Creating a Customer Relations Management System - Report Example

? Creating a Relations Management System: Business Information Systems Creating a Relations Management System: Business Information Systems Every company looks for a way through which each component of their business will satisfy their clients. They must create a customer relationship management system that manages company interactions with the customers, suppliers and sales prospects throughout the world. The use of information systems can thus not be ruled out as the company seeks to organize, automate and synchronize its business franchises and processes alike. It has to ensure that all departments-sales, marketing, customer care services and technical support-read from the same page in meeting the goals and objectives of the company. The overall goal is to not only meet the goals and the costs of the company but to also nurture and retain client loyalty for their services. This means that the overall goals must at all times be in line with what the clients wants as well as other stakeholders within the system. As such, creating a management information system that targets not only the future but also enticing the past clients will be necessary. These information systems always exist to help organizations to achieve their goals and their objectives by determining the competitive strategy that has all the structures, features and functions that help chart the way forward for the company. It will also help determine how well the company relates to the value chains and business processes within their market. The report herein will examine the best possible means of creating an information system that takes into consideration for the creation of the organizational strategies as well as the increasing digital commerce that has commerce to a whole new level. The porter’s five forces model will be used to evaluate the impact that the internet has had in the overall competition process within different industries and how they have affected the interaction between the business and the clients in relation to competitive strategies. Porter’s Five Forces, CRM, ERD and Competitive Strategy The porter’s five force model seeks to showcase the benefits of understanding the business environment in determining the competitive intensity and thus how appealing a market is from the analysis. This means that as a market, the profitability that a company experiences is much more than any factors that could lead to a negative trend in the profitability curve. There are always external and internal factors that we ought to look out for if the business is to overcome challenges and offer that which clients require (Ehmke et al., 2004). The springing up of the internet and digital commerce has made it easier for clients to indulge the companies in getting what they want as well as improve their services due to increased online presence and consequent competition (Bennett, 2007). The forces, horizontally and vertically aligned in relation to business strategies, deal with the micro-environment since these affect the way a company is able to serve its clients and make profit. The horizontal forces include the threat of substitutes, threat of established rivals and the threat of new entrants. The vertical forces include the bargaining power of suppliers and the bargaining power of customers. These deal with how the company has created its information structures, how they conduct themselves when complaints or suggestions arise and the performance based on the systems they have put in place (Powell, 2001). In this era of the internet, companies have been forced to use all the available technology to focus on the top and bottom lines and expand their market share as well as cut on costs. Basing arguments on the five forces as described by Porter, one notes that the application of the internet into the way things are run in these companies has increased their market share, improved on their interactions with different stakeholders as well as provided a leeway for excellence and competition (Bennett, 2007). The use of the customer relationship management (CRM) system has been equivocal in meeting the goals of the company with a plethora of advantages tied to it. Companies have been able to improve on their quality, efficacy, reduce on costs and increase their profitability by tending to issues that their clients have raised through virtual communication lines. Digital commerce has become the best way of dealing with clients from different remote areas where they can virtually order for anything and get it delivered instantly depending on their location. The use of electronic money transfer has also made it easier to deal with clients without physical presence being required (Hoegh, 2008; Ka-Ping, 2002). However, this has also made it intricate to supervise and handle all these transactions without a comprehensive entry relationship diagram that illustrates how the transactions, entities and company departments are related. Each organization has to create an efficient and effective flow of processed information (Hoegh, 2008; powers, 2001). The process of analyzing the data must be quick enough to travel to all the required departments within a short period of time and accurate enough to assure the client of transparency and create confidence in the system. In any industry, a company has to look at how its systems are affecting its competitive strategy. This strategic advantage has to be guided and strengthen by all means as a way of ensuring that the company positions itself as a strategic company within the company as a whole. This may be based on the resources that the company owns and how they can be used to improve on the business objectives. Porter suggests that companies