DEVELOPING MIS SYSTEM
Question paper
1. What is BPR? How IT is an enabler for BPR?
2. What is Brick and Mortar ?How Virtual companies are
different from Brick and Mortar business?
3. How IT helps in becoming the Agile company?
4. What is SDLC?What are the steps involved in SDLC?
5. What is maintenance and its types?
6. What is Testing ? Difference between White box and
Black box testing?
7. What is Predictive and Adaptive approach for software
development with example?
8. What is Waterfall model?
System Development Life
Cycle
 SDLC (System Development Life Cycle) is
defined as the process (as a whole) of
developing system or software to meet certain
requirements.
 It covers many activities
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Understanding why the system should be built,
Studying the project feasibility,
analyzing problems,
choosing the system design and architecture,
implementing and testing it,
 up to delivering the system as product to the user.
 The systems development life cycle (SDLC) is
a conceptual model used in project
management that describes the stages
involved in an information system
development project.
Phases of SDLC
 System development life cycle (SDLC).
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includes six steps
investigation,
analysis,
design,
development,
implementation and
maintenance.
SDLC Methodology
 The existing system is evaluated. Deficiencies are
identified. This can be done by interviewing users of
the system and consulting with support personnel.
 The new system requirements are defined. In
particular, the deficiencies in the existing system
must be addressed with specific proposals for
improvement.
 The proposed system is designed. Plans are laid out
concerning the physical construction, hardware,
operating systems, programming, communications,
and security issues.
SDLC Methodology Contd..
 The new system is developed. The new components and
programs must be obtained and installed. Users of the system
must be trained in its use, and all aspects of performance must be
tested. If necessary, adjustments must be made at this stage.
 The system is put into use. This can be done in various ways. The
new system can phased in, according to application or location,
and the old system gradually replaced. In some cases, it may be
more cost-effective to shut down the old system and implement
the new system all at once.
 Once the new system is up and running for a while, it should be
exhaustively evaluated. Maintenance must be kept up rigorously
at all times. Users of the system should be kept up-to-date
concerning the latest modifications and procedures.
Phases of SDLC
Investigation Phase
 System Investigation :What is the Fault in the System?
 Preliminary Analysis
 Determining the nature and scope of the problems to be solved is
carried out.
 Possible solutions are proposed,
 Feasibility Study is carried out
Here are some possible definitions of problems:
1. The existing system has a poor response time, i.e. it is slow.
2. It is unable to handle workload.
3. The problem of cost, i.e. the existing system is not economical.
4. The problem of accuracy and reliability.
5. The requisite information is not produced by the existing system.
6. The problem of security.
Key Activities
 Conduct preliminary investigation/feasibility study
 Determine scope of problem/project
 Identify constraints to systems development
 Identify resources required
Feasibility Study
 The feasibility of a proposed system can be assessed in terms
of four major categories, as summarized below.
1. Organizational Feasibility: the extent to which a proposed
information system supports the objective of the organization.
2. Economic Feasibility: is the cost benefit analysis.In this
study, costs and returns are evaluated to know whether returns
justify the investment in the system project.
(a) The cost of conducting a full system investigation.
(b) The cost of hardware and software for the class of
application being considered.
(c) The benefits in the form of reduced costs, improved
customer service, improved resource utilization or fewer costly
errors.
 3. Technical Feasibility: whether reliable
hardware and software resources required to
meet the needs of the proposed system can be
acquired or developed by the organization in the
required time.
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4. Operational Feasibility: the willingness and
the ability of the management, employees,
customers, suppliers, etc., to operate, use and
support a proposed system.
Analysis Phase/Requirement
definition Phase
 The aim of this phase is to document the existing user functions,
processes, activities and data.
 The analyst understands the type of information and the nature
of the functions required for the propose system. The analyst
makes a brief survey of the requirements and tries to analyze the
performance of the system which is to be developed.
