IT's impact on business today - *

Name two ways business has been influeced by IT

Internet popularity

• High percentage of users
• Email
• Facebook
• New websites

Information Technology Capital Investment - ***

What effect does IT investment have on Total investment?

• Processing
• Classify
• Arrange
• Calculate

• Organization
• Technology
• Management

Tech:

• Management Science
• Computer science
• Operations research

Behavioral:

• Socialogy
• Economics
• Psychology

• Hardware
• Software
• Storage
• Communications technology
• Networks

Organization-IT Interdependence *

IS communicates Business objectives and processes with what 3 aspects of software?

• Hardware
• Data management
• Telecommunications

Strategic Business Objectives of IT **

There are 6 objectives, with examples.

• Operational excellence
• UPS
• New products, services, and business models.
• Spotify (soft ownership)
• Customer and supplier intimacy
• JCPenny and TAL - utilize customer data
• Improved decision making
• Verizon - shortened customer service call times
• Competative advantage
• Dell - pull model
• Survival
• Citibank - first to put out ATM's

Variation of ROI of IT ***

Explain the benefits and drawbacks of investing in IT

Benefit: on average investments in IT are far above other investments

Drawback: Variation is much higher across firms (risky)

Complementary Assets **

List some assets that complement of each of the following aspects of business:

• Organizational Assets
• Managerial Assets
• Social Assets

Organizational

• Culture
• Business model
• Processes
• IS Developement

Mangerial

• Management Support
• Innovation
• Teamwork
• Training

Social

• Society's invetment
• Laws and regulations
• Internet
• Education
• IT Services

Four Major Business Functions **

List them.

• Sales & Marketing
• Manufactuing & Production
• Finance & Accounting
• Human Resource

Strategic Level (top)

• ESS - Executive Support System

Management Level (middle)

• MIS - Management Information Systems
• DSS - Decision-Support Systems

Operational level (bottom)

• TPS - Transaction Processing Systems

TPS - Transaction Processing System

TPS is used by employees to support operational activities and transactions

Management Information Systems

MIS is used to sum up all relevant information for management to make educated decisions.

Decision Support System

Takes in various information, analyzes the data and gives the best possible solution.

Executive Support System

ESS is used to monitor each devision of a company and make broad strategic executive decisions.

Order Tracking System

What type of:

Business Function?

Information System?

Manufacturing & Production

TPS

Order fulfillment System e.g. NewEgg

What type of:

Business Function?

Information System?

Sales & Marketing

TPS

Order fufilment process *

Name the function of each of the following processes

• Sales
• Accounting
• Manufacturing and Production

Sales

• Generate and submit order

Accounting

• Check/approve credit

Manufacturing & Production

• Assemble product
• Ship product

Challenge:

More "empowered" customers - online forums and customer reviews can tarnish your product

Oppurtunity

More "involved" customer - fish for feedback on your product to improve

CRM - Acronym for what? **

An enterprice applicatin taht helps firms manage ________ with customers.

Customer Relationship Management

"relationships"

From Marketing *

Explain some benifits of a high customer retention, and good customer service.

Cost is 1/6th of a new customer.

Dissatisfied customers gossip

Profits increase 85% by increasing customer retention by 5%

Odds of selling to a new customer - 15%

Odds of selling to an existing customer - 50%

Beyond Sales... **

The front office is the focus of the:

a. Sales department

b. Entire company

Beyond Sales... **

With new CRM technology business models are shifting from _________-based to _________-service based.

Beyond Sales... **

Customer Centricity definition

Customer Loyalty Management Process Map *

After entering customer information into the CRM database, what are the three possible routes to manage their service?

Returning Customer?

• w/ high value and loyalty
• Provide special offers and service*
• w/o high value and loyalty
• Route to best agent to resolve issue*

New Customer?

