IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 9-1 Chapter 9 Building Organizational Partnerships.

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 9-1 Chapter 9 Building Organizational Partnerships Using Enterprise Information Systems We have this beautiful, elegant, high-I.Q. part of our business that we have been working hard on for many years.” Jeff Bezos, Founder and CEO of Amazon.com We have this beautiful, elegant, high-I.Q. part of our business that we have been working hard on for many years.” Jeff Bezos, Founder and CEO of Amazon.com

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Learning Objectives 1. Describe what enterprise systems are and how they have evolved. 2. Describe enterprise resource planning systems and how they help to improve internal business processes. 3. Describe customer relationship management systems and how they help to improve downstream business processes. 4. Describe supply chain management systems and how they help to improve upstream business processes. 5. Understand and utilize the keys to successfully implementing enterprise systems. 9-2

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Enterprise Systems 9-4 Problem:  Information systems growing over time  Lack of integration  Different computing platforms  Difficult to integrate  Data must be reentered from one system to another  Same pieces of data stored in several versions  Functional areas should be interrelated

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Supporting Business Processes 9-7 Internally focused systems  Support functional areas, business processes, and decision making within an organization  New information (value) is added at every step

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Supporting Business Processes 9-8 Externally focused systems (interorganizational systems)  Coordinate business activities with customers, suppliers, business partners, and others who operate outside the organization  Streamline the flow of information between companies

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Internally Focused Applications: Value Chain 9-9 Flow of information through a set of business activities  Core activities—functional areas that process inputs and produce outputs  Support activities—enable core activities to take place

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Core Activities 9-10 Inbound logistics activities  Receiving and stocking raw materials, parts, and products  Cisco—delivery of electronic components from suppliers Operations and manufacturing activities  Order processing and/or manufacturing of end products  Dell—component parts assembled to make products Outbound logistics activities  Distribution of end products  Amazon.com—delivery of books to customers

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Core Activities (cont’d) 9-11 Marketing and Sales activities  Presale marketing activities (e.g., creating marketing brochures)  Amtrak—use of IS to update prices and schedules Customer service activities  Post-sale activities  HP—downloads related to purchased products

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Support Activities 9-12 Administrative activities  Support of day-to-day operations (for all functional areas) Infrastructure activities  Implement hardware and software needed Human resource activities  Employee management

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Support Activities (cont’d) 9-13 Technology development activities  Design and development of applications to support the primary activities Procurement activities  Purchasing of goods and services (inputs into the primary activities)

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Externally Focused Applications—Value System (cont’d) 9-15 Information Flows in a Value System  Upstream information flow— information received from another company  Downstream information flow— information produced by a company and sent to another organization

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 The Rise of Enterprise Systems 9-16 Packaged applications  Written by third-party vendors  Used by many different organizations  Useful for standardized, repetitive tasks  Cost effective  Examples: Microsoft Money and Quicken Custom applications  Developed exclusively for a specific organization  Designed for particular business needs  Higher development costs

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 The Rise of Enterprise Systems 9-17 Evolution of enterprise systems  Organizations start with stand-alone applications  Legacy systems

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Legacy Systems 9-18 Each department has its own system  Infrastructure specific  Inefficient processes  Potential for inaccuracies

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 The Need for Integrated Enterprise Systems 9-19 Advantages of integrated systems  Centralized point of access  Conversion of information from legacy systems needed Enterprise Resource Planning (ERP) vendors offer different modules  Components that can be selectively implemented  Example: Modules of mySAP business suite

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Vanilla Versus Customized Software 9-20 Vanilla version  Features and modules that an enterprise system comes with out of the box  Certain processes might not be supported Customization  Additional software or changes to vanilla version  Always needs to be updated with new versions of vanilla

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Best Practices-Based Software 9-21 Most ERP vendors build best practices into their ERP systems  Identify business processes in need of change  Future updates are smoother if businesses change their business processes to fit with ERP systems Is following the best practices always the best strategy?  If companies have competitive advantage from unique business processes

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Business Process Management (BPM) 9-23 Systematic and structured improvement approach  All or part of organization is involved  Rethinking and redesign of business processes Became popular in 1990s IS seen as key enabler for radical change Processes intended to be cross-functional Various related terms:

