Cross-Functional Systems: CRM, ERP, and EAI Chapter Extension 10 Cross-Functional Systems: CRM, ERP, and EAI © 2006 Prentice Hall, Introduction to MIS: A Modular Approach, David Kroenke

Study Questions What is the importance of inherent processes? What are the characteristics of customer relationship management (CRM) systems? What are the characteristics of enterprise resource planning (ERP) systems? How is an ERP system implemented? What are the characteristics of enterprise application integration (EAI) systems?

Business Process Design Business process redesign Organizations should not automate or improve functional systems Organizations should create new business processes Came from idea that information systems should support linkages across departments and activities

Challenges of Business Process Design Projects expensive and difficult Systems analysts interview personnel, document existing systems Managers review results, develop new process New information systems developed Takes time Underlying systems constantly changing Employees resist change Outcome uncertain

Benefits and Disadvantages of Inherent Processes Business applications Processes for using software are inherent Integrate activities across departments Benefits Saves time Saves money Reduces design process problems Disadvantages Organizations must conform activities to processes May have to change substantially

Organizational Change Common problem has produced change management industry Blend of business, engineering, sociology, psychology Strives to understand dynamics of change Develop theories, methods, techniques Employee resistance Need to understand rationale for new system Fear of unknown Increase employees’ sense of self-efficacy Bosses’ behavior and communication important

Customer Relationship Management Systems (CRM) Support processes of attracting, selling, managing, delivering, and supporting customers Addresses all activities that touch customers Single repository for customer data Customer life cycles Marketing sends messages to target market Prospects order and need to be supported Support and resale increases value to existing customers Win-back processes categorize customers according to value

Components of CRM System Solicitation Supporting system is email and organization’s Web site Lead-tracking Presale applications turn prospects into customers Relationship management Maximize value of existing customers Sales management applications help develop strategies for regaining lost customers

Enterprise Resource Planning Systems (ERP) Support business processes, human resources, account support processes Enterprise-wide Cross-departmental process systems Based on documented, tested business models Process blueprint Comprehensive set of inherent processes for all business activities Formally designed Organizations must adapt to blueprint

Benefits and Problems of ERP Processes effective and efficient Organizations do not need to reinvent processes Reduce lead time No data inconsistency problem Lower costs Higher profitability Problems Costly Change is challenging

Implementing ERP Tasks in implementation Difficult, time-consuming Model current business processes Compare these to ERP blueprint processes Eliminate differences Implement new, revised system Train users Difficult, time-consuming

Enterprise Application Integration (EAI) Systems Solves problems of isolated systems Provides layers of software that connect applications together Enables existing applications to communicate Provides integrated information Leverages existing systems Enables gradual move to ERP No centralized database Files of metadata describing where data kept

Active Review What is the importance of inherent processes? What are the characteristics of customer relationship management (CRM) systems? What are the characteristics of enterprise resource planning (ERP) systems? How is an ERP system implemented? What are the characteristics of enterprise application integration (EAI) systems?