Moore medical group case for Tuesday

[Jared Call]

Here are my initial notes on the Moore Medical case:

Due: Group Oral Case: Moore Medical Corporation

1. Which new information systems, if any, should Moore purchase? How did you arrive at this decision? Come to class prepared to present and justify your decision.

·         Rather than choose between $300k for the ERP bolt-ons and $500k up-front plus $90k/mo for the customer care on the CRM system from Clarify, maybe they should spend $25k or so on a consultant to help them decide what they really need.  I realize that they already did this with Arthur Andersen and experienced significant cost overruns, so they may not trust consultants at this point, or may want to use a different consulting company.

 

2. Why is Moore considering purchasing CRM? What are the various business needs they are hoping to address with this information technology?
• First, they aren’t even convinced they need a CRM.  Are they too far down the road of quotes/evaluations for not knowing whether or not a CRM will address their business needs?
• They want to better understand their customer behaviors and preferences. They don’t know why they have a 30-35% customer churn, 10% over industry average.
• No understanding of why penetration rates and wallet shares are so different in different markets.  Marketing (market research + analysis + advertising) are key here.  The current ERP system does not address this need.
• Some executives feel that Moore is not fully utilizing the recently-purchased ERP system.  Do they need further study to determine what functionality they can get from that ERP system beyond what they’re getting today?  Are there other modules that would address CRM?
• 1-800 calls are expected to account for 50% of customer orders, but the new ERP system takes longer to enter/process customers/orders than the old system did. What was the % of orders in 2000 that came from 1-800 operators?  How does the more lengthy ERP process affect the profitability of these orders?
• Demand planning – will CRM address this at all?  Since this is “the most serious problem Moore faced with its J.D. Edwards implementation” maybe they should spend some $$ addressing this issue before tackling CRM.  What has more immediate importance, addressing the demand planning problem or the CRM? From the case’s initial comments, it seems that the need for CRM is somewhat unknown, but the need for the demand planning has a clear business impact.  Do we address the known problem first, or leave it festering while forging into the unknown with the CRM?

 

3. Can the likely financial benefits of any of the proposed new information technologies be assessed? If so, which ones? What are the benefits?
• The demand planning system appears to have clear benefits and address well-understood issues.
1. Optimal stock levels at the right distribution centers
2. Reduce split orders
3. Faster shipping
4. Improved ordering from suppliers
1. Stock up when there are special offers
2. Reduce total number of suppliers
• The CRM system is relatively unknown, and would address poorly-understood issues.

 

4. What are the most important things that Moore does not know about its customers at the time of the case? What are the best ways for the company to obtain this knowledge?
• Optimal customer visitation schedule for salespeople
• Better understand their customer behaviors and preferences. Why do they have a 30-35% customer churn, 10% over industry average?
• Why are penetration rates and wallet shares are so different in different markets? Marketing (market research + analysis + advertising) are key here.  The current ERP system does not address this need.
1. Is Moore’s product lineup too narrow for customer customers?
2. Do some customers only care about price?  If so, are these customers more concentrated in certain market segments?
3. The customers that call the 1-800 number – Why did they not order online? Did they find problems?  Prefer talking with a  human?  Had ordering questions?  Can Moore improve its online ordering to reduce phone ordering costs and increase % of customers that order online?

 

5. What are the pros and cons of Moore’s move into eCommerce / online ordering? Do you agree that this was a good move for the company? 
• Con? It would seem that costs of processing online orders would be lower than processing phone orders, but with $1.5 million to get it all set up, and considering 2-3 employees at $75-100k each to maintain it, are online orders really cheaper than phone orders?
• Pro: Online ordering is the present and future. Not having online ordering will lose customers.

 

Notes: Holy cow the CRM CustomerCARE is expensive.  18% per MONTH?  They’re also getting charged a lot for the user accounts – do they really need 100 licensed users?

ERP modules under consideration do not appear to address bids/quotes, marketing, order entry, or new account setup. These seem core to Moore’s ability to do business, and must be addressed.  Would the CRM system address these?  Any better understanding of customer behaviors and preferences will likely be hampered by the current issues managing those customers in the ERP system.

