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Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

This document discusses enterprise applications and systems. It covers three main types: ERP systems which integrate business processes; SCM systems which track inventory and information across the supply chain; and CRM systems which manage customer relationships. It describes the core components and business benefits of each type of system, and how they work together in integrated enterprise suites. It also covers opportunities and challenges of enterprise applications, such as high costs but also flexibility of new technologies.

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Aida Natasha
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© © All Rights Reserved
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111 views

Achieving Operational Excellence and Customer Intimacy: Enterprise Applications

This document discusses enterprise applications and systems. It covers three main types: ERP systems which integrate business processes; SCM systems which track inventory and information across the supply chain; and CRM systems which manage customer relationships. It describes the core components and business benefits of each type of system, and how they work together in integrated enterprise suites. It also covers opportunities and challenges of enterprise applications, such as high costs but also flexibility of new technologies.

Uploaded by

Aida Natasha
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Chapter 9

Achieving Operational
Excellence and Customer
Intimacy: Enterprise
Applications
Integration Tools

Three Primary Enterprise Systems


Enterprise Systems
Enterprise Systems

• Enterprise Systems
– Enterprise resource planning (ERP) systems
– Suite of integrated software modules and a
common central database
– Collects data from many divisions of firm for use
in nearly all of firm’s internal business activities
– Information entered in one process is
immediately available for other processes
THE CONNECTED CORPORATION

• At the heart of all


ERP systems is a
database, when a
user enters or
updates
information in
one module, it is
immediately and
automatically
updated
throughout the
entire system
CORE ERP COMPONENTS

• Three most common core ERP components


1. Accounting and finance
• such as general ledger, accounts payable, accounts
receivable, budgeting, and asset management

2. Production and materials management


• such as demand forecasting, production scheduling,
job cost accounting, and quality control

3. Human resource
• – track employee information including payroll,
benefits, compensation, performance assessment
Enterprise Systems

• Enterprise Software
– Built around thousands of predefined business processes
that reflect best practices
• Finance and accounting
• Human resources
• Manufacturing and production
• Sales and marketing
– To implement, firms:
• Select functions of system they wish to use.
• Map business processes to software processes.
– Use software’s configuration tables for customizing.
How Enterprise Systems Work

Enterprise systems feature a


set of integrated software
modules and a central
database that enables data to
be shared by many different
business processes and
functional areas throughout
the enterprise
Figure 9-1
Enterprise Systems

• Business value of enterprise systems


– Increase operational efficiency
– Provide firm-wide information to support decision
making
– Enable rapid responses to customer requests for
information or products
– Include analytical tools to evaluate overall
organizational performance
Supply Chain Management
Systems
SUPPLY CHAIN MANAGEMENT
• Supply chain management (SCM) –
– tracks inventory and information among business
processes and across companies
– Network of organizations and processes for:
• Procuring materials, transforming them into products, and
distributing the products
– Most supply chains use inter-modal transportation,
multiple transportation channels (railway, truck, etc) to
move products from origin destination
– This creates supply chain complexities
• Supply chain management (SCM) system – IT system
that supports supply chain management
Supply Chain Management Systems

• Supply Chain Management Software


– Supply chain planning systems
• Model existing supply chain
• Enable demand planning
• Optimize sourcing, manufacturing plans
• Establish inventory levels
• Identify transportation modes
– Supply chain execution systems
• Manage flow of products through distribution centers
and warehouses
Supply Chain Management Systems

• Global supply chain issues


– Greater geographical distances
– Greater time differences
– Participants from different countries
• Different performance standards
• Different legal requirements
• Internet helps manage global complexities
– Warehouse management
– Transportation management
– Logistics
– Outsourcing
Supply Chain Management Systems

• Business value of SCM systems


– Match supply to demand; reduce inventory levels
– Improve delivery service
– Speed product time to market
– Use assets more effectively
– Reduced supply chain costs lead to increased
profitability
• Total supply chain costs can be 75% of operating budget
– Increase sales
Customer Relationship
Management Systems
Customer Relationship Management Systems

• Customer relationship management (CRM)


– Knowing the customer
– In large businesses, too many customers and too many
ways customers interact with firm
• CRM systems:
– Capture and integrate customer data from all over the
organization
– Consolidate and analyze customer data
– Distribute customer information to various systems and
customer touch points across enterprise
– Provide single enterprise view of customers
Customer Relationship Management (CRM)

CRM systems examine


customers from a multifaceted
perspective. These systems use
a set of integrated applications
to address all aspects of the
customer relationship,
including customer service,
sales, and marketing.

Figure 9-6
Customer Relationship Management Systems

• CRM Software
– Packages range from niche tools to large-scale
enterprise applications.
– More comprehensive have modules for:
• Partner relationship management (PRM)
– Integrating lead generation, pricing, promotions, order
configurations, and availability
– Tools to assess partners’ performances
• Employee relationship management (ERM)
– Setting objectives, employee performance management,
performance-based compensation, employee training
Customer Relationship Management Systems

• CRM software (cont.)


– CRM packages typically include tools for:
• Sales force automation (SFA)
– Sales prospect and contact information, sales quote
generation capabilities
• Customer service
– Assigning and managing customer service requests, Web-
based self-service capabilities
• Marketing
– Capturing prospect and customer data, scheduling and
tracking direct-marketing mailings or e-mail, cross-selling
Customer Loyalty Management Process Map

Figure 8-9 This process map shows how a best practice for promoting customer loyalty through customer service would
be modeled by customer relationship management software. The CRM software helps firms identify high-
value customers for preferential treatment.
The Focuses of Customer
Relationship Management

Analytics is now a
huge part of CRM.
Analytics use hard
data to support
decision making.
Customer Relationship Management Systems

• Business value of CRM systems


– Increased customer satisfaction
– Reduced direct-marketing costs
– More effective marketing
– Lower costs for customer acquisition/retention
– Increased sales revenue
• Churn rate:
– Number of customers who stop using or purchasing
products or services from a company
– Indicator of growth or decline of firm’s customer base
Enterprise Applications:
Opportunities &
Challenges
THE FUTURE OF ENTERPRISE SYSTEMS: INTEGRATING
SCM, CRM, AND ERP
Enterprise Applications: New Opportunities and Challenges

• Enterprise application challenges


– Highly expensive to purchase and implement
enterprise applications
• Average “large” system—$12 million +
• Average “small/midsize” system—$3.5 million
– Technology changes
– Business process changes
– Organizational learning, changes
– Switching costs, dependence on software vendors
– Data standardization, management, cleansing
Enterprise Applications: New Opportunities and Challenges

• Next-generation enterprise applications


– Enterprise solutions/suites:
• Make applications more flexible, Web-enabled,
integrated with other systems
– SOA standards
– Open-source applications
– On-demand solutions
– Cloud-based versions
– Functionality for mobile platform
• Thank you!

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