IT Strategic Management
IT Strategic Management
1. Identify an organization which is in Retail business and is using e-business and CRM for its operations providing brief history and details of its business.
History of IBM
In the 1886 there was the formation of the Tabulating Machine Company by Herman Hollerith with Thomas J. Watson heading it nine years later. The slogan the company used was ‘Think’. It later altered its name to be the International Business Machines in 1924 (IBM, 2012). Acquisition by the United States government then followed at the start of the Second World War and was able to amass 1% in profit that supported victims of the war.
At the period around 1910 and 1960, it advanced products arising from punch-card tabulating machines to room-sized calculators to mainframe machines for big companies and altered its method in accounting, computation and primary back-office business management.
Around the 70s and 80s, IBM had its product lines grow from local mainframes to minicomputers and personal computers and application shifted to backend management to departmental management. In 1981, IBM came up with the IBM Personal Computer that made it possible for students to use them in their learning institutions, homes and places of work. Parts of the computer were outsourced to other companies (Ramaseshan, et al, 2006, 200; Strauss et al, 2003, 30). The processor chip originated from Intel and system that was running at the time was DOS (Disk Operating System) that originated from Microsoft.
IBM came up with the ThinkPad in 1992, the first of a number of notebook computers that were processed from the company. Three years later, the company took possession of Lotus Development Corporation as well as the Tivoli Systems. N 1997, the company showed the ability of the computer using a Deep Blue, 32-node IBM RS/6000 SP computer that was able to play chess on the international stage.
It is at the nineties, with the help the Internet and open standards, that IBM encompassed the network computing model and came up with the term ‘e-business’ which is used to describe how the network computing is able to change vital business and operations (Lindgreen, 2004, 166).
By October 2002, IBM took possession of PwC Consulting, the global management consulting and technology services unit owned by PwC. The company sold off a good number of its hard drives to the Hitachi Company three months later. The sale took comprised of the formation of an all-inclusive undertaking termed to as Hitachi Global Storage Technologies that had 70% of its ownership to Hitachi.
In 2003, IBM undertook research that started the On Demand Innovation Services, which got support from clients with a group of researchers that are concerned with business transformation and technology consulting (Ramaseshan, et al, 2006, 201). Approximately one billion will be used in the next three years and will be composed of employees of 200 IBM research consultants.
Currently, IBM is one of the biggest information technology company internationally and the eighth biggest globally. By 2003, its revenues accumulated to $89.1 billion with a net income of 4.32 and over 366, 000 in staff from over 160 nations which shows about 60% of revenue acquired externally from the US.
Vision: IBM’s vision is to have success in microprocessor architecture which allows broadband communications to be placed correctly on a chip.
Mission: Its mission is aiming to manage its operation in the invention, advancement and processing of the company’s well developed information technologies as well as computer systems, software and microelectronics.
2. Describe how the organization is using the CRM along with e-business to gain competitive advantage for its business.
IBM business and key projects
The market has been known to change constantly, it is hence vital that for company to sustain itself in such a market situation it has to keep up with the change. IBM has been able to come up with Customer Operations Transformations solution (IBM, 2012). This has been made so as to assist utilities to connect well with the new clients with regard to a continued flexible relationship (Smith, 200, 90). With the help of IBM services, hardware and software and its huge network of associations this strong solution has made it possible for utilities to leverage a developed technology and is able to acquire vital business needs like the market and regulatory environment transformation. As a result, the utilities make it possible to have a balance between supply and demand, acquire invaluable client insights and elevate client service rating, while limiting its operational cost and threat.
IBM has been able to create the solution based on a suite of an all comprising offerings: Customer Management, Customer Contact Center and their systems (Silverman, 1998, 6). The offerings involve the company’s skilled gained from an extended time period in the industry and utility sector.
Business leaders like IBM have to get the relevance in high performance, efficiency and reaction to supply chains in acquiring market demands as well as maintaining competitive advantage (Bolton, 2004, 46). From managing suppliers and procurement operations using planning, managing and inventory aspects business front runners are keen in making what they do to be efficient. This is composed of elevating responsiveness to clients, limiting energy among other things, maximizing vital procedures, using technology to automate procedures, increasing capital and integrating business procedures.
Operations and Supply Chain services are keen on noting and quantifying supply chain advancement and helping customers in altering their operations, from the suppliers to the clients in controlling competitive advantage (Bolton, 2004, 44).
