Management Information Systems Term Paper

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Management Information Systems

Internet business-to-business sales will attain approximately $1.3 trillion in 2003 and, in 2004, business-to-consumer sales will attain approximately $100 billion. E-businesses at the moment have attained a point where they are trying to move away from a superficial analysis of their customers to engaging in rich customer relations. Strategic customer relationship management and its relationship to e-business is the focus of this paper.

Internet business-to-business sales will attain approximately $1.3 trillion in 2003 and, in 2004, business-to-consumer sales will attain approximately $100 billion (Lord, 2000). Near 2005, U.S. companies will use $63 billion yearly on online marketing, advertising, as well as Email Marketing (Forrest, E. And R. Mizerski, 2001). The Gartner Group estimates that 75% of all e-business schemes will not succeed owing to a deficient in technical perceptive and poor business preparation (Lord, 2000). In spite of the risks, the Internet challenge is fascinating. Flourishing e-businesses in the present day have moved beyond an arm's length transactional observation of their customers to forming prosperous customer relationships (Olson, 2001).

Effective e-business strategy needs that an organization gives customer value that is greater to that of the rivalry. To tender greater delivered value, marketing ought to directly persuade three fundamental business procedures: product development management (PDM), supply chain management (SCM) and customer relationship management (CRM) (Srivastiva, Shervani and Fahey, 1999). The objective of the PDM procedure is to generate solutions that customers require and desire. SCM procedures consist of the attainment of physical and informational inputs and the competence and efficacy of transforming these inputs into customer solutions.

The objectives of the CRM procedures are to form customers' insight of the organization and its products through recognizing customers; forming customer knowledge and structuring dedicated customer dealings. In spirit, CRM "is a business strategy that attempts to ensure every customer interaction (whether for sales or service) is appropriate, relevant, and consistent -- regardless of the communication channel" (Khirallah, 2000, Pg: 1). CRM is a nucleus business strategy for managing and optimizing all customer relations across an organization's customary and electronic edge (Sowalskie, 2001).

Lately, both Customer Relationship Management (CRM) and e-commerce are words that have infiltrated the corporate culture of today. CRM, in its most basic form, goes beyond mere customer service into the area of actually managing information about customers through software and other technology. The theory behind CRM is that knowing everything about the customer - from purchases to how many phone calls to the company - will help the company provide stronger service for the customer, ultimately meaning a stronger bottom line (as a satisfied customer will purchase more and refer friends to the company in question). E-commerce has also had an impact on sales and CRM - doing business electronically (whether via the Internet, phone or fax) has meant businesses are dealing in a whole new realm of customer relationships. By the very nature of e-commerce, it seems as though CRM would be a perfect fit.

This is not always the case however - many CRM systems implemented today are failing (Sviokla and Wong, 2003). For one thing, no amount of customer information will ever lead to controllable customer interaction (Sviokla and Wong, 2003). For another, senior management that implements CRM tends to forget that the employees who are closest to the customers either don't know how to use CRM - or simply may not want to (Sviokla and Wong, 2003). In addition, in their rush to add CRM to their applications, companies have not given much thought to integrating those applications with already existing ones (Vizard, 2001).

Because of this, CRM fails - normally after companies have spent a great deal of money on software and training. This is an issue that is not going away any time soon - and because of that, a thesis on this would contribute a great deal to this new and growing field.

Statement of Objectives:

It ought to be considered that effectual CRM is more than a software solution; it is about how customer information is employed to make an ongoing relationship with the customer. The purpose of the paper is to establish whether the e-commerce and CRM -- that promised customers' personalization and customization-have lived up to its expectations?

The purpose of the paper is to establish whether e-commerce and CRM -- that promised marketers deeper insights into the habits, feelings, likes and dislikes of customers -- have it lived up to these promises?

Summary of relevant literature

Because the concept of CRM is relatively new, there hasn't been a whole lot of study or research performed on the issue. Much of the evidence available is anecdotal. There is, however, some research I can draw on for this paper. One study, "Understanding the World of the Jetsons: The New Age of Building

Customer Relationships," notes that implementation of e-commerce technologies does help manufacturers target customers, integrate channels and maximize marketing opportunities without having to rely on the retailer (Anonymous, 2001). Again however, this study has stressed the necessity of integration - in this case, researchers noted that for effectiveness, data needed to be integrated from a variety of channels and other applications (Anonymous, 2001). Researchers also cautioned that an e-commerce/CRM strategy for manufacturers means more than selling products online - in fact, the study goes on to say, online sales is not necessarily a core competency for such manufacturers (Anonymous, 2001).

Interestingly enough, despite the gloom-and-doom reviews of the success of CRM, one study, "The Blueprint for Success," found that 67% of CRM implementations succeeded either with average or above average performance (Krol, 2001). The researchers went on to say that 33% of under-performing or non-performing CRM projects are still considerable; the figure is below the failure rates cited by other researchers in the industry (Krol, 2001). Still, one of the main reasons for success involved strong training and support (Krol, 2001). "Too many CRM implementations have stopped in their tracks because expensive and sophisticated software is dumped on field sales staffs who refuse to use it," noted one CRM expert (Krol, 2001, p. 19).

Up-and-coming technologies offer corporations the prospective to develop their capacity to magnetize and maintain customers, acquire more knowledge through the online channel than through any other customer contact point, and carry out successful CRM (Butler, 2000). Furthermore, Davids (Davids, 1999) proposes that the demand of CRM remains principally out of reach for a great number of companies. In line with Keefe (Keefe, 2001), a number of CRM specialists dispute that there is little accord concerning what CRM really is, or how to best carry out or assess it. In her article, Keefe reports on a discussion with Heidi Wisbach, manager of CRM Analytics in the New York office of Cap Gemini Ernst & Young, who has dedicated himself in CRM initiatives in the manufacturing, hospitality, financial services, as well as telecommunications industries. Wisbach is one of the originators of the CRM directory, which can be used by a company to determine the degree to which they use real CRM methods and to contrast their standing against competitors. In relation to Wisbach, a company's CRM keenness is a purpose of having: 1) a way to follow customer information; 2) metrics -- a way of assessing customer performance; and 3) the capacity to impact transformation. The industries that are inclined to be more CRM -- prepared are those, which are conscious of divergent contact with the customer, and those, which are actually ready for action, as a result compelling individual companies to distinguish themselves considerably.

Methodology

The Approach Utilized or the Provisional Timetable

The approach utilized in this thesis is that: first the problem in the use of Customer Relationship Management (CRM) is acknowledged, as well as the problem in the management / formation of e-commerce and CRM strategy is acknowledged and then essential data to highlight this issue is acquired. The data attained will be analyzed and summarized using techniques appropriate to the reader's satisfaction. The outcome and the summary of the data will be reported and interpreted in light of the initial problem that has been identified and required.

Data Gathering and Utilizing Method

The potential approach or methodology in this research would be to study companies that have implemented CRM strategies and determine how effective they have been in terms of e-commerce service. In order to do this, it's recommended that I try to partner with a vendor of CRM systems and try to obtain a list of companies to survey about this.

The survey can include measurable items such as cost of implementation, willingness of employees to use the new system, increase in customer satisfaction (based on number of complaints/returns) and other figures. The survey would also include information about how CRM has been revamped in case it didn't succeed (was the program scrapped, was a consultant called in or did a vendor help?)

Other interesting information could include other systems (such as ERP) that might already be in place, and if the CRM system has been implemented with…[continue]

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