Enterprise Business Systems Chapter 8 Enterprise Business Systems McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

Learning Objectives Identify and give examples to illustrate the following aspects of customer relationship management, enterprise resource manage-ment, and supply chain management systems: Business processes supported Customer and business value provided Potential challenges and trends Understand the importance of managing at the enterprise level to achieve maximum efficiencies and benefits.

Customer Relationship Management (CRM) Customer focused Customer relationships – most valued asset Find and retain most profitable customers possible Company has Single, complete view of every customer Customers have Single, complete view of the company Integrates and automates customer-serving processes Customer relationships have become a company’s most valued asset Every company’s strategy should be to find and retain the most profitable customers possible Managing the full range of the customer relationship involves Providing customer-facing employees with a single, complete view of every customer at every touch point and across all channels 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 many of the customer-serving processes

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

Marketing and Fulfillment Automate direct marketing campaigns Qualifying leads for targeted marketing Scheduling and tracking mailings Capturing and managing responses Analyzing the business value of the campaign Fulfilling responses and requests

Customer Service and Support Shared database Requests for service are created, assigned, and managed Call center software routes calls to agents Help desk software provides service data and suggestions for solving problems Personalized support information A CRM system gives service reps real-time access to the same database used by sales and marketing

Retention and Loyalty Programs Primary objective - enhancing and optimizing customer retention and loyalty Identify, reward, and market to the most loyal and profitable customers Evaluate targeted marketing and relationship programs

Identify and target the best customers 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 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 Reasons for Failure Lack of senior management sponsorship Improper change management Elongated projects that take on too much, too fast Lack of or poor integration between CRM and core business systems Lack of end-user incentives leading to poor user adoption rates Lack of understanding and preparation -- # 1 Not solving business process problems first No participation on part of business stakeholders involved Business benefits of CRM are not guaranteed 50 percent of CRM projects did not produce promised results 20 percent damaged customer relationships List of reasons for failure from 9th edition changed to paragraph below list in 10th edition Lack of understanding and preparation Not solving business process problems first No participation on part of business stakeholders involved How could some of the spectacular failures of ERP systems have been avoided? Recommendations: start early clean up data first involve end users obtain top management commitment get professional help from industry experienced consultants implement the system in phases (reduces complexity) train users promote realistic expectations

Cross-functional enterprise system What is ERP? Cross-functional enterprise system Integrated suite of software modules Supports basic internal business processes Manufacturing Logistics Distribution Accounting Finance Human resources Facilitates information flows Business Supplier Customer Enterprise resource planning is a cross-functional enterprise system An integrated suite of software modules Supports basic internal business processes Facilitates business, supplier, and customer information flows

Most common causes of ERP failure Causes of ERP Failures Most common causes of ERP failure Under-estimating complexity Planning, development, training Failure to involve affected employees Too much too fast Insufficient training Insufficient data conversion and testing Over-reliance on ERP vendor or consultants

Supply Chain Management (SCM) Helps a company Get the right products To the right place At the right time In the proper quantity At an acceptable cost Goal of SCM is to efficiently… Forecast demand Control inventory Enhance relationships Receive feedback What is a Supply Chain? Definition from previous chapter Supply Chain Management (SCM) the complete sequence of suppliers that contribute to creating a good or service and delivering it to business users and final customers 1. Supply chain begins when the raw materials used in production are delivered to the producer 2. Continues with the actual production activities that create finished goods. 3. Finally the finished goods move through the producer's distribution channels to end customers. Chapter 8 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 Forecast demand How much to build Control inventory How much to have on hand Enhance relationships with customers, suppliers, distributors, and others Receive feedback on the status of every link in the supply chain

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

Challenges of SCM Key Challenges Lack of knowledge, tools, and guidelines Inaccurate data Lack of collaboration SCM tools are immature, incomplete, and hard to implement

Modern Plastics, SupplySolution, Inc. Trends in SCM CVS, McKesson CVS leading drug retail chain McKesson largest pharmaceutical distributor Point-of-sale data Agreed on service levels Reduced replenishment time Modern Plastics, SupplySolution, Inc. Upraded reactive system to proactive system Customer persuaded Modern Plastics to connect with its iSupply system, could see what customers needed eliminating the wait for an order