Lecture 9 Flashcards
Information system
a group of parts that work together to collect, process, store, and deliver data, turning it into useful information.
Five-component framework of information systems
information systems consists of:
- hardware (actor)
- software (instructions)
- data (bridge between computer and human side)
- procedures (instructions)
- people (actor)
Information technology
The technology used within an information system (IS) to collect, store, process and share data. Data is stored in these technologies.
Functions of IS
- Operational: Processes routine tasks by managing and automating data.
- Monitoring: Tracks performance and makes forecasts.
- Decision Support: Helps in evaluating alternatives and making decisions.
- Communication: Supports communication within the organization.
Enterprise resource planning (ERP)
An integrated system that connects various business processes and information systems within an organization. It manages and streamlines data and tasks such as finance, inventory management, sales, and production, allowing all departments to work with the same up-to-date information and collaborate more efficiently.
an integrated system that connects and manages key business processes, ensuring all departments work with the same data for better efficiency.
Why would you use an ERP?
- To optimize processes
- To increase efficiency
- To increase effectiveness
- To reduce costs
- Single source of truth (provides a centralized database where everyone works with the same up-to-date data)
Adavantages of ERP
- integration and standardization
- outside connections (easy to integrate with external sytems)
- information availability and synchronicity accross departments
- decision information
- best practices baked into the system
Disadvantages of ERP
- Low Success Rate: Many companies do not achieve the expected benefits on time or overspend.
- High Costs: ERP systems come with high costs, including licensing, consulting, and maintenance.
- Organizational Changes: ERP may require significant changes to company processes, which can clash with company culture, competitive advantages, or innovation. It enforces standard workflows which can hinder innovation.
Consequences of ERP
- Centralizing information: This allows managers to monitor and control processes across multiple locations or departments more easily (span of control)
- Prioritizing control over coordination (centralization)
- Standardizing processes (formalization)
Advantages of ERP
- Integration & Standardization: Helps create a consistent organization, integrates regional differences, and takes advantage of the company’s size for efficiency.
- Outside Connections: Can connect to CRM systems and supply chain systems for smoother business operations.
- Information Availability: Ensures information is available and synchronized across departments.
- Decision Support: Provides reliable data and insights for better decision-making.
- Best Practices: Built-in best practices guide efficient and standardized business operations.
Customer Relationship Management (CRM)
An information system used to manage and coordinate all business processes that involve the customer.
In simpler terms, it’s a collection of tools, a database, and processes that help businesses keep track of and manage interactions with their customers.
Elements of CRM (CRM framework)
- customer acquisition
- customer retention
- customer extension
- customer selection
These are specific stages or strategies in the CRM process that help companies manage and optimize customer relationships. They involve different ways to acquire, retain, and expand customers.
Customer acquisition
Forming relationships to gain new customers
Often through tailored marketing communications like direct mail, email, and visits from sales representatives. These communications explain the features and benefits of services.
Customer retention
Keeping existing customers buying existing products
Personalized communications are used to keep the customer informed about the products offered, fostering loyalty and continued business.
Customer extension
A specific aspect of retention that emphasizes cross-selling (selling additional similar products) and up-selling (encouraging customers to buy higher-value products).
Personalized communications play a key role in motivating customers for further purchases.
Customer selection
Involves targeting customers most likely to respond positively to marketing efforts.
Database analysis and modeling help identify groups of customers, such as those who are likely to engage with specific types of communications.
Operational CRM
Focuses on making interactions smoother and more efficient
Analytical CRM
Focuses on gathering, analyzing and using customer data to inform strategic decisions
