MIS Exam 3
customer-toucing applications
(or electronic CRM e-CRM) customer self-help applications/technologies
EDI disadvantages
-Business processes sometimes must be restructured to fit EDI requirements -Many EDI standards in use today
two major components of operational CRM
-Customer-Facing Applications -Customer-Touching Applications
analytical CRM systems analyze data for
-Designing and executing targeted marketing campaigns -Increasing customer acquisition, cross-selling, and upselling -Providing input into decisions relating to products and services (e.g., pricing and product development) -Providing financial forecasting and customer profitability analysis
CRM- customer relationship management
-Lifetime value -Customer churn -CRM Strategy versus CRM Systems -Low-end CRM Systems versus High-end CRM Systems
EDI benefits
-Minimizes data entry errors -Length of the message can be shorter -Messages are secured -Reduces cycle time -Increases productivity -Enhances customer service -Minimizes paper usage and storage
open source CRM disadvantages
-Risk related to quality control -Company IT platform must match development platform of open-source CRM system
customer-touching applications
-Search and Comparison Capabilities -Technical and Other Information and Services -Customized Products and Services -Personalized web pages -FAQs -E-mail and Automated Response -Loyalty Programs
potential problems with on demand CRM
-Unreliable vendors -Hosted software difficult to modify -Upgrades only available through the vendor -Difficult to integrate with organization's existing software -Information security and privacy risks
marketing
-cross selling -upselling -bundling
benefits of open source CRM
-source code is available to developers and users -Provide the same features or functions as other CRM -Implemented either on-premise or on-demand -Favorable pricing -Wide variety of applications -Easy to customize -Updates and bug (software error) fixes rapidly distributed -Extensive support information available for free
two primary sources of problems along the supply chain
1. Uncertainties 2. The need to coordinate multiple activities, internal units, and business partners
pull model
A business model in which the production process begins with a customer order and companies make only what customers want, a process closely aligned with mass customization. Also known as make-to-order
push model
A business model in which the production process begins with a forecast (which is simply an educated guess as to customer demand), which predicts the products that customers will want as well as the quantity of each product. The company then produces the amount of products in the forecast, typically by using mass production, and sells, or "pushes," those products to consumers. Also known as make-to-stock
outsourcing
Acquiring IT applications from outside contractors or external organizations
employ custom development
Another option is to custom-build an application. Companies can either perform this operation in-house or outsource the process
marketing
CRM Marketing applications use data mining to sift through volumes of customer data
software as a service
Companies that use ___________ are running applications on the vendor's hardware
lease the application
Compared with the buy option and the option to develop applications in-house, the lease option can save a company both time and money. Leased packages (like purchased packages) may not exactly fit the company's application requirements. Leasing can be especially attractive to small and medium-sized enterprises (SMEs) that cannot aff ord major investments in IT software
customer service and support
Customer Interaction Centers (CIC) -Call center -Outbound telesales -Inbound teleservice
customize a prewritten application
Customizing existing software is an especially attractive option if the software vendor allows the company to modify the application to meet its needs. However, this option may not be attractive in cases where customization is the only method of providing the necessary flexibility to address the company's needs. It also is not the best strategy when the software is either very expensive or likely to become obsolete in a short time
demand forecast
Demand for a product can be influenced by numerous factors such as competition, price, weather conditions, technological developments, overall economic conditions, and customers' general confidence
mainframes and dumb terminals
Forcing users to go to wherever the mainframe was located was time consuming and inefficient. As a result, firms began placing so-called "dumb terminals"—essentially electronic typewriters with limited processing power—in user departments. This arrangement enabled users to input computer programs into the mainframe from their departments, a process called remote job entry
programmers
IS professionals who either modify existing computer programs or write new programs to satisfy user requirements
systems analysts
IS professionals who specialize in analyzing and designing information systems
custom development
Insourcing refers to building IT applications in-house
purchase a prewritten application
Many commercial soft ware packages contain the standard features required by IT applications. Therefore, purchasing an existing package can be a cost-effective and time-saving strategy compared with custom-developing the application in-house
stand alone mainframes
Organizations initially used mainframe computers in their engineering and accounting departments. The mainframe was typically housed in a secure area, and only MIS personnel had access to it.
