Data Warehousing at REI: Understanding the Customer Case Study

This is about using Information System to apply for an Organization.

 

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Chapter 6 Foundations of Business Intelligence

Case 2: Data Warehousing at REI: Understanding the Customer

Tags: integrating data from all customer contact points; understanding customer interests; corporate
strategy; Web marketing; IBM DB2; data warehousing; retail

Summary: REI uses IBM data warehousing technology to achieve its vision of understanding what its
customers want, and how they want to interact with the company. L= 4:39.

URL:http://www.youtube.com/watch?v=fUSEtLlwzNg

Case

REI (Recreational Equipment Inc.) is an American consumers’ cooperative that sells outdoor recreation gear
and sporting goods via the Internet, catalogs, and over 90 stores in 27 states. It opens six to eight new stores
each year. REI’s sales exceeded $1.4 billion in 2008. Its major competitors in the U.S. include many other
sporting goods retailers. REI is the largest consumer co-op in the U.S.

A consumer’s cooperative is a business owned by its customers for their mutual benefit. The goal of a co-op
is to sell quality goods and services at the lowest cost to its consumers, as opposed to the traditional model
of selling goods and services at the highest cost that consumers are willing to pay. However, a co-op is no
different from traditional firms in the following regard: databases and information management still play
key roles in efficiency and strong customer service and are critical to the company’s bottom line.

There is a one-time fee of $20 for lifetime membership to REI. The company normally pays an annual
dividend check to its members equal to 10% of what they spent at REI on regular-priced merchandise in the
prior year, although this is not guaranteed. The refund, which expires on December 31 two years from the
date of issue, can be used as credit for further purchases or taken as cash or check between July 1 and
December 31 of the year that the dividend is valid.

In order to better understand its three million active co-op members and customers, REI launched an
initiative to build a data warehouse containing many different types of information about its customers. To
better serve its customers, REI needs to know precisely what they do in the outdoors. With the help of IBM,

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REI hopes its data warehouse will allow them to identify and organize all of the ways that each customer
interacts with the company, including what they bought online or retail outlets, whether they attended
special training sessions for equipment and outdoor activities, or items they returned.

REI also deployed IBM’s DB2 9 Viper technology to run REI’s marketing campaigns. REI’s site will
recognize its members when they log in, allowing them to serve up content customized towards individual
users

Case Study Questions

1. What is a data warehouse and why is REI building one?

2. What are some of the disadvantages of consumer cooperatives compared to ‘traditional’ firms?

3. Describe some of the marketing strategies that REI’s data warehouse will allow them to use. Would these
have been possible before the data warehouse was built?

4. What are some of the risks or concerns surrounding the creation of a data warehouse?

5. Why do you think REI chose to work with IBM’s data warehouse technology?

Copyright © 2009 Kenneth Laudon. Copyright © 2009 Pearson Education.

Running head: CUSTOMER RELATIONSHIP MANAGEMENT CASE STUDY
1

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6

Customer Relationship Management for San Francisco’s City Government

Customer Relationship Management for San Francisco’s City Government

AAAA

IT 500

Professor

June 30, 2013

University

1. How did the DTIS CRM team change the business process for dealing with abandoned vehicles in San Francisco? How did the old business process work, and what kinds of problems arose? Why was it necessary to change the business process before developing a new CRM system?

They created a single reporting database and the 311 single call center for people to call by using technology with software. Therefore, people can call and talk to a person without leaving a voicemail. They made the process of calling into the city similarly to every department. This helped make this process efficient and user friendly as well as helped employee deal with the customer in every kind of problem (Loftus, 2007).

The old process used a voicemail system and customers would have to leave a voicemail with complaint. In addition, this could make people call multiple reports about the same vehicle.

It is impossible to develop a new CRM system with the old process. As the old system created a lot of problem, it is necessary to change the business process. The new business process would make a faster response because it makes people talk to people.

One of the greatest problems that were experienced by the DTIS in San Francisco was the use of automated calls which made the recovery of abandoned vehicles slow. Although, systems could receive as many calls as possible, decision support was slow since it mostly required human decision for quick recovery. Noting the CRM that was instituted by the San Francisco department was necessary since the system included both automated calls and human interface. This indeed helped in increasing the speed of vehicle recovery (Francis, 2012).

2. Why is a CRM particularly useful for the support of “interaction” jobs (described in the text chapter) as opposed to “transaction jobs?”

The reason why CRM is useful is CRM has to do with people to people interaction not only doing the transaction. Therefore, CRM is very useful to interaction job and can add value in order to maintain existing customers as well as attract new customers (Laudon, 2012). CRM is one of the most useful organs in any organization and the San Francisco case is an example. The customer is the most useful part of any dealing. The forces of demand and supply are in deed regulated around the customer. In the case of a government like San Francisco, the common man is the customer; they are the person who chooses the government and upon whom the sovereignty of the government is based (Peel, & Mike, 2002).

