CHAPTER 2

MAJOR BUSINESS INITIATIVES

Gaining Competitive Advantage with IT

OPENING CASE: DEATH OF A TRAVEL AGENT

Because consumers are now “empowered,” travel agents have declined from 171,600 (1999) to 95,000 (2009)

WHAT ARE SUPPLY CHAIN MANAGEMENT SYSTEMS?

Typical supply chain: lots of lag, inventory depreciates, inventory holding costs.

Just-in-time Produce/deliver product or service just at the time the

customer wants it Need to be in touch with suppliers frequently and in some

cases (like Dell) let customers order directly from suppliers Inter-modal transportation

Multiple transportation channels (railway, truck, etc) to move products from origin destination

Creates supply chain complexities Think about buying from Amazon…many different sellers

but same order from you, the customer

SCM: OPPORTUNITIES Can lead to cost leadership (Walmart).

Can lead to reduced customer waiting time (Dell, Amazon).

Can lead to availability of products when they are needed, without running out (Walmart).

Can lead to predictability of order streams for everyone in the supply chain (Walmart).

SCM: RADIO FREQUENCY IDENTIFICATION (RFID)

RFID

Examples On Products:

http://www.youtube.com/watch?v=_xNhL39uD7I

WristBands: http://www.youtube.com/watch?v=l62jJ20CH10

Healthcare:http://www.youtube.com/watch?v=DabzIhgyCo0

CUSTOMER RELATIONSHIP MANAGEMENT SYSTEMS

Collects information on each customer and all their purchases

If customers have ongoing issues, it pulls up the customer profile and purchase history when they call

Allows communication via email, chat and telephone

Does data analysis to see what type of customer bought what, and makes recommendations

Can help in new product development by analyzing what kinds of products our customers are interested in.

Allows sales force to track leads and sales

Allows marketing promotions and tracking

THE FOCUSES OF CUSTOMER RELATIONSHIP MANAGEMENT

Analytics is now a huge part of CRM. Analytics use hard data to support decision making.

CRM: OPPORTUNITIES

Classic goals Treating customers better Understanding their needs and

wants Tailoring offerings Providing “delightful” experiences Increasing revenue (sales) Identify the products that are

selling well.

CRM: IT/IS SUPPORT Front-office systems

Primary interface to customers and sales channels Back-office systems

Fulfill and support customer orders Both interface to CRM database and analysis and

reporting systems

CRM: IT/IS SUPPORT

Software-as-a-service (SaaS) – software model in which you pay for software on a pay-per-use basis instead of buying the software

This reduces fixed costs and is scaleable as the business grows.

Should we buy an off the shelf CRM or get a custom developed CRM?

WHAT IS AN ENTERPRISE RESOURCE PLANNING SYSTEM? MRP (Materials Requirement Planning) Systems

Circa 1965-1975

MRP II systems: added inventory and productivity optimization to manufacturing, link accounting to manufacturingCirca 1975-1985

ERP (Enterprise resource planning): take database applications used by diverse business functions and put them together in one large database system

Are modular and allow one to buys a few modules at a time. Is this an advantage or a disadvantage?

Force data centralization, which is a good goal.. What do ERP systems do to our competitive advantage?

ENTERPRISE RESOURCE PLANNING

ERP is big business Federal government spent $7.7 billion on

ERP in 2009 60% of Fortune 1000 companies have ERP

systems

ERP II systems are now being used to do business intelligence analysis on the data that has been accumulated.

Data quality is important. Garbage in-Garbage out?

ERP: FUNCTIONALITY

ENTERPRISE RESOURCE PLANNING

The Big 4 ERP Vendors

ERP: FUNCTIONALITY

Attempts to integrate everything CRM drives what SCM will produce Everyone works together The entire organization knows what it needs to

know about the entire organization Think about TU

Can you register for class with a bill outstanding?

Can you register for a class for which you haven’t completed the prerequisite?

WHAT IS SOCIAL MEDIA?

Web 2.0

Social Media Social networking Social shopping Social playing Social “saving the world” Social locationing There are many more

SOCIAL MEDIA: SOCIAL NETWORKING

Social networking site site on which you post information about yourself,

create a network of friends, read about other people, share content, and communicate with people

The big ones Facebook & LinkedIn Google+ StumbleUpon, Twitter, YouTube

SOCIAL MEDIA: SOCIAL SHOPPING

See what other people are buying and wearing, trying to find the same, and informing others of where the best deals are. Pinterest. Instagram.

Pepsi – social vending machines Bartab Groupon/living social Reviews of products/services on amazon,

yelp

SOCIAL MEDIA: SOCIAL PLAYING

MMORPGs (massively multiplayer online role-playing games) world of warcraft , second life

Xbox 360, Sony Ps4

Ipad, Android games

Facebook games. Farmville.

SOCIAL MEDIA:SOCIAL “SAVING THE WORLD”

Social causes. Environmental. Protest movements.

Arab Spring

Recent riots in Kiev, Ukraine.

Kickstarter, Causes, CrowdRise.

http://socialmediasun.com/group-funding-websites/

SOCIAL MEDIA: SOCIAL LOCATIONING

Social locationing (location-based services) Use of a mobile device and its location to

Check into locations Find friends and their locations Receive rewards Take advantage of specials based on location

Popular examples – Geoloqi, Facebook Places, SCVNGR, Google Latitude,

Foursquare,