use open source software
Organizations obtain a license to implement an open-source soft ware product and either use it as is, customize it, or develop applications with it
software as a service
Software-as-a-service is a method of delivering software, in which a vendor hosts the applications, and customers access these applications over the Internet
purchase a prewritten application
The buy option is particularly attractive if the software vendor allows the company to modify the package to meet its needs
data consolidation; 360
_____ ______ and the _____ view of the customer enable the organization's functional areas to readily share information about customers which leads to collaborative CRM
vertical integration
a business strategy in which a company purchases its upstream suppliers to ensure that its essential supplies are available as soon as the company needs them
call center
a centralized office set up to receive and transmit a large volume of requests by telephone
electronic data interchange
a communication standard that enables business partners to exchange routine documents, such as purchasing orders, electronically. EDI formats these documents according to agreed-upon standards (e.g., data formats). It then transmits messages over the Internet using a converter, called translator
joint application design
a group-based tool for collecting user requirements and creating system designs. It is most often used within the systems analysis and systems design stages of the SDLC. JAD involves a group meeting attended by the analysts and all of the users that can be conducted either in person or via the computer. During this meeting, all users jointly define and agree on the systems requirements
software as a service SaaS
a method of delivering software in which a vendor hosts the applications and provides them as a service to customers over a network, typically the Internet. Customers do not own the software; rather, they pay for using it. SaaS eliminates the need for customers to install and run the application on their own computers. Therefore, SaaS customers save the expense (money, time, IT staff) of buying, operating, and maintaining the software
industry extranet
a network used for mission-critical business transactions by leading international organizations in aerospace, automotive, chemical, electronics, financial services, healthcare, logistics, manufacturing, transportation, and related industries
mass customization
a process in which customers can configure their own products (e.g., customized computer systems from Dell)
IT strategic plan
a set of long-range goals that describe the IT infrastructure and identify the major IT initiatives needed to achieve the organization's goals
frequently asked questions
a simple tool for answering repetitive customer queries and when customers find the information they need by using FAQs the need to communicate with an actual person is eliminated
agile development
a software development methodology that delivers functionality in rapid iterations, which are usually measured in weeks. To be successful, this methodology requires frequent communication, development, testing, and delivery
upselling
a strategy in which the salesperson provides customers with the opportunity to purchase related products or services of greater value in place of, or along with, the consumer's initial product or service selection
just in time inventory
a strategy to minimize inventories deliver the precise number of parts, called work-in-process inventory, to be assembled into a finished product at precisely the right time
tiers of suppliers
a supplier may have one or more subsuppliers, a subsupplier may have its own subsupplier(s), and so on. For an automobile manufacturer, for example, Tier 3 suppliers produce basic products such as glass, plastic, and rubber; Tier 2 suppliers use these inputs to make windshields, tires, and plastic moldings; and Tier 1 suppliers produce integrated components such as dashboards and seat assemblies
buy option
a systems acquisition method 1) resulting in software that can be tried out, 2) has been used for similar problems in other organizations, 3) can save time, 4) results in software that is controlled by another company, 5) may be difficult to enhance or modify, 6) may not support desired business processes, and 7) the company will know what it is getting
rapid application design
a systems development method that can combine JAD, prototyping, and integrated computer-assisted software engineering (ICASE) tools to rapidly produce a high-quality system. In the first RAD stage, developers use JAD sessions to collect system requirements. This strategy ensures that users are intensively involved early on. The development process in RAD is iterative
customer-facing applications
allow an organization's sales, field service, and customer interaction center representatives interact directly with customers through customer service and support, sales force automation, marketing, and campaign management
live chat
allows customers to connect to a company representative and conduct an instant messaging session enabling the participants to share documents and photos
application service provider ASP
an agent or a vendor who assembles the software needed by enterprises and then packages it with services such as development, operations, and maintenance. The customer then accesses these applications via the Internet
end-user development
an approach in which the organization's end users develop their own applications with little or no formal assistance from the IT department
mobile CRM systems
an interactive system that enables an organization to conduct communications related to sales, marketing, and customer service activities through a mobile medium for the purpose of building and maintaining relationships with its customers
soft ware as a service providers
application service providers are similar to what?