[David Hall (ZMSC)]

I added some thoughts below for our discussion today.

 

From: byug...@googlegroups.com [mailto:byug...@googlegroups.com] On Behalf Of Jared Call
Sent: Saturday, May 31, 2014 11:05 AM
To: byug...@googlegroups.com
Subject: Moore medical group case for Tuesday

 

Here are my initial notes on the Moore Medical case:

Due: Group Oral Case: Moore Medical Corporation

1. Which new information systems, if any, should Moore purchase? How did you arrive at this decision? Come to class prepared to present and justify your decision.

·         Rather than choose between $300k for the ERP bolt-ons and $500k up-front plus $90k/mo for the customer care on the CRM system from Clarify, maybe they should spend $25k or so on a consultant to help them decide what they really need.  I realize that they already did this with Arthur Andersen and experienced significant cost overruns, so they may not trust consultants at this point, or may want to use a different consulting company.

DH – The monthly price is $7,500 not $90,000. That is the annual cost. Given the results of the Internal Report (Ex. 8) it seems that the desire is to enhance / fix the in house Channel Integration and Technical Environment, which some of the bolt-on tools will provide, then move into a CRM tool to broaden customer share of wallet. If you go in that order of implementation, you have a more exact and consistent approach to order, fulfillment, and service where the CRM can be optimized. If you put a CRM tool overtop a disjointed operating process, you won’t get the benefits you expect from the CRM because the data going in will be more flawed.

 

2. Why is Moore considering purchasing CRM? What are the various business needs they are hoping to address with this information technology?

• First, they aren’t even convinced they need a CRM.  Are they too far down the road of quotes/evaluations for not knowing whether or not a CRM will address their business needs?
• They want to better understand their customer behaviors and preferences. They don’t know why they have a 30-35% customer churn, 10% over industry average.
• No understanding of why penetration rates and wallet shares are so different in different markets.  Marketing (market research + analysis + advertising) are key here.  The current ERP system does not address this need.
• Some executives feel that Moore is not fully utilizing the recently-purchased ERP system.  Do they need further study to determine what functionality they can get from that ERP system beyond what they’re getting today?  Are there other modules that would address CRM?
• 1-800 calls are expected to account for 50% of customer orders, but the new ERP system takes longer to enter/process customers/orders than the old system did. What was the % of orders in 2000 that came from 1-800 operators?  How does the more lengthy ERP process affect the profitability of these orders?
• Demand planning – will CRM address this at all?  Since this is “the most serious problem Moore faced with its J.D. Edwards implementation” maybe they should spend some $$ addressing this issue before tackling CRM.  What has more immediate importance, addressing the demand planning problem or the CRM? From the case’s initial comments, it seems that the need for CRM is somewhat unknown, but the need for the demand planning has a clear business impact.  Do we address the known problem first, or leave it festering while forging into the unknown with the CRM?

DH – Jared covered this very well. I think some of the questions you ask, support the comments I made relative to the investment decision. 

3. Can the likely financial benefits of any of the proposed new information technologies be assessed? If so, which ones? What are the benefits?

• The demand planning system appears to have clear benefits and address well-understood issues.

1. Optimal stock levels at the right distribution centers
2. Reduce split orders
3. Faster shipping
4. Improved ordering from suppliers

1. Stock up when there are special offers
2. Reduce total number of suppliers

• The CRM system is relatively unknown, and would address poorly-understood issues.

1. Correct, until we get the other systems funning more efficiently, we cannot effectively implements a CRM.
2. Once there, then the CRM can tell us what supplies should be in which DC to better support order fulfillment and even do a better job of accomplishing the “perfect order” goals.

 

4. What are the most important things that Moore does not know about its customers at the time of the case? What are the best ways for the company to obtain this knowledge?

• Optimal customer visitation schedule for salespeople

1. I think the added layer here is, which customers prefer or expect salesperson visits. This is like the phone vs. online comments below.

• Better understand their customer behaviors and preferences. Why do they have a 30-35% customer churn, 10% over industry average?

