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- 1. Business Driven Information Systems 2e CHAPTER 9 CUSTOMER RELATIONSHIP MANAGEMENT AND BUSINESS INTELLIGENCE
- 3. SECTION 9.1 CUSTOMER RELATIONSHIP MANAGEMENT
- 13. Evolution of CRM
- 15. Operational and Analytical CRM
- 16. USING IT TO DRIVE OPERATIONAL CRM
- 32. SECTION 9.2 BUSINESS INTELLIGENCE
- 41. OPERATIONAL, TACTICAL, AND STRATEGIC BI
- 42. OPERATIONAL, TACTICAL, AND STRATEGIC BI
Notes de l'éditeur
- CLASSROOM OPENER GREAT BUSINESS DECISIONS – Harley-Davidson Begins the Harley Owners Group (H.O.G.) to Encourage Customer Involvement One of the biggest assets for Milwaukee-based Harley-Davidson Motorcycle Company is its intensely loyal customers. After struggling against Japanese competition throughout the 1960s and 1970s, the company turned a corner in 1981 when a group of 13 senior Harley-Davidson executives purchased the company. Vaughn Beals, the leader, celebrated with a victory ride from the company’s factory in York, Pennsylvania, to its headquarters in Milwaukee. The new owners decided to begin the Harley Owners Group (H.O.G) to get customers more involved with the product. HOG worked. With HOG, the company was able to key into its greatest asset – the people who care about the Harley-Davidson company. HOG opened a dialog outside the company with its loyal customer base and inside the company with its workforce. In 1993, a little over 10 years after the start of HOG, the company celebrated its 90th anniversary with more than 100,000 HOG members converging on Milwaukee for a drive-through parade featuring 60,000 Harley-Davidson machines.
- CLASSROOM VIDEO Lemonade Stand This is a short YouTube clip showing a kid's lemonade stand as the subject of CRM - good discussion starter on CRM. http://www.youtube.com/watch?v=YEa_RNSX5Xo
- 9.1Compare operational and analytical customer relationship management. Operational CRM supports traditional transactional processing for day-to-day front-office operations or systems that deal directly with the customers. Analytical CRM supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers. The primary difference between operational CRM and analytical CRM is the direct interaction between the organization and its customers. 9.2 Explain the formula an organization can use to find its most valuable customers. An organization can find its most valuable customers by using a formula that industry insiders call RFM— Recency, Frequency, and Monetary value. In other words, an organization must track: How recently a customer purchased items (recency). How frequently a customer purchases items (frequency). How much a customer spends on each purchase (monetary value). 9.3 Describe and differentiate the CRM technologies used by sales departments and customer service departments. The three primary operational CRM technologies a sales department can implement to increase customer satisfaction are: Sales management CRM systems. Sales management CRM systems automate each phase of the sales process, helping individual sales representatives coordinate and organize all of their accounts. Features include calendars to help plan customer meetings, alarm reminders signaling important tasks, customizable multimedia presentations, and document generation. Contact management CRM systems. A contact management CRM system maintains customer contact information and identifies prospective customers for future sales. Contact management systems include such features as maintaining organizational charts, detailed customer notes, and supplemental sale information. Opportunity management CRM systems. Opportunity management CRM systems target sales opportunities by finding new customers or companies for future sales. Opportunity management systems determine potential customers and competitors and define selling efforts including budgets and schedules. Advanced opportunity management systems can even calculate the probability of a sale, which can save sales representatives significant time and money when attempting to find new customers. The three primary operational CRM technologies a customer service department can implement to increase customer satisfaction are: Contact center. A contact center (or call center ) is where customer service representatives (CSRs) answer customer inquiries and respond to problems through a number of different customer touchpoints. A contact center is one of the best assets a customer driven organization can have because maintaining a high level of customer support is critical to obtaining and retaining customers. Web-based self-service. Web-based self-service systems allow customers to use the Web to find answers to their questions or solutions to their problems. Call scripting. Call scripting systems access organizational databases that track similar issues or questions and automatically generate the details for the CSR who can then relay them to the customer. The system can even provide a list of questions that the CSR can ask the customer to determine the potential problem and resolution. This feature helps CSRs answer difficult questions quickly while also presenting a uniform image so two different customers do not receive two different answers.
- 9.4 Describe and differentiate the CRM technologies used by marketing departments and sales departments. The three primary operational CRM technologies a marketing department can implement to increase customer satisfaction are: List generator. List Generator List generators compile customer information from a variety of sources and segment the information for different marketing campaigns. Information sources include Web site visits, Web site questionnaires, online and off-line surveys, flyers, toll-free numbers, current customer lists, and so on. After compiling the customer list, an organization can use criteria to filter and sort the list for potential customers. Filter and sort criteria can include such things as household income, education level, and age. List generators provide the marketing department with a solid understanding of the type of customer it needs to target for marketing campaigns. Campaign management. Campaign Management Campaign management systems guide users through marketing campaigns performing such tasks as campaign definition, planning, scheduling, segmentation, and success analysis. These advanced systems can even calculate quantifiable results for return on investment (ROI) for each campaign and track the results in order to analyze and understand how the company can fine tune future campaigns. Cross-selling and up-selling. Cross-Selling and Up-Selling Two key sales strategies a marketing campaign can deploy are cross-selling and up-selling. Cross-selling is selling additional products or services to a customer. Up-selling is increasing the value of the sale. The three primary operational CRM technologies a sales department can implement to increase customer satisfaction are: Sales management CRM systems. Sales management CRM systems automate each phase of the sales process, helping individual sales representatives coordinate and organize all of their accounts. Features include calendars to help plan customer meetings, alarm reminders signaling important tasks, customizable multimedia presentations, and document generation. Contact management CRM systems. A contact management CRM system maintains customer contact information and identifies prospective customers for future sales. Contact management systems include such features as maintaining organizational charts, detailed customer notes, and supplemental sale information. Opportunity management CRM systems. Opportunity management CRM systems target sales opportunities by finding new customers or companies for future sales. Opportunity management systems determine potential customers and competitors and define selling efforts including budgets and schedules. Advanced opportunity management systems can even calculate the probability of a sale, which can save sales representatives significant time and money when attempting to find new customers. 9.5 Compare customer relationship management, supplier relationship management, partner relationship management, and employee relationship management Supplier relationship management (SRM) focuses on keeping suppliers satisfied by evaluating and categorizing suppliers for different projects, which optimizes supplier selection. Partner relationship management (PRM) focuses on keeping vendors satisfied by managing alliance partner and reseller relationships that provide customers with the optimal sales channel. Employee relationship management (ERM) provides employees with a subset of CRM applications available through a Web browser.
