Technology-Driven Demand and e- Customer Relationship Management e-crm

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1 E-Banking and Payment System Technology-Driven Demand and e- Customer Relationship Management e-crm Sittikorn Direksoonthorn Assumption University 1/2004 E-Banking and Payment System Quick Win Agenda Data Warehousing Overview Data Warehousing Characteristics Banking Data Warehouse Data Warehouse Model Supply Chain Innovations Functions of Supply Chain What is e-crm? Why we must Retention? CRM Infrastructure 1

2 Data Warehousing Overview Abilities to organize and access historical data Data can be pulled from multiple sources Data can be stored in a format friendly to conduct ad hoc analyses. The process of extracting data from operational system and transforming, integrating, summarizing and accessing it is called data warehousing. What is Data Warehouse? A Data Warehouse is a solution which enables the business users to make use of data in organization in an efficient timely and consistent manner. A Data Warehouse is usually defined to be a Subject-Oriented Integrated Time-Variant Non-Volatile Collection of data in support of management s decision-making process. 2

3 Operational and Informational: Data are different Operational Data Data Capture and Use Application Oriented Limited Integration Constantly Updated Current Values only Support Day-to-Day operations Example: Account Processing Loan Processing Teller Systems Trade Finance Informational Data Data Analysis Subject Oriented Integrated Non-Volatile Values Over Time Supports Management Decisions Example: Product Sales Analysis Trends Analysis Ad-Hoc Queries Data Mining Data Warehouse Characteristics Subject-Oriented : Not transaction or system oriented Integrated: Cross enterprise view comprising best data Time-Variant: historic information kept, temporal issues resolved Non-Volatile: Information is stable and not continually changing after entry into the warehouse Support Managerial and Decision support needs Contains Summaries as well as limited detail 3

4 Typical Questions & Sample Queries An Enterprise Data Model which can address business questions such as: Show me all new accounts opened last month, and sort them by branch and product line I want the operating margins for all branches What is the product profitability in term of income? What is the product / ATM usage figures by site? Display the breakdown of households based on product usage Display the growth / decline trends in market segments Banking Data Warehouse Customer Information Activities sorted by Transaction Type House holding Loans being used to pay other Loans Assets pledged & Cash vs Loans Comparison against a Pre-defined profiles Product Profitability Products usage by region, branch, segment Products profitability vs competitors Products profitability vs internal products Products revenue and average balance Funds Cash Flow by branch Repayment History, Projected Life Credit Exposure vs Actual Limit Loans roll over statistics Loan maturity by market segment Organization Profitability Accounts opened / closed by reason Total transactions by branch, activities Actual vs Target for new accounts,..etc.. 4

5 MetaData is a vital component of the Banking Data Warehouse Solution Definition: Data which describes the various components of the Warehouse (including Data Items, relationships Population routines, End user facilities, etc.) Characteristics: Rich Business Definitions from info. Framework Data models Rich Functional Display using GUI Product Enables Users to efficiently navigate around the Warehouse Encourages data and query reuse Data Warehouse Model There are 5 basic activities 1. Data Extraction 2. Data Storage 3. OLAP (Multidimensional data analysis) 4. Data Mining 5. Data Access 5

6 Data Warehouse Model Overview Trade PC-Data Access Loan HR Legacy System ETL Data Storage Warehousing OLAP/ Data Mining Data Warehouse Model Data Extraction : is the process of moving data from an operational environment into a data warehouse. As operational data is often stored in various disparate non-relational forms, the process of creating a data warehouse includes a number of discrete activities such as modeling, data conversion, data migration, and data management. Data Storage : is a relational database management system (RDBMS) residing on a dedicated server. There are three types of stored in the warehouse; Meta Data Detail Data Summary Data 6

