Implementing a New CRM System for Wesfarmers Limited

This proposal discusses the implementation of a new CRM system for Wesfarmers Limited to enhance customer relationship management and improve business performance.

Running head: MANAGING INFORMATION SYSTEM
Management Information System
January 20
2019

MANAGING INFORMATION SYSTEM 1
Letter to Sponsor
Mr. Rob Scott
Managing Director
Wesfarmers Limited
123 St Georges Terrace, Perth WA 6000,
Australia
Wesfarmers Limited is one of the largest conglomerates of Australia with the mission to offer
the best quality services to the customers around the world that could increase the satisfaction
level of the customers. As it is clear, that new CRM system has performed an important part
in the retail industry and the key competitors of Wesfarmers have already installed the system
to attain competitive advantage. The newly installed CRM system will assist management in
maintaining a relationship with the customer, enhancing efficiency, increasing productivity,
and making strategies for the business.
It is a pleasure for me to present this reported proposal regarding implementing a new CRM
system in your company. As per the analysis, the key role of CRM system in your company
must contain recording all the activities of sales, delivery best customer experience, data
analysis, offering on demand CRM solution, introducing customer experience portfolio, and
in-store services. The projected time for the development of a new CRM system into the
business is four months, which will be, divided into seven steps of system development life
cycle. The primary activities are detailed in the report.

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I look forward to hearing your response and deliberating the attach report proposal regarding
the development of a new CRM system.
Regards,

MANAGING INFORMATION SYSTEM 3
Executive Summary
The intent of this reported proposal is to develop the understanding related to the adopting
information system into the business for the growth of the business in the long run as well as
short-run. The paper is comprised of a brief analysis of the Wesfarmers Limited for which the
information system has been suggested. The company is dealing with numerous challenges
such as competition, increasing cost, and decreasing satisfaction of the customers. In order to
overcome these challenges, the paper has recommended Wesfarmers Limited to adopt
Analytical CRM system, which operates to retain and acquire customers for the business by
gathering data, related to the existing and potential customers.

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Table of Contents
Letter to Sponsor........................................................................................................................1
Executive Summary...................................................................................................................3
Introduction................................................................................................................................5
Background of Wesfarmers....................................................................................................6
Market Analysis.....................................................................................................................6
External Analysis of Wesfarmers...........................................................................................7
Porter Five force Model.....................................................................................................7
Internal Analysis of Wesfarmers............................................................................................8
SWOT Analysis.................................................................................................................8
Problems and Opportunities.................................................................................................10
The justification for Analytical CRM system......................................................................11
Cost/Benefit Analysis for Analytical CRM system.........................................................12
Cost/Benefit Analysis for Wesfarmers Limited...............................................................13
System Analysis and System Design...................................................................................13
System Development Life Cycle of Analytical CRM System.............................................14
Planning............................................................................................................................14
Requirements....................................................................................................................14
Designing and Prototyping...............................................................................................14
Software Development.....................................................................................................15
Testing..............................................................................................................................15
Development....................................................................................................................15
Operations and Maintenance............................................................................................15
Post Implementation Activities............................................................................................15
Project Management.............................................................................................................16
Change Management............................................................................................................17
Risk Management.................................................................................................................17
Conclusion................................................................................................................................18
References................................................................................................................................19

