1. Enterprise applications
CHAPTER EIGHT
Enterprise applications

2. Introduction Supply Chain Management (SCM)
Customer Relationship Management (CRM)
Enterprise Resource Planning (ERP)

3. SCM / OM The two disciplines are hopelessly interconnected
Your book talks about them separately but I’ll talk about them together
Operations Management (transformation – making things)
Supply Chain Management
(movement of things)

4. Operations Management (Terms 1)
Operations management (OM) - the management of systems or processes that convert or transform resources (inputs) into goods and services (outputs)
Production is a subset of OM
Production - is the creation of goods using the factors of production (making things from raw materials with machines)
Production management - describes all the activities managers do to help companies create goods

5. Operations Management (Terms 2)
Value-added - the term used to describe the difference between the cost of inputs and the value of outputs
Materials requirement planning (MRP) systems
Make sure raw materials are available for the manufacturing process
Supply chain – All parties and processes involved in procurement of raw materials and the distribution of finished goods

6. Operations Management (Terms 3)
Transportation planning systems track and analyze the movement of goods (raw materials, work in progress, finished goods)
JC Penney
Distribution management systems manage goods to distribution centers and to retail outlets
These systems are tightly coupled

7. The IT Role in SCM / OM
IT provides the systems (transactional, MIS, DSS, GIS, GPS, wireless) to make all of this work in real time or near real time)

8. OM Business Tasks Forecasting Capacity planning Locating facilities
Scheduling (and synchronizing)
Raw materials, production, distribution
Managing inventory
Quality assurance

9. SCM / OM Components (Steps)
Plan
Source (we buy goods used in the means of production)
Make (we transform raw materials into finished goods)
And the time it takes to transform resources (production) or move resources (distribution)
Deliver (We get them where they are going)
Return (Defective / unwanted goods come back to us)

10. Supply Chain (Illustration)

11. SCM Strategic Goals (Plan)
The strategic portion of SCM
Set up a system for managing the entire supply chain
Partners
SCM monitoring
Wal-Mart and others
Location of distribution centers
UPS package flow systems
Minimize trucks and transportation distances

12. OM Strategic Goals (Plan)
Lower costs for commoditized items
Improve product or process quality
MINI, Lays Example
Optimize delivery speed
Flexibility in process conversion
MINI example

13. SCM Components (Source)
Find suppliers
Boeing and the 787
Wal-Mart
Establish trading protocols
EDI
Establish pricing metrics
Determine what resources will be needed
When resources will be needed
Where resources will be needed

14. SCM Components (Make) Schedule production Measure production output
Just-in-time inventory management
We produce assemblies and finished goods
Account for production downtime
Measure production output
Account for production variances against expected values

15. SCM Components(Make)

16. SCM Components (Make)
Review the Mini video
Discuss assembly processes

17. SCM Components (Deliver)
The logistics component
Implementation of effective transportation and distribution systems
Outsource warehousing
Location of distribution centers
Selection of transportation companies
Discuss Wal-Mart video

18. SCM Components (Return)
We use the term reverse logistics
The system whereby customer can return good they don’t want
Particularly important in the e-commerce world

19. Technology and SCM EDI allows automated transaction processing
Purchasing / fulfillment / payment systems
Decision-support systems to optimize routing and transportation
Cross-functional systems to integrate finance / sales / accounting / etc…

20. SCM Success Metrics

21. Quality Systems
Six sigma – reduce defects to 3.4 per million opportunities
ISO 9000 – Quality assurance standards
IS – Environmental best practices
CMMI – develop best practices

22. CRM (Introduction) CRM goals
Customer has a complete view of the organization
Organization has a complete view of the customer

23. CRM (Illustration)

24. CRM Strategy
It’s more than a software application – it’s a business strategy
Harrah’s
Walgreens
Brokerages
The list is endless

25. Business Value of CRM You know your customer Your customer knows you
Purchase activity
Recency
Frequency
Monetary value
Your customer knows you
American Express

26. CRM Benefits / Goals Provide better customer service
Make call centers more efficient
Cross sell products more effectively
Help sales staff close deals faster
Simplify marketing and sales processes
Discover new customers
Increase customer revenues

27. Evolution of CRM We began with basic reporting
Who bought what
We began to analyze the core data to identify customer habits
We now use predictive technologies to assess future customer behavior

28. CRM Examples

29. IT and CRM
Marketing
Sales and operations
Customer service

30. CRM Marketing List generation for existing and future customers
Managing and measuring the effectiveness of marketing campaigns
Cross-selling and up-selling
Amazon.com
Lands End

31. CRM Sales and Operations
Sales force automation
Generate prospects (leads) and manage them
Sales Management and contact management systems
Salesforce.com
Siebel

32. The Sales Process

33. CRM and Customer Service
Call centers
Use CRM software to solve common questions
Increase single call solutions
The risks of outsourcing and off shoring
Keyword detection
Automatic call routing
Wait time calculations

34. CRM and Customer Service
Web-based self service
Improve customer satisfaction and reduce costs through decreased call center use
Click to talk technology
Examples
Harrah’s TotalRewards online
FedEx and UPS package tracking

35. CRM and Call Scripting Benefits Risks Track and solve common problems
Presents uniform outputs to the customer
Risks
Does not always account for ‘savvy’ customers
Is it plugged in?