- CRM systems help organizations understand and manage their customers Charles Schwab recouped the cost of a multimillion-dollar CRM system in less than two years The system allowed Schwab to segment its customers in terms of serious and nonserious investors The CRM system looked for customers that had automatic withdrawal from a bank account as a sign of a serious investor The CRM system looked for stagnant balances as a sign of a nonserious investor Charles Schwab could then focus efforts on selling to serious investors, and spend less time attempting to sell to nonserious investors Kaiser used CRM to enforce more rigorous eye-screening for diabetic patients Ask your students to list other organizations that use CRM to increase sales and improve operations Ritz-Carlton Hotels Harrah’s Harley-Davidson
- Customers contact organizations multiple times through numerous channels Each contact can be stored in a different system or different database. For example, a sales call and a billing call will be maintained in two different databases The CRM system tracks all of the different contacts through the various channels and collates the information into a central repository This gives the organization a complete and total view of its customers, along with their purchases, questions, issues, and concerns, in one single place Why is it so important for an organization to embrace CRM on an enterprisewide level? What happens if only one division in an organization embraced CRM? (not enterprisewide) What happens if the customer service system or order fulfillment system were not part of the CRM system in the above diagram? How would the company determine orders or provide customer service? CLASSROOM VIDEO Mini Cooper CRM Great video to begin your CRM discussion. http://www.youtube.com/watch?v=DpFwb4cnTB0
- CRM is not just a technology, but a strategy that an organization must embrace on an enterprisewide level Although CRM has many technical components, it is actually a process and business goal simply enhanced by technology Organizations must first decide that they want to build strong customer relationships and then they determine how IT can support their goals Provide examples of bad customer experiences you have had in the past Are you still doing business with that company? What could the company have done to attempt to keep your business? Do you see the value in CRM and how beneficial it can be for an organization to develop and maintain strong customer relationships?
- Once a company knows this information, it can begin to strategize marketing campaigns, sales promotions, and other ways to increase business For example: If Ms. Smith buys only at the height of the season, then the company should send her a special offer during the “off-season” Ask your students if they have received any personalized promotions lately How did the company gather information on the student to be able to offer the personalized promotion?
- As the business world increasingly shifts from product-focus to customer-focus, most organizations recognize that treating existing customers well is the best source of profitable and sustainable revenue growth Ask your students why, in the age of e-business, an organization is challenged more than ever before to truly satisfy its customers Business 2.0 ranked "You - the customer" as one of the 50 people who matter now for 2006. http://money.cnn.com/magazines/business2/peoplewhomatter/ These Web sites show the power people have in the consumer market today http://www.ihatedell.net/ http://www.donotbuydodge.ca/
- Reporting Help organizations identify their customers across applications Analyzing Help organizations segment their customers into categories such as best and worst customers Predicting Help organizations make predictions regarding customer behavior such as which customers are at risk of leaving
- Reporting Help organizations identify their customers across applications Analyzing Help organizations segment their customers into categories such as best and worst customers Predicting Help organizations make predictions regarding customer behavior such as which customers are at risk of leaving
- Ask your students to define additional examples of reporting, analyzing, and predicting questions CLASSROOM EXERCISE Implementing a CRM Strategy Organizations can find their most valuable customers through “RFM” - R ecency, F requency, and M onetary value How recently a customer purchased items (Recency) How frequently a customer purchased items (Frequency) How much a customer spends on each purchase (Monetary Value) Break your students into groups and ask them to form a CRM strategy for a new company that sells office supplies. Have your students present their strategy to the class. The strategy should address how to gain new customers and how to keep existing customers. For example, The company should create personal promotions for its best customers The company should target new customers in the surrounding area, especially business customers The company should try to buy a list of business customers in the area from a valid source The company should advertise in local trade papers, newspapers, radio stations, and restaurants The company should track the responses it receives from the various advertising sources
- Can you list a few examples of front-office systems? Customer service, sales, billing Can you list a few examples of back-office systems? Accounting, finance, human resources, data warehouses Ask your students which systems are more important to an organization – front-office or back-office Ans: Both, one cannot function without the other CLASSROOM EXERCISE Designing a Digital Dashboard for a CRM System Digital dashboards offer an effective and efficient way to view enterprisewide information at near real-time. According to Nucleus Research, there is a direct correlation between use of digital dashboards and a company’s return on investment (ROI), hence all executives should be using or pushing the development of digital dashboards to monitor and analyze organizational operations. Break your students into groups and ask them to develop a digital dashboard for a CRM system. Be sure your students have addressed all of the following in their digital dashboard: Customers Sales Marketing Customer service Order entry Billing Collections Credit limits Shipping Transportation
- Walk-through the Figure with your students Why would an organization have a separate system for each front-office system and each back-office system? Most organizations operate functional “silos”, and each department typically has its own systems A company might purchase an ERP and then all of the functional silos would be on one system, however, this doesn’t happen very often in the real world. Most organizations require anywhere from 10 to 100 to 1,000 different systems to run their business Finding one system that could meet all the needs of an entire organization from billing to sales is almost impossible For this reason, the CRM system is the integrator, gathering all of the customer information from the many different system to obtain a single view of the customer Personalization is one of the benefits of an analytical CRM system Personalization occurs when a Web site can know enough about a person’s likes and dislikes that it can fashion offers that are more likely to appeal to that person
- Operational CRM technologies for sales, marketing, and customer service departments
- How many of you are marketing majors? Do you anticipate using these types of technologies in the marketing department?
- Walk your students through the sales process displayed in the above figure LASSROOM DEMO Microsoft CRM Demo Watch this Microsoft Business Solutions CRM demo for an overview of their CRM application. http://www.microsoft.com/BusinessSolutions/content/demos/MSCRMdemos/full_demo.htm Ask your students how they could use Microsoft CRM to help a start-up business grow and increase sales
- Ask your students to identify additional pointers for gaining prospective customers 1. Get their attention If you have a good prospect, chances are that he or she receives dozens of offers from similar companies. Be sure your first contact is professional and gets your customer’s attention. 2. Value their time When you ask for a meeting, you are asking for the most valuable thing a busy person has— time. Many companies have had great success by offering high-value gifts in exchange for a meeting with a representative. Just be careful because some organizations frown on expensive gifts. Instead, offer these prospective customers a report that can help them perform their jobs more effectively. 3. Overdeliver If your letter offered a free DVD in exchange for a meeting, bring a box of microwave popcorn along with the movie. Little gestures like these tell customers that you not only keep your word, but also can be counted on to overdeliver. 4. Contact frequently Find new and creative ways to contact your prospective customers frequently. Starting a newsletter and sending out a series of industry updates are excellent ways to keep in contact and provide value. 5. Generate a trustworthy mailing list If you are buying a mailing list from a third party be sure that the contacts are genuine prospects, especially if you are offering an expensive gift. Be sure that the people you are meeting have the power to authorize a sale. 6. Follow up One of the most powerful prospecting tools is a simple thank-you note. Letting people know that their time was appreciated may even lead to additional referrals.