7 Data Warehouse Model OLAP (On-line Analytical Processing) : is an architecture for performing complex analysis from a business perspective. OLAP is often referred to as multidimensional analysis such as data analysis which typically involves trends and comparisons that span several business dimensions. A business dimension is a subject s.a. product, sales region or distribution channel. Data Access : Data access tools provide easy access to data stored in a data warehouse. There are data access tools to address unique requirements of end users and professional programmers. Front-end data access tools are often referred to as DSS and ESS. Data Warehouse Model Data Mining : Data Warehousing is the process of creating a centralized stored of information for the purpose of analysis, Analyzing this store of info is called Data Mining. Data in data warehouses are often so large and complex they cannot be analyzed adequately with repetitive queries and reports. In such situation, data mining tools can be used to automate the decision-support process and find facts hidden in databases. Using a combination of machine learning and database technology, data mining tools find patterns in data and infer rules about the patterns, find answers to questions do not know how to ask. The information is then presented in a suitable form with graphics, reports, text and hypertext 7

8 Supply Chain Innovations 16 Supply Chain Functions E-Banking and Payment System The Internet goes beyond other technologies in providing two-way Communication between multiple firms offering products and services with multiple consumers for those products and services SCM is abilities to collect, store, communicate and forecasting inventory control Functions of The Supply Chain 1. Marketing research / new product development. 2. Forecasting demand 3. Purchasing of raw materials 4. Production, usually at multiple sites 5. Transportation between sites 6. Storage / Inventory 7. Delivery to end consumer. 8. Breaking of bulk 9. Consolidating / bundling. 10. Information flow and coordination 11. Cash flow. 12. Financing 13. Information to consumer. 14. Display, touch, feel by consumer. 15. Matching consumer with ideal product. 16. After-sales services 8

9 16 Supply Chain Functions 3. Purchasing of Raw Materials Component production 5. Transportation multiple sites 4. Production, usually at multiple sites Optimal Supply decision 6. Storage / Inventory Distribution Center 10. Information flow and coordination 14. Display, touch, feel by Consumer Stores Consumer 7. Deliver to End Consumer 2. Forecasting demand 1. Marketing Research/ new product Development E-Banking and Payment System Are All Customers Worth Keeping? What is e-crm? ERP SCM CRM PRM 9

10 Customer are number 1? Stu Leonard, who operates one of the most profitable supermarkets in the world, advertise two rules to his employees: Rule 1st: The Customers always right Rule 2nd: If the customers wrong, go back to rule 1 But consider that the company s largest customers tend to get the deepest discounts and demand the most services. There is some evidence that medium-size customers often yield a higher return on investment than the company s largest customers. 20/80/30 Rule The 20 percent of profitable customers account for 80 percent of the company s profits. The formulation has been modified more recently into the 20/80/30 rules, which adds the observation that the poorest 30 percent of the company s customers cuts the company s potential profits in half. All Customers important, but Some important than other 10

11 Why we must Retention? Retained customers buy more over time if they are highly satisfied. Cross-selling Up-selling The cost of serving a retained customer declines over time. Highly satisfied customers often recommend the seller to other potential buyers. Long-term customers are less price-sensitive in the face of reasonable price increase by seller. Business Cycle 3rd Business Intelligent Re-marketing 2nd New Business 1st Retention Enterprise 11

12 What is CRM? Customer Relationship management (CRM) is a business strategy to select and manage the most valuable customer relationships. CRM requires a customer-centric business philosophy and culture to support effective marketing, sales, and service processes. CRM application can enable effective customer relationship management, provided that an enterprise has the right leadership, strategy,and culture. Customer Relationship Management Infrastructure Manage Client Profitability Manage Client Information E-CRM Manage Client Interface Manage Sales Process 12

13 Manage Client Information Financial Objective Tracking Derived Transactional Profile Behavior / Trend Analysis Customer Master File Manage Client Interface Sale Platform All services automated Describes Key services Open / Close / Transfer, etc. Support Platform Tele-banking Administrative Support Business banking Commission Sales staff Service Platform Reduce client impact errors Improve Productivity Increase Revenue Client Interface Devices 13

14 Manage Sale Process Market Analysis Sales Tracking and Analysis Predictive Modeling Manage Client Profitability Marketing segmentation Profitability Analysis Customer Product Pricing 14

15 E-Banking and Payment System Next Week for Finalize Quick Win KUSA for you all Knowledge Understanding Skill Attitude 15