Customer Relationship Management and Business Intelligence

Question One - What is your understanding of CRM?

Customer Relationship Management (CRM) is the managing of all aspects of a customer's relationship with an organisation. The benefit of CRM is the increase in customer loyalty and retention, which correlates to the profitability of an organisation. In essence, the communications between an organisation and their customers are seen to be "friendlier", and organisations hence appear less focused on gaining profits and more focused on customer satisfaction. The main intention of CRM is to keep existing customers rather than apply effort to find new customers.

CRM is a business tool that has increased substantially in popularity over the past ten years. Christopher Musico reports upon this finding in 2009, noting that over the past five years, the CRM Market had consistently grown, and from 2008-2009, the market increased by 12.5%. The full text can be found at http://www.destinationcrm.com/Articles/CRM-News/Daily-News/CRM-Market-Grows-for-Fifth-Straight-Year-55275.aspx.

Question Two - Compare operational and analytical customer relationship management.

Operational CRM - supports traditional transactional processing for day-to-day, front of office operations or systems that deal directly with the customers. An example of an operational CRM system is Microsoft Dynamics CRM, where the CRM system is designed to integrate with standard Microsoft programs, such as Outlook and Excel. Product information can be found at the following link: http://crm.dynamics.com/.

Analytical CRM - supports back-office operations and strategic analysis and includes all systems that do not deal directly with the customers. Analytical CRM systems focus on long-term customer relationship management. These CRM systems are used to mine large amounts of data in order to map customer trends. Analytical CRM systems work in conjunction with Operational CRM systems to provide the most reliable customer information and profiles.

Question Three - Describe and differentiate the CRM technologies used by marketing departments and sales departments.

In Marketing Departments, operational CRM is used through campaign management systems, where users are guided through the formation and implementation of marketing campaigns. Operational CRM assists through looking at the costs associated with implementing and maintaining such a campaign. It can also be used to form customer profiles to assist in the selection of a target market which would be the focus of the campaign.

In Sales Departments, operational CRM is used mainly to automate the sales process. Such systems allow sales persons to coordinate their occupation and streamline the business processes they use most. Functions such as calenders, reminder systems, and contact databases can be used by sales departments as a way to automate the sales process.

Question Four - How could a sales department use operational CRM technologies?

An Operational CRM System would benefit a sales department on a day-to-day basis through:

• Generating lists - customer information from a variety of sources is complied and segmented for different marketing campaigns
• Cross-selling and up-selling - CRM systems can be implemented to make it easier to add further products to the sale (cross-selling) or increasing the value of a sale (up-selling

Question Five - Describe business intelligence and its value to businesses.

Business intelligence is the technology that provides data to support strategic decision making within the executive levels of an organisation. Business intelligence relies heavily upon data mining, whereby large amounts of data are analysed to map out patterns and trends. The following link shows how data can be mined to extract common themes and patterns that may emerge when large amounts of data are analysed. http://www.youtube.com/watch?v=Pzh1D-_0hQA.

Question Six - Explain the problem associated with business intelligence. Describe the solution to this business problem.

The main problem associated with business intelligence is that companies are data rich and information poor, i.e.companies have access to so much data that they cannot distinguish between what is valuable to them and what is not. The consequences of this includes a diminished opportunity to compete with other firms, and the inability to decide upon the best tactical move for a business to take, given the fact that they have an abundance of data but a lack of information and knowledge.

The solution to this problem is business intelligence. As data mining methods can be used to analyse such vast amount of data, the data will be converted into more useful formats and therefore, functional areas have an increased opportunity to use such information in their own specific decision making situations

Question Seven - What are two possible outcomes a company could get from using data mining?

• Increase in profits - data mining revels trends that can be targeted in future advertising and marketing campaigns.
• Better deployment of resources - data mining will highlight trends that may also indicate what products are most popular and which are least popular, allowing a company to better spend their resources.