- Contact center (call center) – where CSRs answer customer inquiries and respond to problems through different touchpoints Web-based self-service system – allow customers to use the Web to find answers to their questions or solutions to their problems Click-to-talk –customers click on a button and talk with a CSR via the Internet Call scripting system – access organizational databases that track similar issues or questions and automatically generate the details to the CSR who can then relay them to the customer Documedics is a health care consulting company that provides reimbursement information about pharmaceutical products to patients and health care professionals. The company currently supports inquiries for 12 pharmaceutical companies and receives over 30,000 customer calls per month. Originally, the company had a data file for each patient and for each pharmaceutical company. This inefficient process resulted in the potential for a single patient to have up to 12 different information files if the patient was a client of all 12 pharmaceutical companies. To answer customer questions, a CSR had to download each customer file causing tremendous inefficiencies and confusion.
- Automatic call distribution A phone switch routes inbound calls to available agents. Interactive voice response (IVR) Directs customers to use touch-tone phones or keywords to navigate or provide information. Predictive dialing Automatically dials outbound calls and when someone answers, the call is forwarded to an available agent. A contact center is part of the customer service department and falls into the category of operational CRM A contact center (call center) is where CSRs answer customer inquiries and respond to problems through different touchpoints A contact center is one of the best assets a customer-driven organization can have because maintaining a high level of customer support is critical to obtaining and retaining customers Automatic call distribution, IVR, and predictive dialing are only three of many different systems available to help an organization automate its contact centers
- Without understanding CRM’s impact, a business will not be able to understand if its CRM practices are adding to its success Using CRM metrics to track and monitor performance is a best practice for many companies Ask your students how they would use CRM sales metrics to keep a company on track? Ask your students if they can think of any additional sales metrics they would measure? Number of sales calls per lead Turnover of sales representatives Number of dropped customers Average product sales Best product sold Worst product sold Best sales representative Worst sales representative
- Using CRM metrics to track and monitor performance is a best practice for many companies Ask your students how they would use CRM service metrics to keep a company on track? Ask your students if they can think of any additional service metrics they would measure? Percentage compliance with service-level agreement Percentage of service renewals Customer satisfaction levels Average number of service calls per customer Average number of time to complete service call Metrics on customer service representatives such as best, worst, most number of calls closed per day, etc.
- Using CRM metrics to track and monitor performance is a best practice for many companies Ask your students how they would use CRM Marketing metrics to keep a company on track? Ask your students if they can think of any additional marketing metrics they would measure? Cost per interaction by marketing campaign Number of new customers acquired by marketing campaign Number of new leads by products
- Analytical CRM has the ability to provide an organization with information about their customers that was previously impossible to locate, and the resulting payback can be tremendous.
- Ask your students to provide additional examples of analytical CRM 1. Give customers more of what they want Analytical CRM can help an organization go beyond the typical “Dear Mr. Smith” salutation. An organization can use its analytical CRM information to make its communications more personable. For example, if it knows a customer’s shoe size and preferred brand it can notify the customer that there is a pair of size 12 shoes set aside to try on the next time the customer visits the store. 2. Find new customers more of what they want similar to the best customers Analytical CRM might determine that an organization does a lot of business with women 35 to 45 years old who drive SUVs and live within 30 miles of a certain location. The company can then find a mailing list that highlights this type of customer for potential new sales. 3. Find out what the organization does best Analytical CRM can determine what an organization does better than its competitors. For example, if a restaurant caters more breakfasts to midsized companies than its competition does, it can purchase a specialized mailing list of midsized companies in the area and send them a mailing that features the breakfast catering specials. 4. Beat competitors to the punch Analytical CRM can determine sales trends allowing an organization to offer the best customers deals before the competition has a chance to. For example, a clothing store might determine its best customers for outdoor apparel and send them an offer to attend a private sale right before the competition runs its outdoor apparel sale. 5. Reactivate inactive customers Analytical CRM can highlight customers who have not done any business with the organization in a while. The organization can then send them a personalized letter along with a discount coupon. It will remind them of the company and may help spark a renewed relationship. 6. Let customers know they matter Analytical CRM can determine what customers want and need, so an organization can contact them with this information. Anything from a private sale to a reminder that the car is due for a tuneup is excellent customer service.
- Supplier relationship management (SRM) – focuses on keeping suppliers satisfied by evaluating and categorizing suppliers for different projects, which optimizes supplier selection Partner relationship management (PRM) – focuses on keeping vendors satisfied by managing alliance partner and reseller relationship that provide customers with the optimal sales channel Employee relationship management (ERM) – provides employees with a subset of CRM applications available through a Web browser CLASSROOM EXERCISE 10 Cool CRM Developments With the advent of CRM as a development platform -- think solutions from Salesforce.com, Microsoft and SugarCRM -- customers and partners have begun to develop some interesting applications. Here are some prime examples. http://ct.enews.eweek.com/rd/cts?d=186-9305-53-799-1193181-893357-0-0-0-1 Ask your students for additional examples of CRM developments. Supplier relationship management (SRM) focuses on keeping suppliers satisfied by evaluating and categorizing suppliers for different projects, which optimizes supplier selection. SRM applications help companies analyze vendors based on a number of key variables including strategy, business goals, prices, and markets. The company can then determine the best supplier to collaborate with and can work on developing strong supplier relationships with that supplier. The partners can then work together to streamline processes, outsource services, and provide products that they could not provide individually. Partner relationship management (PRM) focuses on keeping vendors satisfied by managing alliance partner and reseller relationships that provide customers with the optimal sales channel. PRM’s business strategy is to select and manage partners to optimize their long-term value to an organization. In effect, it means picking the right partners, working with them to help them be successful in dealing with mutual customers, and ensuring that partners and the ultimate end customers are satisfied and successful. Employee relationship management (ERM) provides employees with a subset of CRM applications available through a Web browser. Many ERM applications assist the employee in dealing with customers by providing detailed information on company products, services, and customer orders. ERM applications typically offer expense tracking, project management tracking, performance appraisals, training, benefits, and company news.