need to concentrate on pursuing policies that create high-quality goods that will always place them above their rivals (Powell, 2001). As noted, all the features work together to ensure that the company makes more profit despite the environment they may be currently in. Strategic organization of a company will always place it in a better position to market its goods to its clients. The porter’s five models have been affected albeit positively by the growing online commerce with CRM becoming a critical aspect of any business that wants to net as many clients as possible. The ERD assists in creating an efficient means of information processing which is necessary to make sure that structures within the company are still functional and aiming at meeting the goals that it has stipulated (Hoegh, 2008). Porter’s Five Forces Model and the Internet As noted hereinabove, the internet has increased competition with commerce going digital and globalization making it easier to reach as many clients as possible. Buyer power This has been increased due to the presence of many companies to choose from. This means that a company must improve on its quality and add value to its products and services for it to attract and retain more clients at the end of the day. As each company seeks to get this in line, the pace at which they respond to meet the clients’ preferences is what determines what share of the market they can control (Bennett, 2007). For instance, the presence of eBay has made it easier for people to choose the best services based on what the traders are offering and at what prices. Power of existing competitors Bigger companies must thus be wary of the smaller traders who sell their products faster because they are not required to have any inventory made. It is essential to note that many small customers acting as a group can create a strong force that may affect the way they transact with the company. Given the ease through which they can comment and review services anonymously and remotely, the way the company will respond will also affect their future decisions (Bennett, 2007). Supplier power This is considered to be high when buyers have choices on where to acquire their products. However, drop shipping has allowed more people to act as suppliers which allow them to trade without worrying about getting a middleman to handle their business transactions with the client (Ehmke et al., 2004). They are also aware that their power to create a bargain with the retailer provides a chance for them to either form a strong or a weak bond with the company. If they can influence the terms and conditions of the transactions, then they will always have transactions in their favor (Bennett, 2007). How strong or weak a bond is determines the pricing and the level of quality to be offered. Further, it is crucial to understand that the buyers can also play suppliers against each other and this will affect the pricing and the quality as well (Ehmke et al., 2004). The threat of substitute products and services This has to be contained and taken into consideration as well. The online presence of several suppliers has made this threat higher than ever imagined before. Globalization has made it easier to access both quality and cheap products and the internet is accredited for such innovations. Alternatives have also been placed companies on their toes because they have to provide goods that are of higher quality and those that add value to the client’s preferences. A company’s products need to be differentiated to accord them a higher competing advantage against their rivals. Online presence allows a company to prove that their products offer real benefit compared to other products. The reviews that these products get from the users will work either against or for the company. In case it is against, the presence of numerous providers allows the customers to make a fast switch to one that suits their needs. Furthermore, commercial sites offer their pricing (Bennett, 2007). If pricing features as a priority for a client, switching loyalty becomes an instant decision and a greater threat. For instance, Amazon and Barnesandnoble offer online book sales. Smaller companies have also placed themselves strategically to act as a fallback for clients who want cheaper products of the same quality. Competition has thus made it difficult for a company to use only one method of strategic management (Ehmke et al., 2004). The threat of new entrants This needs more consideration. With higher entrance barriers and low exit costs are always preferred. New entrants have a great effect on the way business is conducted. They may push down prices and affect the profitability of a company. Existing companies may result to other tactics such as partnerships or lowering prices to deter entry (Bennett, 2007). Unique barriers that have for a long time been identified as preventing the entry of new companies include regulations and the intended irreversible resource commitments that one must make to ensure that they meet the minimum requirements. With online community growing, such regulatory requirements have been downsized since the uniqueness and costs of the products become the new sources of conflict and competition. If existing companies do not provide the required quality, the digital commerce will always provide an option for people to venture into (Ehmke et al., 2004). Question 2: Creating a CRM Understanding the implication of the above forces means that a company is ready to create a CRM system that allows the ERD relationships to be directly involved in easing the way transactions are carried out in the company. A database that enhances the way people communicate means that the company has met the required conditions to involve their clients