1. They also do not know who their price-conscious shoppers are (Segments, geography, specializations?). I know this is implied in the churn discussion, but I think its worth calling out.

• Why are penetration rates and wallet shares are so different in different markets? Marketing (market research + analysis + advertising) are key here.  The current ERP system does not address this need.

1. Is Moore’s product lineup too narrow for customer customers?
2. Do some customers only care about price?  If so, are these customers more concentrated in certain market segments?
3. The customers that call the 1-800 number – Why did they not order online? Did they find problems?  Prefer talking with a  human?  Had ordering questions?  Can Moore improve its online ordering to reduce phone ordering costs and increase % of customers that order online?

 

5. What are the pros and cons of Moore’s move into eCommerce / online ordering? Do you agree that this was a good move for the company? 

• Con? It would seem that costs of processing online orders would be lower than processing phone orders, but with $1.5 million to get it all set up, and considering 2-3 employees at $75-100k each to maintain it, are online orders really cheaper than phone orders?
  
  
• Pro: Online ordering is the present and future. Not having online ordering will lose customers.

 

Notes: Holy cow the CRM CustomerCARE is expensive.  18% per MONTH?  They’re also getting charged a lot for the user accounts – do they really need 100 licensed users?

ERP modules under consideration do not appear to address bids/quotes, marketing, order entry, or new account setup. These seem core to Moore’s ability to do business, and must be addressed.  Would the CRM system address these?  Any better understanding of customer behaviors and preferences will likely be hampered by the current issues managing those customers in the ERP system.

It looks like the Distribution Suite will address Bids/quotes and order entry. With the data from that module you can address the Marketing needs with some simple data analysis. That is an area where CRM tool would be a value add once we cleaned up that current environment. It could give you easier to manage customer order data and provide predictive analytics for order fulfillment and inventory mgmt.
The Foundation Suite has capabilities to address New account set-up and other customer demographic data, that again could be more robust with a solid CRM tool.

 

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[Jared Call]

My first swipe at the presentation is now in Dropbox, saved to the collaboration area called "Group Case - Moore Medical.pptx"

It is also attached to this email so David can get it at work without having to steal someone else's free WiFi.

-jared

[Jared Call]

Small update to the first slide at David's request.

[David Hall (ZMSC)]

Thank you Jared!

 

I think the slides look great, nice job. It’s clean and bright, like you would expect a Doctor’s office to be, I like it.

 

Here is my feedback:

 

Slide 4: I think we can tighten up the bullets:

-          Customer Segmentation

o   Which is most profitable

o   Which products are in demand (by segment)

o   Which are most price conscious

-          Order Channel Preferences

o   Online

o   Phone / Catalog

o   In-person sales

-          Customer Satisfaction

o   Do we offer enough of the right products

o   How do we retain existing customers while gaining new ones

 

Slide 6: Just add to the last bullet:

 

-          Wait on CRM

o   The pressing issues that need to be solved do not require the CRM

o   CRM tools are only as good as the data we have

o   Improve current environment, build a culture of data management, add CRM

[Jared Call]

Good suggestions.  I will need to shrink the font to make those changes, but I think it will look ok.  I can probably get to it in an hour or so.

-jared

[Jared Call]

Updated in Dropbox and attached.

[Thaylene Rogers]

Thank you Jared. 

[Jared Call]

Do we need to submit the presentation?  I have two conflicting memories -- one that says we're to submit via Learning Suite, and another that says that all we need to do is be ready to present if called upon.

I checked in Learning Suite and don't see a way to submit like we did for the poster, though I'm sure we could email it to him.

Do any of you remember for sure?

-jared

[David Hall (ZMSC)]

I believe we are to submit it. He said he was going to get the link ready for submissions.

[Thaylene Rogers]

I remember him saying each group should submit 1 deck. 

 

From: byug...@googlegroups.com [mailto:byug...@googlegroups.com] On Behalf Of Jared Call

Sent: Tuesday, June 03, 2014 12:57 PM
To: Thaylene Rogers