CHAPTER 3

INFORMATION TECHNOLOGY AND

COLLECTING CUSTOMER DATA

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INFORMATION TECHNOLOGY AND CRM
 data warehouse— a large reservoir of detailed and
summary data that describes the firm and its activities,
organized by the various business units in a way to
facilitate easy retrieval of information describing the
firm’s activities
 data— facts and figures that are difficult to use
because of their volume.
 information— meaningful compilations and summaries
of data that tell the user something that he or she did
not already know
 CRM architecture— facilitates the gathering of data,
storing it, transforming it into information, and
presenting the information to users.

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 EXHIBIT 3.1 A BASIC CRM MODEL

Data Data
Data Informatio
gatherin warehouse
sources n delivery
g system system
system

Information
users

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 A Basic CRM Model
 Data Sources
 internal—business units, such as a manufacturing,
finance , or sales
 external—organizations and individuals outside the
firm.
 Data Acquisition
 computer-readable formats acquired from internal
sources, data entry operators, or compatibility with
touch points for external sources
 Data Storage
 record
 file
 database
 data mart—a subset of the data warehouse that
contains data relating to a portion of the firm’s
transactions.
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 A Basic CRM Model
 Data Management
 database management system (DBMS)— software that
maintains the data and makes it available for use
 data dictionary—a detailed description of each data
element
 Exhibit 3.2: A Database Management System Model
 Management and Control
 data security—achieved by use of passwords,
supplemented with directories that specify the operations
 Exhibit 3.3: A Data Dictionary Entry
 Information Delivery
 query responses—answers to user questions that are
displayed on the users’ workstations
 Information Users
 CRM user interface—designed to facilitate navigation
through the data and to enable the users to easily make
queries
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 EXHIBIT 3.2 A DATABASE MANAGEMENT SYSTEM MODEL

Data description
language
processor

Database
Informatio description
n (schema)
requests

Displayed
informatio Database
n manager Database

Printed
information

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EXHIBIT 3.3 A DATA DICTIONARY ENTRY

C : Documents and Sett

Table : tblCustomer

Data Created: 5/15/02

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 COMPUTER ARTHITECTURES
 client/server— the stored data and
functions that are performed on the data
are allocated to the central server and to
the user, called the client
 Exhibit 3.4: Tiered Client/Server Configurations
 Three commodities—(1) control over the user
interface, (2) the location of the software that
performs the user’s functions, and (3) the
location of the data—reside at the client level

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 EXHIBIT 3.4 CLIENT/SERVER ARCHITECTURES

Client Client

Client Server Client Server Server Server

Client Client

A. Two-tiered architecture B. Multi-tiered architecture

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 DATA INPUT
 Contact Points
 touch point—any transaction or customer interaction
with the organization
 Point of Sale Input
 POS terminals—scan product data from bar codes and
obtain customer data from credit cards, checks, or store
identification cards
 Keyed and Scanned Data Input
 keyed input—when POS terminals and EDI cannot be
used, the data most likely will have to be keyed into
workstations by data entry operators
 scanned input—when data can be optically scanned, i.e.
credit card invoices and airline tickets
 Internet Input
 Web-based systems—allow tracking of customer
information for search and purchasing behavior 10
 DATA STORAGE
 main memory
 secondary storage
 direct access storage
 storage area network (SAN)— allows
business units throughout the organization
to store data on different servers.
 storage resource management (SRM)
software— allocates storage in the most
efficient way by locating unused storage
and allocating it where it can best be used

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DATABASE STRUCTURES
 database design— arrange the data so
that it can easily be retrieved
 hierarchical and network— the first
structures, required that special physical
links be built into the records to integrate
data from multiple files
 relational— structure that makes use of
data elements already in the data tables
to integrate the contents of multiple
tables
 Exhibit 3.5: Data Attributes Enable
Relations

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EX 3.5 DATA ATTRIBUTES ENABLE RELATIONS

Salesperson Sales Region Salesperson Name

Number Number
123 1 Carolyn Wright
150 1 Ronald Hudson
188 1 Wally Collins
198 1 Sandy Lee
205 2 Richard Glenn
220 2 Vincent Garza
235 2 Ray Cox
A. Salesperson table