36. CRM Metrics (Sales) Number of prospective customers
Number of new customers
Number of retained customers
Number of open leads
Number of sales calls
Number of proposals
Amount of new revenue
Amount of recurring revenue

37. CRM Metrics (Service) Cases closed same day
Number of cases handled by agent
Number of service calls
Average number of service requests by type
Average time to resolution
Average number of service calls per day

38. CRM Metrics (Marketing)
Customer retention rates
Churn rate
Number of responses by marketing campaign
Number of purchases by marketing campaign
Revenue generated by marketing campaign

39. Analytical CRM Tools These are decision support systems
Use for customer personalization
Identify profitable or unprofitable customers
Treat good customers well
Harrah’s / American Express
Identify customers that might be leaving and why

40. CRM Trends Manage supplier relationships Manage partner relationships
Manage employees
This is really HR

41. CRM Failures Employees feel threatened and don’t adopt the tools
The customer becomes just a number
Web 2.0

42. ERP (Your Book’s Definition)
Enterprise resource planning – integrates all departments and functions throughout an organization into a single IT system (or integrated set of IT systems) so that employees can make enterprise wide decisions by viewing enterprise wide information on all business operations

43. ERP (My Definition)
All of an organization’s business processes are integrated into a single system (SCM, CRM, accounting, finance, manufacturing, along with specialized function applicable to specific industries)

44. ERP (Players) SAP has 30+ percent of the market Oracle / PeopleSoft
IBM
Microsoft Dynamics

45. ERP (Functions)

46. ERP (Business Processes)

47. ERP (Benefits) Breaks down or eliminates information silos
Business processes are performed more efficiently
All functional systems interact together

48. ERP (Risks) Failure can be catastrophic Failure is typically caused by
Hershey
This list is endless
Failure is typically caused by
Poor planning
Not understanding and adapting business process to the ERP

49. The Evolution of ERP

50. Core ERP Components (1) Accounting and Finance
Integrates traditional AR / AP / inventory / payroll / general ledger
Financial reporting systems
Operates with multiple currencies

51. Core ERP Components (2) Production and materials management
Raw materials supply chain
Manufacturing
You can’t make what you don’t have
Distribution
You can’t ship what you have not made
Human resources

52. ERP (Manufacturing and Production)

53. Extended Components Business intelligence integration CRM SCM
Often considered a core component
Ebusiness
Also becoming a core component
Procurement (B2B)
Sales (B2C)

54. Enterprise Application Integration
Integrate SCM, CRM, ERP business partners, suppliers, distributers, resellers, customers typically by creating SOA middleware

55. Collaboration Systems (Introduction)
Simply put, they help people (employees / partners / customers) effectively work together and share information

56. Collaboration Systems (Illustration)

57. Collaboration Systems (Types)
Groupware to collaborate
Content management systems are used as an information repository
Knowledge management
Workflow management
Much of the software performs many of these tasks

58. Collaboration Systems (Groupware)
Groupware allows us to work together
Functions
Calendaring, scheduling, and conferencing
File sharing and change tracking
Providers
Lotus Notes
SharePoint

59. Collaboration Systems (Content Management)
Information creating
Information storage
Changes to information
Information publishing and acquisition

60. Collaboration Systems (Knowledge Management)
Closely related to content management
Capture, classify, retrieve, and share information
It preserves organizational memory
SharePoint

61. Collaboration Systems (Workflow)
Workflow describes how work gets done
You don’t have the prerequisites for a class you want to take
You fill out the College of Business automated add slip form
It’s routed to the department or advisement center
An advisor approves or disapproves the request
You are notified

62. ERP Demo Accounting Sales and Distribution Procurement Production
Financial / Managerial
Sales and Distribution
Customers and products
Procurement
Production
Quality management
Warehouse management HR
And whatever else…

65. SO HOW DO WE DO ALL OF THIS
SAP
Oracle Supply chain
IBM

66. SAP Demo (Manufacturing Process)
Bill of Material describes what we make (a bicycle) and the raw materials needed to make it

67. SAP Demo (Manufacturing Process)
Routings describe how we make it

68. SAP Demo (Manufacturing Process)
Create a production order

69. Which leads us into the ERP discussion