e-Business Systems Chapter 7 McGraw-Hill/Irwin Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved.

Enterprise Business Systems Using the Internet, other networks, and IT to support… Electronic commerce Enterprise communications and collaboration Web-enabled business processes E-commerce Buying, selling, and marketing of products, services, and information over the Internet and other networks

Cross-Functional Systems Cross-functional systems are used to reengineer and improve vital business processes all across the enterprise Cross-functional systems cross the boundaries of traditional business functions

Enterprise Application Architecture This slide presents an overview of enterprise application architecture. It shows the major cross-functional enterprise applications and their interrelationships. Focuses on accomplishing fundamental business processes in concert with Customers Suppliers Partners Employees

Managing at the Enterprise Level Getting the whole business to fly in the same direction, as efficiently as possible Customer relationships Back-office operations Movement of raw materials & finished goods

Customer Relationship Management A customer-centric focus Customer relationships are a company’s most valued asset Every company should find and retain the most profitable customers possible

What is CRM? Managing the full range of the customer relationship involves two related objectives (1) Providing customer-facing employees with a single, complete view of every customer, at every touch point, across all channels (2) Providing the customer with a single, complete view of the company and its extended channels CRM uses IT to create a cross functional enterprise system that integrates and automates customer-serving processes

Application Clusters in CRM

Contact and Account Management CRM helps sales, marketing, and service professionals capture and track relevant data about Every past and planned contact with prospects and customers Other customer business & life-cycle events Data are captured through touchpoints Telephone, fax, e-mail, Websites Retail stores, kiosks, personal contact

Sales A CRM system provides sales reps with the tools and data resources they need to Support and manage sales activities Optimize cross- and up-selling CRM also provides the means to check on a customer’s account status and history before scheduling sales calls

Marketing and Fulfillment CRM systems help with direct marketing campaigns by automating tasks Qualifying leads for targeted marketing Scheduling and tracking mailings Capturing and managing responses Analyzing the business value of a campaign Fulfilling responses & requests

Customer Service and Support CRM helps customer service managers create, assign and manage customers’ requests for service Call center software Help desk software Web-based self-service

Retention and Loyalty Programs The odds of selling to an existing customer are 50%; a new one 15% 70% of complaining customers will do business with the company again if it quickly fixes a problem It costs 6 times more to sell to a new customer An unhappy customer will tell 8-10 others Boosting customer retention 5% can boost profits 85%

Retention and Loyalty Programs Enhancing and optimizing customer retention and loyalty is a primary objective of CRM Identify, reward, and market to the most loyal and profitable customers Evaluate targeted marketing and relationship programs

Three Phases of CRM

Benefits and Challenges of CRM Benefits of CRM Identify and target the best customers Real-time customization and personalization of products and services Track when and how a customer contacts the company Provide a consistent customer experience Provide superior service and support across all customer contact points

CRM Failures Business benefits of CRM are not guaranteed 50% of CRM projects did not produce promised results 20% damaged customer relationships Reasons for failure Lack of understanding and preparation Not solving business process problems first No participation on part of involved business stakeholders

What is ERP? A cross-functional enterprise system Facilitates business, supplier, and customer information flows The backbone of business processes A cross-functional enterprise system Supports basic internal business processes An integrated suite of software modules

ERP Application Components

Benefits and Challenges of ERP ERP Business Benefits 1. Quality & efficiency 2. Decreased costs 3. Decision support 4. Enterprise agility ERP Costs 1. High risk & cost 2. Hardware and software are a small part of overall project 3. Failure can cripple or kill a business

Costs of Implementing a New ERP

Common Causes of ERP Failure Causes of ERP Failures Common Causes of ERP Failure Under-estimating the complexity of planning, development, training Failure to involve affected employees in planning and development Over-reliance on ERP vendor or consultants Insufficient training Insufficient data conversion and testing Trying to do too much, too fast

Supply Chain Management (SCM) Supply chain management helps a company Get the right products To the right place At the right time In the proper quantity At an acceptable cost

Receive feedback on the status of every link in the supply Goals of SCM Forecast demand Control inventory Enhance relationships with customers, suppliers, distributors, and others Receive feedback on the status of every link in the supply

What is a Supply Chain? The interrelationships With suppliers, customers, distributors, and other businesses Needed to design, build, and sell a product Each supply chain process should add value to the products or services a company produces Frequently called a value chain