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 BPM Steps 9-24 1.Develop a vision for the organization (specify business objectives) 2.Identify critical processes that are to be redesigned 3.Understand and measure existing processes as a baseline 4.Identify ways IS can be used for improvement 5.Design and implement a prototype of the new processes

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Conditions Leading to a Successful BPM 9-25 Support by senior management Shared vision by all organizational members Realistic expectations Participants empowered to make changes The right people participating Sound management practices Appropriate funding

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Enterprise Resource Planning (ERP) 9-26 Integrating data to integrate applications Data warehouse  Large, centralized data repository  Single place for data storage and access

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Choosing an ERP System 9-27 Control  Centralized control vs. control within specific business units  Level of detail provided to management  Consistency of policies and procedures Business requirements  Selection of modules  Core and extended components

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Core and Extended ERP Components 9-28 Core components—support primary internal activities Extended components—support primary external activities

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 ERP Limitations 9-29 ERP falls short in communicating across organizational boundaries Not well suited for managing value system activities  Other systems can work with ERP to provide these capabilities

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Customer Relationship Management(CRM) (cont’d) 9-32 The Web has changed the business  Customers have the power  Transactions vs. relationships  Keeping customers satisfied is key CRM  Corporate-level strategy  Concentrates on the downstream information flow  Attract potential customers  Create customer loyalty  Managers need to be able to monitor and analyze factors driving customer satisfaction

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Key Benefits of CRM 9-33 1.Enables 24/7/365 operation 2.Individualized service 3.Improved information 4.Speeds problem identification/resolution 5.Speeds processes 6.Improved integration 7.Improved product development 8.Improved planning

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Developing a CRM Strategy 9-34 More than just software purchase and installation Enterprise-wide changes

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Policy and Business Process Changes 9-35 Policies and procedures need to reflect customer- focused culture

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Customer Service Changes 9-36 Customer-focused measures of quality Process changes to enhance customer experience

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Employee Training Changes 9-37 Employees from all business areas must value customer service and satisfaction

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Data Collection, Analysis, and Sharing Changes 9-38 All aspects of customer experience must be tracked, analyzed, and shared Consider ethical concerns

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Operational CRM 9-40 Systems for customer interaction and service  Personalized and efficient customer service  Access to complete information about customer

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Sales Force Automation 9-41 Component of operational CRM Supports day-to-day sales activities:  Order processing and tracking  Account and contact management  Opportunity management  Sales management  Territory management  Customer history, preferences, (product and communication), and management  Sales forecasting and performance analysis

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Examples of Sales Measures Tracked by SFA 9-44 1. Revenue per sales person, per territory, or as a percentage of sales quota 2. Margins by product category, customer segment, or customer 3. Number of calls per day, time spent per contract, revenue per call, cost per call, ratio of orders to calls 4. Number of lost customers per period or cost of customer acquisition 5. Percentage of goods returned

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 SFA Provides Improved Understanding of Market Conditions 9-45 1. Improved understanding of markets, segments and customers 2. Improved understanding of competitors 3. Enhanced understanding of organization’s strengths and weaknesses 4. Better understanding of economic structure of the industry 5. Enhanced product development 6. Improved strategy development and coordination with the sales function

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Customer Service and Support (CSS) 9-46 Second component of operational CRM Automation of traditional “help desk” services Customer interaction center (CIC)  Multiple communication channels  Customer service anytime, anywhere through any communication channel  Low support cost

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Enterprise Marketing Management (EMM) 9-47 Third component of an operational CRM Make sure right messages are sent to the right people through the right channels Customer lists need to be managed carefully Individualized attention to each potential customer Extensive analytical capabilities

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Analytical CRM 9-48 Analysis of customer behavior and perceptions Customized marketing  Up-selling, cross-selling  Retaining customers Key technologies used to create predictive models  Data mining  Decision support systems Continuous data collection and analysis is necessary

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Customer Focused Business Processes Addressed by Analytical CRM 9-49 1. Marketing campaign management and analysis 2. Customer campaign customization 3. Customer communication optimization 4. Customer segmentation and sales coverage optimization 5. Pricing optimization and risk assessment and management

