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ADMS 4255

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by

Ali Tarbhai

on 19 June 2012

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Transcript of ADMS 4255

***ERASE BEFORE PRESENTATION***
Part 1 - Introduction & Summary of case - Ali
Part 2 - Explanation of Howard's Vision - Guillermo
Part 3 - Problems presented within the case - Mina
Part 4 - VIDEO LINK - Mina
Part 5 - Options & Alternatives - Guillermo/Ali
Part 6 - Success stories - Stephanie
Part 7 - Recommendation - Stephanie
Part 8 - Questions & Answer ALL

They Bought in.
Now they want to bail out.
By: Harsh Ahlawat
Stephanie Ruediger
Guillermo Suarez
Mina Sucar
Ali Tarbhai
Saheer Tariq
Introduction
Barry Golding, Chief Technology Officer wants to implement CRM software at Mathews & Company, a nationwide chain of mall-based menswear stores.

Barry tries to convince the department heads to go ahead with the investment at a meeting

Barry backs up the decision stating it would increase “share of Closet“ for the company.

Barry meets with resistance from all sides starting with Ted Antonelli, Vice President and Director.

Wendy Black, General merchandise manager for the store was unhappy over exclusion of her wish list in the project.

Roger Zinn, Manager of catalog and online division supported Barry’s plan partially but raised a concern about purity of the data collected by the CRM software and efficiency of Data Integration.

After the unsuccessful meeting with the management Barry calls Julie Hendricks. According to Julie, Barry was a victim of “Blue-sky Paradox” where initially everything looks like a possibility but as time progresses and you factor in budget,time constraint, needs,desires the possibility diminishes and increases disappointment and that people are the key to any projects success.
Howard Kempleman
Mathews & Company CEO
Took over the 190-store chain
Doubled the rate of expansion and averaged a total of 30 new stores per year
Noticed that the expansion had absorbed the fundamentals of the apparel business
He pushed his merhants to introduce higher-margin sportswear into the existing mix of business suits and furnishings
Howard's Vision
Howard told Barry, "I don't just want to continue our sales growth; I want to increase our 'share of closet'. But the regional managers tell me they can't get the right information they need. I want you to get the right information out of the computers and into the hands of the people who can use it."
Options
Option 1: Status Quo
- Barry can decide to discontinue implementation of the CRM
system and keep the existing system.
Option 2: Wait for Howard to hear presentation
- Barry can wait for Howard to return to Head Quarters and
present him with the current issue and try to get him
onboard
Option 3: Convince Howard to lead CRM initiative
- Barry can realize Howard should be involved and lead
the new initiative and have Howard take control of
the project by presenting the benefits to him.
Evaluation
PROS
Cons
Option 3: Convince Howard to lead CRM initiative
Success Stories
Enabling employees to se the implications of their actions
Loss of $3 billion in 1992 -> Net income of $752 million in 1993
Closed many stores, Terminated catalogs, and implemented a new vision
Employee-customer-profit model
Between 2000-2004
Organize business around customers
Dividend growth:
- $0.68 a share in 1996
- $1.75 a share in 2003
High-value customer growth of 20%
13% rise in average customer proftability
Royal Bank of Canada
Sears
Kraft
Tailor its advertising, merchandising, and operations in store’s to particular customers
Develop as many different so-called micro-merchandising programs
- The program can be different for every
neighborhood outlet
Individual store managers and regional managers
Centralized information system

Success rate of sales leads rose to 45%
Purchase of bank’s high-margin packages doubled, from 35% to 70%
Information technology awards
Innovative customer-facing computer systems

Cost effective
Investors will be happy due to reduced costs
More time to come up with a solution for long term growth and viability.
Howard has more power over the other investors. Howard may be able to convince the others to invest more if he approves the CRM upgrade.
CRM enables companies to collect the best available data, perform customer analytics of the data, use that data to identify the most promising sales prospects, and arrange their structure, incentives, and metrics to place the customer at the center of their CRM efforts.
Barry can include 'loyalty programs' to engage customers to shop frequently by providing discounts in exchange for their information; creating a relationship that is focused on mutuality. As a result, it hopes to create customer loyalty and reduce customer churn.
The goal is to become a customer-centric enterprise. When data about individual customers is collected and used effectively, it can increase the value of the customer base significantly
After all, it is Howard's vision to increase the 'share of closet'.
By collecting the data, Mathews & Co can receive feedback and modify their products based on the customers preferece.
Mass customization can be used to provide each customer with a product that best satisfies each specific customers needs.
Barry should advice Howard to reduce the amount of new store openings and focus more on the existing stores. This will allow time to train all employees improve their customer skills and retrieve more data.
CONS

CRM will not be implemented and the company won't have a better customer-focused system.
Barry will fail in his attempt to implement the system and dissapoint Howard.
There will be no long-term benefits, only short-term.
Option 1: Status Quo
Option 2: Wait for Howard to hear presentation
Pros
Pros
Cons
Howard may not have the time and be less understanding of the initiative.
Howard will be left ashamed and it will be too late for his reputation to be saved.
Howard has a higher ability to influence the rest of the department heads to get on board.
Howard has a greater deal of control and the ability to control the capital and resources flowing to the project.
Howard will have a better understanding of the benefits and may see the long-term value which will outweigh the costs (Money & Time)
Howard as CEO, has more control and, leading the new intiative will be more within his job description.
Howard will be able to influence all the department heads and make difficult decisions to ensure the success of the program.
Howard would have more skill in motivating the organization into believing and aiming for a successful implementation of the initiative.
If the initiative doesn't work out, Howard will be upset with Barry as he may look bad, He may blame Barry and potentially fire him.
Howard may still not fully understand the initiative, thus confusing others and perhaps the organization.
Because of other duties, Howard may not have enough time to dedicate and delays may present themselves or even lead to obsoletion.
Problems presented within the case
Barry would like to implement a CRM solution in order to imporove the long term bottom line of the company
The VP's and GM's of the company and business units do not want to wait a long time for return on Investment (Seek greater short term gains)
Many business units want to see returns through progression which is unlikely with the CRM implementation strategy
Many aspects which were being seeked, were left out therefore various leaders within the organization began to become disinterested in the CRM initiative.
The whole organization isn't convinced of the plan and no solid criteria are provided (Budget, Timelines, etc.)
Legacy System compatibility issues
Project Information is required which comes at higher costs and longer time to start-up which only serve to delay returns on investment.
Lacking of trust within the organization
CEO is not too involved in the initiative and is leaving the burden on Barry.
Recommendation
THE END
Full transcript