Management Information System Essay

Pages: 10 (3251 words)  ·  Style: Harvard  ·  Bibliography Sources: 8  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business

Management Information Systems

How Customer Relationship Management (CRM) Systems

Are Being Redefined by Social Networking

Taken together the effects of social networking sites including Facebook, Friendfeed, MySpace, Twitter, and many others has the potential to redefine Customer Relationship Management (CRM) software and the strategies it supports. The intention of this analysis is to evaluate how social networking is changing how CRM applications are designed, used and optimized so that ultimately trust can be created and sustained with customers. Selling products on price and availability generates sales quickly yet to gain profitable growth as a company, there must be consistent relationships in place with customers. Social networking is acting as a catalyst of making companies more transparent and trustworthy to their customers, while at the same time understanding their needs better and listening more (Greenberg, 2008). Social networking's many applications and platforms are changing how customer relationships are made, sustained, and grown (McKay, 2009). There is also the perception of social networking being a fad, not really containing data or valuable information that could be used in CRM strategies (Dickie, 2005). This viewpoint often is based on the fact that social networking may seem like a torrent of information with only a few relevant points being made by customers worth listening to. As the book Groundswell (Bernoff, Li, 2008) illustrates through example, customers are now taking control of brands by candidly sharing the opinions, both good and bad.

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How Web 2.0 are Changing Customer Relationships

Essay on Management Information System Assignment

The Internet has over time created more opportunities for companies to listen more precisely to their customers' needs, wants and opinions. Having progressed from electronic billboards, websites today have the ability to interactively listen and discuss not only product needs, but broader solution recommendations to customers through technologies including guided selling (Beasty, 2006) and the use of social networking sites (Bernoff, Li, 2008). The collection of Web 2.0 design objectives and goals as defined by O'Reilly (2006) serve as the catalyst of social networking application development across many areas including CRM. O'Reilly (2006) created a Meme map or thought outline of the key design criteria of Web 2.0, and it is shown in Appendix A of this document. The collection of these design criteria is becoming the new bases for how CRM systems are designed to deliver greater value (Richards, Jones, 2008). CRM applications that at one time were used only for tracking contact information and what products a customer bought today include what areas of a website they visited, which e-mails they opened, and even if they commented on a Facebook wall or Tweeted (Twitter) a comment about their product experiences. CRM applications have to take into account all of these new sources of customer information being generated on social networks to stay relevant to customer's needs and interests (Dych, 2009). CRM systems also need to take into account entirely new ways of managing how customers perceive time, as communications have become in near real-time in social networks including Twitter especially are completely redefining what "responsive" means in CRM strategies in general and customer strategies specifically (Wang, Swanson, 2008).

In addition to redefining the perception of time itself, the perception of value is dramatically changing as a result of social networks, and this is having major ramifications on how CRM systems are developed and used. The ability to integrate knowledge management systems that give sales persons the opportunity to conclusively solve a customers' problem online or over the telephone is the new norm (Liew, 2008). Just as social networks are changing the perception of time, the perception of value of products and services is also changing (Dych, 2009). Social networks and the transparency they enable are increasing customer expectations significantly (Bernoff, Li, 2008). This is all driven from the fact that Web 2.0 design principles, not propagated throughout social networking applications first and now CRM applications, are designed to collaborate with customers, not push products or services on them. The role of the trusted advisor has never been more critical as a result, especially in business-to-business (B2B) customer relationships (Ratnasingam, 2008). Web 2.0 technologies are acting as a powerful catalyst of social networking application development, as can be seen from the applications listed in Appendix B, Web 2.0 Applications. These span the spectrum of social networking sites that take just 140 character discussions as Twitter does all the way to blogs which are comparable to new online magazines. Underscoring all of these applications however is the need to create a dialogue with customers and use each of these applications to listen, respond and grow as a company based on customer feedback. Social networking is accentuating and making marketing real again by putting the customer in charge of the conversation (Greenberg, 2008). The need for managing these conversations not from a position of power but from one of listening and working to be relevant to customers is critically important for any company to survive in the 21st century (Toor, 2009).

Designing CRM Systems for Web 2.0

The essence of any effective information system that is oriented towards serving customers is that it stays in step with how they want to learn, buy and use products (Greenberg, 2008). CRM systems have traditionally been a collection of technologies that are used for enabling greater levels of customer communication, collaboration, support and service. The building blocks of CRM have also been defined by Gartner Group, a research consultancy which focused on the enterprise software market. Figure 1, The Eight Building Blocks of CRM, illustrate the research firms' organization of the elements which comprise CRM systems (Johnson, 2004). This structure captures the need for executive support of CRM strategies at the CRM Vision level followed by the need for coordination of strategy execution.

Figure 1, Eight Building Blocks of CRM

Gartner Group ((Johnson, 2004)

Starting with the CRM Vision at the top of the structure and progressing through the definition of strategies and their impact on the customer experience, this framework accurately communicates how CRM systems from an enterprise standpoint are organized and how they are coordinated to deliver customer experiences. The net effect of social networks on this hierarchy or structure of CRM systems has been to accelerate it. Social networks are changing the perception of time and trust for customers, with trust being the greatest competitive differentiator a company can have today (Toor, 2009). Social networking is also forcing companies to get better at organizational collaboration as well. No longer in a socially networked world will customer stay silent if a company gives them one answer through one support channel, say their call center, and another from in their stores (Dych, 2009). As a result of this increased focus on time and trust, it is imperative for companies to build CRM systems that enable greater levels of organizational collaboration as well. The strategic integration of knowledge management into CRM systems then is being driven by the need to not only respond to customers with accurate support information; it is to respond consistently across all channels as well (Liew, 2008). This presents a unique synchronization challenge to software companies creating the next generation of CRM systems, namely how to ensure multi-channel support for customer solutions to ensure the highest level of satisfaction is attained (Dych, 2009). Social networking's impact on the CRM process layers of the Gartner structure has been to require more intensive integration of knowledge management systems to ensure a higher level of responsiveness, and also the integration of customer preference data to capture the specifics of each customer over the lifecycle of their purchases. The concept of tracking the purchases, preferences and interests over the long-term of their relationships with companies also requires integration to analytics and business intelligence systems as well (Dych, 2009). The CRM information layer includes data, analysis and a single view across all channels. Social networking is the catalyst of an entirely new series of applications and tools in this area of CRM as well. The technologies of latent semantic indexing (LSI) which can aggregate a series of unstructured content groups including blogs and Wikis into a single linguistic model is what Google uses to define search architectures in their search engine, and what state-of-the-art CRM systems are using today to better manage the mass of customer data being generated on social networking sites (Rishel, Perkins, Yenduri, Zand, 2007). Analytics and business intelligence then has become much more attuned to finding patterns in data that were not visible or intuitively obvious in the past. The use of LSI technologies has also been supplanted with the use of sentiment analysis which can determine the emotional state of customers based on their comments and discussions online (Boiy, Moens, 2009). LSI and sentiment analysis are redefining how analytics are used in customer relationships as a result. The use of this data is highly relevant for tailoring marketing programs that earn the trust, over time, of customers. That is the new currency in customer relations and CRM systems that are re-oriented in their design to support… [END OF PREVIEW] . . . READ MORE

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How to Cite "Management Information System" Essay in a Bibliography:

APA Style

Management Information System.  (2009, November 7).  Retrieved November 24, 2020, from

MLA Format

"Management Information System."  7 November 2009.  Web.  24 November 2020. <>.

Chicago Style

"Management Information System."  November 7, 2009.  Accessed November 24, 2020.