- Ask your students how a customer complained prior to the invention of the Internet? They wrote a letter, made a phone call, visited in person – the bottom line is the impact of one person was minimal Ask your students how customers complain today? Blogs, websites, emails, etc – one person can easily impact millions of people by using the Internet CLASSROOM EXERCISE Sprint to 1000 Customers – You’re Fired! Excellent example of what not to do to your customers. Sprint Nextel, which ranked at the top of MSN Money's Customer Service Hall of Shame in April, apparently didn't appreciate when people called their customer-service lines to voice complaints, The Wall Street Journal reported Saturday. So the company told those unhappy customers to hit the road. http://articles.moneycentral.msn.com/Investing/Extra/SprintDumpingCustomers.aspx
- 1. Summarize the evolution of CRM and provide an example of a reporting, analyzing, and predicting question Progressive might ask its customers. There are three phases in the evolution of CRM: (1) reporting, (2) analyzing, and (3) predicting. CRM reporting technologies help organizations identify their customers across other applications. CRM analysis technologies help organizations segment their customers into categories such as best and worst customers. CRM predicting technologies help organizations make predictions regarding customer behavior such as which customers are at risk of leaving. Reporting questions What was the major cause of your accident? How helpful was the progressive insurance representative during your claim? Where was your accident? What kind of car were you driving? Whose fault was the accident? What kind of car was the other vehicle? What time of day was the accident? What were the road conditions when the accident occurred? Analyzing questions Why are there so many customer accidents in one specific location? Why are there so many customers that drive a certain type of car getting into accidents? Why do certain types of weather conditions cause more accidents for our customers? Why are certain customers continually getting into accidents? Why are so many customer accidents during a certain time of the day? Predicting questions What customers are at risk of leaving? What additional insurance products will our customers buy? Which customers should we discontinue providing insurance for? Which customers should we try to sell additional insurance to? What can we do to reduce the number of accidents? Are there certain types of cars that we can reduce the insurance on? Are there certain types of cars that we should increase the insurance on? 2. How could Progressive’s marketing department use CRM technology to improve its operations? The three primary operational CRM technologies a marketing department can implement to increase customer satisfaction are: List generator. List Generator List generators compile customer information from a variety of sources and segment the information for different marketing campaigns. Information sources include Web site visits, Web site questionnaires, online and off-line surveys, flyers, toll-free numbers, current customer lists, and so on. After compiling the customer list, an organization can use criteria to filter and sort the list for potential customers. Filter and sort criteria can include such things as household income, education level, and age. List generators provide the marketing department with a solid understanding of the type of customer it needs to target for marketing campaigns. Campaign management. Campaign Management Campaign management systems guide users through marketing campaigns performing such tasks as campaign definition, planning, scheduling, segmentation, and success analysis. These advanced systems can even calculate quantifiable results for return on investment (ROI) for each campaign and track the results in order to analyze and understand how the company can fine tune future campaigns. Cross-selling and up-selling. Cross-Selling and Up-Selling Two key sales strategies a marketing campaign can deploy are cross-selling and up-selling. Cross-selling is selling additional products or services to a customer. Up-selling is increasing the value of the sale. Progressive can use any of the above to increase the efficiency and effectiveness of its marketing department. 3. How could Mini’s sales department use CRM technology to improve its operations? Mini can use any of the following CRM sales technologies to improve its operations: Sales management systems automate each phase of the sales process, helping individual sales representatives coordinate and organize all of their accounts. Contact management systems maintain customer contact information and identify prospective customers for future sales. Opportunity management systems target sales opportunities by finding new customers or companies for future sales.
- 4. How could Progressive and Mini’s customer service departments use CRM technology to improve their operations? The three primary operational CRM technologies a sales department can implement to increase customer satisfaction are: Sales management CRM systems. Sales management CRM systems automate each phase of the sales process, helping individual sales representatives coordinate and organize all of their accounts. Features include calendars to help plan customer meetings, alarm reminders signaling important tasks, customizable multimedia presentations, and document generation. Contact management CRM systems. A contact management CRM system maintains customer contact information and identifies prospective customers for future sales. Contact management systems include such features as maintaining organizational charts, detailed customer notes, and supplemental sale information. Opportunity management CRM systems. Opportunity management CRM systems target sales opportunities by finding new customers or companies for future sales. Opportunity management systems determine potential customers and competitors and define selling efforts including budgets and schedules. Advanced opportunity management systems can even calculate the probability of a sale, which can save sales representatives significant time and money when attempting to find new customers. 5. Define analytical CRM and its importance to companies like Progressive and Mini. Analytical CRM supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers. The primary difference between operational CRM and analytical CRM is the direct interaction between the organization and its customers. Progressive and Mini can use analytical CRM to perform analyzing and predicting CRM strategies. Maturing analytical CRM and behavioral modeling technologies are helping numerous organizations move beyond legacy benefits such as enhanced customer service and retention to systems that can truly improve business profitability. Unlike operational CRM that automates call centers and sales forces with the aim of enhancing customer transactions, analytical CRM solutions are designed to dig deep into a company’s historical customer information and expose patterns of behavior on which a company can capitalize. Analytical CRM is primarily used to enhance and support decision making and works by identifying patterns in customer information collected from the various operational CRM systems.
- CLASSROOM EXERCISE The Brain Behind The Big Bad Burger The Brain Behind the Big, Bad Burger and Other Tales of Business Intelligence You will enjoy this one! It is an excellent article on the side of BI – but seriously scary on the side of fast food. Be warned – you might never eat fast food again!! http://www.cio.com/article/109454/The_Brain_Behind_the_Big_Bad_Burger_and_Other_Tales_of_Business_Intelligence Read the above article and discuss the following: A) What does business intelligence really mean to a business? B) What are the negative impacts of business intelligence? C) How does a database and data warehouse support business intelligence? D) Any other thoughts or insights you have into this chapter and this case