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Introduction
An information system is said to be a set of components that operate together to manage
storage and data processing. The role of an information system is to assist the main features
of running the business, like record-keeping, data analysis, decision-making, communication,
etc. This information is used by businesses to enhance their operations, take decisions, and
attain a competitive advantage (Gunasekaran and Sandhu, 2010). Information systems
classically comprise a mixture of hardware, software, and telecommunication networks.
Modern technology can majorly boost the productivity and performance of the company. The
information system does not have any substitute, organization globally relies on them to
investigate and identify new ways to make a profit, involve customers, and rationalize time-
consuming tasks. With the support of an information system, a business can save money and
time at the same time taking smarter decisions (Lugmayr, Stojmenova and Stanoevska,
2017). The international department of a company like sales and marketing, can easily share
information and communicate better. As this technology is automatic and practices complex
systems it decreases the chances of human error. Besides this, personnel can concentrate on
the key features of business in place of spending hours in gathering data, performing manual
analysis, and filling out paperwork (Baglieri, Metallo and Rossignoli, 2014). The paper is
aimed towards discussing the importance of using information system into the business and
the way it assists in resolving issues and increasing long-term productivity. The paper will be
comprised of highlighting the seven steps involved in the system development life cycle and
its cost-benefit analysis to analyze its feasibility. Wesfarmers has been selected for which an
information system will be selected that will support the company in enhancing its results and
performance. Besides this, the paper will examine the risk involved in the implementation of
the information system and the way they will be managed by the business.

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Background of Wesfarmers
Wesfarmers Limited is one of the famous conglomerates of Australia with headquarter in
Western Australia, and majorly operations in New Zealand and Australia in the different
segments such as fertilizers, industrial, and safety, retail, coal mining, and chemicals. In
2016, the company earned AU $65.98 billion revenue, which resulted in making Wesfarmers
the largest Australian business (Wesfarmers, 2019). It is the largest employer in Australia
with around 220,000 employees (Wesfarmers, 2018). The company was established in 1914
as a co-operative to offer services to the farmers situated in Western Australia. The vision and
mission of the company are to conduct ethical practices considering the rules and regulations
framed by the government. It desires to deliver satisfactory returns to the key shareholders
(Sustainability report, 2018).
Market Analysis
The grocery stores and supermarkets industry is the most severely competitive industries of
Australia. The fast development of ALDI in the last five years has considerably changed the
operating landscape of the industry, with the status of its private-label products with low cost
supporting strong growth (IBIS World, 2018c). The development of ALDI has enforced the
established giants in the industry that are Coles (Wesfarmers) and Woolworths to reduce the
prices of their products and introduce private label products variety. Small chains of the
supermarket, like FoodWorks, have thrashed to contend in a progressively price competitive
industry. The profit margin of the industry has decreased in the last five years due to cost
leadership strategy adopted by key players in order to remain competitive (IBIS World,
2018a).

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External Analysis of Wesfarmers
Porter Five force Model
The threat of New Entrant
Wesfarmers is one of the famous businesses of Australia that deals in the retailing of
numerous types of items, like industrial, hardware, insurance, energy, fertilizers, and safer
chemicals (Fern Fort University, 2018b). This reflects that Wesfarmers is one of the obstacles
for new entrants in the Australian retailing. Hence, the threat of new entrant is low in the
industry.
The threat of Substitute Products
The threat of substitute products for Wesfarmers is high in the retailing industry. However,
the company has adopted different environmental friendly, energy efficient techniques of
production and offer high quality services to the customers that help business in attaining
competitive advantage in the market.
Bargaining power of customers
Wesfarmers frequently conducts adequate market research in order to understand the altering
trends and expectations of the customers. The company also advertise its viable method of
operating business that makes further acknowledgment to an already known organization like
Wesfarmers (Fern Fort University, 2018b). Therefore, the bargaining power of the customers
is moderate in the retailing industry of Australia.
Bargaining power of suppliers
Wesfarmers gets its resources from diverse markets, as an outcome of its different range of
products it deals due to which company deals with limited competition in the supplier market.
Therefore, the bargaining power of the suppliers in the industry is low.