Key Activities
 Gather business requirements
 Build trust and rapport with users
 Document the existing system
 Develop preliminary data and process models
 Verify requirements and current system/procedures with users
How to get information
 Direct observation
 Interviews (individual and groups, structured
and unstructured)
 Questionares
 Surveys
 Records
 Observations
 Activity logs/work diaries
Requirements
 User Interface Requirement
 Processing Requirements
 Storage Requirements
 Control requirements
Output of analysis phase is System requirement
specification, a requirements specification for
a software system, is a complete description of the
behavior of a system to be developed and may
include a set of use cases that describe interactions
the users will have with the software.
Flow Charts
 A system flow chart, or data flow chart, is used to describe
the flow of data through a complete data-processing system.
Different graphic symbols represent the clerical operations
involved and the different input, storage, and output
equipment required. Although the flow chart may indicate the
specific programs used, no details are given of how the
programs process the data. In other words, it's like a DFD.
 A program flow chart is used to describe the flow of data
through a particular computer program, showing the exact
sequence of operations performed by that program in order to
process the data. Different graphic symbols are used to
represent data input and output, decisions, branches, and
subroutines.
Design Phase
 Objective of the design phase is to create a
design that satisfies the agreed software
requirements.
Successful completion of the Design Phase
should comprise:
 Transformation of all requirements into
detailed specifications covering all aspects of
the system
 Approval to progress to the Development
Phase
System Design Phase
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Data structure (e.g. field names, data types and lengths, filenaming, folder structure schemes etc
How the data is to be acquired (what procedures and equipment will be needed?)
Data input procedures and equipment (e.g. keyboard? barcode reader? ICR/OMR?)
Interfaces (e.g. what will a data entry screen look like? Will people need to leave the main screen to
access functions? How will menus be organised into commands and submenus? What shortcut keys will
be used? Will you use a text box, listbox, combo box, tickbox for a particular item of data entry? What
colour scheme will be used? What navigation scheme will be used? What icons represent what
meaning? Will the layout of the data entry form help users enter data in the required order and the
required format? Control procedures - What validation rules will be used on what fields to check for
data reasonableness, existence or format?) What will different error messages say?
What workloads and capacities the system must be capable of - e.g. storage capacities, number of
transactions per hour, disaster-recovery abilities
Documentation and training requirements for different types of users
Validation and storage methods to be used
Backup requirements and procedures - what needs to be backed up, how often, how backups are
stored, what backup scheme will be used?
Tools for System Design
 A data flow diagram is used to describe the flow of data
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through a complete data-processing system.
Different graphic symbols are used to represent input, process
,storage, and output.
Flow chart may indicate the specific programs used, no details
are given of how the programs process the data.
Gantt Charts is detailed timeline of events in a project laid out.
Structure chart consist of a top-down description of a process
and its sub-processes.
Data Dictionary - describes (for example) a database's fields,
types, lengths, validation rules, formulae.
Development phase
 The design must be translated into a machinereadable form.
 The code generation step performs this task. If
the design is performed in a detailed manner,
code generation can be accomplished without
much complication.
 Programming tools like compilers, interpreters,
debuggers etc. are used to generate the code.
 Different high level programming languages
like C, C++, Pascal, Java are used for coding.
Testing Phase
 Software testing is the process of checking software, to
verify that it satisfies its requirements and to detect errors.
Software testing methods are traditionally divided into
black box testing and white box testing.
Black box testing
Black box testing treats the software as a black-box without
any understanding of internal behavior. It aims to test the
functionality according to the requirements. Thus, the
tester inputs data and only sees the output from the test
object.
White box testing
White box testing, however, is when the tester has access
to the internal data structures and algorithms.
Implementation Phase
In SDLC, implementation refers to post-development process of
guiding to use the system. This includes customizations,
Systems Integrations, User Policies, User Training and Delivery.
Software Implementations involve several professionals like
Business Analysts, Technical Analysts, Solution Architect , and
Project Managers.
Analysts in the implementation phase acts as the intermediator
between user and developers.
The Implementation Phase includes:
Hardware and software installation
User Training
Documentation
Implementation
 Deploying of new system in its target
environment. The purpose of the
Implementation Phase is to deploy and
enable operations of the new information
system in the production environment.