Thus, CRM is the organ that helps any king of management to ensure that the automate boss is heard and considered in decision making (Francis, 2012). The automate boss here, the customer, is a large population who has a diverse opinion. The needs analysis of the whole customer base cannot be completed in a single unit as preferences and tastes keep changing. In this view, CRM comes in handy to ensure that the changing tastes and preferences f the customer are considered for the going concern of the organization.

3. How does this city-wide system help different agencies collaborate with one another?

The city wide system, which is adopted by the San Franciscan government, assists in the interdepartmental collaboration. The city wide system helps different agencies collaborate with one another through the advanced internet system. By collaboration, every agency can access to a single database so that they can work, connect and contact together. First of all, there is a single source of data, which needs to be acted upon by each of the departments singularly and in collaboration. For example, the case of abandoned cars is a data source that is of importance both to the security department as well as to the environmental department (Peel, & Mike, 2002). The planning department will also require such data. Thus, a single system helps the city system in sharing data and ensuring that the departments are in consistent interaction with one another.

The city wide system also has helped the San Franciscan administration in centralizing its activities. The security department, for example, receives command from a central location and this is based on the information relied to DTIS (Jha, 2008). The unification of a command base is important in ensuring that there is no redundancy and thus all the resources that are available are optimally used.

4. How has the system installed by DTIS helped integrate information among city agencies? What difference would this make for customer service?

The DTIS CRM system that has been adopted by San Francisco has indeed helped to integrate the information system in the city. As noted in the section above, all the departments have a single source from which they draw raw data from. Also, it is good to note here that, most of the information that is given through the system is unsolicited (Francis, 2012). Thus, this helps the city management to come up with a clear guideline on the rate of occurrence of various incidences. Such data when coming from a single source helps in simplifying the research work which needs to be continuous in any organization (Jha, 2008).

For example, about potholes in the street, a tree that wants decorating and a lot more requests. The collaboration can make thing simpler to give people options to communicate to the government about problems that have to be reports (Loftus, 2007).

5. Considering the types of information systems discussed in the chapter, what type of system is this? How would you characterize this system?

This type of information system is “Enterprise System” as it is about CRM. In addition, Transaction Processing System (TPS) was discussed in this case study too because it supports transaction. Executive Support System (ESS) is the last information system that was used in this case study because it prepared high level activity reports for senior managers.
In addition, in the chapter we have covered various types of information systems. The CRM used by the San Franciscan government is a DSS or decision support system. This is a system that is used to make critical decisions. It also assists the management to come up with its goals and objectives (Jha, 2008). The single source of the data system that is used by the San Francisco government helps identify areas of concern that must be addressed. The calls are used to determine the urgency of the mater and thus help the city management in deciding how to allocate resources to different occurrences (Peel, & Mike, 2002).

Furthermore, the system can be classified as the Management information system (MIS). A management information system is a system that helps the management of an organization by supplying information to the management. As noted, the CRM system adopted here is directly linking all the departments in the management of San Francisco (Jha, 2008). However, considering the two classifications, the system would better be classified under the decision support system.

References

Francis, B., (2012).

Customer Relationship Management

. New York: Wiley. Retrieved from
books.google.co.ke/books?id=BBat770XfJIC&printsec=frontcover&dq=Customer+R
elationship+Management&hl=en&sa=X&ei=MsnQUe-
BEYSN4gTUl4DoAg&redir_esc=y#v=onepage&q=Customer Relationship
Management&f=false

Jha, L., (2008).

Customer Relationship Management: A Strategic Approach

. New York:
SAGE. Retrieved from

http://books.google.co.ke/books?id=NbnZwhUjlF0C&printsec=frontcover&dq=Cust

omer+Relationship+Management:+A+Strategic+Approach&hl=en&sa=X&ei=tsnQ
UZmJPIeM4gSq7YGwCA&redir_esc=y

Laudon, J., & Laudon, K. (2012). Management information systems. Upper Saddle River,
New Jersey: Pearson.

Loftus, T. (2007). Sfgtv customer relationship management CRM San Francisco. Retrieved
from

Peel, J., & Mike, G., (2002).

Crm: Redefining Customer Relationship Management

. Mason:
Cengage brain. Retrieved from

http://books.google.co.ke/books?id=R4ath4NZcPkC&printsec=frontcover&dq=Crm+
Re

defining+Customer+Relationship+Management&hl=en&sa=X&ei=A8rQUYHaLuXR4QSdm4HABA&redir_esc=y