- 9.6 Explain the problem associated with business intelligence. Describe the solution to this business problem. The issue most organizations are facing today is that it is next to impossible to understand their own strengths and weaknesses, let alone their enemies, because the enormous amount of organizational data is inaccessible to all but the IT department. Please note that organization data includes far more than simple fields in a database, it also includes voice mails, customer phone calls, text messages, video clips, along with the numerous new forms of data organizations are storing. The Problem: Data Rich: Information Poor 9.7 Describe the three common forms of data-mining analysis? The more common forms of data-mining analysis capabilities include: Cluster analysis: Cluster analysis is a technique used to divide an information set into mutually exclusive groups such that the members of each group are as close together as possible to one another and the different groups are as far apart as possible. Cluster analysis is frequently used to segment customer information for customer relationship management systems to help organizations identify customers with similar behavioral traits, such as clusters of best customers or one-time customers. Association detection: Association detection reveals the degree to which variables are related and the nature and frequency of these relationships in the information. Maytag’s warranty analysis tool, for instance, uses statistical analysis to automatically detect potential issues, provide quick and easy access to reports, and perform multidimensional analysis on all warranty information. This association detection data-mining tool enables Maytag’s managers to take proactive measures to control product defects even before most of its customers are aware of the defect. The tool also allows Maytag personnel to devote more time to value-added tasks such as ensuring high quality on all products rather than waiting for or manually analyzing monthly reports. Statistical analysis: Statistical analysis performs such functions as information correlations, distributions, calculations, and variance analysis, just to name a few. Data-mining tools offer knowledge workers a wide range of powerful statistical capabilities so they can quickly build a variety of statistical models, examine the models’ assumptions and validity, and compare and contrast the various models to determine the best one for a particular business issue. 9.8 Compare tactical, operational, and strategic BI. See the IM for detailed answer
- 9.9 Explain the organization-wide benefits of BI. Richard Hackathorn of Bolder Technologies developed an interesting graph to demonstrate the value of operational BI. Figure 9.16 shows the three latencies that impact the speed of decision making. These are data, analysis, and decision latencies. Data latency is the time duration to make data ready for analysis, i.e., the time for extracting, transforming, and cleansing the data, and loading it into the database. All this can take time depending on the state of the operational data to begin with. Analysis latency is the time from which data is made available to the time when analysis is complete. Its length depends on the time it takes a business to do analysis. Usually, we think of this as the time it takes a human to do the analysis, but this can be decreased by the use of automated analytics that have thresholds. When the thresholds are exceeded, alerts or alarms can be issued to appropriate personnel, or they can cause exception processes to be initiated with no human intervention needed. Decision latency is the time it takes a human to comprehend the analytic result and determine an appropriate action. This form of latency is very difficult to reduce. The ability to remove the decision making process from the human and automate it will greatly reduce the overall decision latency. Many forward thinking companies are doing just that. For example, rather than send a high value customer a letter informing them of a bounced check (which takes days to get to the customer), an automated system can simply send them an immediate email or voice message informing them of the problem. 9.10 Describe the four categories of BI business benefits. A practical way of breaking down these numerous benefits is to separate them into four main categories: Quantifiable benefits: Quantifiable benefits include working time saved in producing reports, selling information to suppliers, etc. Indirectly quantifiable benefits : Indirectly quantifiable benefits can be evaluated through indirect evidence— improved customer service means new business from the same customer, and differentiated service brings new customers. Unpredictable benefits: Unpredictable benefits are the result of discoveries made by creative users and a few Intangible benefits: Intangible benefits include improved communication throughout the enterprise, improved job satisfaction of empowered users, and improved knowledge sharing.
- An early reference to business intelligence occurs in Sun Tzu’s book The Art of War. Sun Tzu claims that to succeed in war, one should have full knowledge of one’s own strengths and weaknesses and full knowledge of the enemy’s strengths and weaknesses. Lack of either one might result in defeat.
- As businesses increase their reliance on enterprise systems such as CRM, they are rapidly accumulating vast amounts of data. Every interaction between departments or with the outside world, historical information on past transactions, as well as external market information, is entered into information systems for future use and access. CLASSROOM VIDEO Microsoft BI Intelligence Videos Excellent video to jumpstart your BI lecture. Is there any business intelligence out there? Mike Arcuri, group program manager on the business intelligence team shows off Excel 12's new features for looking at how your business is doing. You'll never look at pivot tables the same way again. http://video.aol.com/video-detail/business-intelligence-in-excel-2007/538243300
- For instance, giving a customer a discount may or may not help the bottom line, depending on the profitability of the client over the duration of the relationship. To improve the quality of business decisions, managers can provide existing staff with BI systems and tools that can assist them in making better, more informed decisions. The result creates an agile intelligent enterprise. A few examples of using BI to make informed business decisions include: Retail and sales: Predicting sales; determining correct inventory levels and distribution schedules among outlets; and loss prevention. Banking: Forecasting levels of bad loans and fraudulent credit card use, credit card spending by new customers, and which kinds of customers will best respond to (and qualify for) new loan offers. Operations management: Predicting machinery failures; finding key factors that control optimization of manufacturing capacity. Brokerage and securities trading: Predicting when bond prices will change; forecasting the range of stock fluctuations for particular issues and the overall market; determining when to buy or sell stocks. Insurance: Forecasting claim amounts and medical coverage costs; classifying the most important elements that affect medical coverage; predicting which customers will buy new insurance policies.
- The solution of implementing business intelligence systems and tools allows business users to receive data for analysis that is: Reliable. The data have been documented as the certified or approved data for the enterprise. The business users are confident that the data are the best possible and that they suit the decision-making purposes. Consistent. The processes that deliver the data to the business community are well documented; there are no surprises such as missing or inaccurate data in the mix, analytics that will not run, response times that are unpredictable. Understandable. The data have been defined in business terms; calculations and algorithms are easily accessed for comprehension. These are documented in a data dictionary or metadata repository that is easy to access and understand. Easily manipulated. It is no longer required to have a PhD in statistics to get sophisticated analytics delivered to users’ fingertips. And it is just as easy to change the question or set different parameters to twist and turn the data in ways unimaginable just a few years ago.
- The figure displays how organizations using BI can find the root causes to problems and provide solutions simply by asking “Why?” The process is initiated by analyzing a global report, say of sales per quarter. Every answer is followed by a new question, and users can drill deep down into a report to get to fundamental causes. Once they have a clear understanding of root causes, they can take highly effective action. Finding the answers to tough business questions by using data that is reliable, consistent, understandable, and easily manipulated allows a business to gain valuable insight into such things as: Where the business has been. Historical perspective is always important in determining trends and patterns of behavior. Where it is now. Current situations are critical to either modify if not acceptable or encourage if they are trending in the right direction. And where it will be in the near future. Being able to predict with surety the direction of the company is critical to sound planning and to creating sound business strategies.
- Two trends are displayed when viewing the spectrum from operational through tactical to strategic. First, the analysis becomes increasingly complex and ad hoc. That is, it is less repetitive, less predictable, and it requires varying amounts and types of data. Second, both the risks and rewards of the analysis increase. That is, the often time-consuming, more strategic queries produce value less frequently but, when they do, the value can be extraordinary. CLASSROOM EXERCISE - ETHICS AND BI Mining Physician Data Listen to the NPR story at: http://www.npr.org/templates/story/story.php?storyId=11382945 Answer the following questions 1) Do you agree that mining physician data should be illegal? Why or why not? 2) As a patient how do you feel about pharmaceutical companies mining your doctor's data? 3) As an employee of one of the pharmaceutical companies how do you feel about mining physician data?