Types of Implementation
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Direct Approach:Installation of new system and the immediate discontinuation of old
system.Sometimes called Cut off.This approach produces rime gap when no system is working.
Parallel Approach:The new system is installed and operated in parallel with the current system
untill it has been tested throughly.
It is the opposite of the direct implementation approach.
It is costly because of duplicating facelities and personnel to maintain the dual system.
Advantage is the accuracy of the system.
Modular Approach:”Pilot Approach” refers to implementation of a system in the organisation on a
module basis.for example:an inventory system might be implemented with only selected product
grouping or with all the products on one location of multiple location oreganisation.
Advantages
The risk of system failure is localised
The problem is identified in the system can be corrected before further implementation.
Other operating personnel can be trained in a live environment before the system is implemented
at their location.
Phase-in Approach:”Cut over by segments” which is similar to the modular approach. The only
difference is the system itself is segmented and not the organisation.
Maintenance
 Maintenance includes all the activity after the
installation of software that is performed to
keep the system operational.
Types of Maintenance
 System maintenance is an ongoing activity, which covers a wide
variety of activities, including removing program and design errors,
updating documentation and test data and updating user support.
For the purpose of convenience,
Maintenance may be categorized into three classes, namely
i) Corrective,
ii) Adaptive, and
iii)Perfective.
Corrective Maintenance: - Corrective maintenance refers to action
only taken when a system or component failure has occurred.
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This type of maintenance implies removing errors in a program,
which might have crept in the system due to faulty design or
wrong assumptions.
Adaptive Maintenance: - In adaptive maintenance, program functions are
changed to enable the information system to satisfy the information
needs of the user. This type of maintenance occurs due to organizational
changes which may include:
a) Change in the organizational procedures,
b) Change in organizational objectives, goals, policies, etc.
c) Change in forms,
d) Change in information needs of managers.
e) Change in system controls and security needs, etc.
Perfective Maintenance: - Perfective maintenance means adding new
programs or modifying the existing programs to enhance the
performance of the information system.
 To respond to user’s additional needs which may be due to the changes
within or outside of the organization.
 Outside changes are primarily environmental changes that include:
a) Changes in governmental policies,laws, etc.,
b) Economic and competitive conditions, and
c) New technology.
Data Flow diagrams
Graphical representation of the logical flow of
data. It is also know as bubble chart.
A DFD consists of a series of bubbles joined by
lines representing data flow in the system.
 Square: Represents the source and
destination of system data.
 Arrow: It represents the data flow.
 Circle or Bubble: Represents a process that
transforms incoming data flow into outgoing
data flow.
 Open Rectangle: Represents a data store.
Rules for DFD
 Process should be named and numbered
 The direction of flow is from top to bottom
and from left to right.
 When a process is exploded into lower levels
they are numbered properly.e.g-5 can be
exploded in 5.1,5.2..
 The name of data stores, source and
destinations are written in capital letters.
ER Diagrams
 A graphical representation of entities and their
relationships to each other.
It is used in organization of data within databases.
The elements of an ERD are:
 Entities are the "things" for which we want to
store information. An entity is a person, place,
thing or event.
 Attributes are the data we want to collect for an
entity.
 Relationships describe the relations between
the entities.
 A relationship is how the data is shared
between entities.
There are three types of relationships
 1. One-to-One
 For example, in a database of employees,
each employee name (A) is associated with
only one social security number (B).
 One to Many
 For example, for a company with all employees
working in one building, the building name (A) is
associated with many different employees (B), but
those employees all share the same singular
association with entity A.
 Many-to-Many
 For example, for a company in which all of its
employees work on multiple projects, each
instance of an employee (A) is associated with
many instances of a project (B), and at the same
time, each instance of a project (B) has multiple
employees (A) associated with it.
Relationships
Decision Tree
 Graphical representation of a sequence of
decisions and actions.
 The decision tree represents various
conditions and actions that resembles
branches of a tree that why it is called
decision tree.
