Chapter 3
There are three phases of CRM:
(1) reporting, (2) analyzing, and (3) predicting
An Account
An existing business relationship exists and can include customers, prospects, partners, and competitors
The two key components of an ERP system help to resolve these issues and include a common data repository and modular software design.
Common data repository Module Software design
BPR
Creating value for the customer is the leading reason for instituting BPR, and MIS often plays an important enabling role. Fundamentally new business processes enabled Progressive Insurance to slash its claims settlement time from 31 days to four hours, for instance. Typically, car insurance companies follow this standard claims resolution process: The customer gets into an accident, has the car towed, and finds a ride home. The customer then calls the insurance company to begin the claims process, which includes an evaluation of the damage, assignment of fault, and an estimate of the cost of repairs, which usually takes about a month
Effective and efficient supply chain management systems can enable an organization to:
Decrease the power of its buyers. Increase its own supplier power. Increase switching costs to reduce the threat of substitute products or services. Create entry barriers thereby reducing the threat of new entrants. Increase efficiency while seeking a competitive advantage through cost leadership
Firms can find their most valuable customers by using the RFM formula—recency, frequency, and monetary value.
How recently a customer purchased items. How frequently a customer purchases items. The monetary value of each customer purchase.
CRM Strategic Goals
Identify sales opportunities. Classify low-value customers and create marketing promotions to increase consumer spending. Page 47 Classify high-value customers and create marketing promotions to increase consumer loyalty. Analyze marketing promotions by product, market segment, and sales region. Identify customer relationship issues along with strategies for quick resolution.
Lead
Person or company that is unknown to your business
5 Basic supply chain activities
Plan Source Make Deliver Return
Contact
Specific individual representing the account
Common data repository
allows every department of a company to store and retrieve information in real-time allowing information to be more reliable and accessible.
Business- Facing Processes
also called back-office processes, are invisible to the external customer but essential to the effective management of the business; they include goal setting, day-to-day planning, giving performance feedback and rewards, and allocating resources.
Customer-Facing Processes
also called front-office processes, result in a product or service received by an organization's external customer. They include fulfilling orders, communicating with customers, and sending out bills and marketing information.
Core Processes
are business processes, such as manufacturing goods, selling products, and providing service, that make up the primary activities in a value chain.
Module Software Design
divides the system into a set of functional units (named modules) that can be used independently or combined with other modules for increased business flexibility. Module software design allows customers to mix-and-match modules so they purchase only the required modules. If a company wants to implement the system slowly it can begin with just one module, such as accounting, and then incorporate additional modules such as purchasing and scheduling.
Swim line diagram
documents the steps or activities of a workflow by grouping activities into swimlanes, which are Page 42 horizontal or vertical columns containing all associated activities for that category or department. help identify process owners who can repair delays, bottlenecks, or redundancies. Figure 3.10 illustrates an As-Is process model of the order-to-delivery process, using swimlanes to represent the relevant departments.
CRM Reporting technologies
help organizations identify their customers across other applications.
CRM Predicting Technologies
help organizations predict customer behavior, such as which customers are at risk of leaving.
CRM Analysis Technologies
help organizations segment their customers into categories such as best and worst customers.
Workflow
includes the tasks, activities, and responsibilities required to execute each step in a business process.
Enterprise Resource Planning
integrates all departments and functions throughout an organization into a single system (or integrated set of MIS systems) so that employees can make decisions by viewing enterprisewide information on all business operations.
Sales Analytics
involves gathering, classifying, comparing, and studying company sales data to analyze product cycles, sales Page 48 pipelines, and competitive intelligence.
Customer Analytics
involves gathering, classifying, comparing, and studying customer data to identify buying trends, at-risk customers, and potential future opportunities.
Customer Relationship Management
involves managing all aspects of a customer's relationship with an organization to increase customer loyalty and retention and an organization's profitability. CRM allows an organization to gain insights into customers' shopping and buying behaviors in order to develop and implement enterprisewide strategies.
Business Process Model
is a graphic description of a process, showing the sequence of process tasks, which is developed for a specific purpose and from a selected viewpoint.
Business Process Model & Notation
is a graphical notation that depicts the steps in a business process. BPMN provides businesses with a graphical view of the end-to-end flow of their business processes. Diagramming business processes allows for easy communication and understanding of how core business processes are helping or hindering the business.
Business Process Patent
is a patent that protects a specific set of procedures for conducting a particular business activity. A firm can create a value chain map of the entire industry to extend critical success factors and business process views beyond its boundaries.
Dynamic Process
is continuously changing and provides business solutions to ever-changing business operations. As the business and its strategies change, so do the dynamic processes. Examples of dynamic processes include managing layoffs of employees, changing order levels based on currency rates, and canceling business travel due to extreme weather.
Business Process Re-engineering
is the analysis and redesign of workflow within and between enterprises. During a BPR effort a company begins with a blank sheet of paper evaluating existing processes to create new processes that deliver added-value to customers and eliminate redundancies in workflows. The primary goals of BPR efforts are to reduce organizational layers and eliminate unproductive activities by redesigning functional departments into cross-functional teams and promote the dissemination of information throughout the organizations.
Supply Chain Management
is the management of information flows between and among activities in a supply chain to maximize total supply chain effectiveness and corporate profitability. Complex SCM systems provide demand forecasting, inventory control, and information flows between suppliers and customers.
Process Owner
is the person responsible for the end-to-end functioning of a business process.
AS-IS model
represent the current state of the operation that has been mapped, without any specific improvements or changes to existing processes.
TO-BE model
that displays how the process problem will be solved or implemented. To-Be process models show the results of applying change improvement opportunities to the current (As-Is) process model.
Static Process
uses a systematic approach in an attempt to improve business effectiveness and efficiency continuously. Managers constantly attempt to optimize static process. Examples of static processes include running payroll, calculating taxes, and creating financial statements.