IBM has the biggest portfolios of alliances with a front line and growing supply chain retailers, hence creating a source for a front line and extensive operations and supply chain management matters. IBM issues advice and process modelling services for vital supply chain actions as well as supply and demand tendencies. Its services are logistics, procurement change, profit elevation and supply chain sustainability among others.
Application Projects of E-business and CRM in IBM
Due to a number of retailers who aiming to note, advance and sustain their profit clients, the application of e-business in precise being the customer relationship management (CRM). CRM is basically a strategy that is applied so as to: refine insights into what a client needs and desires, advance the intended value propositions with regard to the effects of these desires, be keen on marketing and other resources on the clients that will offer the best value to the retail organization (Bohling, 2006, 188). IBM as a company strategy to e-business CRM creates on these aspects with complete solution issuing modeled for multichannel, client-based retailers.
The IBM e-business retail CRM solution makes it possible for retailers to manage sales and revenue through creating client loyalty, advancing visit frequency and improving spend for every visit in all of the several media.
The IBM e-business solution for retail CRM is composed of hardware, software, applications, model blueprints and consulting services so as to create the infrastructure needed for management operation of a constant shopper/client loyalty program, business intelligence and reporting among others as well as client contact in all of the retail media.
IBM has formed this e-business retail CRM solution in regards to a number of principles; the solution has to make it possible for consolidation focus of the client, with the ability to get and update client details. There is also a single view of the client that has to be involved in the details from the start as well as physical storage, telephone and client and retailer-made connections (Bolton, 2004, 48; (IBM, 2012). The applications are not meant to get all of the aspects and the prevailing best breed solutions may be improved in the future, these solutions will be improved as time goes by and hence the model that will be depended on has to have special abilities on precise applications (Light, 2001, 1233). Another aspect is that the procedure and evaluation has to connect to the CRM, the model has to be dynamic so as to make it possible for retailers to later what they need.
The central part of the solution is a client data warehouse. It allows the complete range of client operations and associations from several locations around the world. It is still dynamic so as to be integrated into a number of analysis tools. To have the ability to handle massive data that is produced by client associations (Pinto, & Slevin, 1987, 22). It plays the role of data repository and method through which tools and applications are engaged in work as one.
IBM undertake constant an flexible flow of client details in the data warehouse, to which it is integrated with other business intelligence details, then evaluated with the help of tools. The evaluation details control the choices on marketing, client service and planning that may in the end impact client information.
Best-of-breed facilities are applied constantly and where viable. For instance, the same query tool is applied for client evaluation, promotion analysis and reaction analysis. Without regard to the significance or the ability, IBM notes that company precise details are vital (Pinto, & Slevin, 1987, 23). This is the reason why the solution is comprised of a retail-precise client details data model and analysis report.
Retailers have applied a number of solution aspects in a better way. There is though the genuine benefit of retail CRM are well known with an integrated method.
It is well known that the retail CRM creates major advantages to the retailers; it advances the real solutions that need keen planning and consideration (Kotorov, 2003, 567). This is the reason as to why IBM applied the e-business retail CRM solution with the help of a four phased e-business strategy:
• Transform vital business operations: this is achieved by focusing on the customer and increasing the interaction with the clients as well as increasing as increasing the number of channels that are there in retailing.
• Create new applications: this has been made possible through the use of loyalty cards model, advancement of promotions, and creation of services through the internet and storage of data of the company.
• Operate a scalable, accessible and secure setting: this has been acquired through an all-time retailing service, offering business intelligence in all of the channels, use of company e-business processes and instilling a safe setting for operation.
• Leverage skills and details: this is acquired through going through the company’s past, offering preference to goods and services to the clients.
A good instance where IBM has had success is in the Boots the Chemists, which is company that is based in the United Kingdom and deals in pharmacy, beauty and presents. This retail company began its loyalty program in 1997 with the help of smart cards for the hoppers and presentable menu rewards. Over 10 million cards have been allocated in a year since it began and the Boots led to 4% sales improvement for the strategy (Bolton, 2004, 46; Silverman, 1998, 7). To acquire an added business value of the information the company was acquiring. Boots went to IBM so as to set up a client database.
IBM created a client analysis model and promotion management application for the company. The solution operates on IBM RS/6000SP and DB2 Universal Database System using an AIX OS. It is after two years in operation of the system that the company was able to acquire over 1.2 terabyte of client and operation details.