Example
 A computer firm offers the following discount
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policy to its customers
If payment is made within 10 days
3% discount is allowed on orders above Rs
10000
2% for orders between 5000 to 10000
1% for orders upto 5000
However if the payment is made more than
10 days than no discount is allowed.
Objectives of SDLC
 An SDLC has three primary business
objectives:
- Ensure the delivery of high quality systems;
- Provide strong management controls;
- Maximize productivity.
Waterfall Model
 In "The Waterfall" approach, the whole process
of software development is divided into
separate process phases.
 The phases in Waterfall model are: Requirement
Specifications phase, Software Design,
Implementation and Testing & Maintenance.
 All these phases are cascaded to each other so
that second phase is started as and when
defined set of goals are achieved for first phase
and it is signed off, so the name "Waterfall
Model".
Waterfall Model
Phases of waterfall maodel
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Requirement Analysis and Definition
All possible requirements of the system to be developed are captured in this
phase.
2. Requirements are a set of functions and constraints that the end user (who will
be using the system) expects from the system.
3.
The requirements are gathered from the end user are analyzed for their validity,
and the possibility of incorporating the requirements in the system to be
developed is also studied.
4. Finally, a requirement specification document is created which serves the
purpose of guideline for the next phase of the model.
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System and Software Design
The requirement specifications from the first phase are studied in this phase and
a system design is prepared.
2. System design helps in specifying hardware and system requirements and also
helps in defining the overall system architecture.
3.
The system design specifications serve as an input for the next phase of the
model.
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Implementation and Unit Testing
On receiving system design documents, the work is divided in modules/units and
actual coding is started.
2. The system is first developed in small programs called units, which are
integrated in the next phase.
3.
Each unit is developed and tested for its functionality; this is referred to as unit
testing. Unit testing mainly verifies if the modules/units meet their
specifications.
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Integration and System Testing
These units are integrated into a complete system during integration phase and
tested to check if all modules/units coordinate with each other, and the system
as a whole behaves as per the specifications.
2. After successfully testing the software, it is delivered to the customer.
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Operations & Maintenance
This phase of the model is virtually a never-ending phase. Actions taken to solve
the problems or errors arises after the system become operational.
Spiral Model
 The spiral model, also known as the spiral
lifecycle model, combines the features of the
prototyping model and the waterfall model.
 The spiral model is intended for large,
expensive, and complicated projects.
Steps of Spiral Model
 The new system requirements are defined in as much detail as
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possible. This usually involves interviewing a number of users
representing all the external or internal users and other aspects of the
existing system.
A preliminary design is created for the new system.
A first prototype of the new system is constructed from the
preliminary design. This is usually a scaled-down system, and
represents an approximation of the characteristics of the final
product.
A second prototype is evolved by a fourfold procedure: (1) evaluating
the first prototype in terms of its strengths, weaknesses, and risks; (2)
defining the requirements of the second prototype; (3) planning and
designing the second prototype; (4) constructing and testing the
second prototype.
The cycle keep on repeating itself untill the customer is satisfied.
The final system is constructed, based on the refined prototype.
Iterative Model
 Iteration means the act of repeating a process with
the aim of approaching a desired goal,target or
result.
 An iterative lifecycle model does not attempt to
start with a full specification of requirements.
 Instead, development begins by specifying and
implementing just part of the software, which can
then be reviewed in order to identify further
requirements.
 This process is then repeated, producing a new
version of the software for each cycle of the model.
Prototype
 A prototype is a working model that is functionally
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equivalent to a component of the product. In many
instances the client only has a general view of what is
expected from the software product.
In such a scenario where there is an absence of detailed
information regarding the input to the system, the
processing needs and the output requirements, the
prototyping model may be employed.
This model reflects an attempt to increase the flexibility
of the development process by allowing the client to
interact and experiment with a working representation
of the product.
The developmental process only continues once the
client is satisfied with the functioning of the prototype.
At that stage the developer determines the
specifications of the client’s real needs.
