Information Systems for Managers-II Assignment-6

Moore Medical Corporation

Group 3 Section A
Arpit Tandon Chandraprakash Sinha Navtej Verma Rishabh Singh Souvik Sinha Roy Yadav Rahul 2012PGP063 2012PGP093 2012PGP221 2012PGP306 2012PGP370 2012PGP446

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Group 3 Section A

Q1. Which new information systems, if any, should Moore purchase?

Major Problem facing by Moore Medical Corporations: Less share of wallet while having more penetration rate in the same customer group It has a higher customer churn rate of 30% to 35% compared to industry average of 25% PMS system indicated that it had 68% perfect order Passive demand forecasting An efficient CRM system can help Moores in following ways: Increases effectiveness of field Reps by providing capabilities like multitasking, monitoring, full time tracking An integrated record of all customer contacts from all sales channels and a optimal salesperson scheduling tool to increase Moores consistency with customers Sales management to enable sales forecasting, capturing of reasons of winning and loosing deals and competitor information
ISM-II Group 3 Section A

Q1. Which new information systems, if any, should Moore purchase? (contd.)
Another option is to add bolt-on software to existing ERP system, which can help MMC in the following ways: It includes demand planning system which will create purchasing requirements based on previous history and future planning activity It also includes three additional modules a)Warehouse transfer system, b)Deal Management, and c)Inventory stock simulation, which will save purchase order cost and enable MMC to carry less inventory while high service level Claritys CRM system is reasonably priced but it doesnt solve the major demand forecasting problem. We suggest that MMC should purchase the Demand Planning System, which would cost $300,000. It will increase customer satisfaction and it will boost profitability of company.
ISM-II Group 3 Section A

Q2. Things Moore doesnt know about its customers and best ways to obtain this knowledge
Why the number of loyal customers is less than the industry average? narrow product line or price sensitivity? Narrow product line - set up more distributor agreements and have big ticket items sent directly to their customers. Price sensitivity - can be assessed through testing. Approach several key customers within each segment and indicate that price are marginally increasing. Price sensitive customers will resist such change whereas loyal wont be much affected. Give certain price discounts to see if some customers come back. Those who dont, maybe getting better service elsewhere. This analysis could also give a new segment, similar to the pharmaceutical market, which is not profitable and should be dropped in order for the company to become profitable once again. Are there certain segments that are willing to pay more for the high levels of service that Moore Medical offers? If so then these customers need to be segmented down further using the above mentioned testing approach. When do the customers need additional supply? Add on a module to ERP that allows the company to forecast when specific customers will require a reorder of a product and in turn push the inventory straight through the system. This would increase customer satisfaction and minimize inventory shelving time for Moore. Can also be obtained through CRM implementation. Data on the newfound end-consumer market through the e-commerce - how to attract and retain them? Online surveys with discount incentives to get pertinent and honest data in timely manner.
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Q3. a) What are the pros and cons of Moore's move into e-Commerce / online ordering?
PROS
New customers from a completely new segment attracted by website accounted for 13% of online orders. They were projected to account for $500,000 within in the next year Customers were trained to navigate the site which can lead to less reliance on salespeople in the future thereby saving on labor costs The number of orders per month grew from 1,423 to 2,218, an increase of over $220,000 per month in additional income 87% of the customers ordering from the site were converted from other channels, saving time for salespeople The websites full catalog saved printing costs Customer convenience increased by providing them option of comparing products and costs on their own and saved
time

CONS
The investment was expensive and caused Moore to suffer operating losses in 2000. Further, it prevented Moore from investing in other projects Costs are expected to rise further if two or three additional programmers at $75,000 to $100,000 each are hired to keep the website updated It is an impersonal selling tool and some customers who prefer high-touch service may be dissatisfied due to lowering of perceived value. This could possibly result in increased churn rate

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Q3. b) Do you agree that this was a good move for the company?
Yes, we believe this investment was a good move for the company because of the following reasons, as determined from the advantages of entering into an online ordering system:
Financially, this was a good move for Moore. Online sales have increased new customers "wins" by 13% and established a new target market for the company to pursue, which is projected to account for approximately $500,000 in new business in the upcoming year. This consumer market did not require direct mail solicitation or outgoing phone calls from existing sales staff, thereby increasing profits from this segment. Existing customers are also drawn to online ordering, as 10% of existing clients are expected to use this system instead of other channels in the next year. Despite initial extravagant costs due to the transformation from traditional catalog to brick-and-click model, the amount of business generated from the website, projected at $544,732 per month means that the rise in costs should be nullified by increase in sales.
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