LECTURE 5 18/10/11

Salesforce.com Executive Team Dashboard Illustrated here are some of the capabilities of Salesforce.com, a market-leading provider of on-demand customer relationship management (CRM) software. CRM systems integrate information from sales, marketing, and customer service. Types of Business Information Systems

What is customer relationship management? Knowing the customer In large businesses, too many customers and too many ways customers interact with firm Customer relationship management (CRM) systems Capture and integrate customer data from all over the organization Consolidate and analyze customer data Distribute customer information to various systems and customer touch points across enterprise Provide single enterprise view of customers Customer Relationship Management Systems

Customer Relationship Management (CRM) Figure 9-7 CRM systems examine customers from a multifaceted perspective. These systems use a set of integrated applications to address all aspects of the customer relationship, including customer service, sales, and marketing. Customer Relationship Management Systems

CRM software packages More comprehensive packages have modules for: Partner relationship management (PRM) Employee relationship management (ERM ) Most packages have modules for Sales force automation (SFA): Sales prospect and contact information, and sales quote generation capabilities; etc. Customer service: Assigning and managing customer service requests; Web-based self-service capabilities; etc. Marketing: Capturing prospect and customer data, scheduling and tracking direct-marketing mailings or ; etc. Customer Relationship Management Systems

How CRM Systems Support Marketing Figure 9-8 Customer relationship management software provides a single point for users to manage and evaluate marketing campaigns across multiple channels, including , direct mail, telephone, the Web, and wireless messages. Customer Relationship Management Systems

CRM Software Capabilities Figure 9-9 The major CRM software products support business processes in sales, service, and marketing, integrating customer information from many different sources. Included are support for both the operational and analytical aspects of CRM. Customer Relationship Management Systems

Analytical CRM Data Warehouse Figure 9-11 Analytical CRM uses a customer data warehouse and tools to analyze customer data collected from the firm’s customer touch points and from other sources. Customer Relationship Management Systems

Business value of customer relationship management Increased customer satisfaction Reduced direct-marketing costs More effective marketing Lower costs for customer acquisition/retention Increased sales revenue Reduced churn rate Churn rate: Number of customers who stop using or purchasing products or services from a company. Indicator of growth or decline of firm’s customer base Customer Relationship Management Systems

Enterprise application challenges Highly expensive to purchase and implement enterprise applications – total cost may be 4 to 5 times the price of software Requires fundamental changes Technology changes Business processes changes Organizational changes Incurs switching costs, dependence on software vendors Requires data standardization, management, cleansing Enterprise Applications: New Opportunities and Challenges

Knowledge Management… 11

Knowledge Management 12

KM, it’s like riding a bicycle… 13

Knowledge management systems Support processes for acquiring, creating, storing, distributing, applying, integrating knowledge Collect internal knowledge and link to external knowledge Include enterprise-wide systems for: Managing documents, graphics and other digital knowledge objects Directories of employees with expertise Systems That Span the Enterprise

Definitions Knowledge Knowledge is a fluid mix of framed experience, values contextual information and expert insight that provides a framework for evaluating and incorporating new experiences and information (Davenport and Prusak, 1998)  Explicit Dimension  Tacit Dimension Knowledge Management An organisation’s ability to effectively acquire, create, retain, deploy and leverage knowledge 15

16 Data Information Knowledge Context Knowledge Hierarchy

The Knowledge Continuum 17

The Knowledge Evolution Hard and soft data (Mintzberg, 1975) Managers get more information and knowledge from face to face meetings than they do from documentation/ repositories (Kefalas,1973; Keegan, 1974; Mintzberg, 1975; Eisenberg, 1984; Davenport, 1994; Davenport et al., 1998) “Knowing who to consult” (Keegan, 1974; Simon, 1977) 18

The Knowledge Evolution… Strategic Scanning (El Sawy, 1985) Accommodation Information Assimilation Information Proposed Solution: “Programs that allow users to record their creative ideas, provide editing, organizing, and outline facilities that later rearrange those thoughts into topics and give each topic a separate heading and sub-heading”. 19