• Route to best agent to resolve issue*

* = end result

Functions of CRM *

List a few functions of CRM

• Manages ways used by firms to deal with existing and potential new customers
• Captures customer data
• Consolidates customer data and provides analytical tools for answering questions
• Provides a unified view of customers across the company
• Distribute customer info to variosu systems and customer touch points

Touch Points *

3 Good

3 Bad

Good

• New product offerings to customers in need
• Customized website
• Product promotions to right customers

Bad

• Junk mails
• Phone calls at wrong time
• SPAM

How CRM System Supports Marketing *

What two mediums of communication generate the best response

Customer Relationship Management (CRM) **

Provides/organizes customer data to aid in these three fields.

List the fields and explain how they are helped.

Sales

• Telephone sales
• Web Sales
• Retail Store sales
• Field Sales

Marketing

• Campaign data
• Content
• Data Analysis

Service

• Call center data
• Web self-service
• Wireless data

Example of CRM Software Capabilities *

List the 3 uses of customer data and how you can use that data.

Sales

• Account management
• Lead management
• Order management
• Sales planning
• Field sales
• Sales analytics

Marketing

• Campaign management
• Channel promotions management
• Events management
• Market planning
• Market operations
• Marketing analytics

Service

• Service delivery
• Customer satisfaction management
• Returns management
• Service planning
• Call center & help desk
• Service analytics

Operational CRM **

Define operational CRM and give examples

Managing customers face to face, sales, service and marketing.

Examples include:

• Campaign management
• e-marketing
• account and contact management
• lead management
• telemarketing
• telselling
• e-selling
• field sales

Analytical CRM **

Define and give examples of Analytical CRM

Analyzes customer data generated by operational CRM applications to provide information for improving business performance.

Examples include:

• Develop customer segmentation and profiles
• analyze customer or product profitability
• identify trends in sales length cycle
• analyze leads generate and conversion rates

Analytical CRM Data Warehouse *

The Customer Data Warehouse plays what role within CRM?

Business Value of CRM Systems **

What are the values of a CRM System (6 total)

know the 2 bold ones

• Increased customer satisfaction
• More effective marketing and reduce direct marketing costs
• Lower costs for customers acquisition and retention
• Increased revenue from identifying most profitable customer and segements of marketing, cross-selling, up-selling
• Reduce churn rate: Number of customers who stop using or purchasing products or services from a company.
• Realizing Customer Lifetime Value (CLTV): Difference between revenues and expenses minus the cost of promotional marketing used to retain an account.

CRM Performance Measurement **

List ways to measure CRM effectiveness (5 total)

• Cost per lead
• Cost per sale
• Number of repeat customers
• Churn rate
• Sales closing rate

Name 4 types of IT and a company that utilizes that

1.

Pricing and marketing: QuiBids/Priceline/Groupon

Selling direct: Amazon Fresh/Dell/MINIUSA

Digital goods: iTunes/Amazon Kindle

C2C commerce: Craigslist/eBay/Prosper.com/GetAround

What are 3 types of media IT is prevalent in and an example of its use in that type?

1.

TV: HDTV / Interactive TV / 3D TV / Google TV

Music: Spotify / Satellite Radio / iCloud / Google Music

Movie: Netflix / Amazon VOD / Hulu

What are examples of IT in Gaming, Social Networking, & Virtual Communities?

1.

Gaming: MW3 / WoW / Second Life / Kinect / Wii

Social: Facebook / MySpace / LinkedIn / Twitter

Virtual Communities: Wikipedia / Flickr / YouTube / Instagram

What is IT?

2.

IT Specialists

IT department

What is MIS (IS)?

2.

What are the four roles of IS?

2.

Functional support role

Decision support role

Strategic support role

Performance monitoring role

What are the historical IT views and what they were viewed as?

2.

Connection View (~1970-95) IT as Tool

Immersion View (~1991-2012) IT as Environment

Fusion View (~2012 - ?) IT as Fabric

What is the idea of Ubiquitous Computing?

1.

What are some voice recognition applications?

1.

What is special about today's business vs business 50+ years ago.

1.

Doing business on a Global Scale

Overcoming regional/country differences and similarities

To be good at everything means being good at nothing.

--Old Chinese Idiom

What is it referring to?

1.

What are challenges/impacts of the ubiquitous environment?

1.