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 EX 3.5 DATA ATTRIBUTES ENABLE RELATIONS (Cont.)
Customer Number Customer Name Salesperson Number Year-to-Date Sales

30788 Austin Auto 123 2,500

30381 Jitney Jungle 235 16,283
30885 Central Repair 123 432,850
31246 Ace Body Shop 198 325
31980 Armadillo Imports 123 37,098

32659 Southern Motors 123 2,375

32776 Bonham Bearings 150 16,201

32829 Wrecking Bar 188 88,567

35294 Continental Cars 150 14,219

36291 Cowboy Trailers 220 59,263

41283 Nomad Motors 205 12,504

B. Customer table

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 Multidimensional Databases
 data dimension— an array of data in a particular
order
 one-dimension analysis
 two-dimension analysis—for example, customer sales
by month (customer and time)
 multidimensional databases (MDDBs)— software
developed to overcome the decreased effectiveness of
relational database structures as the number of
dimensions increases
 hypercube— data arrayed by three or more
dimensions
 Exhibit 3.6: Data Stored in Hypercubes
 Exhibit 3.7: More than Three Data Dimensions

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EXHIBIT 3.6 DATA STORED IN HYPERCUBES

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EXHIBIT 3.7 VISUALIZING MORE THAN THREE DATA DIMENSIONS
Salesperson Customer Product Time

Salesperson Customer Product Time

Hour

Sales branch Customer

territory Day

Product line
Month
Sales region Customer
category
Quarter

All regions All customers All products Year

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 DATA ANALYSIS AND
INFORMATION DELIVERY
 analysis tools—include reports, database
queries, and mathematical modeling, or on-
line analytical processing (OLAP)
 Reports and Database Queries
 repetitive report (or periodic report)—prepared
automatically according to a schedule, such as
monthly, without requiring requests by users
 special report—prepared when a special
information need arises, such as a response to a
database or data warehouse query
 Exhibit 3.8: A Report or Query Response Showing
Two Dimensions of Data
 drill down—successively increasing the degree of
detail, or granularity, of the data
 Exhibit 3.9: Drilling Down to Finer Granularity
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 EXHIBIT 3.8 A REPORT OR QUERY RESPONSE SHOWING TWO
DIMENSIONS OF DATA
Customer Sales by Salesperson Report
Sales Region Salesperson Salesperson
Y-T-D Sales
Number Number Name
1 123 Carolyn Wright 474,823
1 150 Ronald Hudson 30,420
1 188 Wally Collins 88,567
1 198 Sandy Lee 325

Region 1 Total 594,135

2 205 Richard Glenn 12,504

2 220 Vincent Garza 59,263
2 235 Ray Cox 16,283

Region 2 Total 88,050

Company Total 682,185

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EXHIBIT 3.9 DRILLING DOWN TO FINER GRANULARITY
Product Sales in Dollars May 2003
Product Line Quota Actual Variance%
CD/tape/radio 200,000 182,305 -8.8
TV 750,000 831,200 +10.8
Computer 375,000 402,117 +7.2
Total 1,325,000 1,415,622 +6.8
A. Product Sales by product line

CD/Tape/Radio Sales in Dollars May 2003

Product Quota Actual Variance%
Patriot 150,000 104,900 -30.1
Series30 30,000 31,200 +4.0
Series50 20,000 46,205 +231.0
Total 200,000 182,305 -8.8
B. CD/Tape/Radio sales

Patriot Model CD/Tape/Radio Sales by Retail Store

May2003
Retail Store Quota Actual Variance%
Phoenix 45,000 20,010 -55.5
Santa Fe 50,000 25,877 -48.2
Rapid City 32,500 33,338 +2.6
Boise 22,500 25,675 +14.1
Total 150,000 104,900 -30.1
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C.Patriot model CD/Tape/Radio sales by retail store
 DATA ANALYSIS AND
INFORMATION DELIVERY

 Mathematical Modeling
 constructed in a software form and uses data and
users’ instructions to project what might happen
in the future
 On-line Analytical Processing (OLAP)
 an approach to quickly conduct analysis of data in
a data warehouse where the user is on-line with
the system