Software Prototyping
 Software prototyping, a possible activity during
software development, is the creation of
prototypes, i.e., incomplete versions of the software
program being developed.
 A prototype typically implements only a small
subset of the features of the eventual program, and
the implementation may be completely different
from that of the eventual product.
 The purpose of a prototype is to allow users of the
software to evaluate proposals for the design of the
eventual product by actually trying them out, rather
than having to interpret and evaluate the design
based on descriptions.
Data Flow Daigram
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A data-flow diagram (DFD) is a graphical representation of the "flow" of
data through an information system.
Entities: can be people, departments, other companies, other systems
are called sources if they are external to the system and provide data to
the system, and sinks if they are external to the system and receive
information from the system
Processes must have at least one input and at least one output at the
primitive.
Data stores: can be online or “hard copy” (see notes on logical VS
physical DFD’s below) are labeled with a noun (e.g. the label “customer”
indicates that information about customers is kept in that data
store)data is stored whenever there are more than one process that
needs it and these processes don’t always run one after the other (if the
data is ever needed in the future it must be stored)
Data flows :must originate from and/or lead to a process and data stores
cannot communicate with anything except processes
Enterprise resource planning
 ERP software means Enterprise Resource Planning
systems.
 ERP systems are large computer systems that
integrate all facets of an operation, including
development, manufacturing, sales and marketing.
 This integration is accomplished with through a
database shared by all the application programs.
An ERP is a “do it all” system that performs everything
from entry of sales orders to customer service.
 The purpose of ERP is to facilitate the flow of
information between all business functions inside the
boundaries of the organization and manage the
connections to outside stakeholders.
Scope of ERP
 The scope offered by ERP is to include other
“back-office” functions such as order
management, financial management,
warehousing, distribution production, quality
control, asset management and human
resources management.
 The evolution of extended-ERP systems has
further expanded in recent years to include more
“front-office” functions, such as sales force and
marketing automation, electronic commerce
and supply chain management systems.
Evolution of ERP
 In 1990 Gartner Group first employed the
acronym ERP as an extension of material
requirements planning (MRP), later
manufacturing resource planning and
computer-integrated manufacturing.
 ERP systems initially focused on automating
back office functions that did not directly
affect customers and the general public.
History of ERP
 Inventory Management & Control : Inventory
Management and control focuses on appropriate
level of stock in a warehouse.
 Material Requirement Planning (MRP) : Materials
Requirement Planning (MRP) utilizes software
applications for scheduling production processes.
MRP generates schedules for the operations and
raw material purchases based on the production
requirements of finished goods, the current
inventories levels and the lot sizing procedure for
each operation.
 Manufacturing Requirements Planning (MRP II) : MRPII
focused on the manufacturing process. Manufacturing
Requirements Planning or MRP utilizes software
applications for coordinating manufacturing processes,
from product planning, parts purchasing, inventory control
to product distribution. A major purpose of MRPII is to
integrate primary functions (i.e. production, marketing and
finance).
 Enterprise Resource Planning (ERP) : Enterprise Resource
Planning or ERP uses multi-module application software for
improving the performance of the internal business
processes. ERP systems often integrates business activities
across functional departments, from product planning,
parts purchasing, inventory control, product distribution,
fulfillment, to order tracking.
ERP Software Modules
 ERP software consists of many enterprise
software modules that are individually
purchased, based on what best meets the
specific needs and technical capabilities of the
organization.
 Each ERP module is focused on one area of
business processes, such as product
development or marketing.
 Some of the more common ERP modules include
those for product planning, material purchasing,
inventory control, distribution, accounting,
marketing, finance and HR.
ERP Model
ERP Vendors
Depending on your organization's size and needs there are a number of
enterprise resource planning software vendors to choose from in the
large enterprise, midmarket and small business ERP markets.
The ERP vendors are continuously expanding the capabilities of their
packages by adding functionality for new business functions such as
sales force automation, supply-chain, order management, data
warehousing, maintenance repair-and-overhaul, etc. SAP-AG, Oracle,
JD Edwards,PeopleSoft and Baan – collectively called the “Big Five” of
ERP software vendors coovering 70 percent of ERP market share.
