Enterprise Business Processes and Applications (IS 6006) Masters in Business Information Systems 17 th Feb 2009 Fergal Carton Business Information Systems

Last week Marketing Sales force automation Apple Exercise: homework

This week Managing demand complexity Apple Exercise –Sales Order Processing: single instance –Customer Care example CRM implementations eCRM

Managing demand complexity Customers require existing and new products –There are many new products coming onto the market –After sales service has a cost, but customers willing to pay –After sales service impact for new products unknown? Customers are prepared to buy in new ways –There are many new channels for selling those products Customers will invent new combinations of product / channel Processing the requirements for products is a challenge –Customer lead times must be maintained –Product quality must not be compromised –Customer details must be retained and managed –Costs must be kept under control Efficient execution is vital, no matter what the requirement is The company needs to perform financially –Markets watch revenue, inventory holding, margins, …

Integration and the single instance Functions in a business are working towards a common goal To get to that goal information needs to be shared Integration is a way of sharing information on corporate resources Multiple sources of demand for the same finite set of finished goods Where volume is increasing, standardisation is key ERP provides the one drum beat for all resources

Apple channels and products An increasing range of channels –Apple stores (eg. ATMac, Penrose Wharf) –Apple.com –Major accounts (Dixons, Curry’s, Fnac, HMV, Virgin, …) –Retailer (Tesco, O2 stores, Argos, …) –Indirect distributor (Russian market?) –… An increasing range of products –iTunes –iTunes gift cards –iPods –iPod accessories –Notebooks –Desktops –iPhones –Service –Software –…

Apple Case Study : impact of single instance “If it ain’t in SAP, it don’t exist”, Pat Duggan, IT Director, Apple Holyhill ERP should help to manage complexity in the demand fulfilment cycle, but can it handle this? –Map out channels, products and customers –Group channels into those similar in terms of fulfilment process –Think through the stages in the fulfilment process –What is the impact of a single instance ERP system?

Apple case study 2: customer care AppleCare Repairs Depot in Holland Repairs for North Europe carried out by this center, supplied by Cork Concern that cycle time is increasing, leading to negative customer experience Programme of “Advance Exchange” being considered to improve “cycle time attainment” –Commodity items (boards, power supplies, drives, hard disks, monitors) are replaced immediately, regardless of the issue –In the meantime the Repairs Center carries out repairs –Customers would be asked to pay for this service Look at ways of improving quality and costs for depot, including Advance Exchange Also consider option of centralising Repairs back to Cork

Why CRM Fails Why Does CRM Fail? –Disparate views of customers –Silo effect –Many types of CRM –Many types of CRM application

Critical Success Factors (Parr & Shanks, 2000) Top management Support Full-time release of business experts Empowered decision makers Realistic milestones and end date Steering Committee determines scope & goals Smaller scope Champion Vanilla ERP Balanced team Commitment to change Project Technology People

CRM is more than Technology Strategy important too Integrated business model needed Holistic view of customers needed Need to combine data from various sources Need to integrate value chain

Channel Disparity What sort of channels can a customer use to interact with a company? What sort of channel conflicts arise? Why do channel conflicts arise? What are the consequences for the customer? What are the consequences for the firm?

Operational and Analytical Disparity Data from Operations is not analysed – it gets buried in silos Business insights from Analytics are not applied to enhance operations Businesses tend to collect huge amounts of data –But little of use is done with these data

eCRM eCRM is an evolution of CRM using Internet technology A lot of eCRM is based around the customer portal A portal is a website that aggregates all of the customer’s shopping, research and service needs –E.g. amazon.com

eCRM and Portals Features –Online catalogues –Online order processing –Online order configurability –Lead capture and profiling –Online surveys –Literature fulfillment – (!) marketing

eCRM and Portals Advantages for customer –Customer is in control of purchasing process –Customer is not pressed for time –Site can be tailored to customer’s needs and interests –Customer can check out problems themselves

eCRM and Portals Advantages for company –Marketing information easy to gather –Profile of customer can be built –Cheaper than lots of call centre staff and physical retail locations