increase
as systems age, maintenance costs __________
information help desk
assists customers with their questions concerning products or services, and it also processes customer complaints
360 data view customer
complete data set on each customer that allows a company can enhance its relationship with its customers and ultimately make more productive and profitable decisions
IT steering committee
comprised of a group of managers and staff who represent the various organizational units, is created to establish IT priorities and to ensure that the MIS function is meeting the organization's needs. It approves resource allocation, establish performance measures, link corporate strategy to IT strategy
IS operational plan
consists of a clear set of projects that the IS department and the functional area managers will execute in support of the IT strategic plan
inbound teleservice
customers communicate directly with the CIC to initiate a sales order, inquire about products and services before placing an order, and obtain information about a transaction they have already made
information flows
data related to demand, shipments, orders, returns, and schedules, as well as changes in any of these data
data mining
develops a purchasing profile or snapshot of a consumer's buying habits that may lead to additional sales through cross-selling, upselling, and bundling
bullwhip effect
erratic shifts in orders up and down the supply chain
technical specialist
experts on a certain type of technology, such as databases or telecommunications
information sharing
facilitated by electronic data interchange and extranets, it helps to improve demand forecasts
disadvantages of buy option
for acquiring IS applications: 1) software may not exactly meet the company's needs, 2) software may be impossible to modify, 3) company will not have control over software improvements, and 4) software may not integrate with existing systems
organization strategic plan
identifies the firm's overall mission, the goals that follow from that mission, and the broad steps required to reach these goals
systems stakeholders
include everyone who is affected by changes in a company's information systems—for example, users and managers. All stakeholders are typically involved in systems development at various times and in varying degrees
financial flows
involve money transfers, payments, credit card information and authorization, payment schedules, e-payments, and credit-related data
bundling
is a form of cross-selling in which a business sells a group of products or services together at a lower price than their combined individual prices
pilot conversion
is the process where the new system is introduced in one part of the organization. A firm implements a new information system in one of its plants, assesses the new system's performance, and then implements the new system in its other plants
direct conversion
is the process where the old system is cut off and the new system is turned on at a certain point in time. The riskiest type of conversion process is direct. If a firm shuts down its old COBOL legacy system and starts up the new PeopleSoft ERP system immediately
application
lease the applications though an ______ service provider
extranets
link business partners over the Internet by providing them access to certain areas of each other's corporate intranets
vendor managed inventory
occurs when the supplier, rather than the retailer, manages the entire inventory process for a particular product or group of products
customized products and services
offering customers the ability to custimize products, view account balances, check shipping status of an order, etc
personalized we pages
organizations permit their customers to create personalized Web pages used to record purchases and preferences, as well as problems and requests
technical and other information services
personalized experiences offered by organizations to induce customers to make purchases or to remain loyal (e.g., allowing customers to download product manuals; providing detailed technical information, maintenance information, and replacement parts to customers).
loyalty programs
programs that recognize customers who repeatedly use a vendor's products or services
analytical CRM
provide business intelligence by analyzing customer behavior and perceptions providing information concerning customer requests and transactions, as well as customer responses to the organization's marketing, sales, and service initiatives. These systems also create statistical models of customer behavior and the value of customer relationships over time, as well as forecasts about acquiring, retaining, and losing customers
collaborative CRM system
provide effective and efficient interactive communication in all aspects of marketing, sales, and customer support with the customer throughout the entire organization
outsourcing
refers to acquiring IT applications from outside contractors
reverse flows
returned products that are damaged, unwanted, or in need of recycling
buy option
saves the company's time, enables the company to select software that has been used for similar problems in other organizations, and allows the company to try out the software. It can result in a company's acquiring software that is controlled by another company, may be difficult to enhance or modify, and may not support the desired business processes
search and comparison capabilities
search and comparison capabilities offered to customers by online stores, online malls, and independent comparison Web sites
on demand CRM systems
systems hosted by an external vendor in the vendor's data center which spares the organization the costs associated with purchasing the system, maintenance, and employees need to know only how to access and utilize it. Also known as utility computing or soft ware-as-a-service (SaaS).
customer service and support
systems that automate service requests, complaints, product returns, and requests for information
operational CRM
systems that support front-office business processes
outbound telesales
the CIC generates a call list for the sales team, whose members contact sales prospects
cross-selling
the marketing of additional related products to customers based on a previous purchase
e-mail and automated response
the most popular tool for customer service, inexpensive, fast, and companies use e-mail not only to answer customer inquiries but also to disseminate information, send alerts and product information, and conduct correspondence on any topic
customer touch points
the numerous and diverse interactions organizations have with their customers including traditional customer touch points such as telephone contact, direct mailings, and actual physical interactions with customers during their visits to a store and the additional touch points that occur through organizational CRM systems such as e-mail, Web sites, and communications via smartphones
data consolidation
the organization's CRM systems must manage customer data effectively with modern interconnected systems built around a data warehouse to make all customer-related data available to every unit of the business
material flows
the physical products, raw materials, supplies, and so forth that flow along the chain. Material flows also include the reverse flows
open source CRM systems
the source code for open-source software is available at no cost
systems development life cycle SDLC
the traditional systems development method that organizations use for large-scale IT projects. The SDLC is a structured framework that consists of sequential processes by which information systems are developed
social CRM
the use of social media technology and services to enable organizations to engage their customers in a collaborative conversation in order to provide mutually beneficial value in a trusted and transparent manner
IT architecture
the way an organization should utilize its information resources to accomplish mission. Encompases technical (hardware, operating systems, networking, data management systems, and applications) and managerial (how the IT dept will be managed, how function area managers will be involved, and how IT decisions will be made)
front-office processes
those processes that directly interact with customers (i.e., sales, marketing, and service)
customer interaction centers (CIC)
where organizational representatives use multiple channels such as the Web, telephone, fax, and face-to-face interactions to communicate with customers