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Strategy, Management and Information Systems
Royal Philips’s Application of Information System in Business Processes
Nowadays information system is indispensable. The services industries, finance, insurance, real estate, and personal services, such as travel, medicine, and education, cannot operate without information systems. Information technology is the foundation of business in the 21st century. The ability of an enterprise to use information technology is increasingly dependent on its ability to implement its strategy and achieve its goals. Increasing market share, becoming high-quality or low-cost producers, developing new products and improving employee productivity are increasingly dependent on the types and quality of information systems in the organization (Laudon and Laudon, 2018). Royal Philips, one of the world’s largest health technology (HealthTech) companies (Oracle, 2016a), is no exception. The company was founded by Gerard Philips and his father Frederik in 1891, headquartered is in the Netherlands and employs approximately 77,000 employees across more than 100 countries (Philips, 2018a; Philips, 2018b; Oracle, 2016a). Royal Philips is a diversified enterprise, it includes the Consumer Health and Well-being division (formerly Consumer Electronics and Domestic Appliances and Personal Care division) and Professional Healthcare division (formerly Medical Systems division). The lighting division has been spun off as a separate company, Signify N.V. The core sectors of Royal Philips include improving people’s health and creating better outcomes in the health continuum from healthy living and prevention to diagnosis, treatment and home care (Philips, 2018b). Royal Philips reported sales of EUR 4.3 billion in the third quarter of 2018, up 4 percent from a year earlier. Net income from continuing operations rose 17 percent to EUR 307 million and adjusted earnings before interest, taxes, depreciation and amortization (EBITA) margins rose 40 basis points to 13.2 percent (Philips, 2018c).
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Dealing with thousands of customers across multiple channels, Philips perceived the digital technology can bring customer and data from global markets to promote better customer engagement. Therefore, Philips adopted a digital transformation program including CRM and Digital Campaign, aiming at transforming B2B and B2C CRM across global business sectors. They particular focus on modeling B2B campaign and leadership management. Oracle Eloqua, part of Oracle’s CRM which assist Philips improve the capability of campaign and lead management. In just nine months, they have created 600 marketing qualified leads (MQLs) and delivered EUR 9 million worth of new pipelines (Oracle, 2016a).
First of all, in order to analyze the macro environmental of a company from various aspects, researcher could use the analysis tools of political factors, economic factors, social factors, technological factors, environmental factors and legal factors (PESTEL) to analyze the company (Zahari and Romli, 2018). In this study, the most relevant aspects for Royal Philips is technological force.
In this tech-filled society, marketing departments can process complex feedback processes through software programs (Campbell, 2003). Campaign management software monitors customer communications and manages multiple touchpoints, such as customer service, point-of-sale, telemarketing, direct mail, and e-mail (Stefanou et al., 2003). Although activity management software is seen as part of the overall solution, it is mainly the smooth interaction between people and processes, information technology, sales channels and promotion of marketing (Hill, 1999; Rygielski et al., 2002). However, Royal Philips has considerable manual processes in B2B leadership management and did not cope with the cases problems timely enough. The Global Brand, Communications and Digital CRM & Campaign B2B team conducted a comprehensive review of their activities and leadership management projects and perceived that they could significantly improve the end-to-end process. This is also the time to improve communication and the correlation between marketing teams and sales teams, who strive to effectively share information about marketing schemes, leadership generation, and sales pipeline. Because of these disconnected and ultimately ineffective processes, measuring activity key performance indicators (KPIs) is difficult and impossible to see the results clearly. Consequently, in order to better manage customer schedules and data, increasing the visibility between sales and marketing functions, Royal Philips have to redesign and formalize its campaigns and leadership processes completely through customer relationship management technology application (Oracle, 2016a).
Secondly, we are going to apply Porter’s competitive forces model to analyze the strategic position and strategies of Royal Philips. The strategies do not solely depend on competing directly with traditional competitors, it also contains four other forces: new entrants to the market, substitute products, customers and suppliers (Laudon and Laudon, 2018). In this study, we are going to apply competitive force. Since Royal Philips is a diversified company, few companies of the same type as Philips are involved in so many fields. Therefore, in this part we mainly focus on the competitor in the field of consumer electrical appliances.
As technology improvement in modern society, more and more consumer electrical appliances enterprises manage campaign through customer relationship management software (Campbell, 2003). Take Panasonic for instance, they apply Oracle CX Cloud to assist company improve their sales, marketing, campaign and service performance (Oracle, 2016b).
Finally, Royal Philips implement differentiation strategy. In order to solve the specific challenges in the campaign, leveraged Oracle Eloqua to improve and re-design the campaign management, connecting Oracle Eloqua B2B software with the existing lead management system (Oracle, 2016a).