3. Discuss the key challenges faced by the organization with the implementation of CRM with e-business.
Challenges in the Application of the e-business/ CRM in IBM
As stated above, there are a number of stages that are involved in the implementation of e-business/CRM ((IBM, 2012). There however challenges that arise from these stages that ought to be looked into for a successful implementation in an organization.
a. Transforming the Core Business Operations
For a good number of retailers, this is that stage that has the greatest challenge. This is since it needs the retailers to look carefully into the business stages that they have relied on constantly for a number of years so as to develop their sales and elevate profit. This is though, when one looks into how baldy the client attributes are changing, this stage is quite important (Bohling, 2006, 179; Chen, & Popovich, 2003, 680). The transformation is composed of business stages like: focus on the clients, client interaction and shifting to several channels among others.
Initially, retailers applied a product focus so as to comprehend what a client needs. Inventory was well assessed. Retailers took interest in the goods that were sold highly, the price they went for and the time of the month they went, they then ordered and got more products.
Moving to client focus, though, involves client’s expertise to an inner level. It means looking what clients need first, how it is needed, when where to acquire and means of payment. It is with details that they are able to go above the need of the client (Sin, et al, 2005, 1267). This controls their needs, brings about loyalty and may elevate client spend when they get to be conversant of the products that they were not presented to initially.
Direct marketing assist retailers to note the top clients, the ones that visit them constantly and use a lot of their money as persons. This makes it possible for direct interaction that makes vivid that the retailer is keen in offering the correct good and service when needed. Direct delivery though challenging to most companies like IBM, it shifts from a multichannel. It is here that there are several stores to meet the needs of the clients. Direct communication impacts the client service procedure.
Solution by IBM
IBM has created a number of facilities that would be vital to retailers in meeting the transformation to retail CRM. The most significant is the CRM foundation where with this retailers are able to acquire the setting that they need to direct client information from number of points. They are also able to alter the manner through which retail choices are made.
CRM foundation involves a retail-based client file which upholds clients and tendency evaluation, metrics aspects, reports to assess client dynamics promotion matters and purchase details among others. IBM retail organization consultants are sure of retail and CRM (Chen, & Popovich, 2003, 674; Mguyen, Sherif, & Newby, 2007, 106). They begin with the issues that they have to solve, assess the prevailing techniques and presents solutions that are connected with the extensive strategic goals.
b. Creating New Applications
This is the second stage as well as a challenge that if sorted out would bring about retail CRM that is well aligned. It ought to bring about the application of e-business use that make it possible for one to acquire details regarding clients, integrate with other company’s expert information and share it with others.
This may involve: the Loyalty Card Program which offers clients in depth details regarding themselves in return for a special client number (Bohling, 2006, 186). This number is known in all of the retails stores so as to trace what the client buys and his tendencies and reward him or her.
Promotion management: this involves to know that methods that would be best suited with the loyal clients, retailers require so as to computer and assess the list of day to day operations that are connected to promoting the business involving; planning, management, setting of goals, promotion cost, timing and client-retailer connections among others.
Full-service Website: a flexible internet shows the client browsing abilities on products, create buying s that are safe and acquire services over the internet. Every operation offers retailers another chance to acquire client details.
Enterprise Data Store: this company setup makes it possible for retailers to be part of the data set from POS, call centers and sites and loyalty cards. The composition of details makes it possible to create a focus on the client.
Solution
IBM with the help of its associates have been able to issue an in depth e-business solutions that would vital in acquiring client details on an all-inclusive company-wide basis.
Electronic Marketing: this answer is vital for retailers in offering a card-based loyalty that issues rewards to clients for more visits and elevate spending so as issue their details (Mguyen, Sherif, & Newby, 2007, 104). This additionally makes it possible for retailers to manage electronic marketing with the help of POS, loyalty totaling and coupon management among others. Retailers are able to make use of Electronic Marketing Enterprise solution to sure that clients acquire loyalty rewards without regard to the store that they go to.
Campaign Management: IBM issues three choices for marketing promotions tendencies, they are able offer proven soften packages from IBM to their associates (Gummesson, 2002, 37). The ones that need assessment may be helped to undertake workshop to list their main needs. The retailers that desire to apply promotional management freely are offered precise and models that will be vital to assist them to fast create their promotional management facilities.
c. Operate Scalable, Accessible and Safe Environment
There is no CRM application that is able to create a measurable financial effect if it is not created on a rigid IT system. To operate a scalable, accessible and safe setting, retailers have to make sure that the CRM IT model has these features:
• Daily retailing; these meets client needs.