- Ask your students if they can differentiate between operational, tactical, and strategic BI and to give examples of each CLASSROOM VIDEO Illuminate Your Data Great video by Microsoft on Data. Data is growing at an alarming rate. So how do you keep the vast amounts of data in your company accessible, while still being mindful of the latest regulatory and compliance mandates? Watch this new Webcast and find out. In this Webcast, trusted advisors look at the effects of the data explosion and solutions to manage it. They discuss the changes in business intelligence and analytics, and how these changes affect the information infrastructure. http://www.itbriefingcenter.com/programs/gartner_msftsql_smb.html
- These three forms are not performed in isolation from each other. It is important to understand that they must work with each other, feeding results from strategic to tactical to promote better operational decision making. This Figure demonstrates this synergy. In this example, strategic BI is used in the planning stages of a marketing campaign. The results of these analytics form the basis for the beginnings of a new campaign, targeting specific customers or demographics, for example. The daily analyses of the campaign are used by the more tactical form of BI to change the course of the campaign if its results are not tracking where expected. CLASSROOM VIDEO BI for Restaurants Good video, especially if you teach Excel and Access in your course - helps show the students why they need to learn these tools. Video shows how a major restaurateur has used Microsoft Office technologies to improve efficiency, lower costs, and identify key business trends to help keep them ahead of their competition. http://www.microsoft.com/office/showcase/restaurantbi/demo.mspx
- Richard Hackathorn of Bolder Technologies developed an interesting graph to demonstrate the value of operational BI. This Figure shows the three latencies that impact the speed of decision making. These are data, analysis, and decision latencies. Data latency is the time duration to make data ready for analysis (i.e., the time for extracting, transforming, and cleansing the data), and loading the data into the database. All this can take time depending on the state of the operational data to begin with. Analysis latency is the time from which data are made available to the time when analysis is complete. Its length depends on the time it takes a business to do analysis. Usually, we think of this as the time it takes a human to do the analysis, but this can be decreased by the use of automated analytics that have thresholds. When the thresholds are exceeded, alerts or alarms can be issued to appropriate personnel, or they can cause exception processes to be initiated with no human intervention needed. Decision latency is the time it takes a human to comprehend the analytic result and determine an appropriate action. This form of latency is very difficult to reduce. The ability to remove the decision-making process from the human and automate it will greatly reduce the overall decision latency. Many forward thinking companies are doing just that. For example, rather than send a high value customer a letter informing him of a bounced check (which takes days to get to the customer), an automated system can simply send an immediate email or voice message informing the customer of the problem
- The best time to influence customers is not after they have left the store or the website. It is while they are still in the store or still wandering around the website. For example, a customer who is searching a website for travel deals is far more likely to be influenced by appropriate messaging actions then and there. Actions taken immediately, while customers are still in the site, might include: Offering customers an appropriate coupon for the trip they showed interest in while searching for cheap airfares. Giving customers information about their current purchase such as the suggestion that visas are needed. Congratulating them on reaching a certain frequent-buyer level and giving them 10 percent off an item. A website represents another great opportunity to influence a customer, if the interactions are appropriate and timely. For example: A banner could announce the next best product to offer right after the customer puts an item in her basket. The customer could receive an offer for a product he just removed from his shopping basket. Appropriate instructions for the use of a product could come up on the customer’s screen; perhaps warning a parent that the product should not be used by children under three.
- Data mining approaches decision making with basically a few different activities in mind including: Classification —assign records to one of a predefined set of classes. Estimation — determine values for an unknown continuous variable behavior or estimated future value. Affinity grouping — determine which things go together. Clustering — segment a heterogeneous population of records into a number of more homogeneous subgroups. CLASSROOM EXERCISE Ask A Ninja.COM If you need some insight into just about anything you can visit AskANija.com http://askaninja.com/ I like to show this site to my students and ask why this site is so successful? Why would people assume that just because someone is dressed as a Nija they are knowledgeable about all subjects? This leads to a great discussion on how can you validate business intelligence. How do you know the data or analysis you are receiving is from a credible source? Can you prove the data is complete, accurate, etc? Makes for an interesting classroom discussion.
- Can you explain the difference between cluster analysis, association detection, and statistical analysis? Cluster analysis - a technique used to divide an information set into mutually exclusive groups such that the members of each group are as close together as possible to one another and the different groups are as far apart as possible Association detection – reveals the degree to which variables are related and the nature and frequency of these relationships in the information Statistical analysis – performs such functions as information correlations, distributions, calculations, and variance analysis Cluster analysis, association detection, and statistical analysis are covered in detail over the next few slides
- Some examples of cluster analysis include: Consumer goods by content, brand loyalty or similarity Product market typology for tailoring sales strategies Retail store layouts and sales performances Corporate decision strategies using social preferences Control, communication, and distribution of organizations Industry processes, products, and materials Design of assembly line control functions Character recognition logic in OCR readers Data base relationships in management information systems
- Maytag uses association detection to ensure that each generation of appliances is better than the previous generation Maytag’s warranty analysis tool automatically detects potential issues, provides quick and easy access to reports, and performs multidimensional analysis on all warranty information Market basket analysis – analyzes such items as Web sites and checkout scanner information to detect customers’ buying behavior and predict future behavior by identifying affinities among customers’ choices of products and services
- Kraft uses statistical analysis to assure consistent flavor, color, aroma, texture, and appearance for all of its lines of foods Kraft evaluates every manufacturing procedure, from recipe instructions to cookie dough shapes and sizes to ensure that the billions of Kraft products that reach consumers each year taste great (and the same) with every bite Nestle Italiana uses data mining and statistical analysis to determine production forecasts for seasonal confectionery products The company’s data-mining solution gathers, organizes, and analyzes massive volumes of information to produce powerful models that identify trends and predict confectionery sales
- CLASSROOM EXERCISE Apple’s Customer Strategy When shoppers sleep outside of stores just to be one of the first to buy an iPhone, it's obvious that Apple Inc. is a company that enjoys fanatical brand loyalty. However, this brand success is not a result of dumb luck or forces beyond Apple's control; it's part of a well-thought-out plan to deliver strong products and create an Apple culture. Find out more about these and other strategies that Apple employs to achieve its tremendous customer loyalty. http://www.insidecrm.com/features/strategies-apple-loyal-customers/ Single Point of Access to Information for All Users With a BI solution, organizations can unlock information held within their databases by giving authorized users a single point of access to data. Wherever the data reside, whether stored in operational systems, data warehouses, data marts and/or enterprise applications, users can prepare reports and drill deep down into the information to understand what drives their business, without technical knowledge of the underlying data structures. The most successful BI applications allow users to do this with an easy-to-understand, nontechnical, graphical user interface. BI across Organizational Departments There are many different uses for BI and one of its greatest benefits is that it can be used at every step in the value chain. All departments across an organization from sales to operations to customer service can benefit from the value of BI. Volkswagen AG uses BI to track, understand, and manage data in every department—from finance, production, and development, to research, sales and marketing, and purchasing. Users at all levels of the organization access supplier and customer reports relating to online requests and negotiations, vehicle launches, and vehicle capacity management and tracking. Up-to-the-Minute Information for Everyone The key to unlocking information is to give users the tools to quickly and easily find immediate answers to their questions. Some users will be satisfied with standard reports that are updated on a regular basis, such as current inventory reports, sales per channel, or customer status reports. However, the answers these reports yield can lead to new questions. Some users will want dynamic access to information. The information that a user finds in a report will trigger more questions, and these questions will not be answered in a prepackaged report.
