Wesfarmers Limited: Proposal Report on CRM System Implementation

This report proposes the implementation of an Analytical Customer Relationship Management (CRM) system at Wesfarmers Limited to address challenges such as increasing competition, rising costs, and declining customer satisfaction. The report details the background of Wesfarmers, its market analysis, and internal/external environmental factors using Porter's Five Forces and SWOT analysis. It justifies the need for an Analytical CRM system, outlining its benefits and costs, and includes a system analysis and design section, which covers the system development life cycle (SDLC) in seven steps: planning, requirements, designing and prototyping, software development, testing, development, and operations and maintenance. Post-implementation activities, project management, change management, and risk management are also discussed. The goal is to assist Wesfarmers in retaining and acquiring customers through improved data gathering and analysis, ultimately enhancing business performance and long-term productivity.

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.

MANAGING INFORMATION SYSTEM 2
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.

MANAGING INFORMATION SYSTEM 4
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

MANAGING INFORMATION SYSTEM 5
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.

MANAGING INFORMATION SYSTEM 6
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).

MANAGING INFORMATION SYSTEM 7
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.

MANAGING INFORMATION SYSTEM 8
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

MANAGING INFORMATION SYSTEM 9
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.

MANAGING INFORMATION SYSTEM 10
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

MANAGING INFORMATION SYSTEM 11
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.