Supply Chain Life Cycle

Electronic Data Interchange The electronic exchange of business transaction documents between supply chain trading partners One of the earliest uses of information technology for supply chain management The almost complete automation of an e-commerce supply chain process Many transactions occur over the Internet, using secure virtual private networks

Typical EDI Activities

Roles and Activities of SCM in Business

Planning & Execution Functions of SCM Supply chain design Collaborative demand & supply planning Execution Materials management Collaborative manufacturing Collaborative fulfillment Supply chain event management Supply chain performance management

Benefits and Challenges of SCM Faster, more accurate order processing Reductions in inventory levels Key Benefits Strategic relationships with supplier Quicker times to market Lower transaction and materials cost

Goals and Objectives of SCM

Benefits and Challenges of SCM Key Challenges Lack of demand planning knowledge, tools, and guidelines Inaccurate data provided by other information systems Lack of collaboration among marketing, production, and inventory management SCM tools are immature, incomplete, and hard to implement

Enterprise Application Integration EAI software connects cross-functional systems Serves as middleware to provide Data conversion Communication between systems Access to system interfaces

How EAI Works

Transaction Processing Systems Cross-functional information systems that process data resulting from the occurrence of business transactions Transactions include sales, purchases, deposits, withdrawals, refunds, and payments Online transaction processing (OLTP) is a real-time system that captures transactions immediately

Transaction Processing Systems

The Transaction Processing Cycle

Enterprise Collaboration Systems (ECS) EC systems are cross-functional information systems that enhance team and workgroup Communication Coordination Collaboration Systems may include Networked PC workstations Servers Databases Groupware and application packages

ECS Tools

Functional Business Systems Various types of information systems that support the business functions of… Accounting Finance Marketing Operations management Human resource management

IT in Business

Marketing Systems Marketing systems are concerned with… Planning, promotion, and sale of existing products in existing markets Development of new products and new markets Better attracting and serving present and potential customers

Marketing Information Systems

Interactive Marketing A customer-focused marketing process Uses the Internet, intranets, and extranets Establishes two-way transactions between a business and its customers or potential customers Goal Profitably use networks to attract and keep customers Get customers to help create, purchase, and improve products and services

Targeted Marketing Community: customized ads to appeal to specific virtual communities Content: ads placed on a variety of selected websites, aimed at a specific audience Context: ads placed on web pages that are relevant to a product or service Demographic/Psychographic: web marketing aimed at specific types or classes of people Online behavior: promotions tailored to each visit to a site by an individual Advertising and promotion management concept with five targeting components

Sales Force Automation Outfit sales force with notebook computers, web browsers, and sales contact software Connect them to marketing websites and the company intranet Goals Increase personal productivity Speed up capture and analysis of sales data Gain strategic advantage

Manufacturing Information Systems Supports production/operations functions All activities concerned with planning and control of the processes tied to producing goods or services

Computer-Integrated Manufacturing

CIM Objectives Simplify… production processes, product designs, and factory organization Automate… production processes and the business functions that support them Integrate… all production and support processes using Networks Cross-functional business software Other information technologies

CIM supports the concepts of… CIM Objectives CIM supports the concepts of… Flexible manufacturing systems Agile manufacturing Total quality management (TQM)

Manufacturing Information Systems Computers help engineers design products Computer-aided engineering (CAE) Computer-aided design (CAD) Computer-aided manufacturing (CAM) Manufacturing also uses software Computer-aided process planning Material requirements planning (MRP) Manufacturing resource planning Manufacturing execution systems (MES) Process and machine control

Human Resource Management (HRM) Information systems support Planning to meet personnel needs Development of employees to their full potential Control of all personnel policies and programs

HRM Systems

HRM and the Internet Recruitment via the company website & commercial recruiting services Posting messages in selected Internet newsgroups Communicating with job applicants via e-mail

HRM and Corporate Intranets Corporate intranet uses Process common HRM transactions Around-the-clock HRM services Disseminate information faster than previous company channels Collect information from employees online Allow HRM tasks to be performed with little HRM dept. intervention Training

Employee Self-Service Intranet applications can allow employees to View benefits Enter travel and expense reports Verify employment and salary information Access and update personal information Enter time-sensitive data Receive training Produce automated pay sheets

Accounting Information Systems Oldest and most widely used information system in business Records and reports business transactions and economic events Produces financial statements Forecasts future conditions

Accounting Information Systems

Financial Management Systems Supports business managers and professionals making decisions concerning Financing of a business Allocation and control of financial resources within a business

Financial Management Systems