 Large Enterprise ERP (ERP Tier I)
The ERP market for large enterprises is dominated by three companies: SAP,
Oracle and Microsoft.
 Midmarket ERP (ERP Tier II)
For the midmarket vendors include Infor, QAD, Lawson, Epicor, Sage and
IFS.
 Small Business ERP (ERP Tier III)
Exact Globe, Syspro, NetSuite, Visibility, Consona, CDC Software and
Activant Solutions.
Advantages and Disadvantages
 ERP systems have certain advantages such as
low operating cost and improving customer
service.
 Tight Integration, Huge storage needs,
networking requirements and training overheads
are frequently mentioned ERP problems.
 ERP projects are large, costly and difficult and
that they require large investment in capital and
staff and management time. ERP systems are
complex, and implementing one can be a
difficult, time-consuming and expensive project
for a company
Selection criteria of ERP
 The three distinct types of an ERP system
evaluation were vendor, functional and
technical. Criteria such as vendor reputation,
financial stability, long term viability and the
vendor’s vision/corporate direction were
factors that were considered during the
vendor evaluation.
 Enterprise resource planning (ERP) system is a business
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management system that
comprises integrated sets of comprehensive software,
which can be used, when
successfully implemented, to manage and integrate all the
business functions within an
organisation. These sets usually include a set of mature
business applications and tools
for financial and cost accounting, sales and distribution,
materials management,
human resource, production planning and computer
integrated manufacturing, supply
chain, and customer information
Customer Relationship
Management
 Customer Relationship Management (CRM) is
specific software that allows a company to
measure and control contacts with customers.
 CRM is a business philosphy which provides a
vision for the way your company wants to deal
with your customers.
 CRM can be used for controlling contacts with a
customer either by phone, fax, mail and e-mail.
The data collected can be used for research and
analysis of the customer relationship.
Characteristics of CRM
 It will track and report every interaction with a customer,
describing the customer's purchase, interest or demand. It
will report also the changing needs of the customer and the
way your business reacts effectively to them.
 Furthermore, the CRM will be a universal instrument for
collecting data about the service requests, order entry,
satisfaction and billing.
 3. Third, the CRM will be able to measure the performance
of the business on the basis of internal benchmarks.
 4. Last the CRM will facilitate the working processes by
emphasizing on the positive and exclude the negative
practices in your customer relations center.
Benefits of CRM
• Improve customer Loyalty
• Gain Competitive Advantage over
competitors
• Increase Sales Revenue
• Increase Profitability
• Improve internal Productivity
• Enhance executive decision making
• Decrease costs and expenses
• Deliver Value Added Service to your clients
CRM
CRM Model
 Customer Attraction. This stage intends to attract the customer towards
the website in order to expose the client to our online offers. In this part
of the cycle the customer must be able to find out about our products or
services in an easy and simple way .
 Customer Acquisition. This stage has the important mission of
converting the visitor into a buyer of our products. In order for this to
happen the potential customer has to be able to:
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evaluate the product, when possible visualising it as close as he would do in a
traditional shop
 compare the product with other similar options.
 select the product that best fits their needs, eventually purchasing it
 Customer Analysis. In this stage the data gathered about the different
actions and transactions preformed by the customers are analysed in
different ways with the goal of understanding and better using the
customers'
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buying patterns
navigation patterns through the website
problems they suffer when trying to find information, products or both.
CRM Cycle
 Plan your marketing strategy, determining the
customer segment you will target and the campaigns
you will aim at those segments.Those campaigns
should incorporate some kind of loyalty programmes
to develop long term relationship with the customer.
 Interact with customers through different channels
and execute the marketing plan so that both the
company and its customer gets most out of their
interactions.
 Process the information captured during the
interaction and ensure that customer requirement are
fulfilled.
 Leverage the information collected during previous
stages and use that to update your plan in order to take
relationship with the customer to a higher level.