1. Organizational
2. Economic
3. Technological
4. Political, cultural, social, etc.

Factories

• Just-in-time production
• Continuous inventory replenishment
• Production planning

Remote offices

• Communicate plans and policies
• Group Collaboration
• Electronic communication
• Scheduling

Business Partners

• Joint Design
• Outsourcing

Suppliers

• Procurement
• Supply chain management

Customers

• Online marketing
• Online sales
• Built-to-order products
• Customer service
• Sales force automation

IT is considered a key enabler. What does that mean/refer to?

1.

What is the history of adoption of Global Outsourcing in the US (% & Year --> % and Year)

2.

What % of companies experienced cost saving from outsourcing?

2.

61% of global companies using outsourcing experience cost saving

What % of companies utilizing outsourcing found increasing ability to focus on core business?

2.

57% found increasing ability to focus on core business

What % of companies utilizing outsourcing reported improvements in process speed?

2.

What is the relationship between a website & webpage?

2.

How does someone access a website?

2.

What is the impact of the architecture of enterprise applications?

1.

The Leavitt Diamond

2.

What is an Enterprise Resource Planning System?

1.

A cross-functional enterprise system that allows different software modules to communicate with each other and utilize each other's data.

What is the traditional view of systems?

2.

How do Enterprise Systems Work?

2.

What are ERP benefits?

2.

Decision support and Knowledge Management (KM): provides cross-functional information on business performance to managers, increases decision speed & effectiveness.

Enterprise agility: breaks down walls of business processes, accelerates transfer of information between departments

What are the challenges of Enterprise Systems?

1.

Difficult to build: requires fundamental changes in the way the business operates

Technology: Requires complex software; large investments of time, money, expertise

Centralized organizational coordination and decision making: Not best way for all firms to operate

Costs of ERP (pie-chart)

2.

Reengineering: 43%

Data Conversions: 15%

Training and Change Management: 15%

Sofware: 15%

Hardware: 12%

What is a Supply Chain Management System? (SCM)

2.

Enterprise application that helps manage relationshiop with suppliers.

Macy's sends purchase data to suppliers so they can analyze what colors are popular, when to restock, etc.

What is a supply chain?

2.

Which directions do materials, information, and payments flow through the supply chain?

2.

Supplies: downstream

(raw materials -> finished product -> consumer)

Information: upstream & downstream

(supplier <- purchase info ; tracking info -> consumer)

Payments: upstream

(supplier <- firm <- consumer)

Nike supply chain

1.

Note the tiers of suppliers, flow from Nike <-> Distributor <-> Retailer <-> Customer

[image]

Name 2 key processes of SCM for each:

Plan, Source, Make, Deliver, Return

2.

What are 2 functions of SCM Systems?

2.

1. Decide when and what to produce, store, and move.
2. Rapidly communicate orders/product design
3. Track status of orders/shipment
4. Check inventory availability; monitor inventory levels
5. Reduce inventory, transportation, & warehousing costs
6. Plan production based on actual customer demand

Define the push-based and pull-based models. Who uses them? (SCM)

3.

Push-based: Production master schedules based on forecasts of demand for products; products "pushed" to customers (Fashion industry)

Pull-based: Supply chain driven by actual customer orders (Dell)

Push vs. Pull SCM

1.

What are the 3 Supply Chain Management Applications?

2.

1. Supply chain management systems: Automate flow of info between company and supply chain partners
2. Supply chain planning systems: Generate demand forecasts for a product; help develop sourcing & manufacturing plans
3. Supply chain execution systems: Ensure products delivered to right locations in most efficient manner. Manage flow of products thru distribution centers and warehouses.

What are the metrics used to evaluate Supply Chain Performance?

2.

1. Fill rate
2. Average time: order to delivery
3. Number of days of supply in inventory
4. Forecast accuracy
5. Cycle time for sourcing and making a product

What are two benefits of SCM systems?

1.

• Close coordination of activities involved in buying, making, and moving product; match supply w/ demand
• Integrates supplier, manufacturer, distributor, and customer logistics; including reverse logistics
• Reduces time, redundant effort, and inventory costs; minimizes inventory level
• Helps in procurement of materials & transformation of raw materials into intermediate and finished products
• Helps in distribution of the finished products to customers
• Speed product time to market; use assets more effectively

What is the "Future Internet-Driven Supply Chain?"