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Competitor among existing players
The Australian retailing industry is presently experiencing intense competition among the
existing giant players, such as ALDI, Coles, and Woolworths. Hence, it could be said that the
retailing industry of Australia is highly competitive (Fern Fort University, 2018b).
Internal Analysis of Wesfarmers
SWOT Analysis
Strength of Wesfarmers
Being one of the leading businesses in the retailing industry, Wesfarmers has a number of
strengths that allow it to thrive in the market. The strengths not just support it in protecting
the share in the market but also support in penetrating new markets. Some of the strength of
Wesfarmers are:
Strong brand portfolio – In the last some years the company has invested a huge amount in
increasing the value of its brand portfolio because a strong portfolio can support business in
expanding the business into new product categories (Fern Fort University, 2018a).
Wesfarmers has a successful record of incorporating complimentary businesses through
acquisition and mergers. It has positively integrated many technology companies in past
years to rationalize its processes and to shape a consistent supply chain (MBA Skool, 2018).
Wesfarmers is successful in making highly skilled personnel through different training
programs. The company has invested a huge amount the training of its employees to motivate
the workforce to work towards attaining competitive advantage in the market.
Weaknesses of Wesfarmers
Weaknesses are the points where Wesfarmers can enhance is performance. In the case of
Research and development, Wesfarmers is below the average rate in front of developing

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players in the market. However, company is investing huge amount in research and
development but is incapable to compete with the leading organizations in terms of
innovations (Fern Fort University, 2018a).
Wesfarmers is one of the leading organizations of the Australian industry but it is
unsuccessful in expanding business operating into different segments.
Opportunities for Wesfarmers
The market development will offer an increased competitive advantage and allow
Wesfarmers to improve its competitiveness in comparison to other rivals.
New environmental policies will help in creating a field for every player in the industry. It
highlights a great opportunity for Wesfarmers to carry an advantage in new technology and
gain market share in the new product category (Fern Fort University, 2018a).
The company is investing in the online platform in order to increase its customer base. This
investment has offered a new channel of sales for Wesfarmers. In the future company can use
this opportunity by understanding its consumer better and meeting their requirements with the
help of big data analytics.
Government green drive also unlocks an opportunity for procurement of the products
provided by Wesfarmers Limited by the state and federal government workers (MBA Skool,
2018).
Threats for Wesfarmers
The increasing cost of raw material can raise challenges for Wesfarmers to maintain the cost
of its products.

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The growing trend of isolationism in America can result in a similar type of reaction from
other country’s government thus adversely affecting the worldwide sales (MBA Skool,
2018).
The stable competition in the industry has increased the number of players in the last two
years, which has majorly affected the profitability and sales of the business.
New regulations related to the environment under the 2016 Paris agreement can be a threat to
some of the existing product classes (Fern Fort University, 2018a).
Problems and Opportunities
The system of customer relationship management is a set of software applications that
support business in defining the preferences and needs of their consumers by handling,
forming, tracking, and storing all consumer interactions. As per APICS Dictionary, Customer
relationship management is determined as the assortment and examination of information
intended for marketing and sales decision support to apprehend and meet the potential and
existing consumer needs (Aptean, 2017). It comprises order entry, catalog, and account
management, adjustments, payment processing, credits, and other functions. The CRM
System is valuable as the information provided by them can assist in boosting the business
objectives of an organization. For example, if sales advisers knew the precise needs and
demands of their consumers, they can supply a more tailored service making a more client-
focused environment. The CRM systems also offer a dominant documentation location,
permitting workers across diverse departments' access to similar information (Perna and
Baraldi, 2014).
Wesfarmers Limited is dealing with numerous challenges in the retailing industry of
Australia that is directly affecting the profitability of the business. Some of the challenges
that are faced by the Wesfarmers in the market are increasing competition reducing the

