and focusing our report on.
Chapter 10 and Chapter 11 provided a detailed analysis of the potential security,
privacy and ethical issues relating to cloud computing. Finally, we referred to
Chapter 9 to develop an understanding on how to develop a scoring model. We
utilised the textbook as a starting point and to verify our further research.
3.0 Research
We performed additional research using google and proquest database to gather
information from journal articles and websites. This provided a more in-depth
understanding of the different types of cloud based CRM and SCM vendors.
Although many of them had similarities in terms of the service providers, they
did have some clear distinctions as well. Our further research helped us develop
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a deeper understanding of the characteristics of the different CRM and SCM to

determine which of these the best of breed.

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