- Quantifiable Benefits Quantifiable benefits include working time saved in producing reports, selling information to suppliers, and so on. A few examples include: Moët et Chandon, the famous champagne producer, reduced its IT costs from approximately 30 cents per bottle to 15. A leading risk insurance company provides customers with self-service access to their information in the insurance company’s database and no longer sends paper reports. This one benefit alone saves the organization $400,000 a year in printing and shipping costs. The total three-year ROI for this BI deployment was 249 percent. Indirectly Quantifiable Benefits Indirectly quantifiable benefits can be evaluated through indirect evidence—improved customer service means new business from the same customer, and differentiated service brings new customers. A few examples include: A customer of Owens & Minor cited extranet access to the data warehouse as the primary reason for giving the medical supplies distributor an additional $44 million in business. Unpredictable Benefits Unpredictable benefits are the result of discoveries made by creative users; a few examples include: Volkswagen’s finance BI system allowed an interesting discovery that later resulted insignificant new revenue. The customers of a particular model of the Audi product line had completely different behaviors than customers of other cars. Based on their socioeconomic profiles, they were thought to want long lease terms and fairly large upfront payments. Instead, the information revealed that Audi customers actually wanted shorter leases and to finance a large part of the purchase through the lease. Based on that insight, the company immediately introduced a new program combining shorter length of lease, larger upfront payments, and aggressive leasing rates, especially for that car model. The interest in the new program was immediate, resulting in over $2 million in new revenue. Intangible Benefits Intangible benefits include improved communication throughout the enterprise, improved job satisfaction of empowered users, and improved knowledge sharing. A few examples include: The corporate human resources department at ABN AMRO Bank uses BI to gain insight into its workforce by analyzing information on such items as gender, age, tenure, and compensation. Thanks to this sharing of intellectual capital, the HR department is in a better position to demonstrate its performance and contribution to the business successes of the corporation as a whole.
- 6. Explain the problems of gathering business intelligence form car accidents. How can BI solve this problem and help Progressive Insurance become more efficient and more effective? The primary problem with gathering BI from car accidents is that there are many different people involved in the accident who all have different stories on how the accident occurred. People are also very vulnerable after a car accident and have a hard time detailing the situation. Progressive can use BI to plan for common accidents and try to avoid them, to help give common details surrounding accidents to help the insurance agents understand the circumstances, and to give association detection and cluster analysis benefits to potential accidents. 7. Choose one of the three common forms of data-mining analysis and explain how Progressive Insurance can use it to gain BI. The more common forms of data-mining analysis capabilities include: • Cluster analysis: Progressive insurance can use cluster analysis to determine common factors in driving patterns and accident information. By understanding the information surrounding accidents they can begin to understand weather patterns, time of day, and driver characteristics and how they all impact each other. • Association detection: Progressive Insurance could start to understand how the age of the car and common accidents occur and warn drivers prior to any issues – or raise rates for certain types of vehicles with certain types of drivers such as a sports car with a young driver. • Statistical analysis: Progressive Insurance could use statistical analysis to understand all of the correlations that occur during an accident, such as talking on a cell phone while driving.
- 8. How can Mini use tactical, operational, and strategic BI. Operational BI can help Progressive Insurance manage their daily operations such as how many car accidents occurred today, what types, how much do we need to pay in repairs, how much are we getting in from customers. Tactical BI can help Progressive conduct short-term analysis to meet company goals such as gaining new customers per month, decreasing car accidents, etc. Strategic BI can help Progressive Insurance achieve long-term organizational goals. 9. What types of ethical and security issues will companies face when using business intelligence? The security and ethical issues associated with BI are the same as any information technology including: Information theft Information misuse Hackers Viruses Information privacy
- 1. What are the two different types of CRM and how can they be used to help an organization gain a competitive advantage? Customer relationship management involves managing all aspects of a customer’s relationship with an organization to increase customer loyalty and retention and an organization’s profitability. Operational CRM supports traditional transactional processing for day-to-day front-office operational or systems that deal directly with the customers. Analytical CRM supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers. Analytical CRM relies heavily on data warehousing technologies and business intelligence to glean insights into customer behavior. These systems quickly aggregate, analyze, and disseminate customer information throughout an organization. Analytical CRM has the ability to provide an organization with information about their customers and constituents that was previously impossible to locate, and the resulting payback can be tremendous. 2. Explain how a contact center (or call center) can help an organization achieve its CRM goals A contact center is part of the customer service department and falls into the category of operational CRM. A contact center (call center) is where CSRs answer customer inquiries and respond to problems through different touchpoints. A contact center is one of the best assets a customer-driven organization can have because maintaining a high level of customer support is critical to obtaining and retaining customers. There are numerous systems available to help an organization automate its contact centers including: Automatic call distribution – a phone switch routes inbound calls to available agents Interactive voice response (IVR) – directs customers to use touch-tone phones or keywords to navigate or provide information Predictive dialing – automatically dials outbound calls and when someone answers, the call is forwarded to an available agent 3. Describe three ways an organization can perform CRM functions over the Internet Intranets are a great way to provide information to important customers over the Internet. Organizations can push information to their customers with e-mails discussing new promotions and sales. Offering a Web site that is user friendly is one of the best ways to offer customer support and sales over the Internet.
- 4. How will outsourcing contact centers (call centers) to Canada change as future CRM technologies replace current CRM technologies? CRM future trends include: CRM applications will change from employee-only tools to tools used by suppliers, partners, and even customers CRM will continue to be a major strategic focus for companies CRM applications will continue to adapt wireless capabilities supporting mobile sales and mobile customers CRM suites will incorporate PRM and SRM modules
- 1. How could the ACS’s marketing department use operational CRM to strengthen its relationships with its customers The ACS can use operational CRM to gain a single view of its constituents and all information required to serve them. Three marketing operational CRM technologies that the ACS could use include list generators, campaign management systems, and cross-selling and up-selling. List generators compile customer information from a variety of sources and segment the information for different marketing campaigns. Campaign management systems guide users through marketing campaigns. Cross-selling is selling additional products or services. Up-selling is increasing the value of the sale. 2. How could the ACS’s customer service department use operational CRM to strengthen its relationships with its customers? There are three primary customer service operational CRM technologies that the ACS could use to strengthen its relationships with its customers including contact centers, web-based self-service, and call scripting. Contact center (call center) is where CSRs answer customer inquiries and respond to problems through different touchpoints. Web-based self-service allows customers to use the Web to find answers to their questions or solutions to their problems. Call scripting accesses organizational databases that track similar issues or questions and automatically generates the details to the CSR, who can then relay them to the customer. 3. Review all of the operational CRM technologies and determine which one would add the greatest value to ACS’s business Student answers to this question will vary. The important factor in this decision will be the students’ justification for their answer.
