Lecture 5

1. Lecture 5 18/10/11

2. Types of Business Information Systems 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.

3. Customer Relationship Management 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

4. 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.

5. 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 e-mail; etc.

6. 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 e-mail, direct mail, telephone, the Web, and wireless messages.

7. 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.

8. 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.

9. 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

10. Enterprise Applications: New Opportunities and Challenges • 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

11. Knowledge Management…

12. Knowledge Management

13. KM, it’s like riding a bicycle…

14. Systems That Span the Enterprise • 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

15. Definitions

16. Knowledge Hierarchy Context Knowledge Information Data

17. The Knowledge Continuum

18. 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)

19. 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”.

20. 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

21. Knowledge Economy/Society ENTERPRISE KNOWLEDGE LAND CAPITAL LABOUR

22. 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

23. Management Information Systems Chapter 11 Managing Knowledge The Knowledge Management Landscape U.S. Enterprise Knowledge Management Software Revenues, 2005-2012 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.

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

25. 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

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

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

28. 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

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

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

31. 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

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

34. 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”

35. 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

36. 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

37. 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’

38. 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

39. 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

40. 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

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 Conclusions?

42. 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)