3m's New Information System Research Paper

3M's New Information System Research Paper

Intro The business environment is very competitive. Consequently, companies need to offer customers efficient and reliable service. If they do not, customers will switch to more consumer efficient companies. Furthermore, as companies grow in size, it becomes harder to keep track of the growing amount of customer information. If a company does a poor job of organizing and maintaining customer records and data, it can result in problems for both the company and the consumer. This paper will focus on the Minnesota Mining and Manufacturing Company, more commonly known as 3M, and how it improved its customer service and reduced cost by improving its management information system. Sources consulted included business journals and websites with facts and case studies on 3M.

II. Company Description 3M, internationally established in 1951, is a $16 billion multinational company with its headquarters in Minnesota, U.S.A., with operations in more than 60 countries, and products sold in nearly 200 countries. (About 3M and MIS Quarterly) 3M offers products and services to the transportation, graphics and safety, healthcare, industrial, consumer and office, electro and communications, and specialty markets. (IBM Case Study on 3M) 3M, a company known for its innovation, constantly encourages employees to create new products. Thirty percent of sales must come, each year, from products less than 4 years old and scientists must spend 15% of their time trying to develop new ideas of their own. In 2001, 3M spent over $1 billion dollars alone on research and development (3M 2001 annual report). 3M's corporate culture revolves around creativity, initiative, innovation, and entrepreneurship. This unique and innovative culture is largely responsible for 3M's success. (MIS Quarterly) In accordance with having a strong need to stimulate innovation and creativity, 3M has a very decentralized corporate structure. It maintains over 40 business units that develop and market various 3M products and services. Each department operates as an individual company with its own processes systems and brands. This structure has afforded the different divisions the autonomy to conduct jobs in their own way using their initiative in a responsible manner. (Harvard Business Review and MIS Quarterly) III. The Problem Although 3Ms decentralized structure was good for innovation, it was an obstacle for the customers. Customers were seeing the 3M business units as a set of individual business instead of one unified company. Each business unit recorded its sales and product and customer information in its own database. There was no system in place among the business units to access each other's databases. As a result, 3M did not know how much business it did with a specific customer. Therefore, 3M could not take advantage of cross selling opportunities through "comparing same-customer purchase information" or "analysing buying patterns across product categories". (IBM Case Study) The importance of each customer, to the entire company, could not be evaluated. Furthermore, each unit was responsible for maintaining and updating its customer database, which was a large, costly and duplicative task, as well as highly prone to error. Invalid customer databases existed in 40% of some U.S branch databases. (MIS Quarterly) The problem with the decentralized databases was projected onto the Internet. Customers had to visit a different website for each division, registering with each division and obtaining a separate password to get information on related products. Also, each division's website had its own design and navigation requiring customers to have to familiarise themselves with the features of each website. (Harvard Business Review) Another problem with the 3M information system was that an archival system was being used to store information on customers as well as other business documents. As a result, retrieval of customer information took a very long time, inconveniencing both customers and employees.

IV. Solution In order to fix the problem of each division having its own database, 3M spent $20 million to create a "global data warehouse". This is an integrated database, which stores information on customers, products, sales, inventory, and finance from all divisions and geographies. Access can be gained to the database through a user-friendly website which requires a one-time registration and password for customers. Strong search and product recommendation engines characterize the site along with ten customer centers, which bring together related products and services from across the entire 3M organization. Employees and partners can access current information on product prices, availability, specifications and summaries of customer accounts. The profitability of customers and products and the performance of partners can now be analyzed across the entire company allowing better allocation of company resources. This allows 3M to take advantage of market opportunities and cross-selling opportunities and at the same time meet and customize the needs of customer segments. (Harvard Business Review) V. Software and Hardware Description In order to fix the problem of customer information retrieval taking a long time, 3M implemented new software and hardware from IBM, which allows accurate information to be provided in a timely manner. For software, 3M chose IBM's EDMSuite OnDemand for Windows NT (now referred to as IBM Content Manager OnDemand for Windows NT). 3M chose OnDemand because it is optimized to manage very large collections of smaller objects such as statements and reports and checks. To accompany OnDemand, 3M also chose to use the IBM's popular DB2 database