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 DATA ANALYSIS AND
INFORMATION DELIVERY
 Data Mining
 how the user extracts previously unknown
information from the large reservoir of the data
warehouse, similar to the way that miners extract
gold, coal, diamonds, and so on from the earth.
 verification mode— to believe that the warehouse
contains data in certain forms or patterns and
conducts repetitive queries to support this
hypothesis.
 knowledge discovery— the user lets the system
determine the path to follow in conducting the
analysis
 Exhibit 3.10: Hypothesis Verification and Knowledge
Discovery by Successive Queries

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EXHIBIT 3.10 HYPOTHESIS VERIFICATION AND KNOWLEDGE
DISCOVERY BY SUCCESSIVE QUERIES

Sale Date Customer Product

02/12/03 Ed Flynn TV
02/15/03 Adele Rice Computer
02/18/03 Ric Knowles TV
03/01/03 Ed Flynn Computer
03/19/03 Angela Forest TV
03/30/03 Robin Lin Computer
04/05/03 Robin Lin CD/Tape/Radio
04/11/03 Ed Flynn CD/Tape/Radio
04/21/03 Adele Rice TV
05/16/03 Richard Rodriguez TV
05/17/03 Robin Lin TV
05/26/03 Joe Wardlaw Computer
05/29/03 Angela Forest CD/Tape/Radio
05/29/03 Richard Rodriguez CD/Tape/Radio
05/30/03 Cynthia Garfield Computer
A. Query 1 for transaction data for the Rapid
City store February through May 23
EXHIBIT 3.10 HYPOTHESIS VERIFICATION AND KNOWLEDGE
DISCOVERY BY SUCCESSIVE QUERIES (Cont.)

Product Sales Sequence Customers

TV,Computer,CD/Tape/Radio Ed Flynn

Computer,CD/Tape/Radio,TV Robin Lin

Computer,TV Adele Rice

TV,CD/Tape/Radio Angela Forest
Richard
TV,CD/Tape/Radio
Rodriguez
Joe Wardlaw,
Computer
Cynthia Garfield
TV Ric Knowles
B. Query2 for product sales sequences
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 EXHIBIT 3.10 HYPOTHESIS VERIFICATION AND KNOWLEDGE
DISCOVERY BY SUCCESSIVE QUERIES (Cont.)

Support
Product Sales Sequence Customers
Factor
TV,Computer Flynn 0.125
TV,CD/Tape/Radio Flynn,Forest,Rodriguez 0.375

Computer,CD/Tape/Radio Flynn,Lin 0.250

Computer,TV Lin,Rice, 0.250
TV,Computer,CD/Tape/Radio Flynn 0.125

Computer,CD/Tape/Radio,TV Lin 0.125

C. Query 3 for support factors for product sales sequences

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CLOSED-LOOP MARKETING
 CRM system loop
 (1) data
 Data gathering
 Data storage

 (2) information (CRM system)

 Information delivery
 (3) strategy (managers)
 Exhibit 3.11: CRM-Based Marketing
Strategies Close the Loop

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 EXHIBIT 3.11 CRM-BASED MARKETING STRAGEGIES CLOSE
THE LOOP

Customers Data CRM system Information Managers

Marketing strategy

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COLLECTING CUSTOMER DATA
 Internal Data Sources
 transaction processing systems—the multiple
systems used by organizations to process their
various transactions with customers, suppliers,
employees, etc.
 Exhibit 3.12: Gathering Data From Order-
Processing Systems
 External Data Sources
 external sources—government, suppliers within
the supply chain as well as those that provide
syndicated data, and marketing intelligence about
competitive actions are examples

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 EX 3.12 GATHERING DATA FROM ORDER-PROCESSING
SYSTEMS
1
Sales orders
Approved sales
Customers Order order file
Rejected entry
sales order system
Customer notices 2
statements
Inventory
Customer system
4 invoices 3
Accounts Filled sales
Billing orders file
receivable
Billed sales system
system order file Product
Accounts data
receivable Customer
data data

Accounts
Customer Inventory
receivable
master file master file
master file
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What is the difference between a
data warehouse and a database?
 A data warehouse is a large reservoir
of detailed and summary data that
describes the firm and its activities,
organized by the various business units
in a way to facilitate easy retrieval of
information describing the firm’s
activities. A database is an
accumulation of computer-based data
that is arranged in a format to facilitate
retrieval. A data mart is a subset of
the data warehouse that contains data
relating to a portion of the firm’s
transactions.

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