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Customer Focused Business Processes Addressed by Analytical CRM (cont’d) 9-50 6. Price, quality, and satisfaction analysis of competitors 7. Customer acquisition and retention analysis 8. Customer satisfaction and complaint management 9. Product usage, life-cycle analysis, and product development 10. Product and service quality tracking and management

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Collaborative CRM 9-51 Effective communication with the customer from the entire organization  CIC is the key Collaborative CRM enhances communication  Greater customer focus  Understanding of historical and current needs  Lower communication barriers  Communication preferences of the customer considered  Increased information integration  Customer information shared across the organization

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Supply Chain Management 9-54 Upstream activities Improvement of business processes spanning organizational boundaries Focus on upstream information flows  Acceleration of product development  Reduction of costs of raw materials procurement Collaboration with suppliers (supply network)  Ability to compete more effectively in the market place  Cost reduction  Increased responsiveness to market demands

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Supply Chain Management 9-55 Supply chain: the producers of supplies that a company uses  Suppliers work with additional suppliers  Supply network Problems with not collaborating effectively  Information gets distorted  Forecast errors add up, leading to degradation of profitability and poor customer service  “Bullwhip effect” Goals of improving upstream information flows  Accelerate product development  Reduce costs associated with procuring raw materials

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Functions That Optimize the Supply Network (SCM Modules) 9-57 1. Supply chain collaboration 2. Collaborative design 3. Collaborative fulfillment 4. Collaborative demand and supply planning 5. Collaborative procurement 6. Production planning 7. Supply chain event management 8. Supply chain exchange 9. Supply chain performance management

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 SCM Architecture 9-58 SCM modules support two functions  Supply chain planning— development of resource plans to support production  Supply chain execution— execution of supply chain planning

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Supply Chain Planning (SCP) 9-59 Four types of plans are developed: 1. Demand planning and forecasting o Examination of historic data 2. Distribution planning o Delivering products to consumers o Warehousing, delivering, invoicing, and payment collection 3. Production scheduling o Coordination of activities needed to create the product/service o Optimization of the use of materials, equipment, and labor 4. Procurement planning o Development of inventory estimates

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Supply Chain Execution (SCE) 9-60 Management of three key elements 1. Product flow o Flow of product from supplier to consumer o Automation of product returns 2. Information flow o Complete removal of paper documents o Access to current information at all times 3. Financial flow o Automatic flow of payments

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Developing an SCM Strategy 9-61 SCM efficiency and effectiveness need to be balanced  Efficiency— cost minimization  Effectiveness— customer service maximization  Tradeoffs—Supply chain strategy should match overall competitive strategy

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Emerging SCM Trends 9-62 Enterprise portals—B2B marketplace  Access point to proprietary information  Productivity gains and cost savings Distribution portals  Products from single supplier to many buyers Procurement portals  Procurement of products between single buyer and multiple suppliers

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Example: Distribution Portal 9-63 Automation of business processes between supplier and multiple customers  Before transaction  During transaction  After transaction Trading exchanges  Equilibrium between buyers and sellers  Vertical markets Source: http://www.dell.com

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Procurement Portal 9-64 Automation of business processes between a buyer and multiple suppliers

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Trading Exchanges 9-65 Small companies don’t have funds for SCM Trading exchanges provide a solution  Operated by third-party vendors  Revenue model  Commission for each transaction  Usage and association fees  Advertising  Many buyers and many sellers can come together  Popular trading exchanges:  www.scrapsite.com (steel)  www.paperspace.com (paper)  www.sciquest.com (medical equipment)

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Key Technologies for Enhancing SCM 9-66 Extensible Markup Language (XML)  Specifies rules for tagging elements  Specifies how information should be used and interpreted  ….  Useful for sharing data across applications over the web  Possible replacement for EDI  Customizable  XML variations  Extensible Business Reporting Language (XBRL) Publishing of financial information

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Radio Frequency Identification (RFID) 9-67 Replacement for standard bar codes  Transceiver and antenna  Line-of-sight reading not necessary  RFID tags can contain more information than bar codes Diverse usage opportunities Scanning can be done from greater distance  Passive tags—range of few feet  Active tags—range of hundreds of feet Source: METRO AG.