- 4. Describe the benefits ACS could gain from using analytical CRM Analytical CRM relies heavily on data warehousing technologies and business intelligence to glean insights into customer behavior. These systems quickly aggregate, analyze, and disseminate customer information throughout an organization. Analytical CRM has the ability to provide the ACS with information about their customers and constituents that was previously impossible to locate, and the resulting payback can be tremendous. The business intelligence provided by an analytical CRM system can provide the ACS with facts that can help lead to innovative cancer drugs and the possible elimination of the disease. 5. Summarize SRM and describe how ACS could use it to increase efficiency in its business Supplier relationship management (SRM) focuses on keeping suppliers satisfied by evaluating and categorizing suppliers for different projects, which optimizes supplier selection. SRM applications help companies analyze vendors based on a number of key variables including strategy, business goals, prices, and markets. The company can then determine the best supplier to collaborate with and can work on developing strong supplier relationships with that supplier. The partners can then work together to streamline processes, outsource services, and provide products that they could not provide individually. 6. How could BI and data mining help fight cancer? BI and data mining could help uncover patterns in the data and find links between causes and problems. It could also uncover information in treatment for success. The BI that could be uncovered is exciting!
- 1. What is the problem of gathering business intelligence from a traditional company? How can BI solve this problem? The problem with gathering business intelligence from a traditional company is that information is stored everywhere in different formats. It is stored in old databases, on paper, in people’s minds. If the information is old it will not have current information needs such as fax number, email address, website, etc. as these were not around a decade or so ago. If the company takes the time to cleanse its data it could find all of the missing and inaccurate information so it could begin mining its information for business intelligence. 2. Choose one of the three common forms of data-mining analysis and explain how Travelocity could use it to gain BI. The more common forms of data-mining analysis capabilities include: Cluster analysis: Travelocity could use customer analysis to segment customers and create individualized offers based on buying trends and vacation spot availability. Association detection: Travelocity could use association detection to determine which vacations are at risk due to weather or political issues within the country and alter potential travelers to these issues. Statistical analysis: Travelocity could use statistical analysis to offer upgrades and cross-selling to customers booking vacations such as offering to sell golf passes or vacation park passes to customers booking airfares and hotels. 3. How will tactical, operational, and strategic BI be different when applied to personal Google? Personal Google could use strategic BI to help plan marketing campaigns to attract new customers . It could use operational BI to determine how to make its business more efficient and effective including new offerings for customers. It could use tactical BI to ensure everything is running as expected each day and there are no performance issues, or scalability issues. 4. How is IBM’s search and analysis software an example of BI? IBM’s search and analysis software is a perfect example of a BI tool. The tool took thousands of forms and searched for information against Medicaid rules. This would have taken an enormous manual effort, but was fast and efficient using IBM’s tool. A perfect example of BI.
- 5. What does the term “pervasive business intelligence” mean? Pervasive business intelligence means that information is easily available to anybody in an organization. Businesses must look everywhere and at everything to find and determine business intelligence. By having all employees able to access information it makes the business smarter and employees more efficient and effective. You never know where the next big idea or product will come from and you have to be constantly scanning the competitive environment and your own business to find new and exciting ways to operate. 6. How could any business benefit from technology such as Personal Google? As stated above all businesses can benefit from pervasive business intelligence and personal Google is a pervasive business intelligence tool that any organization could benefit from. 7. How could a company use BI to improve its supply chain? Using BI in the supply chain will allow a company to understand in greater detail all areas of the supply chain. For example, it could look at weather patterns and determine how it will impact its supply chain. It could look across businesses and goods and services such as oil and gas and determine the impact on the supply chain for transportation and storage. There are infinite ways BI can impact the supply chain. 8. Highlight any security and ethical issues associated with Biggle. Biggle is the intersection of BI and Google and represents non-obvious relationship awareness. The security and ethical issues associated with Biggle are the same as any technology including: Information theft Information misuse Hackers Viruses Information privacy
- Today’s consumers are skeptical, and they suffer from information overload. The result: They’ll probably ignore the expensive television and print ads your marketing team creates. So how do people decide which car to buy, or which fashions fit the image they are looking for, or what new techno-appliance is a must for their homes? The first section of this book discusses how buzz spreads and the huge social networks to which we all belong and what we know about how buzz spreads through them. The second section identifies two factors that need to be there for buzz to spread. First, the product must be “contagious” in some way. For example, the game Trivial Pursuit was contagious because people who played it were compelled to demonstrate their knowledge to others. But contagion needs to be accelerated. That is the second factor. The marketers of this game executed a massive grassroots campaign that let people in numerous social networks get “infected” by the game and tell others. The third part of the book describes techniques that companies have used to encourage their customers to talk. How BMW created buzz about the Z3 Roadster through a “sneak preview” in a James Bond movie. How the founders of Powerbar spread the word about their energy food by working with “network hubs” such as coaches and leading athletes.
- Loyalty is at the heart of any company that boasts high productivity, solid profits, and sustained growth. For example, Harley-Davidson recovered from near bankruptcy by building loyal relationships with all stakeholders. And Southwest Airlines, which has never had a layoff, is the only consistently profitable major airline in the United States every year since 1973. Frederick Reichheld, author of Loyalty Rules!, argues that loyalty is still the fuel that drives financial success—even, and perhaps especially, in today’s volatile, high-speed economy—but that most organizations are running on empty. Why? Because leaders too often confuse profits with purpose, taking the low road to short-term gains at the expense of employees, customers, and, ultimately, investors. In a business environment that thrives on networks of mutually beneficial relationships, says Reichheld, it is the ability to build strong bonds of loyalty—not short-term profits—that has become the “acid test” of leadership. Based on extensive research into companies from online start-ups to established institutions—including Harley-Davidson, Enterprise Rent-A-Car, Cisco Systems, Dell Computer, Intuit, and more—Reichheld reveals six bedrock principles of loyalty upon which leaders build enduring enterprises. Underscoring that success requires both understanding and measuring loyalty, he couples each principle with straightforward actions that drive measurement systems, compensation, organization, and strategy: 1. Play to win/win: Never profit at the expense of partners. 2. Be picky: Membership must be a privilege. 3. Keep it simple: Reduce complexity for speed and flexibility. 4. Reward the right results: Worthy partners deserve worthy goals. 5. Listen hard and talk straight: Insist on honest, two-way communication and learning. 6. Preach what you practice: Explain your principles, then live by them. Providing tools for implementing the timeless principles of loyalty in a volatile economy, Loyalty Rules! is a practical guidebook for taking the high road in business—the only road that leads to lasting success.