Vendors of CRM
 Vendors of CRM are
Microsoft,SAP,Oracle,SiebelSystems
,SalesForce ,Maximizer Software.
CRM Cycle
CRM Cycle- Understand and
Differentiate
 Understand what they value, what types of service are important to
them, how and when they like to interact, and what they want to buy.
True understanding is based on a combination of detailed analysis and
interaction.
 Profiling to understand demographics, purchase patterns and channel
preference.
 Segmentation to identify logical unique groups of customers that tend to
look alike and behave in a similar fashion.


Primary research to capture needs and attitudes.
Customer valuation to understand profitability, as well as lifetime value or longterm potential. Value may also be based on the customer's ability or inclination to
refer other profitable customers.
 Customers need to see that we are differentiating our service and communications
based both on what we've learned independently and on what they've told us.
 At the same time, differentiation should be based on the value customers
are expected to deliver.
Develop and Customize
 Earlier companies were product-oriented and used to
develop products and services and expected customers to
buy them. In a customer-focused world, product and
channel development have to follow the customer's lead.
Organizations are increasingly developing products and
services, and even new channels, based on customer needs
and service expectations.
 Most organizations today are not able to cost-effectively
customize products for individual customers. However,
products, services, channels and media can be customized
based on the needs of quantitative customer segments.
The extent of customization should be based on the
potential value delivered by the customer segment.
Interact and deliver
 Interaction is also a critical component of a successful CRM
initiative. It is important to remember that interaction doesn't just
occur through marketing and sales channels and media; customers
interact in many different ways with many different areas of the
organization including distribution and shipping, customer service
and online.
 To foster relationships, organizations need to insure that:
 All areas of the organization have easy access to relevant, actionable
customer information.
 All areas are trained how to use customer information to tailor
interactions based on both customer needs and potential customer value.
 With access to information and appropriate training, organizations will be
prepared to steadily increase the value they deliver to customers.
Acquire and Retain
 Successful customer retention is based very
simply on the organization's ability to
constantly deliver on three principles:
 Maintain interaction; never stop listening.
 Continue to deliver on the customer's definition of
value.
 Remember that customers change as they move
through differing life stages; be alert for the changes
and be prepared to modify the service and value
proposition as they change.
 The use of information technology in e-business
has major impacts on society, and thus raises
serious ethical issues in the areas such as:
Crime
Privacy
Individuality
Employment
Health
Working Conditions
 Computer crime is a growing threat to society
by the criminal or irresponsible actions of
computer individuals whoare taking
advantage of the widespread use and
vulnerability of computers and the Internet
and other networks.
IT and Ethical Issues
 Ethics refers to the principles of right and wrong that
individuals, acting as free moral agents, use to make
choices to guide their behaviors.
 Many ethical issues are arising due to Information
Technology for both individuals and societies.
 IT creates opportunies and helped in social progress
but it can also be used to commit crimes and threaten
cherished social values. The development of
information technology will produce benefits for many
and costs for others.
Employment Challenges:
 The impact of IT on employment is a major ethical
concern and is directly related to the use of
computers to achieve automation of work
activities.
 The use of e-business technologies has created new
jobs and increased productivity. However, it has
also caused a significant reduction in some types of
job opportunities.
Computer Monitoring
 One of the most explosive ethical issues
concerning the quality of working conditions
in e-business is computer monitoring
 Computers are being used to monitor the
productivity and behavior of employees while
they work. Supposedly, computer monitoring
is done so employers can collect productivity
data about their employees to increase the
efficiency and quality of services.
Computer monitoring has been criticized as unethical because:
1.
2.
3.
4.
5.
It is used to monitor individuals, not just work, and is done
continually, thus violating workers’ privacy and personal
freedom.
Is considered an invasion of the privacy of employees, because in
many cases, they do not know that they are being monitored, or
don’t know how the information is being used.
Employee’s right of due process may be harmed by the improper
use of collected data to make personneldecisions.
It increases the stress on employees who must work under
constant electronic surveillance.