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market share of the company, unsatisfied customers due to the increasing cost of the
products, increasing cost of raw material (IBIS World, 2018b). All these issues are being
raised for the marketing and sales team of Wesfarmers Limited, due to which they are unable
to deliver sufficient productivity into the procedure. ALDI is one of the big competitors of
Wesfarmers, which is offering low cost products and private labeled products.
Considering the above-specified challenges, the company required an effective system of
customer relationship management in order to get proper information that could support in
framing policies to meet the needs of the customers and strongly competing with the
competitors such as ALDI (SBS News, 2016). Wesfarmers Limited can install Analytical
CRM through which a company can effectively deal with the competitors by managing the
procedures of customer retention and customer acquisition, and maintaining the track of
consumer details. This system will also support the company in reducing the lot of time that
is consumed in gathering information about customers and evaluating it to get the proper
result (Management Study Guide, 2018).
The justification for Analytical CRM system
Analytical CRM makes the procedure of customer retention and customer acquisition simple
and support in maintaining the proper track of the customer details (Josiah, Ikenna and
Jennifer, 2015). It is said to be the best solution for the businesses that desire to gather and
evaluate huge data. The three key functions of the analytical Customer Relationship
Management system are:
Managing data – The analytical CRM system is involved in tracking consumer interactions
and other customer-related information that can enhance the business bottom line.
Customer Retention – Under this process system is focused on focusing on delighting the
customers, making them happy and inviting them to avail more and better services.

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Customer Retention – Customer retention is focused on converting potential customers into
consumers for the business (Bauer, 2017).
The more information is gathered by the business on customer buying patterns, pain points,
customer behavior, can support in tailoring the sales and marketing strategies of the company
focused on existing and new customers. Investigating data related to the customer can also
support in recognizing places where the sales funnel requirements are de-clogging or
highlighting general issues faced by the current consumer. An analytics CRM offers
information that is required to reframe the marketing strategies and create improved ways to
interact with the target market. The Wesfarmers Limited can install the Analytical CRM
system into its business to solve the issues of increasing cost, decreasing customer
satisfaction, retaining customers, and effectively competing with the competitors in the
retailing industry. As the Analytical CRM system will gather the required data for the
business related to the customer requirement, behavior, buying pattern, such that business can
make marketing and sales strategy to attract customers and give strong competition to the
rivals (Faed, 2013). With the implementation of the Analytical CRM system company can
easily decrease the 10% cost of its products in the future which will eventually result in
increasing the profit for the company. However, in the initial phase of the implementation of
the Analytical CRM system company has to invest some amount to get the benefit in the
future. Moreover, with the implementation of the system company will effectively give
strong competition to the competitors in the market by gathering correct data related to the
customers’ expectation and offering the best services to them.
Cost/Benefit Analysis for Analytical CRM system
Cost
Purchasing Analytical CRM system $ 10000

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Maintenance $ 1200
Benefits
Increasing profit $ 5000
Decreasing Cost $2000
Cost/Benefit Analysis for Wesfarmers Limited
Tangible Cost
Training cost of employees
Purchasing cost of Analytical CRM system
Timely updating the version
Tangible Benefits
Increasing profit by retaining customers
Reducing the cost of the products
Intangible Cost
Time consumption in the employee’s training
Intangible Benefits
Increased customer satisfaction
Improving customer loyalty
Gaining Competitive advantage
System Analysis and System Design
The Analytical CRM system is created to support different businesses in retaining old
customers, and acquiring new customers by gathering data related to customer behavior,
buying patterns, demand, and expectations from the market (Management Association and

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Information Resources, 2017). The designing of this system is done to support the
management of the business to frame different marketing and sales strategies used to attract a
maximum number of customers.
System Development Life Cycle of Analytical CRM System
Planning
Planning is phase is focused on the scope of the project, which is comprised of project
schedules, plans, and cost and procurement requirements. At this phase, the company will
identify the different problems that it is facing in the industry due to which the profitability is
majorly being affected (Langer, 2013). The Wesfarmers is presently dealing with issues such
as increasing competition, increasing the cost of raw material, decreasing customer
satisfaction, etc.
Requirements
The Information Technology team work to identify the needs of the stakeholders. The output
is documented such that the management can identify the solution of the problems
experienced by the business. The Wesfarmers Limited requires an information system that
could work to retain and acquire customers for the company and framing policies to compete
with the rivals.
Designing and Prototyping
Once the necessities are understood, the procedure of designing the information system takes
place. It uses established patterns for application construction and software development
(Roebuck, 2012). Here, Wesfarmers will contact with one of the application developers for
designing Analytical CRM system for the business such as identifying the requirement of the
business and the required features in the system.