• Information Access: most of the top leaders need to assess client details that retail CRM acquires. This needs business skills that offer accessibility.
• Security: client details have to be placed safely. This is a challenge to most companies; clients are not able to trust retailers with their personal details. Retailers on the other hand have to safeguard what they know regarding the clients from rivalry.
Solution
IBM is able to solve this through setting international retail CRM solution. It offers software, and hardware that require constant retailing (Chen, & Popovich, 2003, 673). Security is offered to client details as well as offering consultants that make sure that the model is created from the beginning and maximizes in performance.
d. Leverage Expertise and Information
The last stage is that retailers acquire all of the details regarding the clients and use it. This evaluation offers a great implication on retailers. It makes it possible for marketing, client service and store management choices and assists retailers to issue the correct products at the correct time and place.
Assessing client needs is vital to know their services, medium, interaction and goods (Gummesson, 2002, 40). Knowing their details will make the retailer to know what they need, advancing what they need and create loyalty with the profitable client parts.
Solutions
After the retailers know the flow of client details in a data warehouse, evaluation changes profitable data into true client knowledge that makes profit to be acquired through correct choices. The IBM e-business retail CRM solution is composed of an extensive assessment applications starting from primary reporting to complicated data mining for segmentation, scoring and prediction (Mguyen, Sherif, & Newby, 2007, 115; (IBM, 2012). This IBM makes use of this technique in a number of retailer’s stores to manage these issues.
Conclusion
IBM retail CRM Solution is able to handle a number of company’s needs from their rooms to their shops. There is the ability, resources and technology that help in acquiring success. This paper has been able to look at the e-business CRM with regard to IBM. The company’s history and how it came to apply the technology was in focus. This was followed with the areas where this has been applied in the IBM companies so as to acquire success as well as the challenges that have been experienced and going hand in hand with that the solutions to these issues. CRM/e-business has changed how business is done and made it easier for both clients and retailers to manage their needs and meet their goals.
Bibliography
Bohling, T., Bowman, D., LaValle, S., Mittal, V., Narayandas, D., Ramani, G. & Varadajan, R. 2006. CRM Implementation: CRM Implementation: Effectiveness Issues and Insights. Journal of Service Research, 9 (2): 184-94.
Bolton, M., 2004. Customer centric business processing. International Journal of Productivity and Performance Management, 53(1): 44-51.
Chen, I.J., & Popovich, K. 2003. Understanding customer relation-ship management (CRM): People, processes and technology. Business Process Management Journal, 9 (5): 672-88.
Gummesson, E. 2002. Relationship marketing in the new economy. Journal of Relationship Marketing, 1 (1): 37-57.
IBM (2012). Acquired from: http://www.ibm.com
Kotorov, R. 2003. Customer relationship management: strategic lessons and future directions. Business Process Management Journal, 9 (5): 566-71.
Light, B. 2001. A review of the issues associated with customer relationship management systems, in Proceedings of the 9th European Conference on Information Systems, pp. 1232-41.
Lindgreen, A. 2004. The design, implementation and monitoring of a CRM implementation: a case study. Marketing intelligence &Planning, 22 (2): 160-86.
Mguyen, T.-U.H., Sherif, J.S., & Newby, M. 2007. Strategies for successful CRM implementation. Information Management &Computer Security, 15 (2): 102-15.
Pinto, J.K., & Slevin, D.P. 1987. Critical factors in successful project implementation. IEEE Transactions on Engineering Ma-nagement, 34 (1): 22-7.
Ramaseshan, B., Bejou, D., Jain, S.C., Mason, C., Pancras, J. 2006. Issues and Perspectives in Global Relationship Management. Journal of Service Research, 9 (2): 195-207.
Silverman, D. 1998. Qualitative research: meanings or practices? Information Systems Journal, 8 (1): 3-20.
Sin, L.Y.M., Tse, A.C.B., & Yim, F.K. 2005. CRM: conceptualiza-tion and scale development. European Journal of Marketing, 39(11/12): 1264-90.
Smith, A. 2006. CRM and customer service: strategic asset or cor-porate overhead? Handbook of business strategy, pp. 87-93.
Strauss, J., El-Ansary, A., & Frost, R. 2003. E-marketing. Prentice Hall Edition, New Jersey.