It has been blamed for causing health problems among
monitored workers.
Challenges to Individuality
A frequent criticism of e-business systems
concerns their negative effect on the
Individuality of people. Computer- based systems
are criticized as:
 Being impersonal systems they eliminate the
human relationships present in non computer
systems. Humans feel a loss of identity.
 Humans feel a loss of individuality as some
systems require strict adherence to detailed
procedures.
Health issues
The use of IT in the workplace raises a variety of
health issues
1.
Job stress
2.
Damaged arm and neck muscles
3.
Eye strain
4.
Radiation exposure
5.
Death by computer-caused accidents
Security Issues
Computer crime is a growing threat to society
by the criminal or irresponsible actions of
computer individuals who are taking
advantage of the widespread use and
vulnerability of computers and the Internet
and other networks.
Computer Crime
 Association of Information Technology professionals
1.
2.
3.
4.
5.
(ATIP) defines computer crime as including:
The unauthorized use, access, modification, and
destruction of hardware, software, data, or network
resources.
The unauthorized release of information
The unauthorized copying of software
Denying an end user access to his or her own
hardware, software, data, or network resources
Using or conspiring to use computer or network
resources to illegally obtain information
Hacking
Hacking is the obsessive use of computers, or the
unauthorized access and use of networked computer
systems.Illegal hackers (also calledcrackers) frequently
assault the Internet and other networks to steal or damage
data and programs. Hackers can:
1. Monitor e-mail, Web server access, or file transfers to
extract passwords or steal network files, or to plant data
that will cause a system to welcome intruders.
2. Use remote services that allow one computer on a network
to execute programs on another computer to gain
privileged access within a network.
Cyber Theft
Many computer crimes involve the theft of
money.
In the majority of cases, they are “inside jobs”
that involve unauthorized network entry and
fraudulent alternation of computer databases
to cover the tracks of the employees involved
Computer Viruses or worms
1. They typically enter a computer system
through illegal or borrowed copies of
software, or through network links to other
computer systems.
2. A virus usually copies itself into the operating
systems programs, and from there to the
hard disk and any inserted floppy disks.
Vaccine programs, and virus prevention and
detection programs are available, but may
not work for new types of viruses
Mona’s Factory
Mona is a manager of a gadget factory. Her factory has been quite successful the past
three years. She is wondering whether or not it is a good idea to expand her factory
this year. The cost to expand her factory is $1.5M. If she does nothing and the
economy stays good and people continue to buy lots of gadgets she expects $3M in
revenue; while only $1M if the economy is bad.
If she expands the factory, she expects to receive $6M if economy is good and $2M if
economy is bad.
She also assumes that there is a 40% chance of a good economy and a 60% chance of a
bad economy.
(a) Draw a Decision Tree showing these choices.
Decision Tree Example
40 % Chance of a Good Economy
Profit = $6M
Expand Factory
Cost = $1.5 M
60% Chance Bad Economy
Profit = $2M
Good Economy (40%)
Profit = $3M
Don’t Expand Factory
Cost = $0
Bad Economy (60%)
Profit = $1M
DSS Techniques
 Sensitivity analysis, what-if analysis, and goal
seeking analysis are used to analyze complex
relationships among data items
to discover business patterns, trends.
All of them are part of Decision support
systems (DSS) analysis techniques.
What if Analysis
 In what-if analysis, an end user makes
changes to variables, or relationships among
variables, and observes the resulting changes
in the values of other variables.
 Managers repeat this analysis with different
variables until they understand all the effects
of various situations.
Sensitivity Analysis
Under this analysis the value of only one
variable is changed repeatedly at a time, and
the resulting changes on other variables are
observed.
Typically, sensitivity analysis is used when
decision-makers are uncertain about the
assumptions made in estimating the value of
certain key variables.
Goal Seeking Analysis
 goal-seeking analysis sets a target value for a
variable and then repeatedly changes other
variables until the target value is achieved.
 Backwards approach, starts with goal
 Determines values of inputs needed to achieve
goal
 Relationship is verb and entity is noun
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