1.

A chain with not beginning or end, communication/information flowing throughout.

[image]

Growth of e-Commerce

From graph, 1994 - 2104, what is the projected growth?

1.

1994: just above $0 billion

2014: projected $350 billion

Traits of e-Commerce

Name 3

2.

• Ubiquity: shop anywhere
• Global reach: shop anywhere
• Universal standards: Communications between different systems are seamless
• Increases richness: Internet increases depth, detail, and scope of info
• Interactivity: More interactions with customers
• Information density: Reduces information cost and information asymmetry
• Personalization: Individualized commerce
• Social technology: user-generated content

What do digital markets reduce?

1.

Information asymmetry

Search costs

Transaction costs

Menu costs

What do digital markets enable?

1.

Price discrimination

Dynamic pricing

Disintermediation

Digital Markets Compared to Traditional Markets

3.

Digital markets reduces over cost, reduces information asymmetry, delays gratification, has stronger network effects, and disintermediates the transaction.

Traditional markets have a higher overall cost, instant gratification, high info asymmetry, intermediation, and weaker network effects.

Chart on pg. 380

What is the fundamental basis of e-Commerce? Why do people use it?

1.

What is one e-Commerce Revenue Option from each group?

Commerce, community, content, infrastructure

1.

Commerce:

• Product sales
• Commissions
• Sales or transaction fees

Content:

• Subscription fees
• Document fees
• Registration fees

Community:

• Ad fees
• Referral fees
• Membership fees

Infrastructure:

• Software/hardware sales or license
• Maintenance/update
• Integration/install
• Hosting/access fees

What is a portal?

2.

Provides initial point of entry to Web

ex. Yahoo.com, MSN.com

What is an e-Tailer?

2.

Online retail store for goods

ex. Amazon.com, Newegg.com

What is a content provider?

2.

Provides digital content

ex. WSJ.com, ESPN.com

What is a transaction broker?

2.

Facilitates online transactions

ex. eTrade.com, Expedia.com

What is a market creator?

2.

Provides a trading platoform for individuals and firms

ex. eBay.com, craigslist.org

What is a service provider?

2.

Provides online services, including search

ex. flickr.com, PayPal.com

What is a community provider?

2.

Provides online community to focused groups

ex. MySpace.com, facebook.com

What are two properties of information goods?

Example?

2.

• Information based
• Big fixed cost
• Small or negligible variable cost
• Easy versioning and pricing

Ex. Movie, record, book, research paper, etc.

What is the goal of versioning?

2.

What is the theoretical basis of versioning? What is its purpose?

Is it easier to version information goods or physical goods?

2.

Price discrimination. Purpose is to capture consumer surplus

Information goods. Same product, different modules enabled/disabled.

Costs of Digital vs. Traditional Goods

3.

Digital goods have zero marginal cost, high cost of production, and low copying, dributed delivery, and inventory costs. Marketing and pricing are variable.

Traditional goods have high marginal, copying, distributed delivery, and inventory costs. Variable cost of production and market cost. Fixed pricing.

Chart pg. 381

The study by Brynjolfsson and Smith (2000) showed what about prices for online and conventional stores?

2.

Prices online < conventional store

Price fluctuation online > conventional store

Price dispersion online > conventional store

Why should prices online be lower than traditional stores?

3.

Regular shopping provides:

• Affective processing (images, sounds, smells) leading to impulse buys vs cognitive faculties (price and feature comparison)
• Invisible trasaction costs (gas, time, parking) vs. visible (shipping)
• Instant gratification vs. delayed gratification

What is cost transparency?

2.

What are direct impacts of cost transparency?

2.

Low profits: (AT&T vs. Sprint) Sprint undercut AT&T showing extreme premium AT&T was charging

Services and products as commodities: (Ameritrade, e-Trade vs. Merrill Lynch) Online trading taking lower commission

Customer loyalty: (P&G) 

Reputation damage by price unfairness: (Auto industry 1970s) High value, low price japanese cars coming into market