in decision-making processes as well as provide an opportunity for the company to fulfill the client’s needs within a specified time (Rainer and Turban, 2009). A database allows the company to create relationships that show how a business runs its operations within a specified framework. The database here will be used to show how the different entities within the company are connected. This is where each company differentiates its operations from the rest by either being a business-to-consumer (B2C) operator, a business-to-business (B2B) operator or a business-to-government (B2G) operator (Hoegh, 2008). By defining their stand, they now create a system that will ensure each of the company’s structures achieves the expected goal. A competitive strategy will only be feasible if the company understands and maximally exploits its chances as a force to reckon with in the digital commerce industry. Companies have sought to make the customer experience better as well as more predefined as each company looks at attracting as many clients to its business (Powell, 2001). It is necessary to be aware that each entry into the digital commerce platform allows a buyer to be open to better products with varying prices and the seller is able to use the information provided to predict elasticity of the client demands (Hoegh, 2008). Question3: The organizational strategy opens a platform through which an organization can determine not only its information system but also determines the value chains and business process. As Porter stipulates, making profit should be the core essence of each business venture (Hoegh, 2008). Each of these can only be made possible by ensuring that the clients have what they want at the exact time they prefer it. It means that the company has to create a business process management model that systematically assigns processes of creating, assessing, implementing and altering business processes in a way that builds the company’s prospects (Rijamampianina, Abratt and February, 2003). There are several features that ought to be taken into consideration when building this information system. Each entity relationship within the database has to be definitive enough and showcase the scope that the company wishes to project. The information system has to define whether the scope is functional (restricted to one department), cross-functional (shared across different departments) or inter-organizational (shared by multiple companies with problem resolution based on negotiations and contract) (Hoegh, 2008). Question 4: The complexity of this system means that the chief technical officer has to indulge into better system design and analysis as the failure to meet the expected goals and the expected customer preferences means that they may lose their position in the market. Each company has an opportunity to create a system that eases communication between different companies. How they use this opportunity either opens or closes their ability to win more loyalty from their clients (Powell, 2001). The online community is very critical and very active. If a company does not play its cards according to the unwritten rules of online marketing and service, the likelihood of losing out on the best way of edging out their rivals is greater. As noted within Porter’s model, the power of the buyer to bargain and play suppliers against each other hurts the company’s prospective. Software requirements: The importance of automation of company services and products pays dividends when done correctly (Hoegh, 2008). The best package must be used as advised by the consultants because their wide knowledge base on the same has made them some of the best in their line of duty and hence the need for getting one as a company (Cieslak and Gaby, 2006). MySQL program is an acknowledged database management program that allows one to easily correct, enter and alter data than a spreadsheet would allow. It will also allow for better management and application within a short period which is required for efficiency in company processes (Lau, 2002; Rainer and Turban, 2009). The ease, at which generation of ideas, information and data means that the company has an enhanced user-website interface that eases, attracts and appeals to the client's preferences when it comes to browsing and internet communication. Any suggestions made must be met and the clients made aware of these changes as a way of encouraging future interactions. With each intricacy, the BPM must allow the company to alter its structure and ably meet the rising demands without shutting down or slowing down the rate at which business is being conducted (Ka-Ping, 2002). Conclusion A good CRM will always depend on the way the ERD system is designed. This means that the database management and design system has to be created to meet the company goals, strategies and competitive objectives within the prescribed timeframe. As a company, meeting and exceeding the customer’s expectations is the ultimate goal. As noted, the presence of technology has placed a heavy burden on the companies as they must prove they are worth the position they have been placed in the market share chart. Clients want something that caters to their needs and their preferences. The presence of competition online has made it easier for loyalty switches from one company to the next. References Bennett, J. (2007). Porter’s five forces model and Internet competition. Ezine articles. Retrieved 2012-09-29 from, http://EzineArticles.com/?expert=Jeffrey_Bennett Cieslak, D., & Gaby, B. (December 2006). Programs Provide Extensive Tools For Adaptability And Customization." CPA Technology Advisor, 16(8): 38. Ehmke, C., Fulton, J., Akridge, J., Erickson, K., & Linton, S. 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