Explicit and Tacit Knowledge Explicit Knowledge formal / codified documents, best practices, databases, proposals Tacit Knowledge informal / uncodified experiential, within employee’s head, hard to effectively capture and share 20

Knowledge Economy/Society 21 LANDCAPITALLABOUR ENTERPRISE KNOWLEDGE

The Knowledge Management Landscape Sales of enterprise content management software for knowledge management expected to grow 15 percent annually through 2012 Information Economy 55% U.S. labor force: knowledge and information workers 60% U.S. GDP from knowledge and information sectors Substantial part of a firm’s stock market value is related to intangible assets: knowledge, brands, reputations, and unique business processes Knowledge-based projects can produce extraordinary ROI

U.S. Enterprise Knowledge Management Software Revenues, Figure 11-1 Enterprise knowledge management software includes sales of content management and portal licenses, which have been growing at a rate of 15 percent annually, making it among the fastest-growing software applications. Management Information Systems Chapter 11 Managing Knowledge The Knowledge Management Landscape

KM, a fad? Knowledge is not new People in organisations have always sought, used and valued knowledge Companies hire for minds rather than hands 24

What’s your Strategy for Managing Knowledge? (Hansen et al., 1999) Codification Strategy Computer centred Captured and stored in database Personalisation Strategy Associated with an individual Shared person to person 25

People Broker Locate “experts” to help solve business problems Link “knowledge holders” to “knowledge seekers” Transfer valuable “Tacit” Knowledge 26

Role of the Chief Knowledge/Learning Officer Build organisational knowledge culture Create knowledge management infrastructure Make it all pay off 27

Learning Organisation “the sum of individual knowledge used in the value creation process and the knowledge embedded in collective action”. (Von Krogh et al.,1996, pp.227) Organisations ability to : Have a memory React Make decisions 28

Knowledge Management and IS “‘Techknowledgy’ is clearly part of Knowledge Management” (Davenport and Prusak, 1998) KM is 80% about organization, and 20% about IT 29

Basic Features of a Knowledge Management System (KMS) Storage Publishing Subscription Reuse Collaboration Communication 30

Searching and Filtering Knowledge Knowledge should be Intuitively accessible Searchable to find relevant knowledge Inform how things get done Alternatively you should be able to connect to experts 31

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KM Technology Solution which complements strategy Technology is an enabler Customized solutions which integrate with work processes Non invasive Build on Web and platforms Combination of tools and technology Search / Categorization / Messaging / Collaboration 33

Examples of implemented KMS- Pharmaceutical Business Prosthetics manufacturer Technology LINK (Leveraging Internal Knowledge) Web tool facilitates Expert finder Describes people who might be working on things that you might be working on Ability to index sent items folder Enables a user to build a personal work profile “Brokers Discussions” 34

Continued… Making it pay Reduced length of time to uncover knowledge related to a clinical trial by finding existing experts in the area within the organisation 35

Manufacturing (1) Business Box design and manufacturer Technology InnoBook: An interactive database of box design concepts, continually updated by over 300 designers Utilised by 250 sites across Europe Each design department has access to all designs and uses the system to search for base designs when an order is placed 36

Continued… Designers motivated to contribute their box designs to the repository Initial reluctance to the utilisation of designs contributed to the system by other departments, question mark over the quality of the design not produced by the local team Making it pay overcomes localisation of box design knowledge avoiding ‘reinventing the wheel’ 37

Manufacturing (2) Business Multinational data storage device manufacturer Technology Primus a knowledge repository for customer solutions Implemented by Customer Service Team in two locations – European and US 38

Manufacturing (2) Objective to manage customer support knowledge issues by breaking down a problem or situation into its knowledge components to classify knowledge about the problem received or add new knowledge about the problem 39

Continued… Making it pay build a knowledge base of solutions and solve customer’s problems in a more time efficient and effective manner to provide an integrated approach to problem resolution and a solution for managing the knowledge across the CS group 40

Conclusions? 41 People are the key to successful knowledge management IS may be identified as one factor that can enable the capture, storage, creation and dissemination of organizational knowledge

But: The focus on utilising organizational knowledge should be on a dialogue between two individuals or a community of practice and not knowledge objects stored in a database (Hansen et al., 1999) 42

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