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Use of RFID in Supply Chain Management 9-68 Pallet of inventory processed through an RFID gate Source: METRO AG.

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 The Formula for Enterprise System Success 9-70 1.Secure executive sponsorship  Most failures due to lack of top-level management support 2.Get help from outside experts  Consultants are specifically trained  Implementation tends to happen faster 3.Thoroughly train users  Most overlooked, underestimated, and poorly budgeted expense  Training can prevent dissatisfaction 4.Take a multidisciplinary approach to implementations  Include end users from all functional areas in the implementation 5.Look beyond ERP

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Looking Beyond ERP 9-71 ERP systems are difficult to install, maintain, and upgrade Service oriented architecture (SOA)  Business processes are broken down into services  Services are designed to achieve desired results for service consumer  E.g., Oil change  Enables businesses to react more swiftly to changing needs Three principles of services  Reusability  Interoperability  Componentization ERP vendors are offering products for transitioning to SOA

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Opening Case— Managing in the Digital World: Amazon.com 9-74 35 million customers worldwide Innovations leading to satisfaction Excellent at managing entire supply chain  Both acquiring the right products at the right time and shipping the products to the customers are crucial  12 North American, 7 international fulfillment centers  Amazon.com manages fulfillment for Target.com as well as other businesses  Independent retailers can use Amazon.com’s supply chain infrastructure on an as-needed basis

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Three-Dimensional Fabrication 9-75 Fabbing—three-dimensional (3D) printing  2 printer heads  First lays down a fine powder  Second head is a gluing agent  With each pass of the heads one layer of the model is done  Prototype made in hours vs. days Fast production of prototypes that are  3-D  Usable  With moving parts Hewlett-Packard (HP)—leader  3-D HP printers now available for $1,000

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Outsourcing Your McDonald’s Order 9-76 McDonald’s—One of America’s success stories  Founded in 1948 in San Bernardino, California  $20 billion business  31,000 locations Outsourcing the drive-through  All stores already had an Internet connection  Orders processed overseas  Entered into the queuing system  Food quality remains the same

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 SAP—Dietmar Hopp, Hans-Werner Hector, Hasso Plattner, Klaus Tschira, and Claus Wellenreuther 9-77 Former IBM employees 80’s—multiple international subsidiaries Largest software company  39,300 people  3 rd largest in terms of revenue Includes:  ERP  CRM  PLM  SCM  SRM

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Census Computers 9-78 2006  Census announced $600 million contract for PDAs for census workers  Test run unsuccessful  PDAs not equipped for large volume of data  Contract overruns 2008  Plans for the PDAs scrapped  Contract still paid

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Customer Relationship Management (CRM)—Targeting or Discriminating? 9-79 CRM can be called a marketer’s dream  Getting to know customers  Maximizing the benefits gained from customers  Customer segmentation  Target marketing Companies need to develop ethical principles of CRM use  Establish how data will be used  Inform customers about the use of data  Refrain from stepping over the ethical/unethical line

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 RFID on the Rise 9-80 Market for RFID is exploding  Expected growth from $5.29 billion (2008) to $12.3 billion (2010)  Supply chain elements will account for majority of the growth  Second largest growth segment will be consumer items  Currently, largest RFID market sector is security and access control (62.6%), followed by animals (28.8%)

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 Manufacturing 9-81 Computer Aided Design (CAD)  Create drawings faster  Reduce cycle time  Improve sharing of designs 3-D drawings and printing Computer-Aided Engineering (CAE)  Testing of features before the first prototype is built Computer-Aided Manufacturing (CAM)  Takes input from CAD system  Controls manufacturing of components

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 9-1 Chapter 9 Building Organizational Partnerships.

Similar presentations

Presentation on theme: "IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 9-1 Chapter 9 Building Organizational Partnerships."— Presentation transcript:

Similar presentations

About project

Feedback

Log in

Auth with social network:

IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 9-1 Chapter 9 Building Organizational Partnerships.

Similar presentations

Presentation on theme: "IS Today (Valacich & Schneider) Copyright © 2010 Pearson Education, Inc. Published as Prentice Hall 8/9/2015 9-1 Chapter 9 Building Organizational Partnerships."— Presentation transcript:

Similar presentations

About project

Feedback