McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 4 Business Across the Enterprise

8-2 Learning Objectives  Identify and give examples to illustrate the following aspects of customer relationship management, enterprise resource management, and supply chain management systems:  Business processes supported  Customer and business value provided  Potential challenges and trends

8-3 Learning Objectives  Understand the importance of managing at the enterprise level to achieve maximum efficiencies and benefits.

8-4 Section 1 Customer Relationship Management: The Business Focus

8-5 I. Introduction  Businesses today must be Customer-centric/Customer-focused – Customer, Customer, Customer!

8-6 II. What Is CRM?  Providing the organization with a single complete view of every customer, and providing the customer with a single complete view of the organization and its extended channels

8-7 7 Customer Relationship Management (CRM) Traditional MarketingCRM Goal: Expand customer base, increase market share by mass marketing Goal: Establish a profitable, long-term, one-to-one relationship with customers; understanding their needs, preferences, expectations Product oriented viewCustomer oriented view Mass marketing / mass production Mass customization, one-to- one marketing

8-8 Contact and Account Management Capture and Track relevant data about –Every past and planned contact with prospects and customers –Other business and life cycle events Data captured from touch points –Telephone, fax, –Websites, retail stores, kiosks –Personal contact

8-9 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

8-10 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

8-11 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 Retention and Loyalty Programs

8-12 III. The Three Phases of CRM  Acquire – CRM helps a new customer perceive value of a superior product/service  Enhance – CRM supports superior customer service, and cross-selling/up-selling  Retain – CRM helps proactively identify and reward the most loyal and profitable customers

8-13 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

8-14 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 –Not solving business process problems first –No participation on part of business stakeholders involved.

8-15 Section 2 Enterprise Resource Planning: The Business Backbone

8-16 I. Introduction  ERP is a multifunctional enterprisewide backbone that integrates/automates business processes and information systems.  For example, ERP software for a manufacturing company will typically process the data from and track the status of sales, inventory, shipping, and invoicing, as well as forecast raw material and human resource requirements II. What is ERP?   A cross- functional software suite supporting basic internal business processes of a firm.   Enterprise resource planning is a cross-functional enterprise system driven by an integrated suite of software modules that supports the basic internal business processes of a company.   An ERP system is an attempt to integrate all functions across a company to a single computer system that can serve all those functions’ specific needs.

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8-18 III. Benefits and Challenges of ERP  Major Business Value from ERP  Quality and Efficiency – significant improvements in quality and efficiency of customer service, production, and distribution  Decreased Costs – significant reductions in transaction costs, hardware and software, and IT support staff  Decision Support – provides cross-functional information that enables better decision making across the enterprise  Enterprise Agility – breaks down departmental/functional walls and enables more flexible, adaptive organizational structures

8-19 III. Benefits and Challenges of ERP  Costs of ERP – if you do not do ERP properly you can kill the firm  Causes of ERP Failures  underestimating the complexity of planning, development, and training necessary for success  Failure to involve affected employees  Trying to do too much too fast  Overreliance on claims of software vendors/consulting firms

8-20 Section 3 Supply Chain Management: The Business Network

8-21 I. Introduction  Starting a business takes ideas, capital, and technical savvy. Operating one, however, takes supply chain management (SCM) skills. A successful SCM strategy is based on accurate order processing, just-in-time inventory management, and timely order fulfillment. SCM’s increasing importance illustrates how a tool that was a theoretical process 10 years ago is now a hot competitive weapon.  That’s why many companies today are making supply chain management (SCM) a top strategic objective and major business application development initiative.

8-22 II. What is SCM?  A cross-functional inter-enterprise system using IT to support/manage links between key business processes and suppliers, customers, and business partners Helps a company to –Get the right products –To the right place –At the right time –In the proper quantity –At an acceptable cost

8-23 III. The Role of SCM To optimize the effective/efficient movement of materials between suppliers, customers, and other partners

8-24 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.

8-25 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