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Software Development
This phase produces is focused on developing the required software. The selected application
developer will initiate start developing the CRM system for Wesfarmers such that it could
support it in improving its productivity.
Testing
The phase of testing in the system development life cycle is debatably the most significant
part. It will be difficult for the developers to provide quality software without testing.
Approaches that will be used for system testing are unit testing, security testing, code quality,
performance testing, and integration testing.
Development
The development stage is the most automated step. In high-maturity business, this step is
invisible. At this stage, the Analytical CRM system will be developed for Wesfarmers
Limited such that it can work on retaining customers and acquiring new customers.
Operations and Maintenance
The operations and maintenance step in the procedure is called as the end of the beginning.
However, the system development life cycle does not end here (Singh, 2011). The software is
regularly monitored in order to confirm proper operation.
Post Implementation Activities
Post implementation activities are the activities performed by the business after the successful
instalment if the information system into the system. The post implementation activities that
will be adopted by Wesfarmers Limited are training to the employees, changing marketing
and sales strategies, hiring system experts, etc.

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Project Management
Project management is one of the essential procedures adopted in business to effectively
manage the task or project undertaken and identify the possible challenges that could
influence the performance of the business (Lester, 2017). Under project management, it is
very essential for the business to interact with all the stakeholders for their opinion and
interest in the implementation of the system. The below table will represent different types of
stakeholders of the Wesfarmers Limited and their responsibilities into the business.
Stakeholders Responsibilities Priority
Top management Framing different growth
strategies and policies
Guidelines for the
organization
Budgeting
High
Employees To properly work towards
meeting their responsibilities
Work towards attaining the
goal of the business
To support management in
the decision making
High
Customers To avail the services of the
business
Provide correct feedback
about the availed services
Medium

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Change Management
Change management is a combined term used for all the methods to support and prepare
individuals, teams, and organizations in doing organizational change. The common change
drivers comprise technology evolution, crisis, consumer habit changes, process revise
acquisitions, organizational restructuring, mergers, and the threat of new entrants in the
market (Pugh, 2016). Regarding the implementation of Analytical CRM system, the company
needs to make numerous changes in its mission and vision statement, marketing and sales
strategies. To manage the changes, the company need to communicate the adopted changes
with the employees, before the implementation of the system. The clear communication
avoids the chances of strikes and resistance of the employees in the business.
Risk Management
Risk Management is the process adopted by the business of identifying the potential risk,
assessing them, and taking actions to eliminate risk from the procedure (Elahi, 2018). The
risk that can be experienced by Wesfarmers Limited at the time of implementing the
Analytical CRM system are:
 The resistance of the employees towards adopting the system due to the complex
nature of the CRM system
 Failure in the implementation of the system due to lack of knowledge or expertise
 Financial losses due to any damage to the system
Wesfarmers Limited can avoid these risks by properly providing training to the employee
regarding the processing of the system. Besides this, Wesfarmers can avoid the resistance of
the employees by clearly communicating the benefits and advantages of adopting a new
system into the business.

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Conclusion
The above paper is comprised of a detailed analysis of the system development life cycle of
Analytical CRM system. The paper is based on Wesfarmers Limited, which is one of the
known conglomerates of Australia with major operations in New Zealand and Australia. The
company is involved in the retailing of numerous products that have numerous substituted in
the market, due to which company deals with intense competition from the key players of the
industry. Besides this, the company also struggling with the increasing cost of the raw
material, which is affecting the satisfaction level of the customers. In order to strongly deal
with the competition and manage the cost of its products, the paper has suggested
Wesfarmers Limited adopt Analytical CRM system which is focused towards gathering data
related to customer behavior and buying patterns for retaining and acquiring customers for
the business. However, there is numerous risk involved in the implementation of the
suggested CRM system for the business such as the resistance of the employees, damage in
the system or failure of the implemented system. In order to deal with these risk, a company
needs to communicate the changes going to take place in the business such that strikes can be
avoided at the highest level.

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