The challenges Royal Philips faced with campaign can be mainly divided into three section: highly manual process, lack of end-to-end process for marketing and sales, and campaign key performance indicators (KPIs) measurement is invalid (Oracle, 2017a). To solve these issues, Royal Philips apply Oracle Eloqua system to manage campaign (Oracle, 2016a). Oracle Eloqua is a B2B marketing automation platform for marketers, a leadership and marketing management tool designed to deliver real-time reports and insights at the right time, the right channel, and the right audience (Oracle, 2018a; Oracle, 2018b). Using a fully integrated and consistent process to achieve greater control and visibility throughout the leadership lifecycle.
User can have a general viewing of key marketing indicators in the near future after they login the system. Selecting specific campaign will display more detailed structure.
Creating a campaign on Eloqua Dashboard with a blank canvas. Then name the campaign according the contents. A campaign will have a segment to tell people what contacts will be targeted in the campaign and an email to send to that segment. There is a plethora of elements such as e-mail, landing pages, decisions and actions user could drag-and-drop from the left side onto the canvas, as shown in Fig.1, then configure and connect them accordingly. Firstly, drop the element of Segment Member that target in this campaign and the element of Invite E-mail to the canvas. After placed these elements can add a decision step to track what happens with the form. A decision step lets user decide what they send to contacts depending on whether people submitted the form or not. User can drag the element of Submitted Form decision from the left palette onto the canvas then decide how long are allowing for people to contacts and submit the form. Then decide what will happen to the contacts depending on whether or not people submit the form within the time frame. User can send a gentle reminder e-mail if someone doesn’t sign up or send them a confirmation email after they sign up. Moreover, avoiding people forget to attend, user can send the contacts that are attending the activities a reminder the day before. This can be especially useful if there is a long time period between the email confirmation and the roadshow date. Then open the right-side palette Settings menu to give the campaign descriptions which can decide the start and end dates for the campaign and decide that people can re-enter into the campaign or not. Finally, verify the campaign workflow to make sure that is working properly before clicking the Activate button to active campaign (Oracle, 2016c). The processes are illustrated in Fig. 2.
Fig. 1. Oracle Eloqua campaign canvas screen.
Retrieved from: Oracle, (2016c)
Fig. 2. Oracle Eloqua create campaign processes.
As we see in the Fig.3 the Outbound Activity by Campaign Type show the total outbound activity for all activities within the set date range. The user can see the exact value and overall performance of the outbound activity through the campaign report
The Overall Performance by Campaign, user can see that there is a total inbound activity and a total outbound activity shown by the size of the bubble, user can zoom in on the part of the chart by clicking and dragging the cursor back to the desired area of the default zoom click reset zoom (Oracle, 2017b).
The data tab of the Campaign Activity Timeline can be displayed by day, month, quarter, or year and users can sculpt the reports they need. As with the overall performance chart, the user can also zoom in by dragging an area or reset zoom at any time. These two timelines show the total outbound activity and the total inbound activity respectively (Oracle, 2017b; Oracle, 2017c).
In the Campaign Activity Summary, provides data for each campaign in the dashboard that user can select from the table to view a more detailed of a particular one (Oracle, 2017c).
Fig. 3. Oracle Eloqua campaign analysis screen.
Retrieved from: Oracle, (2017b)
In this assignment, Royal Philips leveraged Oracle’s system to assist them do better and create more business opportunities. In fact, in the modern society, information system is indispensable for enterprises, which can make the originally cumbersome manual process complete efficiently (Laudon and Laudon, 2018). Philips adopted Oracle Eloqua to generate 600 MQLs in just nine months and publish new pipelines worth nine million (Oracle, 2016a).
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As far as I am concerned in the process of research, Royal Philips is a company with lots of efforts and abundant experience. In recent years, they have devoted to HealthTech, but they have not neglected the consumer electronics and domestic appliances.
In HealthTech, Philips and Salesforce cooperate to create the data platform, using Philips’ healthcare technology, clinical information and the application of professional, as well as the Salesforce cloud computing in the enterprise, customer relationship of innovative service, plans to let the patient relationship management becomes the center of the platform, allows caregivers can support their patients closely. The platform will facilitate the sharing of medical devices and data, use the collected data for analysis to strengthen expert clinical diagnosis, and encourage patients to play a more active role in managing their own health (Philips, 2018d). Studies have shown that such patterns can reduce mortality by 26 percent and hospital stay by 20 percent. Based on the Salesforce platform, the platform supports collaboration, workflow, and integration of data from diverse sources around the world, including electronic medical records, diagnostic or therapeutic information, with built-in privacy and data security mechanisms. The platform also enables analysis to strengthen decisions, and the two sides will launch a variety of continuous care applications (Salesforce, 2014).
In consumer electronics and domestic appliances, they create applications that allow consumers to combine products with smart phones, such as electric toothbrush platforms and electric hair removal platforms for adults and children, and electric razor platforms. Most of application on APP stores are well received by consumers (Play.google, 2018)
Philips have sufficient resources to understand both B2B and B2C customers. If appropriate improvements can be made according to customers’ response in the future, they will enhance and attract more loyal customers.
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